This document outlines an annual incentive plan for non-sales employees. It provides details on eligibility, target bonus amounts, performance indicators, and payout calculations. Employees are eligible for a bonus based on business and individual performance. Business performance is measured by comparing actual net income to a target, set at 16% of costs plus expenses. Individual performance is based on an employee evaluation rating of at least 2i. The product of the business and individual multipliers determines the actual payout percentage of the employee's annual target bonus amount. Payouts are made in the local currency following the close of financial books for the performance period.

1. Annual Incentive Plan
Non-Sales Employees
Date: 03/27/2018
Version: V4

2. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
Table of Contents
1. Scope & Objectives............................................................................................................................................. 3
2. Definitions............................................................................................................................................................ 3
3. Eligibility............................................................................................................................................................... 4
4. Annual Variable Target Amount.......................................................................................................................... 5
5. Performance Indicator......................................................................................................................................... 5
6. Incentive Calculation Method.............................................................................................................................. 6
7. Collections & Payout........................................................................................................................................... 7
8. General Conditions ............................................................................................................................................. 8

3. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
1.Scope & Objectives
• Reiterate and Emphasize the importance of achieving a healthy P&L bottom line, starting from
the individual tasks of each employee, as they directly impact the profit outcome for the company.
• Motivate the participants to carry out their activities in an effective way, to use the resources
invested efficiently and, through those who participate in the activities related to the clients, to
implement best practices that influence the profitable growth for the company.
• Reward employees for the achievement of the expected Annual Net Income for the Company.
• Contribute to maintain a competitive market position in Total Compensation.
Notes:
▪ This plan replaces any other incentive plan currently in place for the eligible Employees.
Eligible are all employees that have a variable component to their salary such as e.g. a bonus
percentage.
▪ The Company reserves the right, at its sole discretion, to define who is eligible for this plan.
▪ This plan is effective as of January 1st
, 2018.
2.Definitions
• Period n: The relevant calendar year for which the incentive payment is monitored and granted.
The period starts at January 1st and ends at December 31st of the relevant calendar year.
• Period n+1: The calendar year that is directly following Period n. in which the incentive payment
is calculated once the financial books haven been close for Period n
• Period n+2: The calendar year that is directly following Period n+1.
• Period n+3: The calendar year that is directly following Period n+2.
• Order: A confirmed and binding request by a customer to Smartmatic to buy, sell, deliver, or
receive goods or services under specified terms and conditions, by means of a signed, legally
binding, valid and in force agreement (regardless of the format) between the customer and
Smartmatic containing definitive terms and conditions for the execution of a project, service,
supply, provision, etc. that allows the company to collect certain amounts upon performance.
Preliminary and non-binding arrangements such as LOIs and MOUs shall not be considered
orders for the purpose of this Sales Incentive Plan. Frame Agreements, shall not be considered
orders for the purpose of this Sales Incentive Plan except for the value of individual ‘call off’- or
Purchase- Orders that are firmly committed, legally binding, valid and in force upon signature of
such frame contract.

4. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
• Revenue: The amount of money that Smartmatic actually recognizes and registers in the financial
statement as a direct result of a firm Order. Smartmatic follows the rules established by the
International Financial Reporting Standards (IFRS 15). Revenue is recognized when goods are
transferred, or services rendered according the contractual performance obligations, and the
deliverables are accepted by the client, no matter when cash is received. Revenue for Equipment
is recognized at the time the client gains control of the goods. Control means that the client has
accepted the goods and may obtain benefits from them. Revenue for Services is recognized
based on the delivery of the services and when deliverables agreed on contract and accepted by
the client are completed. In some cases, the deliverables of services can be done by phases and
assigned by milestones. In these cases, the revenue can be recognized by milestone, after
receiving client´s acceptance confirmation.
• Cost of Goods Sold (COGS): As defined in the Smartmatic Financial Statements are the direct
costs attributable to the production of the goods and/or of the service sold. This amount includes
the cost of the materials used in creating the good or providing the service along with the direct
labor costs used to produce the good or provide the Services. It excludes indirect expenses such
as the costs of selling (a list of applicable cost is provided in Appendix A).
• Gross profit: As defined in the Smartmatic Financial Statements, is the profit after deducting
from the registered Revenue the cost associated with making and selling its products, and the
cost associated with providing services. It is equivalent to ‘Revenue minus Cost of Goods Sold
(COGS)’.
• Collections: The actual receipt of cash on the Smartmatic bank account, resulting from invoice
amounts owed to Smartmatic by its customers for the execution of certain orders.
• Net Income: As defined in the Smartmatic Financial Statements measures profit after taxes,
depreciation, amortization and exchange gain/loss. Profit is calculated after deducting the cost of
goods sold, business regions direct expenses, technical and field support expenses, corporate
support expenses and other distributable expenses to the revenue. See “Appendix A” for a Net
Income Statement example.
3.Eligibility
To become eligible, all of the following criteria must be met:
• Be an Employee that is not eligible for the Sales Incentive Plan;
• Employee must still be employed on December 31st
of Period n;
• Have a minimum seniority of 3 months on 31st
, December of Period n. In other words, the hiring
date must be before October 1st
of Period n;
• The incentive will be calculated pro-rata the employee’s seniority in Period n. For the first
calendar year of employment or rehiring, the annual target amount will be prorated to the number
of days worked based on a total of 365 days. In case of leave of absence for a given period, the
annual target amount will be prorated according to the terms of the leave of absence policy;
• Have a closed Performance Evaluation and resulting rating with a minimum rate of 2 improvement
(2i) for Period n.

5. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
4.Annual Variable Target Amount
Each eligible employee has a monetary annual target bonus or variable compensation defined, the
Annual Variable Target Amount. Usually, such target amount is based on a percentage (%) of the
annual base salary or the annual fixed compensation. This percentage is defined based on job grade,
working location and role performed.
Annual Variable Target Amounts are defined and paid in the currency of the location of employment,
unless a separate agreement is in place.
5.Performance Indicator
The Incentive Plan is based on 2 variables:
(a) Business Performance Indicator, and
(b) Individual Performance Indicator.
The product of (a) and (b) is the Combined Multiplier which determines the actual Annual Variable
Target Amount payout percentage.
The Business Performance Indicator is the ratio of USD Actual Net Income divided by the USD
Net Income Target.
▪ For negatives ratios or years with losses, where USD Actual Net Income is negative, the
Business Performance Indicator will be 0
▪ For ratios greater than 1. The Business Performance Indicator will be 1
The Net Income Target will be set following:
• 16% of the actual total Cost of Goods Sold plus the Total expenses incurred by the company in
Period n calculated annually in Period n+1, at the closing of the Financial books of Period n
according to the company Profit & Losses guideline and recorded on Smartmatic audited financial
systems, with
• A minimum of 4 times the sum of the Annual Variable Target Amounts of all employees eligible
for this plan, as per December 31st
of Period n
The Net Income Target will be approved by the Smartmatic President, CEO and Board of Directors.
The Actual Net Income achievement for the Period n, will be calculated annually at the beginning
of Period n+1, at the closing of the Financial books of Period n in accordance with the company
Profit & Losses guideline and as recorded on Smartmatic audited financial systems, and approved
by the Smartmatic President, CEO and Board of Directors.

6. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
Net Income is defined and measured in United States Dollar (USD). For income and expenses in
other currency, the amounts are converted to USD based on the exchange rate Smartmatic has
access to and reflected in the audited financial systems.
The minimum Achievement to start paying is 20% of the Net Income Target.
For Achievement from 20% to 100% of the Net Income Target the Business Multiplier is linear from
20% to 100%.
In case of Achievement over 100% of the Net Income Target, an additional bonus will be paid, the
Profit Sharing Bonus. In this scenario, the Profit Sharing Bonus will be 4% of the difference between
the Actual Net Income and the Net Income Target. The Individual Profit Sharing Bonus will be
a distribution of the Profit Sharing Bonus pro rata the weight of the individual employee’s Annual
Variable Target Amount versus the total Annual Variable Target Amounts of all employees eligible
for this plan at the end of Period n.
The second indicator, the Individual Performance Indicator, is a percentage defined by the
manager following the Performance Management Assessment and resulting PMS rating and
following the multiplier range guideline table (see Appendix B).
A minimum of 2i performance rating for the Period n is required to be eligible for the plan. For
employees with a PMS rating of 1 (Consistently fails) for the Period n, the Individual Performance
multiplier will be 0% and the employee will not receive an incentive (see Appendix B).
6.Incentive Calculation Method
The formula to determine the individual’s final incentive amount is given by multiplying the individual’s
Annual Variable Target Amount by the Combined Multiplier. As mentioned above under the
Performance Indicators section, the combined multiplier is the product of two indicators (a) Business
Performance Indicator and (b) Individual Performance Indicator.
The total Individual Annual Incentive will be calculated as follows:
Individual Annual Incentive
=
Individual Annual Variable Target Amount
x
Combined Multiplier
+
Individual Profit Sharing Bonus (if applicable)

7. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
7.Collections & Payout
The payment of the Individual Annual Incentive will be proportional to the Actual Collections
versus the Target Collections.
The Target Collections is the total of collections related to revenue recognized in Period n or
before for individual identified projects that according to the contractual payment terms should be
collected in Period n.
The Actual Collections is the total of collections related to revenue recognized in Period n or
before for individual identified projects that according to the contractual payment terms should be
collected in Period n, and that is actually collected before March 1st
of Period n+1.
The Remaining Collections after Period n are the Target Collections minus Actual Collections
collected before March 1st
of Period n+1
Payment related to Remaining Individual Incentive (if any) will extend for a two-year period and
will be proportional to the actually collected Remaining Collections in Period n+1 and Period n+2
respectively versus the Target Collections of Period n. The Remaining Individual Annual Incentive
will be paid after Period n+1 and Period n+2 respectively.
The proportion of incentive attributable to Remaining Collections after Period n+2 will be considered
forfeit.
The Incentive will be paid on a yearly basis, between 90 to 120 days after the ending of Period n,
usually between March 30th
to April 30th
.
The Remaining Incentive (if any) will be paid on a yearly basis, between 90 to 120 days after the
ending of Period n+1 and Period n+2, usually between March 30th
to April 30th
.
To be eligible for remaining payment of the Individual Annual Incentive requires the employee to be
employed with the company on December 31st
of the year immediately prior to when the remaining
incentive is paid. (either December 31st
of n + 1, and/or December 31st
n + 2)

8. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
8.General Conditions
i. Should an eligible Employee be dismissed or terminate with the company for any reason (voluntarily
or involuntarily) with effective date before the end of the Period n, the Individual Annual Incentive
payment for that given Period n will be forfeited.
ii. Should an eligible Employee be dismissed or terminated with the company for any reason (voluntarily
or involuntarily) with effective date between the 1st of January of Period n+1 and the date the
Individual Incentive Payment for the Period n is paid, the Employee remains eligible for the incentive
payment. However, in such case any payments related to the Remaining Collections will be forfeited;
iii. Should an eligible Employee be dismissed or terminate with the company for any reason (voluntarily
or involuntarily) with effective date before the end of the Period n+1, the Remaining Individual Annual
Incentive payment related to collected Remaining Collections in Period n+1 will be forfeited.
iv. Should an eligible Employee be dismissed or terminated with the company for any reason (voluntarily
or involuntarily) with effective date between the 1st of January of Period n+2 and the date the
Individual Incentive Payment related to collected Remaining Collections in Period n+1 is paid, the
Employee remains eligible for the incentive payment. However, in such case any further payments
related to the Remaining Collections will be forfeited.
v. Should an eligible Employee be dismissed or terminate with the company for any reason (voluntarily
or involuntarily) with effective date before the end of the Period n+2, the Remaining Individual Annual
Incentive payment related to collected Remaining Collections in Period n+2 will be forfeited.
vi. Should an eligible Employee be dismissed or terminated with the company for any reason (voluntarily
or involuntarily) with effective date between the 1st of January of Period n+3 and the date the
Remaining Individual Incentive Payment related to collected Remaining Collections in Period n+2 is
paid, the Employee remains eligible for the incentive payment.
vii. In case of Disability of the eligible Employee occurring in Period n, n+1 and n+2, incentive rights
related to Period n and rights related to Remaining Collections from Period n that are not paid yet
will be paid to the Employee following the normal incentive payment method and timing, and pro-
rated to the last day of Active Employment in Period n.
viii. In case of Death of the eligible Employee in Period n, n+1 and n+2, incentive rights related to Period
n and rights related to Remaining Collections from Period n that are not paid yet, will be paid to the
corresponding successors following the normal incentive payment method and timing.
ix. Considering the very dynamic business conditions, the plan can be reviewed at the end of every year
to assess its effectiveness. As a result, changes to the plan may be implemented and communicated
to the Employees.

9. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
Approved by:

10. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
Appendix A: Smartmatic Net Income Statement

11. The information contained in this policy is confidential, is intended for Internal Use Only, and may be legally privileged. Any dissemination,
distribution or copying of this policy or any of its contents need to be prior approved in writing by Smartmatic’s HR VP.
Appendix B: Individual Performance Rating & Multiplier Ranges
Minimum Maximum
3
Performance that always exceeds expectations
and is consistently outstanding
115% 130%
Outstanding
2s
Performance that consistently fulfills the job
requirements and sometimes exceeds
expectations
105% 115%
Superior
2a
Performance that consistently meet expectations.
Positive and fully acceptable level of performance
95% 105%
Accomplished
2i
Performance that not always meets the job
requirements. Improvement needed. Moderately
behind expectations
50% 85%
Improvement
1
Performance that consistently fails to meet the job
requirements and expectations
Consistently fails
0%
Description
Individual Multiplier
Range
Performance
Rating