Franklin Credit Management Corporation Employee Restricted Stock Grant Agreement
Franklin
Credit Management Corporation
THIS
AGREEMENT, made as of June 15, 2006, between Franklin Credit Management
Corporation (the “Company”) and Xxxxxxxxx Xxxxxx Jardin (the
“Participant”).
WHEREAS,
the Company has adopted and maintains the Franklin Credit Management 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 its Chief Executive Officer
pursuant to an Employment Agreement, dated as of April 26, 2006 (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 100,000 restricted
shares (the “Restricted Stock”) of common stock of the Company (“Common
Stock”).
2. Grant
Date. The
Grant Date of the Restricted Stock is June 15, 2006.
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, 10,000 shares of Restricted Stock
shall vest immediately upon issuance; 5,000 shares of Restricted Stock shall
vest of the first day after each fiscal quarter from July 1, 2006, until April
1, 2008; and 6,250 shares of Restricted Stock will vest on the first day after
each fiscal quarter from July 1, 2008, until April 1, 2010 (each such date,
a
“Vesting Date”).
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 Service.
In the
event that the Participant’s Service with the Company terminates for any reason
before all the shares of Restricted Stock are vested, 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 Service
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. For purposes hereof, “Service”
means a continuous time period during which the Participant is at least one
of
the following: an employee or a director of, or a consultant to, the
Company.
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 MANAGEMENT CORPORATION 2006 STOCK INCENTIVE PLAN AND A
RESTRICTED STOCK GRANT AGREEMENT BETWEEN FRANKLIN CREDIT MANAGEMENT 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 MANAGEMENT
CORPORATION.”
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.
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(b) Reasonably
promptly after the Restricted Stock vests pursuant to Section 4 hereof, (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.
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.
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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.
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FRANKLIN
CREDIT MANAGEMENT CORPORATION
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By:
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_______________________
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Name:
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_______________________
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Title:
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_______________________
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________________________________
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[Participant]
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