EVERTEC, Inc. (Form: 10-Q, Received: 08/07/2015 07:13:01)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER 001-35872

EVERTEC, Inc.

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


Puerto Rico		66-0783622
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification number)

Cupey Center Building, Road 176, Kilometer 1.3, San Juan, Puerto Rico		00926
(Address of principal executive offices)		(Zip Code)

(787) 759-9999

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company (as defined in rule 12b-2 of the Exchange Act).

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

At July 31, 2015, there were 77,487,933 outstanding shares of common stock of EVERTEC, Inc.

TABLE OF CONTENTS


		Page
Part I. FINANCIAL INFORMATION			1
Item 1.	Financial Statements		1
	Unaudited Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014		1
	Unaudited Consolidated Statements of Income and Comprehensive Income for the three and six months ended June 30, 2015 and 2014		2
	Unaudited Consolidated Statement of Changes in Stockholders’ Equity for the six months ended June 30, 2015		3
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014		4
	Notes to Unaudited Consolidated Financial Statements		5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		17
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		28
Item 4.	Controls and Procedures		28
Part II. OTHER INFORMATION			30
Item 1.	Legal Proceedings		30
Item 1A.	Risk Factors		30
Item 2.	Unregistered Sales of Equity in Securities and Use of Proceeds		30
Item 3.	Defaults Upon Senior Securities		30
Item 4.	Mine Safety Disclosures		31
Item 5.	Other Information		31
Item 6.	Exhibits		31
SIGNATURES			33

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of, and subject to the protection of, the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact our business and could impact our business in the future are:

•

our reliance on our relationship with Popular, Inc. (“Popular”) for a significant portion of our revenues and with Banco Popular de Puerto Rico (“Banco Popular”), Popular’s principal banking subsidiary, to grow our merchant acquiring business;

•

for as long as we are deemed to be controlled by Popular, we will be subject to supervision and examination by U.S. federal banking regulators, and our activities will be limited to those permissible for Popular. Furthermore, as a technology service provider to regulated financial institutions, we are subject to additional regulatory oversight and examination. As a regulated institution, we may be required to obtain regulatory approval before engaging in certain new activities or businesses, whether organically or by acquisition;

•

our ability to renew our client contracts on terms favorable to us;

•

our dependence on our processing systems, technology infrastructure, security systems and fraudulent payment detection systems, as well as on our personnel and certain third parties with whom we do business, and the risks to our business if our systems are hacked or otherwise compromised;

•

our ability to develop, install and adopt new software, technology and computing systems;

•

a decreased client base due to consolidations and failures in the financial services industry;

•

the credit risk of our merchant clients, for which we may also be liable;

•

the continuing market position of the ATH network;

•

a reduction in consumer confidence, whether as a result of a global economic downturn or otherwise, which leads to a decrease in consumer spending;

•

our dependence on credit card associations, including any adverse changes in credit card association or network rules or fees;

•

changes in the regulatory environment and changes in international, legal, political, administrative or economic conditions;

•

the geographical concentration of our business in Puerto Rico, including our business with the government of Puerto Rico, which is facing severe fiscal challenges;

•

additional adverse changes in the general economic conditions in Puerto Rico, which could negatively affect our customer base, general consumer spending, our cost of operations and our ability to hire and retain qualified employees;

•

operating an international business in multiple regions with potential political and economic instability, including Latin America;

•

our ability to execute our geographic expansion and acquisition strategies;

•

our ability to protect our intellectual property rights against infringement and to defend ourselves against claims of infringement brought by third parties;

•

our ability to recruit and retain the qualified personnel necessary to operate our business;

•

our ability to comply with U.S. federal, state, local and foreign regulatory requirements;

•

evolving industry standards and adverse changes in global economic, political and other conditions;

•

our high level of indebtedness and restrictions contained in our debt agreements, including the senior secured credit facilities, as well as debt that could be incurred in the future;

•

our ability to generate sufficient cash to service our indebtedness and to generate future profits; and

•

other factors discussed in this Report, including in the section entitled “Risk Factors.”

These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. The Company does not undertake, and specifically disclaims any obligation, to update any of the “forward-looking statements” to reflect occurrences or unanticipated events or circumstances after the date of such statements except as required by the federal securities laws.

Investors should refer to the Company’s Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”) for a discussion of factors that could cause events to differ from those suggested by the forward-looking statements, including factors set forth in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

EVERTEC, Inc. (Unaudited) Consolidated Balance Sheets

(Dollar amounts in thousands, except for share information)


	June 30, 2015			December 31, 2014
Assets
Current Assets:
Cash	$	38,837		$	32,114
Restricted cash		6,262			5,718
Accounts receivable, net		71,091			75,810
Deferred tax asset		2,323			399
Prepaid expenses and other assets		21,678			20,565

Total current assets		140,191			134,606
Investment in equity investee		12,251			11,756
Property and equipment, net		31,627			29,535
Goodwill		368,911			368,837
Other intangible assets, net		317,431			334,584
Other long-term assets		9,880			10,917

Total assets	$	880,291		$	890,235

Liabilities and stockholders’ equity
Current Liabilities:
Accrued liabilities	$	29,275		$	26,052
Accounts payable		19,133			22,879
Unearned income		11,734			9,825
Income tax payable		81			1,956
Current portion of long-term debt		19,000			19,000
Short-term borrowings		4,000			23,000
Deferred tax liability, net		111			1,799

Total current liabilities		83,334			104,511
Long-term debt		638,530			647,579
Long-term deferred tax liability, net		19,255			15,674
Other long-term liabilities		2,856			2,898

Total liabilities		743,975			770,662

Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock, par value $0.01; 2,000,000 shares authorized; none issued		—			—
Common stock, par value $0.01; 206,000,000 shares authorized; 77,487,933 shares issued and outstanding at June 30, 2015 (December 31, 2014 - 77,893,144)		775			779
Additional paid-in capital		51,914			59,740
Accumulated earnings		89,347			65,576
Accumulated other comprehensive loss, net of tax		(5,720	)		(6,522	)

Total stockholders’ equity		136,316			119,573

Total liabilities and stockholders’ equity	$	880,291		$	890,235

The accompanying notes are an integral part of these unaudited consolidated financial statements.

EVERTEC, Inc. (Unaudited) Consolidated Statements of Income and Comprehensive Income

(Dollar amounts in thousands, except per share information)


	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Revenues
Merchant acquiring, net	$	21,165		$	19,827		$	41,256		$	39,118
Payment processing (from affiliates: $7,644, $7,458, $15,016 and $14,706)		26,759			26,618			53,136			51,843
Business solutions (from affiliates: $35,568, $34,243, $69,258 and $67,601)		45,317			44,888			90,181			87,805

Total revenues		93,241			91,333			184,573			178,766

Operating costs and expenses
Cost of revenues, exclusive of depreciation and amortization shown below		40,665			39,051			80,460			76,919
Selling, general and administrative expenses		8,948			10,463			16,651			18,525
Depreciation and amortization		16,006			16,390			32,834			33,004

Total operating costs and expenses		65,619			65,904			129,945			128,448

Income from operations		27,622			25,429			54,628			50,318

Non-operating income (expenses)
Interest income		127			79			231			154
Interest expense		(6,210	)		(6,501	)		(12,411	)		(13,410	)
Earnings of equity method investment		84			343			199			664
Other income		764			385			1,049			2,376

Total non-operating expenses		(5,235	)		(5,694	)		(10,932	)		(10,216	)

Income before income taxes		22,387			19,735			43,696			40,102
Income tax expense		2,120			1,962			4,366			4,123

Net income		20,267			17,773			39,330			35,979
Other comprehensive (loss) income, net of tax of $26, $48, $33 and $54
Foreign currency translation adjustments		(87	)		794			802			(6,951	)

Total comprehensive income	$	20,180		$	18,567		$	40,132		$	29,028

Net income per common share—basic	$	0.26		$	0.23		$	0.51		$	0.46

Net income per common share—diluted	$	0.26		$	0.22		$	0.51		$	0.45

The accompanying notes are an integral part of these unaudited consolidated financial statements.

EVERTEC, Inc. (Unaudited) Consolidated Statement of Changes in Stockholders’ Equity

(Dollar amounts in thousands, except share information)


	Number of Shares of Common Stock			Common Stock			Additional Paid-in Capital			Accumulated Earnings			Accumulated Other Comprehensive Loss			Total Stockholders’ Equity
Balance at December 31, 2014		77,893,144		$	779		$	59,740		$	65,576		$	(6,522	)	$	119,573
Share-based compensation recognized								2,191									2,191
Repurchase of common stock		(452,175	)		(5	)		(9,986	)								(9,991	)
Restricted stock grants and units delivered, net of cashless		46,964			1			(31	)								(30	)
Net income											39,330						39,330
Cash dividends declared on common stock											(15,559	)					(15,559	)
Other comprehensive income														802			802

Balance at June 30, 2015		77,487,933			775			51,914			89,347			(5,720	)	$	136,316

The accompanying notes are an integral part of these unaudited consolidated financial statements.

EVERTEC, Inc. (Unaudited) Consolidated Statements of Cash Flows

(Dollar amounts in thousands)


	Six months ended June 30,
	2015			2014
Cash flows from operating activities
Net income	$	39,330		$	35,979
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32,834			33,004
Amortization of debt issue costs and premium and accretion of discount		1,621			1,538
Provision for doubtful accounts and sundry losses		684			1,058
Deferred tax expense (benefit)		11			(430	)
Share-based compensation		2,191			665
Unrealized (gain) loss of indemnification assets		(12	)		173
Loss on disposition of property and equipment and other intangibles		1			64
Earnings of equity method investment		(199	)		(664	)
Dividend received from equity method investment		—			326
Decrease (increase) in assets:
Accounts receivable, net		4,342			(2,045	)
Prepaid expenses and other assets		(2,460	)		(4,267	)
Other long-term assets		(50	)		1,811
(Decrease) increase in liabilities:
Accounts payable and accrued liabilities		(1,602	)		(4,120	)
Income tax payable		(1,875	)		1,542
Unearned income		1,909			2,903

Total adjustments		37,395			31,558

Net cash provided by operating activities		76,725			67,537

Cash flows from investing activities
Net (increase) decrease in restricted cash		(543	)		238
Intangible assets acquired		(6,757	)		(5,841	)
Property and equipment acquired		(8,649	)		(3,895	)
Proceeds from sales of property and equipment		11			3

Net cash used in investing activities		(15,938	)		(9,495	)

Cash flows from financing activities
Statutory minimum withholding taxes paid on cashless exercises of stock options and restricted stock		(31	)		(770	)
Net decrease in short-term borrowing		(19,000	)		(27,000	)
Repayment of short-term borrowing for purchase of equipment and software		—			(1,200	)
Dividends paid		(15,542	)		(15,680	)
Tax windfall benefits on exercises of stock options		—			1,482
Issuance of common stock, net		—			54
Repurchase of common stock		(9,991	)		—
Repayment of other financing agreement		—			(82	)
Repayment of long-term debt		(9,500	)		(9,500	)

Net cash used in financing activities		(54,064	)		(52,696	)

Net increase in cash		6,723			5,346
Cash at beginning of the period		32,114			22,485

Cash at end of the period	$	38,837		$	27,831

Supplemental disclosure of non-cash activities:
Dividend declared not received from equity method investment	$	—		$	325
Foreign currency translation adjustments		802			(6,951	)
Payable due to vendor related to software acquired		1,125			—

The accompanying notes are an integral part of these unaudited consolidated financial statements.

Notes to Unaudited Consolidated Financial Statements


Note 1 – The Company and Basis of Presentation			6
Note 2 – Property and Equipment, net			6
Note 3 – Goodwill and Other Intangible Assets			7
Note 4 – Debt and Short-Term Borrowings			8
Note 5 – Financial Instruments and Fair Value Measurements			9
Note 6 – Share-based Compensation			11
Note 7 – Income Tax			12
Note 8 – Net Income Per Common Share			13
Note 9 – Commitments and Contingencies			13
Note 10 – Related Party Transactions			14
Note 11 – Segment Information			15
Note 12 – Subsequent Events			16

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 1 – The Company and Basis of Presentation

The Company

EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) and its subsidiaries (collectively the “Company,” or “EVERTEC”) is the leading full-service transaction processing business in Latin America and the Caribbean. The Company is based in Puerto Rico and provides a broad range of merchant acquiring, payment processing and business process management services across 19 countries in the region. EVERTEC owns and operates the ATH network, one of the leading automated teller machine (“ATM”) and personal identification number (“PIN”) debit networks in Latin America. In addition, EVERTEC provides a comprehensive suite of services for core bank processing, cash processing and technology outsourcing in the regions the Company serves. EVERTEC serves a broad and diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions that are essential to their operations, enabling them to issue, process and accept transactions securely.

Management believes that the Company’s business is well-positioned to continue to expand across the fast growing Latin American region.

Basis of Presentation

The unaudited consolidated financial statements of EVERTEC have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the accompanying unaudited consolidated financial statements requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the unaudited consolidated financial statements. Actual results could differ from these estimates.

Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted from these statements pursuant to the rules and regulations of the SEC and, accordingly, these financial statements should be read in conjunction with the Audited Consolidated Financial Statements of the Company for the year ended December 31, 2014, included in the Company’s 2014 Form 10-K. In the opinion of Management, the accompanying consolidated financial statements, prepared in accordance with GAAP, contain all adjustments, all of which are normal and recurring in nature, necessary for a fair presentation. All significant intercompany accounts and transactions have been eliminated in consolidation.

Note 2 – Property and Equipment, net

Property and equipment, net consists of the following:


(Dollar amounts in thousands)	Useful life in years	June 30, 2015			December 31, 2014
Buildings	30	$	1,616		$	1,602
Data processing equipment	3 - 5		85,698			77,588
Furniture and equipment	3 - 20		8,602			7,540
Leasehold improvements	5 - 10		3,156			2,964

			99,072			89,694
Less—accumulated depreciation and amortization			(68,878	)		(61,580	)

Depreciable assets, net			30,194			28,114
Land			1,433			1,421

Property and equipment, net		$	31,627		$	29,535

Depreciation and amortization expense related to property and equipment for the three and six months ended June 30, 2015 amounted to $3.3 million and $7.4 million, respectively, compared to $3.8 million and $7.7 million, respectively, for the same periods in 2014.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 3 – Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill, allocated by reportable segments, were as follows (See Note 12):


(Dollar amounts in thousands)	Merchant Acquiring, net		Payment Processing			Business Solutions		Total
Balance at December 31, 2014	$	138,121	$	184,228		$	46,488	$	368,837
Foreign currency translation adjustments		—		(26	)		100		74

Balance at June 30, 2015	$	138,121	$	184,202		$	46,588	$	368,911

Goodwill is tested for impairment at least annually, or more often if events or circumstances indicate there may be impairment, using the qualitative assessment option or step zero process. Using this process, the Company first assesses whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount. There were no triggering events or changes in circumstances that, subsequent to the impairment test, would have required an additional impairment evaluation.

The carrying amount of other intangible assets for the six months ended June 30, 2015 and the year ended December 31, 2014 consisted of the following:


		June 30, 2015
(Dollar amounts in thousands)	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	312,795	$	(106,628	)	$	206,167
Trademark	10 - 15		39,950		(16,454	)		23,496
Software packages	3 - 10		146,398		(97,265	)		49,133
Non-compete agreement	15		56,539		(17,904	)		38,635

Other intangible assets, net		$	555,682	$	(238,251	)	$	317,431


		December 31, 2014
(Dollar amounts in thousands)	Useful life in years	Gross amount		Accumulated amortization			Net carrying amount
Customer relationships	14	$	312,735	$	(95,482	)	$	217,253
Trademark	10 - 15		39,950		(14,722	)		25,228
Software packages	3 - 10		138,188		(86,605	)		51,583
Non-compete agreement	15		56,539		(16,019	)		40,520

Other intangible assets, net		$	547,412	$	(212,828	)	$	334,584

For the three and six months ended June 30, 2015, the Company recorded amortization expense related to other intangibles of $12.7 million and $25.4 million, respectively, compared to $12.6 million and $25.3 million for the corresponding 2014 periods.

The estimated amortization expense of the balances outstanding at June 30, 2015 for the next five years is as follows:


(Dollar amounts in thousands)
Remaining 2015	$	23,464
2016		39,154
2017		35,942
2018		32,966
2019		31,937
2020		30,017

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 4 – Debt and Short-Term Borrowings

Total debt as of June 30, 2015 and December 31, 2014 was as follows:


(Dollar amounts in thousands)	June 30, 2015		December 31, 2014
Senior Secured Credit Facility (Term A) due on April 17, 2018 paying interest at a variable interest rate (London InterBank Offered Rate (“LIBOR”) plus applicable margin ⁽¹⁾⁽³⁾ )	$	269,781	$	277,239
Senior Secured Credit Facility (Term B) due on April 17, 2020 paying interest at a variable interest rate (LIBOR Rate plus applicable margin ⁽²⁾⁽³⁾ )		387,749		389,340
Senior Secured Revolving Credit Facility expiring on April 17, 2018 paying interest at a variable interest rate		4,000		23,000
Note Payable due on October 1, 2017 ⁽³⁾		3,638		4,333
Note Payable due on July 1, 2017 ⁽³⁾		1,029		—

Total debt	$	666,197	$	693,912

(1)	Applicable margin of 2.50% at June 30, 2015 and December 31, 2014.

(2)	Subject to a minimum rate (“LIBOR floor”) of 0.75% plus applicable margin of 2.75% at June 30, 2015 and December 31, 2014.

(3)	Includes unamortized discount.

Senior Secured Credit Facilities

Term A Loan

As of June 30, 2015, the unpaid principal balance of the Term A Loan was $270.0 million. The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the maturity of the Term A Loan on April 17, 2018. Interest is based on EVERTEC Group LLC’s (“EVERTEC Group”) first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.00% to 2.50%, or (b) Base Rate, as defined in the 2013 Credit Agreement, plus an applicable margin ranging from 1.00% to 1.50%. Term A Loan has no LIBOR or Base Rate minimum or floor.

Term B Loan

As of June 30, 2015, the unpaid principal balance of the Term B Loan was $392.0 million. The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount on the maturity of the Term B Loan on April 17, 2020. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR Rate plus an applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50% to 1.75%. The LIBOR Rate and Base Rate are subject to floors of 0.75% and 1.75%, respectively.

Revolving Credit Facility

The revolving credit facility has an available balance up to $100.0 million, with an interest rate on loans calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a “commitment fee” payable one business day after the last business day of each quarter calculated based on the daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% and is based on EVERTEC Group’s first lien secured net leverage ratio.

All loans may be prepaid without premium or penalty.

The senior secured credit facilities contain various restrictive covenants. The Term A Loan and the revolving credit facility (subject to certain exceptions) require us to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 to 1.00 as defined in the 2013 Credit Agreement (total first lien secured debt to adjusted EBITDA). In addition, the 2013 Credit Agreement,

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

among other things: (a) limits our ability and the ability of our subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts our ability to enter into agreements that would limit the ability of our subsidiaries to pay dividends or make certain payments to us; and (c) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of our assets.

Note payable

In December 2014 and June 2015, EVERTEC entered into a non-interest bearing $4.6 million and $1.1 million, respectively, financing agreements to purchase software. The notes will be repaid over a 36-month term. As of June 30, 2015 the outstanding principal balance of the notes payable is $5.0 million. The current portion of these notes is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities.

Note 5 – Financial Instruments and Fair Value Measurements

Recurring Fair Value Measurements

Fair value measurement provisions establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. This guidance describes three levels of input that may be used to measure fair value:

Level 1 : Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 : Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date.

Level 3 : Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The Company uses observable inputs when available. Fair value is based upon quoted market prices when available. If market prices are not available, the Company may employ internally-developed models that mostly use market-based inputs including yield curves, interest rates, volatilities, and credit curves, among others. The Company limits valuation adjustments to those deemed necessary to ensure that the financial instrument’s fair value adequately represents the price that would be received or paid in the marketplace. Valuation adjustments may include consideration of counterparty credit quality and liquidity as well as other criteria. The estimated fair value amounts are subjective in nature and may involve uncertainties and matters of significant judgment for certain financial instruments. Changes in the underlying assumptions used in estimating fair value could affect the results. The fair value measurement levels are not indicative of risk of investment.

The following table summarizes fair value measurements by level at June 30, 2015 and December 31, 2014 for assets measured at fair value on a recurring basis:


(Dollar amounts in thousands)	Level 1		Level 2		Level 3		Total
June 30, 2015
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	141	$	141

December 31, 2014
Financial assets:
Indemnification assets:
Software cost reimbursement	$	—	$	—	$	1,428	$	1,428

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The fair value of financial instruments is the amount at which an asset or obligation could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. Fair value estimates are made at a specific point in time based on the type of financial instrument and relevant market information. Many of these estimates involve various assumptions and may vary significantly from amounts that could be realized in actual transactions.

For those financial instruments with no quoted market prices available, fair values have been estimated using present value calculations or other valuation techniques, as well as management’s best judgment with respect to current economic conditions, including discount rates and estimates of future cash flows.

Indemnification assets include the present value of the expected future cash flows of certain expense reimbursement agreements with Popular. These contracts have termination dates up to September 2015 and were entered into in connection with the merger transaction completed on September 30, 2010 (“the Merger”). Management prepared estimates of the expected reimbursements to be received from Popular until the termination of the contracts, discounted the estimated future cash flows and recorded the indemnification assets as of the Merger closing date. Payments received during the quarters reduced the indemnification asset balance. The remaining balance was adjusted to reflect its fair value as of June 30, 2015, therefore resulting in a net unrealized gain of approximately $9,000 and $12,000 for the three and six months ended June 30, 2015, respectively, and a net unrealized gain of approximately $6,000 for the three months ended June 30, 2014 and a net unrealized loss of approximately $0.2 million for the six months ended June 30, 2014, which are reflected within the other expenses caption in the unaudited consolidated statements of income and comprehensive income. The indemnification assets is included within accounts receivable, net in the accompanying unaudited consolidated balance sheets.

The unobservable inputs related to the Company’s indemnification assets as of June 30, 2015 using the discounted cash flow model include the discount rate of 5.01% and the projected cash flows of $0.1 million.

For indemnification assets a significant increase or decrease in market rates or cash flows could result in a change to the fair value. Also, the credit rating and/or the non-performance credit risk of Popular, which is subjective in nature, also could increase or decrease the sensitivity of the fair value of these assets.

The following table presents the carrying value, as applicable, and estimated fair values for financial instruments at June 30, 2015 and December 31, 2014:


	June 30, 2015				December 31, 2014
(Dollar amounts in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Indemnification assets:
Software cost reimbursement	$	141	$	141	$	1,428	$	1,428

Financial liabilities:
Senior secured term loan A	$	269,781	$	264,600	$	277,239	$	266,400
Senior secured term loan B		387,749		385,140		389,340		385,462

The fair value of the senior secured term loans at June 30, 2015 and December 31, 2014 were obtained using prices supplied by third party service providers. Their pricing is based on various inputs such as: market quotes, recent trading activity in a non-active market or imputed prices. The pricing inputs also may include the use of an algorithm that could take into account movement in the general high-yield market, among other variants.

The senior secured term loans, which are not measured at fair value in the balance sheets, if measured, could be categorized as Level 3 in the fair value hierarchy.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The following table provides a summary of the change in fair value of the Company’s Level 3 assets:


	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			2015			2014
Indemnification assets:
Beginning balance	$	971		$	2,947		$	1,428		$	3,586
Payments received		(839	)		(839	)		(1,299	)		(1,299	)
Unrealized gain (loss) recognized in other expenses		9			6			12			(173	)

Ending balance	$	141		$	2,114		$	141		$	2,114

Note 6 – Share-based Compensation

Long-term Incentive Plan

In the first quarter of 2015, the Compensation Committee of the Board of Directors approved grants of restricted stock units (“RSUs”) to executives and certain employees pursuant to the 2015 Long-Term Incentive Program (“LTIP”) under the terms of our 2013 Equity Incentive Plan. Under the LTIP, the Company granted restricted stock units to eligible participants as time-based awards or performance-based awards.

The vesting of the RSUs is dependent upon market, performance and service conditions as defined in the grants. Employees that received time-based awards with service conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the employee is providing services to the Company on the vesting date. Time-based awards vest over a period of three years in substantially equal installments commencing on the start of the fiscal year during which the RSUs were granted and ending on January 1 ^st of each year. Employees that received awards with market conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the Company’s total shareholder return (“TSR”) target relative to a specified group of industry peer companies is achieved. Employees that received awards with performance conditions are entitled to receive a specific number of shares of the Company’s common stock on the vesting date if the Cumulative Compound Annual Growth Rate (“CAGR”) of Diluted EPS target is achieved. Performance and market-based awards vest at the end of the performance period which commenced on the start of the fiscal year during which the RSUs were granted and ends on January 1, 2018. Awards are forfeited if the employee ceases to be employed by the Company prior to vesting.

The following table summarizes the RSU’s granted under the LTIP as of June 30, 2015:


	Units		Weighted-Average Grant Date Fair Value
Awards with market conditions		49,763	$	29.86
Awards with performance condition		67,382	$	22.05
Awards with service conditions		196,272	$	22.11

The following table summarizes stock options activity for the six months ended June 30, 2015:


	Shares		Weighted-average exercise prices
Outstanding at December 31, 2014		316,000	$	19.56

Outstanding at June 30, 2015		316,000	$	19.56

Exercisable at June 30, 2015		83,333	$	23.62

Management uses the fair value method of recording stock-based compensation as described in the guidance for stock compensation in ASC topic 718.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

The following table summarizes nonvested restricted shares and RSUs activity for the six months ended June 30, 2015:


Nonvested restricted shares and RSUs	Shares		Weighted-average grant date fair value
Nonvested at December 31, 2014		23,252	$	22.04
Forfeited		6,205		21.04
Vested		19,116		22.56
Granted		553,242		22.57

Nonvested at June 30, 2015		551,173	$	22.56

For the three and six months ended June 30, 2015 and June 30, 2014, the Company recognized $1.5 million and $2.2 million and $0.3 million and $0.7 million of share-based compensation expense, respectively. As of June 30, 2015, there was $1.0 million of total unrecognized compensation cost related to stock options, which is expected to be recognized over the next 1.51 years. In addition, for the same period, there was approximately $10.8 million of total unrecognized compensation cost related to nonvested shares of restricted stock and RSUs. That cost is expected to be fully recognized over the next 2.4 years.

Note 7 – Income Tax

The components of income tax expense for the three and six months ended June 30, 2015 and 2014 consisted of the following:


	Three months ended June 30,					Six months ended June 30,
(Dollar amounts in thousands)	2015			2014		2015		2014
Current tax provision	$	2,309		$	964	$	4,355	$	4,553
Deferred tax (benefit) provision		(189	)		998		11		(430	)

Income tax expense	$	2,120		$	1,962	$	4,366	$	4,123

The Company conducts operations in Puerto Rico and certain countries in Latin America. As a result, the income tax expense includes the effect of taxes paid to the Puerto Rico government as well as foreign jurisdictions. The following table presents the components of income tax expense for the three and six months ended June 30, 2015 and 2014 and its segregation based on location of operations:


	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			2015			2014
Current tax provision
Puerto Rico	$	1,367		$	423		$	2,522		$	1,360
United States		160			217			301			415
Foreign countries		782			324			1,532			2,778

Total currrent tax provision	$	2,309		$	964		$	4,355		$	4,553


Deferred tax (benefit) provision
Puerto Rico	$	111		$	805		$	410		$	832
United States		(32	)		(2	)		(58	)		(3	)
Foreign countries		(268	)		195			(341	)		(1,259	)

Total deferred tax (benefit) provision	$	(189	)	$	998		$	11		$	(430	)

Taxes payable to foreign countries by EVERTEC’s subsidiaries will be paid by such subsidiary and the corresponding liability and expense will be presented in EVERTEC’s consolidated financial statements.

As of June 30, 2015, the gross deferred tax asset amounted to $8.3 million and the gross deferred tax liability amounted to $25.4 million, compared with $9.7 million and $26.8 million as of December 31, 2014. At June 30, 2015, the recorded value of the Company’s net operating loss (“NOL”) carryforwards was $5.2 million. The recorded value of the NOL carryforwards is approximately $4.2 million lower than the total NOL carryforwards available because of a windfall tax benefit. The windfall tax

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

benefit is available to offset future taxable income and is considered an off-balance sheet item until the deduction reduces taxes payable. This windfall tax benefit results from tax deductions that were in excess of previously recorded compensation expense because the fair value of stock options at the time they were granted differed from their fair value when they were exercised. The total gross NOL carryforwards available, including the windfall benefit, amounted to $24.0 million as of June 30, 2015.

There are no open uncertain tax positions as of June 30, 2015.

Note 8 – Net Income Per Common Share

The reconciliation of the numerator and denominator of the income per common share is as follows:


	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands, except per share information)	2015		2014		2015		2014
Net income	$	20,267	$	17,773	$	39,330	$	35,979
Less: non-forfeitable dividends on restricted stock		3		—		3		—

Net income available to common shareholders	$	20,264	$	17,773	$	39,327	$	35,979

Weighted average common shares outstanding		77,457,322		78,410,554		77,631,339		78,393,042
Weighted average potential dilutive common shares ⁽¹⁾		240,539		789,410		148,863		811,600

Weighted average common shares outstanding - assuming dilution		77,697,861		79,199,964		77,780,202		79,204,642

Net income per common share - basic	$	0.26	$	0.23	$	0.51	$	0.46

Net income per common share - diluted	$	0.26	$	0.22	$	0.51	$	0.45

⁽¹⁾	Potential common shares consist of common stock issuable under the assumed exercise of stock options and restricted stock awards using the treasury stock method.

On February 18, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on March 19, 2015 to stockholders of record as of March 2, 2015. On May 6, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on June 5, 2015 to stockholders of record as of May 18, 2015.

Note 9 – Commitments and Contingencies

Certain lease agreements contain provisions for future rent increases. The total amount of rental payments due over the lease term is being charged to rent expense on the straight-line method over the term of the lease. The difference between rent expense recorded and the amount paid is recorded as a deferred rent obligation.

Rent expense of office facilities and real estate for both the three and six months ended June 30, 2015 and 2014 amounted to $2.1 million and $4.1 million, respectively. Rent expense for telecommunications and other equipment for the three and six months ended June 30, 2015 amounted to $1.3 million and $2.6 million, respectively, compared to $1.6 million and $3.0 million for the corresponding 2014 periods.

In the ordinary course of business, the Company may enter into commercial commitments. As of June 30, 2015, EVERTEC has an outstanding letter of credit of $0.9 million with a maturity of less than three months.

EVERTEC is a defendant in a number of legal proceedings arising in the ordinary course of business. Based on the opinion of legal counsel and other factors, Management believes that the final disposition of these matters will not have a material adverse effect on the business, results of operations, financial condition, or cash flows of the Company. The Company has identified certain claims as a result of which a loss may be incurred, but in the aggregate the loss would be minimal. For other claims regarding which proceedings are in an initial phase, the Company is unable to estimate the range of possible loss but at this time believes that any loss related to such claims will not be material.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 10 – Related Party Transactions

The following table presents the Company’s transactions with related parties for the three and six months ended June 30, 2015 and 2014:


	Three months ended June 30,				Six months ended June 30,
(Dollar amounts in thousands)	2015		2014		2015		2014
Total revenues ⁽¹⁾⁽²⁾	$	43,212	$	41,701	$	84,274	$	82,307

Cost of revenues	$	504	$	595	$	1,090	$	756

Rent and other fees	$	1,974	$	2,084	$	3,967	$	4,001

Interest earned from and charged by affiliate
Interest income	$	43	$	50	$	87	$	102

⁽¹⁾	Total revenues from Popular as a percentage of revenues were 46%, 45%, 45% and 45% for each of the periods presented above.

⁽²⁾	Includes revenues generated from investee accounted for under the equity method of $0.5 million and $1.1 million for the three and six months ended June 30, 2015, respectively, and $0.7 million and $1.4 million for the corresponding 2014 periods.

At June 30, 2015 and December 31, 2014, EVERTEC had the following balances arising from transactions with related parties:


(Dollar amounts in thousands)	June 30, 2015		December 31, 2014
Cash and restricted cash deposits in affiliated bank	$	17,648	$	13,566

Indemnification assets from Popular reimbursement ⁽¹⁾
Accounts receivable	$	141	$	1,428

Other due/to from affiliate
Accounts receivable	$	21,472	$	17,006

Prepaid expenses and other assets	$	1,355	$	1,141

Accounts payable ⁽²⁾	$	5,010	$	5,260

Unearned income	$	9,569	$	8,154

Other long-term liabilities ⁽²⁾	$	45	$	45

⁽¹⁾	Recorded in connection with reimbursements from Popular regarding certain software license fees.

⁽²⁾

Includes an account payable of $0.2 million and a long-term liability of $45,000 for both June 30, 2015 and December 31, 2014, related to the unvested portion of stock options as a result of the equitable adjustment approved by our Board of Directors on December 18, 2012 that will be payable to executive officers and employees upon vesting of stock options.

At June 30, 2015, EVERTEC Group has a credit facility with Popular for $4.2 million, on behalf of EVERTEC Costa Rica, S.A., under which a letter of credit of a similar amount was issued.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 11 – Segment Information

The Company operates in three business segments: Merchant Acquiring, Payment Processing and Business Solutions.

The Company’s business segments are organized based on the nature of products and services. The Chief Operating Decision Maker (“CODM”) reviews their individual financial information to assess performance and to allocate resources.

The following tables set forth information about the Company’s operations by its three business segments for the periods indicated:


(Dollar amounts in thousands)	Merchant Acquiring, net		Payment Processing		Business Solutions		Other			Total
Three months ended June 30, 2015
Revenues		21,165		33,702		45,317		(6,943	) ⁽¹⁾		93,241
Income from operations		9,626		14,511		13,467		(9,982	) ⁽²⁾		27,622

Three months ended June 30, 2014
Revenues		19,827		33,252		44,888		(6,634	) ⁽¹⁾		91,333
Income from operations		8,777		15,314		12,113		(10,775	) ⁽²⁾		25,429

⁽¹⁾	Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾	Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.


(Dollar amounts in thousands)	Merchant Acquiring, net		Payment Processing		Business Solutions		Other			Total
Six months ended June 30, 2015
Revenues		41,256		66,802		90,181		(13,666	) ⁽¹⁾		184,573
Income from operations		19,017		28,220		27,241		(19,850	) ⁽²⁾		54,628

Six months ended June 30, 2014
Revenues		39,118		65,094		87,805		(13,251	) ⁽¹⁾		178,766
Income from operations		17,181		30,031		23,537		(20,431	) ⁽²⁾		50,318

⁽¹⁾	Represents the elimination of intersegment revenues for services provided by the Payment Processing segment to the Merchant Acquiring segment, and other miscellaneous intersegment revenues.

⁽²⁾	Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

The reconciliation of income from operations to consolidated net income for the three and six months ended June 30, 2015 and 2014 is as follows:


	Three months ended June 30,						Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			2015			2014
Segment income from operations
Merchant Acquiring	$	9,626		$	8,777		$	19,017		$	17,181
Payment Processing		14,511			15,314			28,220			30,031
Business Solutions		13,467			12,113			27,241			23,537

Total segment income from operations		37,604			36,204			74,478			70,749
Merger related depreciation and amortization and other unallocated expenses ⁽¹⁾		(9,982	)		(10,775	)		(19,850	)		(20,431	)

Income from operations	$	27,622		$	25,429		$	54,628		$	50,318

Interest expense, net		(6,083	)		(6,422	)		(12,180	)		(13,256	)
Earnings of equity method investment		84			343			199			664
Other income		764			385			1,049			2,376
Income tax expense		(2,120	)		(1,962	)		(4,366	)		(4,123	)

Net income	$	20,267		$	17,773		$	39,330		$	35,979

⁽¹⁾	Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

EVERTEC, Inc. Notes to Unaudited Consolidated Financial Statements

Note 12 – Subsequent Events

The Company extended voluntary termination offers to certain employees, which included special termination benefits. These termination benefits will result in one time payments due upon employee’s irrevocable acceptance of the offer. Upon the acceptance of the offers, the Company expects to incur in compensation expense related to these special termination benefits up to approximately $2.8 million during the third quarter of 2015.

On August 5, 2015, the Company’s Board of Directors (the “Board”) declared a regular quarterly cash dividend of $0.10 per share on the Company’s outstanding shares of common stock. The Board anticipates declaring this dividend in future quarters on a regular basis, however future declarations of dividends are subject to Board approval and may be adjusted as business needs or market conditions change. The cash dividend of $0.10 per share will be paid on September 3, 2015 to stockholders of record as of the close of business on August 17, 2015.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis (“MD&A”) covers: (i) the results of operations for the three and six months ended June 30, 2015 and 2014, respectively; and (ii) the financial condition as of June 30, 2015. You should read the following discussion and analysis in conjunction with the audited consolidated financial statements (the “Audited Consolidated Financial Statements”) and related notes for the fiscal year ended December 31, 2014, included in the Company’s Form 10-K and with the unaudited consolidated financial statements (the “Unaudited Consolidated Financial Statements”) and related notes appearing elsewhere herein. This MD&A contains forward-looking statements that involve risks and uncertainties. Our actual results may differ from those indicated in the forward-looking statements. See “Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements.

Except as otherwise indicated or unless the context otherwise requires, (a) the terms “EVERTEC,” “we,” “us,” “our,” “our Company” and “the Company” refer to EVERTEC, Inc. and its subsidiaries on a consolidated basis, (b) the term “Holdings” refers to EVERTEC Intermediate Holdings, LLC, but not to any of its subsidiaries and (c) the term “EVERTEC Group” refers to EVERTEC Group, LLC and its predecessor entities and their subsidiaries on a consolidated basis, including the operations of its predecessor entities prior to the Merger (as defined below). EVERTEC Inc.’s subsidiaries include Holdings, EVERTEC Group, EVERTEC Dominicana, SAS, EVERTEC Panamá, S.A., EVERTEC Costa Rica, S.A. (“EVERTEC CR”), EVERTEC Guatemala, S.A. and EVERTEC México Servicios de Procesamiento, S.A. de C.V. Neither EVERTEC nor Holdings conducts any operations other than with respect to its indirect or direct ownership of EVERTEC Group.

Executive Summary

EVERTEC is the leading full-service transaction processing business in Latin America, providing a broad range of merchant acquiring, payment processing and business process management services. According to the July 2014 Nilson Report, we are the largest merchant acquirer in the Caribbean and Central America and one of the largest in Latin America, based on total number of transactions. We serve 19 countries in the region from our base in Puerto Rico. We manage a system of electronic payment networks that process more than 2.1 billion transactions annually, and offer a comprehensive suite of services for core bank processing, cash processing and technology outsourcing. In addition, we own and operate the ATH network, one of the leading personal identification number (“PIN”) debit networks in Latin America. We serve a diversified customer base of leading financial institutions, merchants, corporations and government agencies with “mission-critical” technology solutions that enable them to issue, process and accept transactions securely. We believe our business is well-positioned to continue to expand across the fast-growing Latin American region.

We are differentiated, in part, by our diversified business model, which enables us to provide our varied customer base with a broad range of transaction-processing services from a single source across numerous channels and geographic markets. We believe this single-source capability provides several competitive advantages that will enable us to continue to penetrate our existing customer base with new, complementary services; win new customers; develop new sales channels and enter new markets. We believe these competitive advantages include:

•

Our ability to provide in one package a range of services that traditionally had to be sourced from different vendors;

•

Our ability to serve customers with disparate operations in several geographies with a single integrated technology solution that enables them to manage their business as one enterprise; and

•

Our ability to capture and analyze data across the transaction processing value chain and use that data to provide value-added services that are differentiated from those offered by pure-play vendors that serve only one portion of the transaction processing value chain (such as only merchant acquiring or payment processing).

Our broad suite of services spans the entire transaction processing value chain and includes a range of front-end customer-facing solutions such as the electronic capture and authorization of transactions at the point-of-sale, as well as back-end support services such as the clearing and settlement of transactions and account reconciliation for card issuers. These include: (i) merchant acquiring services, which enable point of sales (“POS”) and e-commerce merchants to accept and process electronic methods of payment such as debit, credit, prepaid and electronic benefit transfer (“EBT”) cards; (ii) payment processing services, which enable financial institutions and other issuers to manage, support and facilitate the processing for credit, debit, prepaid, automated teller machines (“ATM”) and EBT card programs; and (iii) business process management solutions, which provide “mission-critical” technology solutions such as core bank processing, as well as IT outsourcing and cash management services to financial institutions, corporations and governments. We provide these services through a highly scalable, end-to-end technology platform that we manage and operate in-house and that generates significant operating efficiencies that enable us to maximize profitability.

We sell and distribute our services primarily through a proprietary direct sales force with strong customer relationships. We are also building a variety of indirect sales channels that enable us to leverage the distribution capabilities of partners in adjacent markets, including value-added resellers. Also, we continue to pursue joint ventures and merchant acquiring alliances.

We benefit from an attractive business model, the hallmarks of which are recurring revenue, scalability, significant operating margins and low capital expenditure requirements. Our revenue is recurring in nature because of the “mission-critical” and embedded nature of the services we provide, the high switching costs associated with these services and the multi-year contracts we negotiate with our customers. Our business model enables us to continue to grow our business organically without significant additional capital expenditures.

Corporate Background

EVERTEC, Inc. (formerly known as Carib Latam Holdings, Inc.) is a Puerto Rico corporation organized in April 2012. Our main operating subsidiary, EVERTEC Group, LLC (formerly known as EVERTEC, LLC and EVERTEC, Inc., hereinafter “EVERTEC Group”), was organized in Puerto Rico in 1988. EVERTEC Group was formerly a wholly-owned subsidiary of Popular. On September 30, 2010, pursuant to an Agreement and Plan of Merger (as amended, the “Merger Agreement”), AP Carib Holdings, Ltd. (“Apollo”) acquired 51% indirect ownership interest in EVERTEC Group as part of a merger (the “Merger”) and EVERTEC Group became a wholly-owned subsidiary of EVERTEC Intermediate Holdings, LLC.

On April 17, 2012, EVERTEC Group was converted from a Puerto Rico corporation to a Puerto Rico limited liability company (the “Conversion”) for the purpose of improving its consolidated tax efficiency by taking advantage of recent changes to the Puerto Rico Internal Revenue Code, as amended (the “PR Code”), that permit limited liability companies to be treated as partnerships that are pass-through entities for Puerto Rico tax purposes. Concurrent with the Conversion, Holdings, which is our direct subsidiary, was also converted from a Puerto Rico corporation to a Puerto Rico limited liability company. Prior to these conversions, EVERTEC, Inc. was formed in order to act as the new parent company of Holdings and its subsidiaries, including EVERTEC Group. The transactions described above in this paragraph are collectively referred to as the “Reorganization.”

Separation from and Key Relationship with Popular

Prior to the Merger on September 30, 2010, EVERTEC Group was 100% owned by Popular, the largest financial institution in the Caribbean, and operated substantially as an independent entity within Popular. After the consummation of the Merger, Popular retained an indirect ownership interest in EVERTEC Group and is our largest customer. In connection with, and upon consummation of the Merger, EVERTEC Group entered into a 15-year Master Services Agreement (the “MSA”), and several related agreements with Popular. Under the terms of the MSA, Popular agreed to continue to use EVERTEC services on an ongoing and exclusive basis, for the duration of the agreement, on commercial terms consistent with those of our historical relationship. Additionally, Popular granted us a right of first refusal on the development of certain new financial technology products and services for the duration of the MSA.

Factors and Trends Affecting the Results of Our Operations

The ongoing migration from cash and paper methods of payment to electronic payments continues to benefit the transaction processing industry globally. We believe that the penetration of electronic payments in the markets in which we operate is significantly lower relative to the U.S. market, and that this ongoing shift will continue to generate substantial growth opportunities for our business. For example, currently the adoption of banking products, including electronic payments, in the Latin American region is lower relative to the more mature U.S. and European markets. We believe that the unbanked and underbanked population in our markets will continue to shrink, therefore driving incremental penetration and growth of electronic payments in Puerto Rico and other Latin American regions. We also benefit from the trend for financial institutions and government agencies to outsource technology systems and processes. Many medium- and small-size institutions in the Latin American markets in which we operate have outdated computer systems and updating these IT legacy systems is financially and logistically challenging. We believe that our technology and business outsourcing solutions cater to the evolving needs of the financial institution customer base we target, providing integrated, open, flexible, customer-centric and efficient IT products and services.

Our results of operations may be affected by regulatory changes that will occur as the payments industry has come under increased scrutiny from lawmakers and regulators.

Finally, our financial condition and results of operations are, in part, dependent on the economic and general conditions of the geographies in which we operate.

Overview of Results of Operations

The following briefly describes the components of revenue and expenses as presented in the unaudited consolidated statements of income and comprehensive income. Descriptions of the revenue recognition policies are detailed in Note 1 of the Notes to the Audited Consolidated Financial Statements included in our 2014 Form 10-K.

Merchant Acquiring, net . Merchant Acquiring revenue consists of income from services that allow merchants to accept electronic methods of payment. Our standard merchant contract has an initial term of one or three years, with automatic one-year renewal periods. In the Merchant Acquiring segment, sources of revenue include a discount fee (generally a percentage of the sales amount of a credit or debit card transaction value) and membership fees charged to merchants, debit network fees and rental income from POS devices and other equipment, net of credit card interchange and assessment fees charged by credit cards associations (such as VISA or MasterCard) or payment networks.

Merchant Acquiring accounted for $21.2 million, or 22.7% of total revenues, and $9.6 million or 25.6% of total segment income from operations for the three months ended June 30, 2015, compared with $19.8 million, or 21.7%, of total revenues and $8.8 million, or 24.2% of total segment income from operations for the comparable period in 2014. For the six months ended June 30, 2015, our Merchant Acquiring business accounted for $41.3 million, or 22.4% of total revenues and $19.0 million or 25.5% of total segment income from operations compared with $39.1 million, or 21.9%, of total revenues and $17.2 million, or 24.3%, of total segment income from operations for the six months ended June 30, 2014.

Payment Processing . Payment Processing revenue comprises income related to providing financial institutions access to the ATH network and other card networks, including related services such as authorization, processing, management and recording of ATM and POS transactions, and ATM management and monitoring. Payment Processing revenue also includes income from card processing services for debit or credit issuers, such as credit and debit card processing, authorization and settlement and fraud monitoring and control services; payment processing services such as payment and billing products for merchants, businesses and financial institutions and EBT; which principally consists of services to the Puerto Rico government for the delivery of government benefits to participants. Payment products include electronic check processing, automated clearing house (“ACH”), lockbox, interactive voice response and web-based payments through personalized websites, among others.

We generally enter into one to five year contracts with our private payment processing clients and one year contracts with our government payment processing clients. For ATH network and processing services, revenue is driven mainly by the number of transactions processed. Revenue is derived mainly from network fees, transaction switching and processing fees, and leasing of POS devices. For card issuer processing, revenue is dependent mostly upon the number of cardholder accounts on file, transactions and authorizations processed, the number of cards embossed and other processing services. For EBT services, revenue is derived mainly from the number of beneficiaries on file.

Payment Processing accounted for $26.8 million, or 28.7%, of total revenues and $14.5 million, or 38.6%, of total segment income from operations for the three months ended June 30, 2015, compared with $26.6 million, or 29.1%, of total revenues and $15.3 million, or 42.3%, of total segment income from operations for the three months ended June 30, 2014. For the six months ended June 30, 2015, our Payment Processing business accounted for $53.1 million, or 28.8%, of total revenues and $28.2 million, or 37.9%, of total segment income from operations, compared with $51.8 million, or 29.0%, of total revenues and $30.0 million, or 42.4%, of total segment income from operations for the six months ended June 30, 2014.

Business Solutions . Business Solutions revenue consists of income from a full suite of business process management solutions including core bank processing, network hosting and management, IT consulting services, business process outsourcing, item and cash processing, and fulfillment. We generally enter into one to five year contracts with our private Business Solutions clients and one year contracts with our government Business Solutions clients.

In addition, we are a reseller of hardware and software products and these resale transactions are generally one-time transactions. Revenue from sales of hardware or software products is recognized once the following four criteria are met: (i) evidence of an agreement exists, (ii) delivery and acceptance has occurred or services have been rendered, (iii) the selling price is fixed or determinable, and (iv) collection of the selling price is reasonably assured or probable, as applicable.

Business Solutions accounted for $45.3 million, or 48.6%, of total revenues and $13.5 million, or 35.8%, of total segment income from operations for the three months ended June 30, 2015, compared with $44.9 million, or 49.1%, of total revenues and $12.1 million, or 33.5%, of total segment income from operations for the three months ended June 30, 2014. For the six months ended June 30, 2015, Business Solutions accounted for $90.2 million, or 48.9%, of total revenues and $27.2 million, or 36.6%, of total segment income from operations, compared with $87.8 million, or 49.1%, of total revenues and $23.5 million, or 33.3%, of total segment income from operations for the six months ended June 30, 2014.

Cost of revenues . This caption includes the costs directly associated with providing services to customers, as well as product and software sales, including software licensing and maintenance costs; telecommunications costs; personnel and infrastructure costs to develop and maintain applications, operate computer networks and provide associated customer support, and other operating expenses.

Selling, general and administrative . This caption consists mainly of salaries, wages and related expenses paid to sales personnel, administrative employees and management, advertising and promotional costs, audit and legal fees, and other selling expenses.

Depreciation and amortization . This caption consists of our depreciation and amortization expense. Following the completion of the Merger, our depreciation and amortization expense increased as a result of the purchase price allocation adjustments to reflect the fair market value and revised useful life assigned to property and equipment and intangible assets in connection with the Merger.

Results of Operations

The following tables set forth certain consolidated financial information for the three and six months ended June 30, 2015 and 2014. The following tables and discussion should be read in conjunction with the information contained in our unaudited consolidated financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q.

Comparison of the three months ended June 30, 2015 and 2014

The following tables present the components of our unaudited consolidated statements of income and comprehensive income by business segment and the change in those amounts for the three months ended June 30, 2015 and 2014.

Revenues


	Three months ended June 30,
(Dollar amounts in thousands)	2015		2014		Variance
Merchant Acquiring, net	$	21,165	$	19,827	$	1,338	7	%
Payment Processing		26,759		26,618		141	1	%
Business Solutions		45,317		44,888		429	1	%

Total revenues	$	93,241	$	91,333	$	1,908	2	%

Total revenues for the three months ended June 30, 2015 increased by $1.9 million or 2% as compared to the corresponding 2014 period, driven by revenue growth across all our lines of business.

Merchant Acquiring revenue growth as compared to the same period last year was due mainly to an increase in sales volumes. The increase in sales volume is the result of an income tax amnesty established by the Puerto Rico government to pay past due taxes during the second quarter of 2015, offset by lower volumes for gas station and utilities led by lower oil prices.

Payment Processing revenue growth was driven mainly by an increase in transaction volumes. Revenue growth was mainly driven by an increase in transactions in our ATH debit network and processing business and higher accounts on file within our credit card business. Such increase was offset by a revenue recognized during the second quarter of 2014, for services provided related to a Department of Education program, while in 2015 this service was not provided.

Business Solutions revenues increase is mainly related to our core banking business due to new services and an increase in volume for existing services primarily related to the acquisition of a bank by one of our main customers in Puerto Rico. The increase was partially offset by a decrease in hardware and software sales.

Operating costs and expenses


	Three months ended June 30,
(Dollar amounts in thousands)	2015		2014		Variance
Cost of revenues, exclusive of depreciation and amortization shown below	$	40,665	$	39,051	$	1,614		4	%
Selling, general and administrative expenses		8,948		10,463		(1,515	)	-14	%
Depreciation and amortization		16,006		16,390		(384	)	-2	%

Total operating costs and expenses	$	65,619	$	65,904	$	(285	)	0	%

Total operating costs and expenses for the three months ended June 30, 2015 decreased $0.3 million as compared to the corresponding 2014 period.

Cost of revenues increase was mainly due to higher compensation expense, caused mainly by the share-based compensation plan established at the end of the first quarter of 2015.

Selling, general and administrative expenses decrease was due primarily to a decrease in professional fees as a result of the debt offering during the second quarter of 2014 which was withdrawn.

Depreciation and amortization expense decrease is related primarily to lower equipment depreciation expense.

Income from operations

The following table presents income from operations by reportable segments.


	Three months ended June 30,
(Dollar amounts in thousands)	2015			2014			Variance
Segment income from operations
Merchant Acquiring, net	$	9,626		$	8,777		$	849		10	%
Payment Processing		14,511			15,314			(803	)	-5	%
Business Solutions		13,467			12,113			1,354		11	%

Total segment income from operations		37,604			36,204			1,400		4	%
Merger related depreciation and amortization and other unallocated expenses ⁽¹⁾		(9,982	)		(10,775	)		793		7	%

Income from operations	$	27,622		$	25,429		$	2,193		9	%

⁽¹⁾	Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

Income from operations for the three months ended June 30, 2015 increased $2.2 million or 9% compared with to the corresponding 2014 period. The increase in income from operations was the result of the aforementioned factors affecting our revenues and operating costs and expenses.

See Note 11 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information on the Company’s reportable segments and for a reconciliation of income from operations to net income.

Non-operating income (expenses)


	Three months ended June 30,
(Dollar amounts in thousands)	2015			2014			Variance
Non-operating income (expenses)
Interest income	$	127		$	79		$	48		61	%
Interest expense		(6,210	)		(6,501	)		291		4	%
Earnings of equity method investment		84			343			(259	)	-76	%
Other income		764			385			379		101	%

Total non-operating expenses	$	(5,235	)	$	(5,694	)	$	458		8	%

Total non-operating expenses for the three months ended June 30, 2015 decreased $0.5 million compared with the corresponding 2014 period. This decrease in non-operating expenses was mostly a result of a decrease in interest expense due to lower balance outstanding and a decrease in earnings from the equity method investment.

Income tax expense

Income tax expense for the three months ended June 30, 2015 amounted to $2.1 million compared with an income tax expense of $2.0 million in the prior year period, mainly as a result of an increase in taxable income.

See Note 7 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding income taxes.

Comparison of the six months ended June 30, 2015 and 2014

Revenues


	Six months ended June 30,
(Dollar amounts in thousands)	2015		2014		Variance
Merchant Acquiring, net	$	41,256	$	39,118	$	2,138	5	%
Payment Processing		53,136		51,843		1,293	2	%
Business Solutions		90,181		87,805		2,376	3	%

Total revenues	$	184,573	$	178,766	$	5,808	3	%

Total revenues for the six months ended June 30, 2015 increased $5.8 million or 3% compared with the corresponding 2014 period, driven by revenue growth across all our lines of business.

Merchant Acquiring revenue growth was primarily a result of an increase in sales volumes due to the same trends explained above for the quarter.

Payment Processing revenue growth was driven mainly by an increase in transactions volumes due to the same trends explained above for the quarter.

Business Solutions revenues increase is primarily due to the reasons explained above for the quarter, coupled with an increase in hardware and software sales, partially offset by lower IT Consulting and IT management services.

Operating costs and expenses


	Six months ended June 30,
(Dollar amounts in thousands)	2015		2014		Variance
Cost of revenues, exclusive of depreciation and amortization shown below	$	80,460	$	76,919	$	3,541		5	%
Selling, general and administrative expenses		16,651		18,525		(1,874	)	-10	%
Depreciation and amortization		32,834		33,004		(170	)	-1	%

Total operating costs and expenses	$	129,945	$	128,448	$	1,497		1	%

Total operating costs and expenses for the six months ended June 30, 2015 increased $1.5 million or 1% as compared with the corresponding 2014 period.

Cost of revenue increase was due mainly to the share-based compensation increase coupled with higher cost of sales incurred as a result of the aforementioned increase in hardware and software sales.

Selling, general and administrative expenses decrease was mainly due to a decrease in professional fees primarily related to the withdrawn debt refinancing transaction as mentioned above.

Depreciation and amortization expense for the six months ended June 30, 2015 decreased $0.2 million or 1% compared with the corresponding 2014 period.

Income from operations

The following table presents income from operations by reportable segments.


	Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			Variance
Segment income from operations
Merchant Acquiring, net	$	19,017		$	17,181		$	1,836		11	%
Payment Processing		28,220			30,031			(1,811	)	-6	%
Business Solutions		27,241			23,537			3,704		16	%

Total segment income from operations		74,478			70,749			3,730		5	%
Merger related depreciation and amortization and other unallocated expenses ⁽¹⁾		(19,850	)		(20,431	)		581		3	%

Income from operations	$	54,628		$	50,318		$	4,311		9	%

⁽¹⁾	Primarily represents non-operating depreciation and amortization expenses generated as a result of the Merger and certain non-recurring fees and expenses.

Income from operations for the six months ended June 30, 2015 increased $4.3 million or 9% as compared to the corresponding 2014 period. The increase in income from operations was the result of the aforementioned factors affecting revenues and operating costs and expenses.

Non-operating income (expenses)


	Six months ended June 30,
(Dollar amounts in thousands)	2015			2014			Variance
Non-operating income (expenses)
Interest income	$	231		$	154		$	77		50	%
Interest expense		(12,411	)		(13,410	)		999		7	%
Earnings of equity method investment		199			664			(465	)	-70	%
Other income		1,049			2,376			(1,327	)	56	%

Total non-operating expenses	$	(10,932	)	$	(10,216	)	$	(717	)	-7	%

Total non-operating expenses for the six months ended June 30, 2015 increased $0.7 million compared with the corresponding 2014 period. The increase is mainly due to lower other income as a result of lower foreign currency exchange gains related to the translation of an intercompany loan with our Costa Rica subsidiary as well as lower gains on purchases of local currency.

Income tax expense

Income tax expense for the six months ended June 30, 2014 amounted to $4.4 million compared with an income tax expense of $4.1 million for the corresponding 2014 period. The increase in income tax expense is a result of an increase in taxable income.

See Note 7 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding income taxes.

Liquidity and Capital Resources

Our principal source of liquidity is cash generated from operations, and our primary liquidity requirements are the funding of capital expenditures and working capital needs. We also have a $100.0 million revolving credit facility, of which $96.0 million was available as of June 30, 2015.

At June 30, 2015, we had cash of $38.8 million, of which $26.3 million resides in our subsidiaries located outside of Puerto Rico for purposes of (i) funding the respective subsidiary’s current business operations and (ii) funding potential future investment outside of Puerto Rico. We intend to indefinitely reinvest these funds outside of Puerto Rico, and based on our liquidity forecast, we will not need to repatriate this cash to fund the Puerto Rico operations or to meet debt-service obligations. However, if in the future we determine that we no longer need to maintain such cash balances within our foreign subsidiaries, we may elect to distribute such cash to the Company in Puerto Rico. Distributions from the foreign subsidiaries to Puerto Rico may be subject to tax withholding and other tax consequences.

Our primary use of cash is for operating expenses, working capital requirements, capital expenditures, dividend payments and debt service.

Based on our current level of operations, we believe our cash flows from operations and the available senior secured revolving credit facility will be adequate to meet our liquidity needs for the next twelve months. However, our ability to fund future operating expenses, dividend payments and capital expenditures and our ability to make scheduled payments of interest, to pay principal on or refinance our indebtedness and to satisfy any other of our present or future debt obligations will depend on our future operating performance, which will be affected by general economic, financial and other factors beyond our control.


	Six months ended June 30,
(Dollar amounts in thousands)	2015			2014
Cash provided by operating activities	$	76,725		$	67,537
Cash used in investing activities		(15,938	)		(9,495	)
Cash used in financing activities		(54,064	)		(52,696	)

Increase in cash	$	6,723		$	5,346

Net cash provided by operating activities for the six months ended June 30, 2015 was $76.7 million compared with cash provided by operating activities of $67.5 million for the corresponding 2014 period. The increase of $9.2 million was mainly driven by higher income from operations and a decrease in accounts receivable.

Net cash used in investing activities for the six months ended June 30, 2015 was $15.9 million compared with $9.5 million for the corresponding period in 2014. The increase was mainly attributable to higher purchases of property and equipment in the 2015 period.

Net cash used in financing activities for the six months ended June 30, 2015 was $54.1 million as compared with $52.7 million for the corresponding 2014 period. Increase in cash used in financing activities is due to $10.0 million used to repurchase our common stock offset by lower short term repayments of $8.0 million as compared to last year.

Capital Resources

Our principal capital expenditures are for hardware and computer software (purchased and internally developed) and additions to property and equipment. We invested approximately $15.4 million and $9.7 million for the six months ended June 30, 2015 and 2014, respectively. Capital expenditures are expected to be funded by cash flow from operations and, if necessary, borrowings under our revolving credit facility.

Dividend Payments

We currently have a policy under which we pay a regular quarterly dividend on our common stock, subject to the declaration thereof by our Board each quarter. On February 18, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock, which was paid on March 19, 2015 to stockholders of record as of February 2, 2015.

On May 6, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock. The cash dividend of $0.10 per share was paid on June 5, 2015 to stockholders of record as of close of business on May 18, 2015.

On August 5, 2015, our Board declared a quarterly cash dividend of $0.10 per share of common stock. The cash dividend of $0.10 per share will be paid on September 3, 2015 to stockholders of record as of close of business on August 17, 2015.

Financial Obligations

Senior Secured Credit Facilities

Term A Loan

As of June 30, 2015, the unpaid principal balance of the Term A Loan was $270.0 million. The Term A Loan requires principal payments on the last business day of each quarter equal to (a) 1.250% of the original principal amount commencing on September 30, 2013 through June 30, 2016; (b) 1.875% of the original principal amount from September 30, 2016 through June 30, 2017; (c) 2.50% of the original principal amount from September 30, 2017 through March 31, 2018; and (d) the remaining outstanding principal amount on the maturity of the Term A Loan on April 17, 2018. For the six months ended June 30, 2015, the Company made principal payments amounting to $7.5 million on the Term A Loan. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR plus an applicable margin ranging from 2.00% to 2.50% or (b) Base Rate, as defined in our 2013 Credit Agreement, plus an applicable margin ranging from 1.00% to 1.50%. The Term A Loan has no LIBOR or Base Rate minimum or floor.

Term B Loan

As of June 30, 2015, the unpaid principal balance of the Term B Loan was $392.0 million. The Term B Loan requires principal payments on the last business day of each quarter equal to 0.250% of the original principal amount commencing on September 30, 2013 and the remaining outstanding principal amount on the maturity of the Term B Loan on April 17, 2020. For the six months ended June 30, 2015, the Company made principal payments amounting to $2.0 million on the Term B Loan. Interest is based on EVERTEC Group’s first lien secured net leverage ratio and payable at a rate equal to, at the Company’s option, either (a) LIBOR plus an applicable margin ranging from 2.50% to 2.75%, or (b) Base Rate plus an applicable margin ranging from 1.50% to 1.75%. The LIBOR and Base Rate are subject to floors of 0.75% and 1.75%, respectively.

Revolving Credit Facility

The revolving credit facility has a balance up to $100.0 million, with an interest rate on loans calculated the same as the applicable Term A Loan rate. The facility matures on April 17, 2018 and has a “commitment fee” payable one business day after the last business day of each quarter calculated based on the daily unused commitment during the preceding quarter. The commitment fee for the unused portion of this facility ranges from 0.125% to 0.375% based on EVERTEC Group’s first lien secured net leverage ratio. As of June 30, 2015, the outstanding balance of the revolving credit facility was $4.0 million. For the six months ended June 30, 2015, the Company made payments amounting to $19.0 million on the revolving credit facility.

All loans may be prepaid without premium or penalty. The new senior secured credit facilities allow EVERTEC Group to obtain, on an uncommitted basis at the sole discretion of participating lenders, an incremental amount of term loan and/or revolving credit facility commitments not to exceed the greater of (i) $200.0 million and (ii) maximum amount of debt that would not cause EVERTEC Group’s pro forma first lien secured net leverage ratio to exceed 4.25 to 1.00.

The senior secured revolving credit facility is available for general corporate purposes and includes borrowing capacity available for letters of credit and for short-term borrowings referred to as swing line borrowings. All obligations under the new senior secured credit facilities are unconditionally guaranteed by Holdings and, subject to certain exceptions, each of EVERTEC Group’s existing and future wholly-owned subsidiaries. All obligations under the new senior secured credit facilities, and the guarantees of those obligations, are secured by substantially all of EVERTEC Group’s assets and the assets of the guarantors, subject to certain exceptions.

See Note 4 of the Notes to Unaudited Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information.

Note payable

In December 2014 and June 2015, EVERTEC entered into a non-interest bearing $4.6 million and $1.1 million, respectively, financing agreements to purchase certain softwares. The notes will be repaid over a 36-month term. As of June 30, 2015 the outstanding principal balance of the notes payable is $5.0 million. The current portion of these notes is recorded as part of accounts payable and the long-term portion is included in other long-term liabilities.

Covenant Compliance

The credit facilities contain various restrictive covenants. The Term A Loan and the revolving facility (subject to certain exceptions) require EVERTEC Group to maintain on a quarterly basis a specified maximum senior secured leverage ratio of up to 6.60 to 1.00 as defined in the 2013 Credit Agreement (total first lien senior secured debt to Adjusted EBITDA). In addition, the 2013 Credit Agreement, among other things: (a) limits EVERTEC Group’s ability and the ability of its subsidiaries to incur additional indebtedness, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (b) restricts EVERTEC Group’s ability to enter into agreements that would limit the ability of its subsidiaries to pay dividends or make certain payments to its parent company; and (c) places restrictions on EVERTEC Group’s ability and the ability of its subsidiaries to merge or consolidate with any other person or sell, assign, transfer, convey or otherwise dispose of all or substantially all of their assets. However, all of the covenants in these agreements are subject to significant exceptions. As of June 30, 2015, the senior secured leverage ratio was 3.4 to 1.00 and we were in compliance with the applicable restrictive covenants under the 2013 Credit Agreement.

In this Quarterly Report on Form 10-Q, we refer to the term “Adjusted EBITDA” to mean EBITDA as so defined and calculated for purposes of determining compliance with the senior secured leverage ratio based on the financial information for the last twelve months at the end of each quarter.

Net Income Reconciliation to EBITDA, Adjusted EBITDA and Adjusted Net Income

We define “EBITDA” as earnings before interest, taxes, depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted to exclude unusual items and other adjustments described below. We define “Adjusted Net Income” as net income adjusted to exclude unusual items and other adjustments described below.

We present EBITDA and Adjusted EBITDA because we consider them important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. In addition, our presentation of Adjusted EBITDA is consistent with the equivalent measurements that are contained in the senior secured credit facilities in testing EVERTEC Group’s compliance with covenants therein, such as the senior secured leverage ratio. We use Adjusted Net Income to measure our overall profitability because it better reflects our cash flows generation by capturing the actual cash taxes paid rather than our tax expense as calculated under GAAP and excludes the impact of the non-cash amortization and depreciation that was created as a result of the Merger. In evaluating EBITDA, Adjusted EBITDA and Adjusted Net Income, you should be aware that in the future we may incur expenses such as those excluded in calculating them. Further, our presentation of these measures should not be construed as an inference that our future operating results will not be affected by unusual or nonrecurring items.

Some of the limitations of EBITDA, Adjusted EBITDA and Adjusted Net Income are as follows:

•

they do not reflect cash outlays for capital expenditures or future contractual commitments;

•

they do not reflect changes in, or cash requirements for, working capital;

•

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements;

•

in the case of EBITDA and Adjusted EBITDA, they do not reflect interest expense, or the cash requirements necessary to service interest, or principal payments, on indebtedness;

•

in the case of EBITDA and Adjusted EBITDA, they do not reflect income tax expense or the cash necessary to pay income taxes; and

•

other companies, including other companies in our industry, may not use EBITDA, Adjusted EBITDA and Adjusted Net Income or may calculate EBITDA, Adjusted EBITDA and Adjusted Net Income differently than as presented in this Report, limiting their usefulness as a comparative measure.

EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per common share are not measurements of liquidity or financial performance under GAAP. You should not consider EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per common share as alternatives to cash flows from operating activities or any other performance measures determined in accordance with GAAP, as an indicator of cash flows, as a measure of liquidity or as an alternative to operating or net income determined in accordance with GAAP.

A reconciliation of net income to EBITDA, Adjusted EBITDA and Adjusted Net Income is provided below:


(Dollar amounts in thousands)	Three months ended June 30, 2015			Six months ended June 30, 2015			Twelve months ended June 30, 2015			Three months ended June 30, 2014			Six months ended June 30, 2014
Net income	$	20,267		$	39,330		$	70,883		$	17,773		$	35,979
Income tax expense		2,120			4,366			7,821			1,962			4,123
Interest expense, net		6,083			12,180			24,677			6,422			13,256
Depreciation and amortization		16,006			32,834			65,818			16,390			33,004

EBITDA		44,476			88,710			169,199			42,547			86,362
Software maintenance reimbursement and other costs ⁽¹⁾		455			929			2,068			563			1,109
Equity income ⁽²⁾		(9	)		(199	)		(676	)		(15	)		(338	)
Compensation and benefits ⁽³⁾		1,831			2,664			7,891			437			925
Transaction, refinancing and other non-recurring fees ⁽⁴⁾		411			732			6,146			1,999			2,516
Purchase accounting ⁽⁵⁾		(9	)		(12	)		261			(8	)		173

Adjusted EBITDA		47,155			92,824			204,998			45,523			90,747
Operating depreciation and amortization ⁽⁶⁾		(6,638	)		(14,099	)		(28,853	)		(7,281	)		(14,764	)
Cash interest expense, net ⁽⁷⁾		(5,309	)		(10,642	)		(21,583	)		(5,655	)		(11,410	)
Cash income taxes ⁽⁸⁾		(981	)		(3,601	)		(4,175	)		(402	)		(402	)

Adjusted net income	$	34,227		$	64,482		$	130,278		$	32,185		$	64,171

Adjusted net income per common share:
Basic	$	0.44		$	0.83					$	0.41		$	0.82
Diluted	$	0.44		$	0.83					$	0.41		$	0.81
Shares used in computing adjusted net income per common share:
Basic		77,457,322			77,631,339						78,410,554			78,393,042
Diluted		77,697,861			77,780,202						79,199,964			79,204,642

⁽¹⁾	Primarily represents reimbursements received for certain software maintenance expenses as part of the Merger.

⁽²⁾	Represents the elimination of non-cash equity earnings from our 19.99% equity investment in CONTADO, net of cash dividends received.

⁽³⁾	Primarily represents non-cash equity based compensation expense.

⁽⁴⁾	Represents fees and expenses associated with non-recurring fees and corporate transactions, including costs related to the CEO succession in the fourth quarter of 2014 and fees associated with the withdrawn senior secured notes offerings in the second quarter of 2014.

⁽⁵⁾	Represents the elimination of the effects of purchase accounting in connection with certain software related arrangements where EVERTEC receives reimbursements from Popular.

⁽⁶⁾	Represents operating depreciation and amortization expense which excludes amortization generated as a result of the Merger.

⁽⁷⁾	Represents interest expense, less interest income, as they appear on our consolidated statement of income and comprehensive income, adjusted to exclude non-cash amortization of the debt issuance costs, premium and accretion of discount and other adjustments related to interest expense.

⁽⁸⁾	Represents cash taxes paid.

Off Balance Sheet Arrangements

In the ordinary course of business the Company may enter into commercial commitments. As of June 30, 2015, we had an outstanding letter of credit of $0.9 million with a maturity of less than three months. Also, as of June 30, 2015 we had an off balance sheet item of $4.2 million related to the unused amount of the windfall tax benefit that is available to offset future taxable income.

See Note 7 of the Unaudited Consolidated Financial Statements within Item I of this Quarterly Report on Form 10-Q for additional information related to this off balance sheet item.

Seasonality

Our payment businesses generally experiences increased activity during the traditional holiday shopping periods and around other nationally recognized holidays.

Effect of Inflation

While inflationary increases in certain input costs, such as occupancy, labor and benefits, and general administrative costs, have an impact on our operating results, inflation has had minimal net effect on our operating results during the last three years as overall inflation has been offset by increased selling process and cost reduction actions. We cannot assure you, however, that we will not be affected by general inflation in the future.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to market risks arising from our normal business activities. These market risks principally involve the possibility of changes in interest rates that will adversely affect the value of our financial assets and liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse changes in market rates and prices.

Interest rate risks

We issued floating-rate debt which is subject to fluctuations in interest rates. Our senior secured credit facilities accrue interest at variable rates and only the Term B Loan is subject to floors or minimum rates. A 100 basis point increase in interest rates over our floor(s) on our debt balances outstanding as of June 30, 2015 under the senior secured credit facilities would increase our annual interest expense by approximately $6.6 million, excluding the revolving credit facility. The impact on future interest expense as a result of future changes in interest rates will depend largely on the gross amount of our borrowings at that time.

Foreign exchange risk

We conduct business in certain countries in Latin America. Some of this business is conducted in the countries’ local currencies. The resulting foreign currency translation adjustments, from operations for which the functional currency is other than the U.S. dollar, are reported in accumulated other comprehensive (loss) income in the unaudited consolidated balance sheet, except for highly inflationary environments in which the effects would be included in Other operating income in the consolidated statements of income and comprehensive (loss) income. At June 30, 2015, the Company had $0.8 million in a favorable foreign currency translation adjustment as part of accumulated other comprehensive (loss) income compared with an unfavorable foreign currency translation adjustment of $6.5 million at December 31, 2014.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company, under the direction of the Chief Executive Officer and the Chief Financial Officer, has established disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act. Based upon their evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2015, the Company’s disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rule 13a -15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are defendants in various lawsuits or arbitration proceedings arising in the ordinary course of business. Management believes, based on the opinion of legal counsel and other factors, that the aggregated liabilities, if any, arising from such actions will not have a material adverse effect on the financial condition, results of operations and the cash flows of the Company.

Item 1A. Risk Factors

In addition to the risk factors previously disclosed under Item 1A. of the Company’s 2014 Form 10-K, investors should consider the following updated risk:

Rating downgrades on the Government of Puerto Rico’s debt obligations could slow the Puerto Rico economy and affect consumer spending

In February 2014, the principal nationally recognized statistical rating organizations downgraded the general-obligation bonds of the Commonwealth of Puerto Rico and other obligations of Puerto Rico instrumentalities to non-investment grade categories. The downgrades are based mostly on concerns about financial flexibility and a reduced capacity to borrow in the financial markets. If the government is unable to access the capital markets to place new debt or roll its upcoming maturities, the government may reduce spending, impose new taxes, and take other actions which could slow the economy. A prolonged recession or future fiscal measures may also impact our business. The continuing challenging economic environment could affect our customer base, depress general consumer spending, and lengthen the government’s payments, thus increasing our government accounts receivables; these outcomes, if realized, could have a material adverse effect on our business, financial condition and results of operations.

Further ratings downgrades for the Commonwealth of Puerto Rico and its instrumentalities (collectively the “Government”) have occurred since then and there continues to be significant doubt regarding the Government’s liquidity and its ability to pay outstanding debt obligations. Certain measures have been taken to attend the fiscal crisis, including an increase in the sales tax rate and several spending cuts. Furthermore, the Government has shown indications that it might not be able to make certain scheduled payments on bonds. On August 3, 2015, the Government defaulted for the first time on the Public Finance Corporation bonds and only made a partial interest payment on that obligation. In addition, the Government halted deposits into the fund that pays its general obligation bonds, although has expressed its intentions to deposit the funds on time to comply with scheduled payments. The Government has expressed its intention to continue taking actions to improve the liquidity of the General Fund and is attempting to renegotiate some terms of certain outstanding bonds.

At June 30, 2015, the Company has no direct exposure to the Puerto Rico government, instrumentalities or municipalities’ debt obligations. The Company has accounts receivable with the Puerto Rico government and its agencies amounting to $17.4 million as of June 30, 2015.

The foregoing risk and the risks described in our 2014 Form 10-K and elsewhere in this report are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes repurchases of the Company’s common stock in the six month period ended June 30, 2015:


Period	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of a publicly announced program		Approximate dollar value of shares that may yet be purchased under the program
1/1/2015 - 3/31/2015 ⁽¹⁾		452,175		22.114		452,175	$	40,000,000

Total		452,175	$	22.114		452,175

⁽¹⁾	On September 24, 2014, the Company announced a stock repurchase program authorizing the purchase of up to $75 million of the Company’s common stock over the next twelve months.

Item 3. Defaults Upon Senior Securities

None.

Item 4.

Mine Safety Disclosures

Not applicable.

Item 5.

Other Information

None.

Item 6.

Exhibits


10.49*+		Amendment No. 1 to the Amended and Restated Employment Agreement, dated as of April 1, 2015, by and between EVERTEC Group, LLC and Morgan M. Schuessler, Jr.

10.50*+		Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of April 1, 2015, by and between EVERTEC, Inc. and Morgan M. Schuessler, Jr.

10.51*+		Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of April 1, 2015, by and between EVERTEC, Inc. and Morgan M. Schuessler, Jr.

10.52*+		Employment Agreement, dated as of May 25, 2015, by and between EVERTEC Group, LLC and Mariana Lischner Goldvarg.

10.53*+		Restricted Stock Unit Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Mariana Lischner Goldvarg.

10.54*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Frank G. D’Angelo.

10.55*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Alan H. Schumacher.

10.56*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Brian J. Smith.

10.57*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Jorge Junquera.

10.58*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Olga Botero.

10.59*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Teresita Loubriel.

10.60*+		Restricted Stock Award Agreement under the EVERTEC, Inc. 2013 Equity Incentive Plan, dated as of June 1, 2015, by and between EVERTEC, Inc. and Thomas W. Swidarski.

31.1*		CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1**		CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2**		CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS XBRL***		Instance document

101.SCH XBRL***		Taxonomy Extension Schema

101.CAL XBRL***		Taxonomy Extension Calculation Linkbase

101.DEF XBRL***		Taxonomy Extension Definition Linkbase

101.LAB XBRL***		Taxonomy Extension Label Linkbase

101.PRE XBRL***		Taxonomy Extension Presentation Linkbase

*	Filed herewith.

**	Furnished herewith.

***

Pursuant to applicable securities laws and regulations, the Company is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions of the federal securities laws as long as the Company has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. Users of this data are advised that, pursuant to Rule 406T, these interactive data files are deemed not filed and otherwise are not subject to liability.

+	This exhibit is a management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 10.49

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This AMENDMENT NO. 1 TO THE AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “ Amendment ”) is made by and between EVERTEC GROUP, LLC, a Puerto Rico limited liability company (the “ Company ”), and MORGAN M. SCHUESSLER, JR. (“Executive” and, collectively with the Company, the “ Parties ”), as of this 1 ^st day of April, 2015 (the “ Effective Date ”).

WHEREAS , the Parties previously entered into that certain Amended and Restated Employment Agreement dated December 17, 2014 (the “ Agreement ”); and

WHEREAS , pursuant to Section 9(f) of the Agreement the Parties desire to amend the Agreement to reflect certain changes with respect to the terms, provisions and conditions set forth therein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows:

1.	General . Except as otherwise provided in this Amendment, all capitalized terms used herein shall have the meanings ascribed thereto in the Agreement.

2.	Long-Term Incentive Compensation . Section 2(d)(iii) is hereby amended and restated in its entirety with the following language:

“(iii) Long-Term Incentive Compensation . To the extent that Executive is to be granted any long-term incentive compensation, such long-term compensation shall be subject to the terms of the applicable award agreement, the Evertec 2013 Equity Incentive Plan (or any successor plan thereto, the “ 2013 Plan ”) and any long-term incentive plan adopted under the 2013 Plan. More specifically, within ten (10) business days of the Start Date, Executive will receive (A) a restricted stock unit grant equivalent to $2,000,000 which shall vest in substantially equal installments on the first three anniversary dates of the Start Date (the “ RSU Grant ”), subject to Executive’s continued employment by the Company through each such anniversary date and (B) a restricted stock unit grant equivalent to no less than $1,950,000, 50% of which shall time vest in substantially equal installments on January 1, 2016, January 1, 2017 and January 1, 2018 (subject to Executive being still employed on the applicable vesting dates) and the remaining 50% of which shall vest and Executive shall earn between 0% and 200% of such remainder based on the Company’s financial performance (the attainment of which will be determined by certain performance metrics established by the Compensation Committee of the Board and the Board after appropriate consultation with Executive) over the three year period which starts on January 1, 2015 and ends on January 1, 2018, subject to Executive’s continued employment by the Company throughout the end of such period.”

3.	It is understood and agreed by both Parties that all other terms and conditions of the Agreement, as amended hereby, together with any and all related documentation, shall remain in full force and effect.

4.	In the event of a conflict between the terms of this Amendment and those of the Agreement, the terms of this Amendment shall govern. This Amendment shall be governed by the laws of the State of New York.

IN WITNESS WHEREOF, the Parties have executed this Amendment to be binding as of the Effective Date set forth above, regardless of the actual date of the execution and delivery hereof.


EXECUTIVE		EVERTEC GROUP, LLC

By:	/s/ Morgan M. Schuessler, Jr.	By:	/s/ Frank G. D’Angelo
Name:	Morgan M. Schuessler, Jr.	Name:	Frank G. D’Angelo
Title:	President & Chief Executive Officer	Title:	Chairman of the Board of Directors

Exhibit 10.50

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “ Agreement ”) is made as of this 1 ^st day of April, 2015 (the “ Date of Grant ”), by and between EVERTEC, Inc. (the “ Company ”) and the person whose signature, name and title appear in the signature block hereof (the “ Participant ”). Defined terms used but not otherwise defined herein will have the meanings attributed to them in the Plan (defined below) and the Participant’s employment agreement dated as of December 17, 2014, as amended (the “ Employment Agreement ”).

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

WHEREAS, Section 9 of the Plan authorizes the grant (the “ Award ”) of restricted stock units (“ RSUs ”) with respect to the common stock, par value $0.01 per share, of the Company (“ Common Stock ”); and

WHEREAS, in connection with the Participant’s service as an employee of the Company or any of its affiliates and subsidiaries (the “ Employment ”), the Company desires to grant RSUs to the Participant, subject to the terms and conditions of the Plan and this Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of RSUs .

(a)

In consideration of the Employment, the Company will grant to the Participant 92,294 RSUs.

(b)

Each RSU represents the unfunded and unsecured promise of the Company to deliver to the Participant one share of Common Stock on the Settlement Date (as defined in Section 6 hereof), subject to the discretion of the Company to settle the Award on a cash basis. The Award granted hereunder shall be null and void unless the Participant accepts this Agreement by executing it in the appropriate signature block provided and promptly returning it to the Company.

(c)

The RSUs shall be credited to a separate account maintained for the Participant on the books of the Company (the “ Account ” ). All amounts credited to the Account under this Agreement shall continue for all purposes to be part of the general assets of the Company. The Participant’s interest in the Account shall make the Participant only a general, unsecured creditor of the Company.

2.	Purchase Price . The purchase price of the RSUs shall be deemed to be zero U.S. dollars ($0) per share.

Vesting . The RSUs shall vest and become non-forfeitable in three (3) substantially equal installments (30,764 / 30,765 / 30,765) on each of the first three (3) anniversaries of the Date of Grant (each such date, a “ Vesting Date ”), provided that the Participant is actively carrying out his duties in connection with the Employment at all times from the Date of Grant through each respective Vesting Date.

4.	Termination . For purposes of this Section 4 , “ *Termination Date* ” is the date the Participant’s Employment is terminated under the circumstances set forth in (a) or (b) below.

(a)

In the event the Employment is terminated (i) by the Company without Cause; (ii) by the Participant for Good Reason; or (iii) due to the Participant’s death or Disability, any of the RSUs that have not become vested as of the Termination Date shall automatically vest.

(b)

In the event the Employment is terminated (i) by the Company for Cause; or (ii) by the Participant without Good Reason, any of the RSUs that have not become vested as of the Termination Date shall automatically be forfeited.

Dividend Equivalents . If the Company pays an ordinary cash dividend on its outstanding Common Stock at any time between the Date of Grant and the Vesting Date — provided that the Record Date (which means the date on which stockholders of record are determined for purposes of paying a cash dividend on issued and outstanding shares of Common Stock) for any such dividend falls after the Date of Grant — the Participant shall receive a lump sum cash payment on the Settlement Date (as defined in Section 6 below) equal to the aggregate amount of the cash dividends paid by the Company on a single share of Common Stock multiplied by the number of RSUs that are settled on the Settlement Date (the “ Dividend Payment ”).

6.	Settlement . Within sixty (60) days following the Vesting Date or the day any RSUs are automatically vested in accordance with the terms and conditions of this Agreement (the “ *Settlement Date* ”):

(a)

The RSUs shall cease to be credited to the Account;

(b)

The Company shall, in its discretion, either (i) issue and deliver to the Participant one share of Common Stock for each vested RSU (the “ RSU Shares ” ) and enter the Participant’s name as a shareholder of record or beneficial owner with respect to the RSU Shares on the books of the Company, or (ii) settle the Award on a cash basis; and

(c)

The Company shall calculate the Dividend Payment.

Taxes . Unless otherwise required by applicable law, on the Settlement Date, (a) the RSU Shares and the Dividend Payment will be considered ordinary income for tax purposes and subject to all applicable payroll taxes; (b) the Company shall report such income to the appropriate taxing authorities as it determines to be necessary and appropriate; (c) the Participant shall be responsible for payment of any taxes due in respect of the RSU Shares and the Dividend Payment; and (d) the Company shall withhold taxes in respect of the RSU Shares and the Dividend Payment (a “ Tax Payment ”); provided, however, that the Participant may elect, subject to the Company’s approval in its sole discretion, to satisfy his or her obligation to pay the Tax Payment by authorizing the Company to withhold from any RSU Shares otherwise to be delivered to the Participant, a number of whole shares of Common Stock having a Fair Market Value equal to the Tax Payment (i.e., a “cashless exercise”). If the Participant fails to pay any required Tax Payment, the Company may, in its discretion, deduct any Tax Payments from any amount then or thereafter payable by the Company to the Participant and take such other action as deemed necessary to satisfy all obligations for the Tax Payment (including reducing the number of RSU Shares delivered on the Settlement Date). The Participant agrees to pay the Company in the form of a check or cashier’s check any overage of the Tax Payment paid by the Company as a result of making whole any partial RSU Share issued through a cashless exercise. Furthermore, the Participant acknowledges and agrees that the Participant will be solely responsible for making any Tax Payment directly to the appropriate taxing authorities should the Participant opt not to satisfy his or her Tax Payment through a cashless exercise.

Restrictions . RSU Shares that are issued in connection with a particular Vesting Date may only be sold, pledged, transferred or otherwise disposed of, whether with or without consideration and whether voluntarily or involuntarily or by operation of law, in accordance with the Company’s Stock Ownership Guidelines and the Company’s Insider Trading Policy and Procedures as in effect from time to time (or by will or the laws of descent and distribution or as otherwise permitted by the Committee). The RSUs granted hereunder may not be subject to lien, garnishment, attachment or other legal process and may not be transferred except to the extent permitted by the Plan. The Participant agrees to execute any documents the Company may require to effect these restrictions.

Compliance with Laws and Regulations . The issuance, delivery and transfer of RSU Shares shall be subject to compliance by the Company and the Participant with all applicable requirements of securities laws and with all applicable requirements of any stock exchange on which the Company’s Common Stock may be listed at the time of such issuance, delivery or transfer. If in order to issue and deliver the RSU Shares it is required or desirable to (a) list, register or qualify the RSU Shares upon any securities exchange or under any law; (b) receive the consent or approval of any governmental body; and/or (c) take any other action as a condition of, or in connection with, the vesting of the RSUs or delivery of the RSU Shares hereunder, the RSUs shall not vest nor will the RSU Shares be delivered unless such listing, registration, qualification, consent, approval or action shall have been effected, obtained or taken, free of any conditions not approved by the Company (which approval will not be unreasonably withheld). The Company agrees to use commercially reasonable efforts to effect, obtain or take any such listing, registration, qualification, consent, approval or action.

10.

Rights as Stockholder . Upon and following the Settlement Date, the Participant shall be the record or beneficial owner of the RSU Shares unless and until such shares are sold or otherwise disposed of, and, if a record owner, shall be entitled to all rights of a stockholder of the Company (including voting rights). The Participant acknowledges and agrees that prior to the Settlement Date, the Participant shall not be deemed for any purpose to be the owner of the shares of Common Stock underlying the RSUs and shall not have any rights of a stockholder as a result of receiving the Award under this Agreement other than with respect to the Participant’s right to receive payment pursuant to Section 5 . The Participant acknowledges and agrees that, with respect to each RSU credited to the Account, the Participant shall have no voting rights with respect to the Company unless and until such RSU is settled in RSU Shares pursuant to Section 6 hereof.

11.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

12.

Notice . Every notice or other communication relating to this Agreement shall be made in writing either (a) by personal delivery to the party entitled thereto, (b) by facsimile with confirmation of receipt, (c) by certified mail to the last known address of the party entitled thereto, (d) by email, or (e) by express courier service. The notice, request or other communication shall be deemed to be received upon personal delivery, upon confirmation of receipt or upon receipt by the party entitled thereto if by certified mail or express courier service; provided, however, that if a notice, request or other communication is not received during regular business hours, it shall be deemed to be received on the next succeeding business day of the Company.

13.

Section 409A . Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payments and benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Code, or shall comply with the requirements of Section 409A of the Code, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be exempt from or in compliance with Section 409A of the Code. If the Participant notifies the Company (with specificity as to the reason therefor) that the Participant believes that any provision of this Agreement would cause the Participant to incur any additional tax or interest under Section 409A of the Code or the Company independently makes such determination, the Company shall, after consulting with the Participant, reform such provision (or award of compensation or benefit) to attempt to comply with or be exempt from Section 409A of the Code through good faith modifications to the minimum extent reasonably appropriate. To the extent that any provision hereof is modified in order to comply with Section 409A of the Code, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Participant and the Company without violating the provisions of Section 409A of the Code. Notwithstanding the foregoing, none of the Company, its Affiliates, officers, directors, employees, or agents guarantees that this Agreement complies with, or is exempt from, the requirements of Section 409A of the Code and none of the foregoing shall have any liability for the failure of this Agreement to comply with, or be exempt from, such requirements.

14.

Severability . If any one or more of the provisions contained in this Agreement should be found invalid, illegal, inoperative or unenforceable in any respect, the validity, legality, and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. Any illegal or unenforceable term shall be deemed to be void and of no force and effect only to the minimum extent necessary to bring such term within the provisions of applicable law and such term, as so modified, and the balance of this Agreement shall then be fully enforceable.

15.

Entire Agreement . This Agreement, the Plan and the Employment Agreement (solely with respect to the defined terms contained therein and used herein) contain the entire agreement between the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless in writing and signed by the parties hereto.

16.	Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Participant, acquire any rights hereunder in accordance with this Agreement or the Plan.

17.

Interpretation . The terms and provisions of the Plan are incorporated herein by reference, and the Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Compensation Committee of the Board of Directors of the Company, the resolution of which shall be final and binding on the Company and the Participant. Should a party be required to perform or refrain from performing any action on a particular day during the term of this Agreement and such day falls on day that is not a trading day for the New York Stock Exchange, the day to perform or refrain from performing will be the next full trading day following the day on which the party was originally required to perform or refrain from performing the required action.

18.	Counterparts . This Agreement may be signed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.		THE PARTICIPANT


Name:	Frank G. D’Angelo	Name:	Morgan M. Schuessler, Jr.
Title:	Chairman of the Board of Directors	Title:	President and Chief Executive Officer

Exhibit 10.51

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (together with the Vesting Schedule (defined below), this “ Agreement ”) is made as of this 1 ^st day of April, 2015 (the “ Date of Grant ”), by and between EVERTEC, Inc. (the “ Company ”) and the person whose signature, name and title appear in the signature block hereof (the “ Participant ”). Defined terms used but not otherwise defined herein will have the meanings attributed to them in the Plan (defined below) and the Participant’s Employment Agreement.

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”); and

WHEREAS, in connection with the Participant’s service as an employee of the Company or any of its Affiliates and Subsidiaries (the “ Employment ”), the Company desires to grant Restricted Stock Units (“ RSUs ”) to the Participant (the “ Award ”), subject to the terms and conditions of the Plan and this Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

Grant of RSUs . In consideration of the Employment, the Company will grant to the Participant the number of RSUs set forth in the vesting schedule attached hereto as Exhibit A (the “ Vesting Schedule ”). Each RSU represents the unfunded and unsecured promise of the Company to deliver to the Participant one share of common stock, par value $.01 per share, of the Company (the “ Common Stock ”) on the Settlement Date (as defined in Section 6 hereof).

2.	Purchase Price . The purchase price of the RSUs shall be deemed to be zero U.S. Dollars ($0) per share.

Vesting . The RSUs shall vest and become non-forfeitable on the dates established in the Vesting Schedule (each such date, a “ Vesting Date ”), provided that the Participant is actively carrying out his or her duties in connection with the Employment at all times from the Date of Grant through each respective Vesting Date.

4.	Termination . For purposes of this Section 4 , “ *Termination Date* ” is the date the Participant’s Employment is terminated under the circumstances set forth in (a) or (b) below.

(a)

In the event of the Participant’s Disability or in the event that the Employment is terminated (i) by the Company without Cause; (ii) by the Participant for Good Reason; (iii) due to the Participant’s death; or (iv) due to the Company’s non-renewal of the Participant’s Employment Agreement, then (A) all of the Time-based (defined in the Vesting Schedule) RSUs that have not become vested as of the date of Disability or the Termination Date, as applicable, shall automatically vest, and (B) the Performance-based (defined in the Vesting Schedule) RSUs shall remain outstanding and capable of vesting in the normal course subject to actual performance, provided that the Performance-based RSUs shall be prorated based on a fraction, the numerator of which is the number of full months in the Performance Period (as defined in the Vesting Schedule) during which the Participant was employed by the Company and the denominator of which is 36. Any partial month shall count as a whole calendar month if the Participant was in the employ of the Company for at least 15 calendar days during the month.

(b)

In the event the Employment is terminated (i) by the Company for Cause or (ii) by the Participant without Good Reason, all of the RSUs (both Time-based and Performance-based) that have not become vested as of the Termination Date shall automatically be forfeited.

Dividend Equivalents . If the Company pays an ordinary cash dividend on its outstanding Common Stock at any time between the Date of Grant and the Settlement Date (as defined in Section 6 below) — provided that the date on which stockholders of record are determined for purposes of paying a cash dividend on issued and outstanding shares of the Common Stock falls after the Date of Grant — the Participant shall receive on the Settlement Date: (a) a number of Shares having a Fair Market Value on the Vesting Date equal to the aggregate amount of the cash dividends paid by the Company on a single share of the Common Stock, multiplied by the number of RSUs that are settled on the Settlement Date; or (b) a lump sum cash payment equal to the aggregate amount of the cash dividends paid by the Company on a single share of the Common Stock, multiplied by the number of RSUs that are settled on the Settlement Date ((a) or (b) as applicable, the “ Dividend Payment ”); provided, however, that in the case of (a), any partial Share resulting from the calculation will be paid in cash.

Settlement . On or before March 15 ^th following the Vesting Date or, if earlier, within 75 days following the day any RSUs are automatically vested in accordance with the terms and conditions of this Agreement (the “ Settlement Date ”), the Company shall (a) issue and deliver to the Participant one share of Common Stock for each vested RSU (the “ Shares ” ) and enter the Participant’s name as a shareholder of record or beneficial owner with respect to the Shares on the books of the Company; and (b) calculate the Dividend Payment. The Participant agrees that the Company may deduct from the Dividend Payment any amounts owed by the Participant to the Company with respect to any whole Share issued by the Company to the Participant to cover any partial Share resulting from the settlement process.

Taxes . Unless otherwise required by applicable law, on the Settlement Date, (a) the Shares and the Dividend Payment will be considered ordinary income for tax purposes and subject to all applicable payroll taxes; (b) the Company shall report such income to the appropriate taxing authorities as it determines to be necessary and appropriate; (c) the Participant shall be responsible for payment of any taxes due in respect of the Shares and the Dividend Payment; and (d) the Company shall withhold taxes in respect of the Shares and the Dividend Payment (a “ Tax Payment ”); provided, however, that the Participant may elect, subject to the Company’s approval in its sole discretion, to satisfy his or her obligation to pay the Tax Payment by authorizing the Company to withhold from any Shares otherwise to be delivered to the Participant, a number of whole shares of Common Stock having a Fair Market Value equal to the Tax Payment (i.e., a “cashless exercise”). If the Participant fails to pay any required Tax Payment, the Company may, in its discretion, deduct any Tax Payments from any amount then or thereafter payable by the Company to the Participant and take such other action as deemed necessary to satisfy all obligations for the Tax Payment (including reducing the number of Shares delivered on the Settlement Date). The Participant agrees to pay the Company in the form of a check or cashier’s check any overage of the Tax Payment paid by the Company as a result of making whole any partial Share issued through a cashless exercise. Furthermore, the Participant acknowledges and agrees that the Participant will be solely responsible for making any Tax Payment directly to the appropriate taxing authorities should the Participant opt not to satisfy his or her Tax Payment through a cashless exercise.

Rights as Stockholder . Upon and following the Settlement Date (but not before), the Participant shall be the record or beneficial owner of the Shares unless and until such shares are sold or otherwise disposed of, and, if a record owner, shall be entitled to all rights of a stockholder of the Company (including voting rights).

9.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

10.

Notice . Every notice or other communication relating to this Agreement shall be made in writing and the notice, request or other communication shall be deemed to be received upon receipt by the party entitled thereto. Any notice, request or other communication by the Participant should be delivered to the Company’s General Counsel.

11.

Miscellaneous . This Agreement, the Plan and the Employment Agreement (solely with respect to the defined terms and the non-compete and non-solicitation covenants contained therein (the “ Incorporated Provisions ”)) contain the entire agreement between the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. If the Participant’s Employment Agreement expires or is not renewed by the Company and the Participant’s Employment continues, the Incorporated Provisions will remain valid insofar as this Agreement remains in effect. No change, modification or waiver of any provision of this Agreement shall be valid unless in writing and signed by the parties hereto. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Participant, acquire any rights hereunder in accordance with this Agreement or the Plan. The terms and provisions of the Plan and the Vesting Schedule are incorporated herein by reference, and the Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control. This Agreement may be signed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

SIGNATURES ON NEXT PAGE

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Frank G. D’Angelo Title: Chairman of the Board of Directors				Name: Morgan M. Schuessler, Jr. Title: President and Chief Executive Officer

Exhibit A – Vesting Schedule

Participant : Morgan M. Schuessler, Jr.

Defined Terms : As set forth in the 2015 Long-Term Incentive Plan adopted by the Committee on February 24, 2015 (the “ LTIP ”).

Date of Grant : April 1, 2015

Vesting of Time-based RSUs :


14,998		Vesting Date
14,998		January 1, 2016
14,998		January 1, 2017
14,998		January 1, 2018

Vesting of Performance-based RSUs :


Number		Vesting Date
17,349 Relative TSR RSUs		January 1, 2018
22,497 Cumulative CAGR of Diluted EPS RSUs		January 1, 2018

Performance Period : January 1, 2015 to January 1, 2018

Performance Criteria : As set forth in the LTIP.

Exhibit 10.52

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EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made by and between EVERTEC GROUP, LLC, a Puerto Rico limited liability company (together with its subsidiaries and affiliates, the “ Company ”), and Mariana Lischner Goldvarg (“ Executive ,” and collectively with the Company, the “ Parties ”) as of this 5 ^th day of May (the “ Execution Date ”) with an effective date of May 25, 2015 (the “ Effective Date ”).

WHEREAS, the Parties desire to enter into this employment agreement (this “ Agreement ”) pursuant to the terms, provisions and conditions set forth herein.

NOW, THEREFORE , in consideration of the premises and of the mutual covenants, understandings, representations, warranties, undertakings and promises hereinafter set forth, intending to be legally bound thereby, the Parties agree as follows:

1. Employment Period .

Subject to earlier termination in accordance with Section 3 of this Agreement, Executive shall continue to be employed by the Company until December 31, 2018 (the “ Employment Period ”) unless the parties mutually agree to extend the term at least 90 calendar days prior to the end of the Employment Period. Upon Executive’s termination of employment with the Company for any reason, Executive shall immediately resign all positions with the Company or any of its subsidiaries or affiliates.

2. Terms of Employment .

(a) Position . During the Employment Period, Executive shall serve as President of Latin America for the Company and will perform such duties and exercise such supervision with regard to the business of the Company as are associated with such position, including such duties as may be prescribed from time to time by the President and Chief Executive Officer of the Company (the “ CEO ”). Executive shall report directly to the CEO and if requested by the CEO, Executive hereby agrees to serve (without additional compensation) as an officer and director of the Company or any affiliate or subsidiary thereof.

(b) Duties . During the Employment Period, Executive shall have such responsibilities, duties, and authority that are customary for her position, subject at all times to the control of the CEO, and shall perform such services as customarily are provided by an executive of a corporation with her position and such other services consistent with her position, as shall be assigned to her from time to time by the CEO. During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive is entitled in accordance with Company policies, the Executive agrees to devote all of her business time to the business and affairs of the Company and to use Executive’s commercially reasonable efforts to perform faithfully, effectively and efficiently her responsibilities and obligations hereunder.

(c) Principal Work Location . Executive’s principal work location, subject to travel on Company business, shall be Broward County, Florida.

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(d) Compensation .

(i) Base Salary . During the Employment Period, Executive shall receive an annual base salary in an amount equal to Three Hundred Fifty Thousand Dollars ($350,000), less all applicable withholdings, which shall be paid in accordance with the customary payroll practices of the Company (as in effect from time to time, the “ Annual Base Salary ”). The Annual Base Salary shall be prorated for partial calendar years of employment and shall be subject to annual review as determined by the Board of Directors of the Company (the “ Board ”), in its sole discretion.

(ii) Annual Bonus . During the Employment Period, with respect to each completed fiscal year of the Company, Executive shall be eligible to receive a bonus (the “ Bonus ”) pursuant to the terms and conditions set forth in the EVERTEC Annual Performance Incentive Guidelines in effect on the date eligibility for a bonus is determined, which Bonus shall be prorated for partial calendar years and which shall be payable on or about March 15 of each year.

(iii) Long-Term Incentive Compensation .

(a) Within ten business days of the Effective Date, the Company will grant Executive restricted stock units (the “ RSUs ”) of EVERTEC, Inc. (“ EVERTEC ”) common stock under the EVERTEC, Inc. 2013 Equity Incentive Plan with a value equal to $1,000,000 on the date of grant, the number of which RSUs as determined by dividing $1,000,000 by the fair market value of EVERTEC’s common stock, using the market price of EVERTEC’s common stock at the close of business on the grant date. The RSUs shall become vested on the third anniversary of the grant date, subject to Executive’s continuous employment with the Company throughout the three-year vesting period.

(b) It is anticipated that Executive will participate in the EVERTEC 2016 Long Term Incentive Plan and will receive an RSU grant equal to 125% of Executive’s Annual Base Salary on or about February 15, 2016 (the “ 2016 LTIP Grant ”). The 2016 LTIP Grant is contingent upon the adoption by the Compensation Committee of the Board of Directors of EVERTEC (the “ Compensation Committee ”) of a 2016 Long Term Incentive Plan. To the extent that the 2016 LTIP Grant is made to Executive, the RSUs which are the subject of the grant will likely vest based on the achievement of quantitative performance goals for EVERTEC established by the Compensation Committee, as well as annual time vesting.

(iv) Benefits . During the Employment Period, Executive shall be eligible to participate in all employee benefit plans, practices, policies and programs, including any health and dental insurance, vacation pay, and life insurance for a face amount of no less than $1,000,000 and short-term ($1,000 per week) and long-term (60% of base salary, subject to a cap of $10,000 a month) disability insurance benefits provided by the Company to other executives of the Company (except severance plans, policies, practices, or programs) subject to the eligibility criteria set forth therein, as such may be amended or terminated from time to time. During the Employment Period, Executive shall also be provided (A) an automobile plus related insurance in accordance with Company policy or (B) reimbursement of monthly lease or loan payments encumbering such automobile, in the Company’s sole discretion. Finally, Executive shall be eligible to four (4) weeks paid vacation each calendar year in addition to the Company’s standard holidays.

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(v) Expenses . During the Employment Period, Executive shall be entitled to receive reimbursement for all reasonable business expenses incurred by Executive in performance of her duties hereunder provided that Executive provides all necessary documentation in accordance with the Company’s policies.

3. Termination of Employment .

(a) Death or Disability . Executive’s employment shall terminate automatically upon Executive’s death. If Executive becomes subject to a “Disability” (as defined below) during the Employment Period, the Company may give Executive written notice in accordance with Sections 3(g) and 9(g) of its intention to terminate Executive’s employment. For purposes of this Agreement, “ Disability ” means Executive’s inability to perform her essential duties hereunder by reason of any medically determinable physical or mental impairment for a period of six (6) months or more in any twelve (12) month period.

(b) Cause . Executive’s employment may be terminated at any time by the Company for Cause. For purposes of this Agreement “ Cause ” shall mean Executive’s (i) commission of a felony or a crime of moral turpitude; (ii) engaging in conduct that constitutes fraud, bribery or embezzlement; (iii) engaging in conduct that constitutes gross negligence or willful misconduct that results or could reasonably be expected to result in harm to the Company’s business or reputation; (iv) breach of any material terms of Executive’s employment, including this Agreement, which results or could reasonably be expected to result in harm to the Company’s business or reputation; or (v) continued willful failure to substantially perform duties as President of Latin America.

(d) Good Reason . Executive’s employment may be terminated at any time by Executive for Good Reason upon thirty (30) calendar days’ prior written notice following the occurrence of the event giving rise to the termination for Good Reason. For purposes of this Agreement, “ Good Reason ” means voluntary resignation after any of the following actions taken by the Company without Executive’s written consent: (i) any material failure of the Company to fulfill its obligations under this Agreement; (ii) a material and adverse change to, or a material reduction of, Executive’s duties and responsibilities to the Company; (iii) a material reduction in Executive’s then current Annual Base Salary (not including any diminution related to a broader compensation reduction that is not limited to Executive specifically and that is not more than 10% in the aggregate); or (iv) the failure of any successor (whether by sale, reorganization, consolidation, merger or other corporate transaction) to assume this Agreement, whether in writing or by operation of law; provided , that any such event shall not constitute Good Reason unless and until Executive shall have provided the Company with notice thereof no later than 30 calendar days following Executive’s knowledge of the occurrence of such event and the Company shall have failed to remedy such event within 30 calendar days of receipt of such notice.

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(e) Voluntary Termination . Executive’s employment may be terminated at any time by Executive without Good Reason upon 30 calendar days’ prior written notice.

(f) Termination as a Result of Expiration of the Employment Period . Unless otherwise agreed between the Parties, Executive’s employment shall automatically terminate upon expiration of the Employment Period.

(g) Notice of Termination . Any termination by the Company for Cause or without Cause, or by Executive for Good Reason or without Good Reason, shall be communicated by notice of termination to the other party hereto given in accordance with Section 9(g) herein specifying the Date of Termination (as defined below) (a “ Notice of Termination ”). The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance that contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company hereunder or preclude Executive or the Company from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(h) “ Date of Termination ” means (i) if Executive’s employment is terminated by the Company for Cause, without Cause or by reason of Disability, or by Executive for Good Reason or without Good Reason, the date of receipt of the Notice of Termination (in the case of a termination with or without Good Reason, provided such Date of Termination is in accordance with Section 3(d) or Section 3(e)) or any later date specified therein pursuant to Section 3(g), as the case may be; (ii) if Executive’s employment is terminated by reason of death, the date of death; and (iii) the expiration of the Employment Period, and the termination of Executive’s employment upon the date of such expiration.

4. Obligations of the Company upon Termination .

(a) With Good Reason; Without Cause . If during the Employment Period the Company terminates Executive’s employment without Cause or Executive terminates her employment for Good Reason, then the Company will provide Executive with the following payments and/or benefits:

(i) The Company shall pay to Executive as soon as reasonably practicable but no later than the 15 ^th day of the third month following the end of the calendar year that contains the Date of Termination in a lump sum to the extent not previously paid, (A) the Annual Base Salary through the Date of Termination; (B) the Bonus earned for any fiscal year ended prior to the year in which the Date of Termination occurs, provided that Executive was employed on the last day of such fiscal year; (C) the amount of any unpaid expense reimbursements to which Executive may be entitled pursuant to Section 2(d)(v) hereof; and (D) any other vested payments or benefits to which Executive or Executive’s estate may be entitled to receive under any of the Company’s benefit plans or applicable law, in accordance with the terms of such plans or law (clauses (A)-(D), the “ Accrued Obligations ”); and

(ii) Subject to Section 4(e) below, after the Date of Termination, the Company will pay Executive severance in an amount equal to the greater of (a) Executive’s Annual Base Salary and (b) amounts due under applicable laws (the “ Severance Payment ”). The Severance Payment shall be made in a lump sum on the date that is sixty (60) calendar days following the Date of Termination, subject to the terms and conditions in Section 4(e) below.

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(b) Death or Disability . If Executive’s employment shall be terminated by reason of the Executive’s death or Disability, then the Company will provide Executive with the Accrued Obligations. Thereafter, the Company shall have no further obligation to Executive, her estate, her beneficiaries or her legal representatives.

(c) Cause; Other than for Good Reason . If Executive’s employment shall be terminated by the Company for Cause or by Executive without Good Reason, then the Company shall have no further obligations to Executive other than for payment of the Accrued Obligations.

(d) Expiration of the Employment Period . Subject to Section 4(e) below, if Executive’s employment shall be terminated by reason of the expiration of the Employment Period (and not for Cause), then the Company will provide Executive with the Accrued Obligations and will pay Executive an amount equal to the greater of (a) Executive’s Annual Base Salary and (b) amounts due under applicable laws (the “ Expiration Payment ”). The Expiration Payment shall be made in a lump sum on the date that is sixty (60) calendar days following the expiration of the Employment Period.

(e) After the payments specified in Sections 4(a)(ii) and 4(d), thereafter the Company shall have no further obligation to Executive or her legal representatives.

(f) Separation Agreement and General Release . The Company’s obligation to make the Severance Payment is conditioned on Executive’s or her legal representative’s executing a separation agreement and general release of claims (a “ Release ”) related to or arising from Executive’s employment with the Company or the termination of employment, against the Company, including, for the avoidance of doubt, any subsidiary or affiliate thereof (and their respective officers and directors), in a form reasonably determined by the Company, which shall be provided by the Company to Executive within five (5) calendar days following the Date of Termination; provided , however , that if Executive should fail to execute (or revokes) such Release within forty-five (45) calendar days following the Date of Termination, the Company shall not have any obligation to provide the Severance Payment. If Executive executes the Release within such 45-calendar day period and does not revoke the Release within seven (7) calendar days following the execution of the Release, the Severance Payment will be made in accordance with Section 4(a)(ii).

5. Restrictive Covenants .

(a) In consideration of Executive’s employment and receipt of payments hereunder, including, without limitation, the grant of any form of long-term compensation described in Section 2(d) herein, during the period commencing on the Effective Date and ending twelve (12) months after the Date of Termination, Executive shall not directly, or indirectly through another person, (i) directly or indirectly induce or attempt to induce any employee, representative, agent or consultant of the Company or any of its affiliates or subsidiaries to leave the employ or services of the Company or any of its affiliates or subsidiaries, or in any way interfere with the relationship between the Company or any of its affiliates or subsidiaries and any employee,

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representative, agent or consultant thereof; or (ii) hire any person who was an employee, representative, agent or consultant of the Company or any of its affiliates or subsidiaries at any time during the twelve-month period immediately prior to the date on which such hiring would take place.

(b) Non-Competition . Executive hereby acknowledges that she is familiar with the Confidential Information (as defined below) of the Company and its affiliates and subsidiaries. Executive acknowledges and agrees that the Company would be irreparably damaged if Executive were to provide services to any person directly or indirectly competing with the Company or any of its affiliates or subsidiaries or engaged in a “Similar Business” (as defined below) and that such competition by Executive would result in a significant loss of goodwill by the Company. Therefore, Executive agrees that the following are reasonable restrictions:

(i) Similar Business: During the Employment Period, and for a term of twelve (12) months immediately after the termination of such relationship (voluntarily or involuntarily), Executive shall not, directly or indirectly, engage in Similar Business services or activities within Latin America (including Puerto Rico) or any other market the Company is engaged in business; provided, that nothing herein shall prohibit Executive from being a passive owner of not more than 5% of the outstanding stock of any class of a corporation which is publicly traded so long as none of such persons has any active participation in the business of such corporation.

(ii) Clients: For a period of twelve (12) months after the termination the Executive’s employment relationship with the Company (voluntarily or involuntarily), Executive shall not, directly or indirectly, solicit or provide, without the written consent of the Company, any service for any Client, such as those Similar Business services or activities provided by Executive during her employment relationship.

For purposes of this Section 5(b), the following terms shall have the following meanings:

“ Similar Business ” shall mean the same or substantially the same business activity or activities performed or engaged by Executive for, or on behalf, of the Company or any of its subsidiaries or affiliates.

“ Clients ” shall mean any person or entity that was a client or customer of the Company at the time of termination of Executive’s employment relationship with the Company or for whom Executive provided any services on behalf of the Company or any of its affiliates or subsidiaries at any time during the twelve (12) months prior to such termination and which still maintains a business relationship with the Company as of the Date of Termination.

Executive warrants and represents that the nature and extent of this non-competition clause has been fully explained to Executive by the Company, and that Executive’s decision to accept the same is made voluntarily, knowingly, intelligently and free from any undue pressure or coercion and after consultation with an attorney. Executive further warrants and represents that she has agreed to this non-competition clause in exchange for compensation, benefits and protections Executive is receiving under this Agreement.

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(c) Non-Disclosure; Non-Use of Confidential Information . Executive shall not disclose or use at any time, either during her employment with the Company or at any time thereafter, any Confidential Information of which Executive is or becomes aware, whether or not such information is developed by her, except to the extent that such disclosure or use is directly related to and required by Executive’s performance in good faith of duties assigned to Executive by the Company. Executive will take all appropriate steps to safeguard all Confidential Information in her possession and to protect it against disclosure, misuse, espionage, loss and theft. Executive shall deliver to the Company at the termination of her employment with the Company, or at any time the Company may request, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copies thereof, whether in written or electronic form) relating to the Confidential Information or the “Work Product” (as defined in Section 5(e)(ii)) of the business of the Company that Executive may then possess or have under her control.

(d) Proprietary Rights . Executive recognizes that the Company possesses a proprietary interest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect by copyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to the exclusion of Executive, except as otherwise agreed between the Company and Executive in writing. Executive expressly agrees that any Work Product made or developed by Executive or her agents during the course of Executive’s employment, including any Work Product which is based on or arises out of Work Product, shall be the property of and inure to the exclusive benefit of the Company. Executive further agrees that all Work Product developed by Executive (whether or not able to be protected by copyright, patent or trademark) during the course of her employment with the Company, or involving the use of the time, materials or other resources of the Company, shall be promptly disclosed to the Company and shall become the exclusive property of the Company, and Executive shall execute and deliver any and all documents necessary or appropriate to implement the foregoing.

(e) Certain Definitions .

(i) As used herein, the term “ Confidential Information ” means information that is not generally known to the public (but for purposes of clarity, Confidential Information shall never exclude any such information that becomes known to the public because of Executive’s unauthorized disclosure) and that is used, developed or obtained by the Company in connection with its business, including, but not limited to, information, observations and data obtained by Executive while employed by the Company concerning (A) the business or affairs of the Company; (B) products or services; (C) fees, costs and pricing structures; (D) designs; (E) analyses; (F) drawings, photographs and reports; (G) computer software, including operating systems, applications and program listings; (H) flow charts, manuals and documentation; (I) databases; (J) accounting and business methods; (K) inventions, devices, new developments, methods and processes, whether patentable or unpatentable and whether or not reduced to practice; (L) customers and clients and customer or client lists; (M) other copyrightable works; (N) all production methods, processes, technology and trade secrets; and (O) all similar and related information in whatever form. Confidential Information will not include any information that has been published in a form generally available to the public (except as a result of Executive’s unauthorized disclosure or any third party’s unauthorized disclosure resulting from

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any direct or indirect influence by Executive) prior to the date Executive proposes to disclose or use such information. Confidential Information will not be deemed to have been published or otherwise disclosed merely because individual portions of the information have been separately published, but only if all material features comprising such information have been published in combination.

(ii) As used herein, the term “ Work Product ” means all inventions, innovations, improvements, technical information, systems, software developments, methods, designs, analyses, drawings, reports, service marks, trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable) that relates to the Company’s actual or anticipated business, research and development or existing or future products or services and that are conceived, developed or made by Executive (whether or not during usual business hours and whether or not alone or in conjunction with any other person) while employed by the Company together with all patent applications, letters patent, trademark, trade name and service mark applications or registrations, copyrights and reissues thereof that may be granted for or upon any of the foregoing.

6. Non-Disparagement .

During the Employment Period and at all times thereafter, neither Executive nor her agents or representatives, on the one hand, nor the Company itself, or its executives or boards of directors or managers, on the other hand, shall directly or indirectly issue or communicate any public statement, or statement likely to become public, that maligns, denigrates or disparages the other (including, in the case of communications by Executive or her agents or representatives, the Company or any of the Company’s officers, directors or employees. The foregoing shall not be violated by truthful responses to (a) legal processes or governmental inquiries or (b) by private statements to the Company or any of Company’s officers, directors or employees; provided , however , that in the case of Executive, with respect to clause (ii), such statements are made in the course of carrying out her duties pursuant to this Agreement.

7. Confidentiality of Agreement .

The Parties agree that the consideration furnished under or otherwise referenced in this Agreement, the discussions and correspondence that led to this Agreement, and the terms and conditions of this Agreement and any other collateral agreement referred to herein are private and confidential. Except as may be required by applicable law, regulation, or stock exchange requirement, neither Party may disclose the above information to any other person or entity without the prior written approval of the other.

8. Executive’s Representations, Warranties and Covenants .

(a) Except as set forth in Schedule 8 , Executive hereby represents and warrants to the Company that:

(i) Executive has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by Executive voluntarily, knowingly, intelligently and free from any undue pressure or coercion;

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(ii) the execution, delivery and performance of this Agreement by Executive does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party or any judgment, order or decree to which Executive is subject;

(iii) Executive is not a party to or bound by any employment agreement, consulting agreement, non-compete agreement, non-solicitation agreement, fee-for-services agreement, confidentiality agreement or similar agreement with any other person;

(iv) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of Executive, enforceable against her in accordance with its terms;

(v) Executive understands that the Company will rely upon the accuracy and truth of the representations and warranties of Executive set forth herein and Executive consents to such reliance;

(vi) Executive has had ample opportunity to consult with an attorney prior to entering into this Agreement; and

(vi) as of the date of execution of this Agreement, Executive is not in breach of any of its terms, including having committed any acts that would form the basis for a Cause termination if such act had occurred after the Effective Date.

(b) The Company hereby represents and warrants to Executive that:

(i) the Company has all requisite power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby, and this Agreement has been duly executed by the Company;

(ii) the execution, delivery and performance of this Agreement by the Company does not and will not, with or without notice or the passage of time, conflict with, breach, violate or cause a default under any agreement, contract or instrument to which the Company is a party or any judgment, order or decree to which the Company is subject;

(iii) upon the execution and delivery of this Agreement by the Company and Executive, this Agreement will be a legal, valid and binding obligation of the Company, enforceable in accordance with its terms; and

(iv) the Company understands that Executive will rely upon the accuracy and truth of the representations and warranties of the Company set forth herein and the Company consents to such reliance.

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9. General Provisions .

(a) Severability . It is the desire and intent of the Parties hereto that the provisions of this Agreement be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Upon a determination that any term or provision is invalid, illegal, or incapable of being enforced, the Parties agree that a reviewing court shall have the authority to “blue pencil” or modify this Agreement so as to render it enforceable and effect the original intent of the parties to the fullest extent permitted by applicable law.

(b) Entire Agreement and Effectiveness . Effective as of the Effective Date, this Agreement embodies the complete agreement and understanding among the Parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the Parties, written or oral, which may have related to the subject matter hereof in any way (excluding any type of long-term compensation described in Section 2(d) herein the terms and conditions of which are or will be embodied in other agreements).

(i) This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(ii) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. The Company will require any successor (whether direct or indirect, by sale, reorganization, consolidation, merger, or other corporate transaction) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “ Company ” shall mean the Company as hereinbefore defined (which, for the avoidance of doubt, shall include any subsidiary or affiliate thereof) and any successor to its business and/or assets as aforesaid that assumes and agrees to perform this Agreement by operation of law, contract or otherwise.

(d) Governing Law . THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF FLORIDA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF FLORIDA TO BE APPLIED. IN FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF FLORIDA WILL CONTROL THE INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

EXECUTION COPY

(e) Enforcement .

(i) Arbitration . Except for disputes arising under Section 5 of this Agreement (including, without limitation, any claim for injunctive relief), any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the Parties are unable to resolve by mutual agreement, shall be settled by submission by either Executive or the Company of the controversy, claim or dispute to binding arbitration in Miami, Florida (unless the Parties agree in writing to a different location), before a single arbitrator in accordance with the Employment Dispute Resolution Rules of the American Arbitration Association then in effect. In any such arbitration proceeding the Parties agree to provide all discovery deemed necessary by the arbitrator. The decision and award made by the arbitrator shall be accompanied by a reasoned opinion, and shall be final, binding and conclusive on all Parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof. The Company will bear the totality of the arbitrator’s and administrative fees and costs. Each party shall bear its or her litigation costs and expenses (including, without limitation, legal counsel fees and expenses); provided, however, that the arbitrator shall have the discretion to award the prevailing party reimbursement of its or her reasonable attorneys’ fees and costs. Upon the request of either of the Parties, at any time prior to the beginning of the arbitration hearing the Parties may attempt in good faith to settle the dispute by mediation administered by the American Arbitration Association. The Company will bear the totality of the mediator’s and administrative fees and costs. In any arbitration, neither of the Parties will be entitled to present, maintain or participate in a class, collective or representative complaint, and the arbitrator will have no authority over any of said claims or actions. This covenant to arbitrate shall not govern claims regarding workers’ compensation under the State Insurance Fund, state insurance for temporary disability or unemployment insurance benefits.

(ii) Remedies . The arbitrator shall have authority to grant remedies under this Agreement and/or remedies provided for by law, and may, to the extent permitted by law, be exercised concurrently or separately.

(iii) Waiver of Jury Trial . EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(f) Amendment and Waiver . The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Executive and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

(g) Notices . Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) in an envelope marked “confidential” to the recipient at the address below indicated or at such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder and received when delivered personally, five (5) calendar days after deposit in the U.S. mail and one (1) calendar day after deposit for overnight delivery with a reputable overnight courier service.

EXECUTION COPY

If to the Company, to:

EVERTEC GROUP, LLC

GENERAL COUNSEL AND HUMAN RESOURCES SENIOR VICE

PRESIDENT

Carr #176, Km 1.3

Cupey Bajo, Rio Piedras Puerto Rico 00926

P.O. Box 364527

San Juan, Puerto Rico 00936-4527

Telephone: (787) 759-9999

with a copy (which shall not constitute notice) to:

Lic. Reynaldo Quintana

Baerga & Quintana Ass

416 Ponce de Leon Ave.

Union Plaza Suite 810

San Juan, Puerto Rico 00918

Tel. 787.753.7455

Fax. 787.756.5796

If to Executive, to:

Executive’s home address most recently on file with the Company.

(h) Withholdings Taxes . The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

(i) Survival of Representations, Warranties and Agreements . All representations, warranties and agreements contained herein shall survive the consummation of the transactions contemplated hereby indefinitely.

(j) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. All references to a “Section” in this Agreement are to a section of this Agreement unless otherwise noted.

(k) Construction . Where specific language is used to clarify by example a general statement contained herein, such specific language shall not be deemed to modify, limit or restrict in any manner the construction of the general statement to which it relates. The language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Party.

EXECUTION COPY

(l) Counterparts . This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

(m) Section 409A . Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and applied so that the payment of the benefits set forth herein either shall either be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “ Code ”), or shall comply with the requirements of such provision. Notwithstanding anything in this Agreement or elsewhere to the contrary, distributions upon termination of Executive’s employment may only be made upon a “separation from service” as determined under Section 409A of the Code. Each payment under this Agreement or otherwise shall be treated as a separate payment for purposes of Section 409A of the Code. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement or otherwise which constitutes a “deferral of compensation” within the meaning of Section 409A of the Code. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code. To the extent that any reimbursements pursuant to this Agreement or otherwise are taxable to Executive, any reimbursement payment due to Executive shall be paid to Executive on or before the last calendar day of Executive’s taxable year following the taxable year in which the related expense was incurred; provided , that , Executive has provided the Company written documentation of such expenses in a timely fashion and such expenses otherwise satisfy the Company’s expense reimbursement policies. Reimbursements pursuant to this Agreement or otherwise are not subject to liquidation or exchange for another benefit and the amount of such reimbursements that Executive receives in one taxable year shall not affect the amount of such reimbursements that Executive receives in any other taxable year. Notwithstanding any provision in this Agreement to the contrary, if on the date of her termination from employment with the Company Executive is deemed to be a “specified employee” within the meaning of Code Section 409A and the Final Treasury Regulations using the identification methodology selected by the Company from time to time, or if none, the default methodology under Code Section 409A, any payments or benefits due upon a termination of Executive’s employment under any arrangement that constitutes a “deferral of compensation” within the meaning of Code Section 409A shall be delayed and paid or provided (or commence, in the case of installments) on the first payroll date on or following the earlier of (i) the date which is six (6) months and one calendar day after Executive’s termination of employment for any reason other than death; and (ii) the date of Executive’s death, and any remaining payments and benefits shall be paid or provided in accordance with the normal payment dates specified for such payment or benefit. Notwithstanding any of the foregoing to the contrary, the Company and its respective officers, directors, employees, or agents make no guarantee that the terms of this Agreement as written comply with, or are exempt from, the provisions of Code Section 409A, and none of the foregoing shall have any liability for the failure of the terms of this Agreement as written to comply with, or be exempt from, the provisions of Code Section 409A.

[SIGNATURE PAGE FOLLOWS]

EXECUTION COPY

IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the Execution Date first written above.

EVERTEC GROUP, LLC

Name: Morgan M. Schuessler, Jr.

Title: President & Chief Executive Officer

EXECUTIVE NAME

Name: Mariana Lischner Goldvarg

Title: President of Latin America

Exhibit 10.53

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “ Agreement ”) is made as of this 1 ^st day of June 2015 (the “ Date of Grant ”), by and between EVERTEC, Inc. (the “ Company ”) and the person whose signature, name and title appear in the signature block hereof (the “ Participant ”). Defined terms used but not otherwise defined herein will have the meanings attributed to them in the Plan (defined below) and the Participant’s employment agreement dated as of 25 ^th day of May, 2015 (the “ Employment Agreement ”).

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of RSUs .

(a)

In consideration of the Employment, the Company will grant to the Participant 44,984 RSUs.

(b)

(c)

2.	Purchase Price . The purchase price of the RSUs shall be deemed to be zero U.S. dollars ($0) per share.

3.	Vesting . The RSUs shall vest and become non-forfeitable on June 1, 2018 (the “ *Vesting Date* ”), provided that the Participant is actively carrying out her duties in connection with the Employment at all times from the Date of Grant through the Vesting Date.

4.	Termination . For purposes of this Section 4 , “ *Termination Date* ” is the date the Participant’s Employment is terminated under the circumstances set forth in (a) or (b) below.

(a)

(b)

Settlement . Within sixty (60) days following the Vesting Date or the day any RSUs are automatically vested in accordance with the terms and conditions of this Agreement (the “ Settlement Date ”), the Company shall (a) issue and deliver to the Participant one share of Common Stock for each vested RSU (the “ Shares ” ) and enter the Participant’s name as a shareholder of record or beneficial owner with respect to the Shares on the books of the Company; and (b) calculate the Dividend Payment. The Participant agrees that the Company may deduct from the Dividend Payment any amounts owed by the Participant to the Company with respect to any whole Share issued by the Company to the Participant to cover any partial Share resulting from the settlement process.

7.	Taxes . Unless otherwise required by applicable law, on the Settlement Date:

(a)

the Shares and the Dividend Payment will be considered ordinary income for tax purposes and subject to all applicable payroll taxes;

(b)

the Company shall report such income to the appropriate taxing authorities as it determines to be necessary and appropriate;

(c)

the Participant shall be responsible for payment of any taxes due in respect of the Shares and the Dividend Payment; and

(d)

the Company shall withhold taxes in respect of the Shares and the Dividend Payment (a “ Tax Payment ”); provided, however, that the Participant may elect, subject to the Company’s approval in its sole discretion, to satisfy his or her obligation to pay the Tax Payment by authorizing the Company to withhold from any Shares otherwise to be delivered to the Participant, a number of whole shares of Common Stock having a Fair Market Value equal to the Tax Payment (i.e., a “cashless exercise”).

If the Participant fails to pay any required Tax Payment, the Company may, in its discretion, deduct any Tax Payments from any amount then or thereafter payable by the Company to the Participant and take such other action as deemed necessary to satisfy all obligations for the Tax Payment (including reducing the number of Shares delivered on the Settlement Date). The Participant agrees to pay the Company in the form of a check or cashier’s check any overage of the Tax Payment paid by the Company as a result of making whole any partial Share issued through a cashless exercise. Furthermore, the Participant acknowledges and agrees that the Participant will be solely responsible for making any Tax Payment directly to the appropriate taxing authorities should the Participant opt not to satisfy his or her Tax Payment through a cashless exercise.

10.

11.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

12.

13.

maintain the original intent and economic benefit to Participant and the Company without violating the provisions of Section 409A of the Code. Notwithstanding the foregoing, none of the Company, its Affiliates, officers, directors, employees, or agents guarantees that this Agreement complies with, or is exempt from, the requirements of Section 409A of the Code and none of the foregoing shall have any liability for the failure of this Agreement to comply with, or be exempt from, such requirements.

14.

15.

16.	Successors . This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Participant, acquire any rights hereunder in accordance with this Agreement or the Plan.

17.

18.	Counterparts . This Agreement may be signed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Luis Rodríguez Title: Senior Vice President

Exhibit 10.54

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “ Agreement ”) is made as of this June 1, 2015 (the “ Date of Grant ”), by and between EVERTEC, Inc. (the “ Company ”) and the person whose signature, name and title appear in the signature block hereof (the “ Participant ”). Defined terms used but not otherwise defined herein will have the meanings attributed to them in the Plan (defined below).

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

WHEREAS, Section 9 of the Plan authorizes the grant (the “ Award ”) of Restricted Stock with respect to the common stock, par value $0.01 per share, of the Company (“ Common Stock ”); and

WHEREAS, in connection with the Participant’s service as a member of the Board of Directors of the Company (the “ Directorship ”), and in accordance with the Company’s Independent Director Compensation Policy, the Company desires to grant Restricted Stock to the Participant, subject to the terms and conditions of the Plan and this Agreement.

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 5,623 shares of Restricted Stock (the “ *Restricted Shares* ”).

Vesting . The Restricted Shares shall vest and become non-forfeitable on May 31, 2016 (the “ Vesting Date ”), provided that the Participant is actively carrying out his or her duties in connection with the Directorship at all times from the Date of Grant through the day immediately preceding the Company’s 2016 Annual Meeting of Stockholders.

3.	Termination .

(a)

In the event of the Participant’s Disability (defined below) or in the event the Directorship is terminated due to the Participant’s death, all of the Restricted Shares that have not become vested as of the date of Disability or the Termination Date (defined below), as applicable, shall automatically vest.

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Disability ” shall mean the Participant’s inability to perform the Directorship by reason of any medically determinable physical or mental impairment for a period of 6 months or more in any 12 month period.

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

Taxes . On the Vesting Date, the Participant shall be responsible for paying the Company any taxes due on taxable income recognized by the Participant with respect to the Restricted Shares (the “ Tax Payment ”); provided, however, that (a) the Participant may satisfy payment of the Tax Payment through (i) a cash payment to the Company; (ii) authorizing the Company to repurchase from the shares of Common Stock otherwise to be delivered to the Participant, a number of whole shares of Common Stock having a Fair Market Value equal to the Tax Payment; or (iii) any combination of (i) and (ii); and (b) in the event that the Company determines that a Tax Payment is required and the Participant fails to advance the Tax Payment after so requested by the Company, the Company may, in its discretion, deduct any Tax Payments from any amount then or thereafter payable by the Company to the Participant and take such other action as deemed necessary to satisfy all obligations for the Tax Payment.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

Miscellaneous . This Agreement and the Plan contain the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all prior communications, representations and negotiations in respect thereto. No change, modification or waiver of any provision of this Agreement shall be valid unless in writing and signed by the parties hereto. This Agreement shall be binding upon and inure to the benefit of any successor or successors of the Company and any person or persons who shall, upon the death of the Participant, acquire any rights hereunder in accordance with this Agreement or the Plan. The terms and provisions of the Plan are incorporated herein by reference, and the Participant hereby acknowledges receiving a copy of the Plan. In the event of a conflict or inconsistency between the terms and provisions of the Plan and the provisions of this Agreement, the Plan shall govern and control. Every provision of this Agreement is intended to be severable and any illegal or invalid term shall not affect the validity or legality of the remaining terms. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Compensation Committee of the Company’s Board of Directors (the “ Committee ”) for review, as provided for in the Plan. The resolution of such a dispute by the Committee shall be binding on the Company and the Participant. This Agreement may be signed in counterparts, each of which shall be deemed an original and both of which together shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Frank G. D’Angelo Title: Independent Director

Exhibit 10.55

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 3,374 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Alan H. Schumacher Title: Independent Director

Exhibit 10.56

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 6,748 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Brian J. Smith Title: Independent Director

Exhibit 10.57

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 3,374 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Jorge Junquera Title: Independent Director

Exhibit 10.58

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 3,374 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Olga Botero Title: Independent Director

Exhibit 10.59

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 3,374 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Teresita Loubriel Title: Independent Director

Exhibit 10.60

EVERTEC, INC.

2013 EQUITY INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

W I T N E S S E T H

WHEREAS, the Company maintains the EVERTEC, Inc. 2013 Equity Incentive Plan (the “ Plan ”);

NOW, THEREFORE, in consideration of the covenants and agreements contained herein and for other good and valuable consideration, the parties agree as follows:

1.	Grant of Restricted Stock . In consideration of the Directorship and subject to the terms, conditions and restrictions set forth herein, the Company grants to the Participant 3,374 shares of Restricted Stock (the “ *Restricted Shares* ”).

3.	Termination .

(a)

(b)

In the event the Directorship is terminated other than as set forth in (a) above, all of the Restricted Shares that have not become vested as of the Termination Date shall automatically be forfeited.

(c)

For purposes of this Section 3 :

“ Termination Date ” is the date the Participant’s Directorship is terminated under the circumstances set forth in (a) or (b) above.

4.	Rights as Stockholder; Dividends . The Participant shall be the record owner of the Restricted Shares, and as record owner shall be entitled to all rights of a stockholder, including, but limited to the right to vote and the right to receive any dividends.

6.	Governing Law . This Agreement shall be construed and interpreted in accordance with the laws of the Commonwealth of Puerto Rico applicable to contracts to be performed therein.

Signatures on Next Page

IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the Date of Grant set forth above.


EVERTEC, INC.				THE PARTICIPANT


Name: Morgan M. Schuessler, Jr. Title: Chief Executive Officer				Name: Thomas W. Swidarski Title: Independent Director

EXHIBIT 31.1

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Morgan Schuessler, certify that:

I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 7, 2015				/s/ Morgan Schuessler
				Morgan Schuessler
				Chief Executive Officer

EXHIBIT 31.2

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a)

I, Juan J. Román, certify that:

I have reviewed this report on Form 10-Q of EVERTEC, Inc.;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 7, 2015				/s/ Juan J. Román
				Juan J. Román
				Chief Financial Officer

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 , the undersigned officer of EVERTEC, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.


Date: August 7, 2015				/s/ Morgan Schuessler
				Morgan Schuessler
				Chief Executive Officer

EXHIBIT 32.2

Certification Pursuant to 18 U.S.C. 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of EVERTEC, Inc. (the “Company”), does hereby certify, to such officer’s knowledge, that:


Date: August 7, 2015				/s/ Juan J. Román
				Juan J. Román
				Chief Financial Officer

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