Franklin Credit Holding Corporation Employee Restricted Stock Grant Agreement
Exhibit 10.2
Franklin Credit Holding Corporation
THIS AGREEMENT, made as of January 11, 2010, between Franklin Credit Holding Corporation (the
“Company”) and Xxxxx Xxx (the “Participant”).
WHEREAS, the Company has adopted and maintains the Franklin Credit Holding Corporation 2006
Stock Incentive Plan (the “Plan”) to provide certain key persons, on whose initiative and efforts
the successful conduct of the Company’s business depends, and who are responsible for the
management, growth and protection of the Company’s business, with incentives to: (a) enter into and
remain in the service of the Company, a Company subsidiary or a Company joint venture, (b) acquire
a proprietary interest in the success of the Company, (c) maximize their performance and (d)
enhance the long-term performance of the Company;
WHEREAS, the Plan provides that the Compensation Committee of the Board of Directors of the
Company (the “Compensation Committee”) shall administer the Plan and determine the key persons to
whom awards shall be granted and the amount and type of such awards; and
WHEREAS, the Compensation Committee has determined that the purposes of the Plan would be
furthered by granting the Participant an award under the Plan as set forth in this Agreement;
WHEREAS, the Company engaged the Participant to serve as Executive Vice President and Managing
Director of the servicing and recovery departments of the Company’s mortgage servicing subsidiary,
Franklin Credit Management Corporation (“FCMC”)_, pursuant to an Employment Agreement between the
Participant and FCMC, dated as of December 15, 2009, to be effective January 11, 2010 (the
“Employment Agreement”);
WHEREAS, in consideration of the Participant agreeing to be so engaged pursuant to the
Employment Agreement, the Company has agreed to grant the Participant an award of certain shares of
the Company’s stock as set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, the parties hereto hereby agree as follows:
1. Grant of Restricted Stock. Pursuant to, and subject to, the terms and conditions
set forth herein and in the Plan, the Compensation Committee hereby grants to the Participant
17,000 restricted shares (the “Restricted Stock”) of common stock of the Company (“Common
Stock”).
2. Grant Date. The Grant Date of the Restricted Stock is January 11, 2010.
3. Incorporation of Plan. All terms, conditions and restrictions of the Plan are
incorporated herein and made part hereof as if stated herein. If there is any conflict between the
terms and conditions of the Plan and this Agreement, the terms and conditions of the Plan, as
interpreted by the Compensation Committee, shall govern. Except as otherwise provided herein,
all capitalized terms used herein shall have the meaning given to such terms in the Plan.
4. Vesting. Subject to the further provisions of this Agreement, 8,500 shares of
Restricted Stock shall vest on January 11, 2010; and 8,500 shares shall vest on January 11, 2011
(each such date, a “Vesting Date”); provided, however, that the entire Restricted Stock award shall
vest and become nonforfeitable upon a Change in Control, as defined under the Employment Agreement.
5. Restrictions on Transferability. Until a share of Restricted Stock vests, the
Participant shall not transfer the Participant’s rights to such share of Restricted Stock or to any
rights related thereto. Any attempt to transfer unvested shares of Restricted Stock or any rights
related thereto, whether by transfer, pledge, hypothecation or otherwise and whether voluntary or
involuntary, by operation of law or otherwise, shall not vest the transferee with any interest or
right in or with respect to such shares of Restricted Stock or such related rights.
6. Termination of Employment. In the event that the Participant’s employment with
FCMC terminates for any reason before all the shares of Restricted Stock are vested, except as the
Company shall have otherwise agreed all unvested shares of Restricted Stock, together with any
property received in respect of such shares, as set forth in Section 9 hereof, shall be forfeited
as of the date such employment terminates, and the Participant promptly shall return to the Company
any certificates evidencing such shares, together with any cash dividends or other property
received in respect of such shares.
7. Issuance of Certificates.
(a) Reasonably promptly after the Grant Date, the Company shall issue and deliver to the
Participant stock certificates, registered in the name of the Participant, evidencing the shares of
Restricted Stock or shall instruct its transfer agent to issue shares of Restricted Stock which
shall be maintained in book entry form on the books of the transfer agent. The Restricted Stock,
if certificated, shall bear the following legend:
“THE SALE, TRANSFER, ASSIGNMENT, PLEDGE, HYPOTHECATION ENCUMBRANCE OR OTHER DISPOSAL
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THE
FRANKLIN CREDIT HOLDING CORPORATION 2006 STOCK INCENTIVE PLAN AND A RESTRICTED STOCK
GRANT AGREEMENT BETWEEN FRANKLIN CREDIT HOLDING CORPORATION AND THE HOLDER OF RECORD
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE. NO TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IN CONTRAVENTION OF SUCH PLAN AND RESTRICTED STOCK
GRANT AGREEMENT SHALL BE VALID OR EFFECTIVE. COPIES OF SUCH AGREEMENT MAY BE
OBTAINED BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THE CERTIFICATE TO THE
SECRETARY OF FRANKLIN CREDIT HOLDING CORPORATION.”
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If the Restricted Stock is in book entry form, it shall be subject to electronic coding or stop
order indicating that such shares of Restricted Stock are restricted by the terms of this Agreement
and the Plan. Such legend, electronic coding or stop order shall not be removed until such shares
of Restricted Stock vest.
(b) Reasonably promptly after the Restricted Stock vests pursuant to Section 4 hereof and
subject to the limitations set forth in Section 8, (i) in the case of certificated shares, in
exchange for the surrender to the Company of the certificate evidencing the Restricted Stock,
delivered to the Participant under Section 7(a) hereof, and the certificates evidencing any other
securities received in respect of such shares, if any, the Company shall issue and deliver to the
Participant (or the Participant’s legal representative, beneficiary or heir) a certificate
evidencing the Restricted Stock and such other securities, free of the legend provided in Section
7(a) hereof and (ii) in the case of book entry shares, the Company shall cause to be lifted and
removed any electronic coding or stop order established pursuant to Section 7(a) hereof.
(c) The Participant shall not be deemed for any purpose to be, or have rights as, a
shareholder of the Company by virtue of the grant of Restricted Stock, except to the extent a stock
certificate is issued therefor or an appropriate book entry is made on the books of the transfer
agent reflecting the issuance thereof pursuant to Section 7(a) hereof, and then only from the date
such certificate is issued or such book entry is made. Upon the issuance of a stock certificate or
the making of an appropriate book entry on the books of the transfer agent, the Participant shall
have the rights of a shareholder with respect to the Restricted Stock, including the right to vote
the shares, subject to the restrictions on transferability and the forfeiture provisions, as set
forth in this Agreement.
8. Securities Matters. The Company shall be under no obligation to effect the
registration pursuant to the Securities Act of 1933, as amended (the “1933 Act”) of any interests
in the Plan or any shares of Common Stock to be issued thereunder or to effect similar compliance
under any state laws. The Company shall not be obligated to cause to be issued or delivered any
certificates evidencing shares of Common Stock pursuant hereto unless and until the Company is
advised by its counsel that the issuance and delivery of such certificates is in compliance with
all applicable laws, regulations of governmental authority and the requirements of any securities
exchange on which shares of Common Stock are traded. The Compensation Committee may require, as a
condition of the issuance and delivery of certificates evidencing shares of Common Stock pursuant
to the terms hereof, that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Compensation Committee, in
its sole discretion, deems necessary or desirable. The Participant specifically understands and
agrees that the shares of Common Stock, if and when issued, may be “restricted securities,” as that
term is defined in Rule 144 under the 1933 Act and, accordingly, the Participant may be required to
hold the shares indefinitely unless they are registered under such Act or an exemption from such
registration is available.
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9. Dividends, etc. Unless the Board of Directors otherwise determines, any property,
including cash dividends, received by the Participant with respect to a share of Restricted Stock
as a result of any dividend, recapitalization, merger, consolidation, combination, exchange of
shares or otherwise, will not vest until such share of Restricted Stock vests. Any cash dividends
or other property (but not including securities) received by a Participant with
respect to a share of Restricted Stock shall be returned to the Company in the event such
share of Restricted Stock is forfeited. Any securities received by a Participant with respect to a
share of Restricted Stock as a result of any dividend, recapitalization, merger, consolidation,
combination, exchange of shares or otherwise will not vest until such share of Restricted Stock
vests and shall be forfeited if such share of Restricted Stock is forfeited. Unless the
Compensation Committee otherwise determines, such securities shall bear a legend or be subject to
an electronic coding or stop order, as set forth in Section 7(a) hereof.
10. Delays or Omissions. No delay or omission to exercise any right, power or remedy
accruing to any party hereto upon any breach or default of any party under this Agreement, shall
impair any such right, power or remedy of such party, nor shall it be construed to be a waiver of
any such breach or default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of
any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or default under this
Agreement, or any waiver on the part of any party or any provisions or conditions of this
Agreement, must be in a writing signed by such party and shall be effective only to the extent
specifically set forth in such writing.
11. Right of Discharge Preserved. Nothing in this Agreement shall confer upon the
Participant the right to continue in the employ or other service of the Company, or affect any
right which the Company may have to terminate such employment or service.
12. Integration. This Agreement contains the entire understanding of the parties with
respect to its subject matter. There are no restrictions, agreements, promises, representations,
warranties, covenants or undertakings with respect to the subject matter hereof other than those
expressly set forth herein. This Agreement, including, without limitation, the Plan, supersedes
all prior agreements and understandings between the parties with respect to its subject matter.
13. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
14. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware, without regard to the provisions governing
conflict of laws.
15. Obligation to Notify. If the Participant makes the election permitted under
Section 83(b) of the Internal Revenue Code of 1986, as amended (that is, an election to include in
gross income in the year of transfer the amounts specified in Section 83(b)), the Participant shall
notify the Company of such election within 10 days of filing notice of the election with the
Internal Revenue Service and shall within the same 10-day period remit to the Company an amount
sufficient in the opinion of the Company to satisfy any federal, state and other governmental tax
withholding requirements related to such inclusion in Participant’s income. The Participant should
consult with his or her tax advisor to determine the tax consequences of acquiring the Restricted
Stock and the advantages and disadvantages of filing the Section 83(b)
election. The Participant acknowledges that it is his or her sole responsibility, and not the
Company’s, to file a timely election under Section 83(b), even if the Participant requests the
Company or its representatives to make this filing on his or her behalf.
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16. Participant Acknowledgment. The Participant hereby acknowledges receipt of a copy
of the Plan. The Participant hereby acknowledges that all decisions, determinations and
interpretations of the Compensation Committee in respect of the Plan, this Agreement and the
Restricted Stock shall be final and conclusive.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly
authorized officer, and the Participant has hereunto signed this Agreement on his own behalf,
thereby representing that he has carefully read and understands this Agreement and the Plan as of
the day and year first written above.
| FRANKLIN CREDIT HOLDING CORPORATION |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | Chief Legal Officer | |||
| /s/ Xxxxx Xxx | ||||
| Xxxxx Xxx | ||||
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