Exhibit 10.2

WHITE RIVER CAPITAL, INC.
 
DIRECTORS STOCK COMPENSATION PLAN
 
1. Purpose. The purpose of this Plan is to provide for greater ownership of the
Common Shares of White River Capital, Inc. by Directors of the Corporation in
order to provide Directors with a more direct and proprietary interest in the
welfare and success of the Company and its subsidiaries and to encourage their
continuation as Directors.
 
2. Definitions. The following terms shall have the meanings hereinafter set
forth:
 

 
(a)
“Affiliate” means a business entity that is a subsidiary of the Company.

 

 
(b)
“Board of Directors” means the board of directors of the Company as it shall
exist from time to time.

 

 
(c)
“Code” means the Internal Revenue Code of 1986, as amended.

 

 
(d)
“Common Shares” means the Common Stock, without par value, of the Company.

 

 
(e)
“Company” means White River Capital, Inc., an Indiana corporation.

 

 
(f)
“Determination Date” for a Plan Year, commencing with the 2006 Plan Year means
the third business day following the first public release (by press release or
SEC filing) by the Company of annual consolidated financial information for the
Plan Year; provided that the Determination Date for a Plan Year shall not be
later than March 15 of the immediately subsequent Plan Year.

 

 
(g)
“Director Fees” means the total fees payable to a Director for service as a
Director as determined by the Board of Directors from time to time.

 

 
 

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(h)
“Fair Market Value” shall mean, as of any date, the value of one share of Common
Stock determined as follows:

 
If the Common Stock is listed on any established stock exchange or a national
market system, including without limitation, the Nasdaq National Market or The
Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading day
prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable.
 
If the Common Stock is regularly quoted by one or more recognized securities
dealers but selling prices are not reported, its Fair Market Value shall be the
mean between the high bid and low asked prices for the Common Stock quoted by
such recognized securities dealer(s) on the last market trading day prior to the
day of determination; or
 
In the absence of an established market for the Common Stock, its Fair Market
Value shall be determined by the Administrator in any reasonable manner
including, for example, the valuation method described in § 20.2031-2 of the
regulations promulgated pursuant to the Code.
 

 
(i)
“Director” means any member of the Board of Directors of the Company.

 

 
(j)
“Plan” means this White River Capital, Inc. Directors Stock Compensation Plan.

 

 
(k)
“Plan Committee” means the individual or group of individuals appointed by the
Board of Directors as the committee responsible for administration of the Plan,
initially, the Chief Financial Officer of the Corporation

 

 
(l)
“Plan Year” means the twelve month period commencing on January 1 and ending on
December 31 of each year or such other dates as may be established by the Plan
Committee from time to time.

 
3. Administration. The Plan shall be administered by the Plan Committee. The
Plan Committee shall have the power to interpret and construe the provisions of
the Plan, and its interpretations and constructions shall be final and binding.
The Plan Committee may prescribe, amend and rescind rules and regulations
relative to the Plan or its construction or interpretation. The initial Plan
Committee shall have one member, who shall be the Chief Financial Officer of the
Company. The Plan Committee shall not be liable for any action or determination
made in good faith.
 
4. Participation. Each incumbent Director shall be eligible to participate in
the Plan; provided, that no Director shall be eligible to receive Common Shares
under the Plan if, as after such receipt, (i) such Director would hold economic
ownership of more than 4.9% of the outstanding Common Shares and (ii) such
Director was not (prior to September 1, 2005) already
 

 
 

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deemed a 5% shareholder of the Company for purposes of determining the
availability of net operating loss carryforwards under Section 382 of the Code.
 
5. Shares. The shares to be issued pursuant to the Plan shall be the Company’s
authorized but unissued Common Shares. The total number of the Common Shares
that may be issued under the Plan shall not exceed fifty thousand (50,000)
shares in the aggregate, subject to adjustment in accordance with the provisions
set forth in paragraph 6(f) hereof. In the event any Common Shares issuable
pursuant to the Plan revert to the Company for any reason during the term of
this Plan, those Common Shares may again be issued under the Plan. During the
term of the Plan, the Company shall reserve and keep available a sufficient
number of Common Shares to satisfy its obligations hereunder.
 
6. Operation of the Plan. The Plan shall operate in accordance with and subject
to the following terms and conditions:
 

 
(a)
Director Compensation with Common Shares. Fifty percent (50%) of total Director
Fees payable to each Director eligible to participate in the Plan under Section
4 shall be paid in the form of Common Shares, subject to the terms and
conditions of this Plan.

 

 
(b)
Determination of Number of Common Shares. The number of Common Shares to become
issuable to an eligible Director as of a Determination Date shall be the largest
number of whole shares resulting from the division of (i) the dollar amount of
the Director Fees to be paid in the form of Common Shares under paragraph 6(a),
by (ii) Fair Market Value of one Common Share on the Determination Date. No
fractional shares shall be issued under the Plan and cash shall be paid in lieu
thereof based upon the Fair Market Value of one Common Share.

 

 
(c)
Issuance of Certificates and Delivery to Directors.

 

 
(i)
As soon as practicable after the Determination Date following each Plan Year,
and no later than is necessary to avoid such payment being subject to Section
409A of the Code, the Company shall issue, in the name of each eligible Director
entitled thereto with respect to Director Fees payable for that Plan Year, a
share certificate with respect to the number of Common Shares determined in the
manner provided in this Plan.

 

 
(ii)
If requested by an eligible Director in writing prior to the payment date, share
certificate(s) may be issued jointly to the Director and any other person or
persons.

 

 
(d)
Proration. If an eligible Director serves as a Company Director for less than a
full Plan Year, then Common Shares payable based on Director Fees that would
have been earned had the Director been incumbent for the full Plan Year shall be
prorated so that the number of Common Shares

 

 
 

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issuable shall be determined based on the portion of the Plan Year during which
the Director was incumbent relative to the full Year.
 

 
(e)
Special Provision for 2005. Notwithstanding any provision of this Section 6 to
the contrary, with respect to the 2005 Plan Year, on the date this Plan is
adopted by the board of directors, each eligible Director shall become entitled,
as compensation under this Plan for director services during 2005, $7,880.43
divided by the Fair Market Value of one Common Share on the date of such
adoption (representing the proration of $20,000 annual compensation initially
expected to be payable in shares, for the period of calendar 2005 following
consummation of the Company’s share exchange transaction with Union Acceptance
Corporation). The Plan Committee shall determine the number of such shares so
issuable and arrange for issuance of such shares, subject to compliance with
Section 6(h), including filing of a registration statement with respect to the
shares issuable under the Plan with the Securities and Exchange Commission.

 

 
(f)
Recapitalization. The aggregate number of Common Shares which may be issued
hereunder, and the number of Common Shares subject to issuance, shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding Common Shares resulting from a subdivision or consolidation of
shares of the Company or any other capital adjustment of the Company, the
payment of a share dividend, a share split or any other increase or decrease in
the Common Shares effected without receipt of consideration by the Company.

 

 
(g)
Nonassignability. No right to receive shares pursuant to this Plan shall be
assignable or transferable except by will or under the laws of descent and
distribution.

 

 
(h)
Issuance of Shares and Compliance with Securities Laws. The Company may postpone
the issuance and/or delivery of certificates representing Common Shares until
(i) the admission of such shares to listing on any stock exchange on which
shares of the Company of the same class are then listed or the admission of such
shares for quotation in any automated inter-dealer quotation system in which
such shares are then quoted and (ii) the completion of such registration or
other qualification of such shares under any state or Federal law, rule or
regulation or the rules and regulations of any exchange upon which the Common
Shares are traded as the Company shall determine to be necessary or advisable,
which registration or other qualification the Company shall use its best efforts
to complete. Any person acquiring Common Shares pursuant to the Plan may be
required to make such representations and furnish such information as may, in
the opinion of counsel for the Company, be appropriate to permit the Company, in
light of the existence or non-existence with respect to such shares of an
effective registration under the Securities Act of 1933, as amended, or any
similar state statute, to issue the shares in compliance

 

 
 

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with the provisions of those or any comparable acts. Certificates representing
Common Shares issued pursuant to the Plan may bear such legends or other
statements concerning restrictions on the transferability of the shares as the
Company may determine to be necessary or advisable to comply with applicable
securities laws.
 

 
(i)
Rights as a Shareholder. An eligible Director shall have no rights as a
shareholder with respect to Common Shares issuable under the Plan until the date
of issuance of a certificate representing those shares after the applicable
Determination Date. Upon the issuance of a certificate, the shares represented
thereby shall be fully paid and nonassessable Common Shares of the Company, the
Director shall have the power to vote those Common Shares on all matters
presented to a vote of the shareholders of the Company and shall be entitled to
receive all dividends and other distributions declared or paid by the Company
with respect thereto. No adjustment will be made for dividends or other rights
for which the record date is prior to the date such certificate is issued.

 
7. Term of Plan. The Plan shall become effective as of September 1, 2005. The
Plan shall terminate on December 31, 2010, or on such earlier date as the Board
of Directors may determine. No Common Shares shall be issued under the Plan
after the termination date.
 
8. Amendment of the Plan. The Board of Directors may from time to time, alter,
amend, suspend or discontinue the Plan, provided, that no such change shall
affect any Common Shares for which certificates have been issued under the Plan
without the consent of the Director to whom such shares have been issued.
 
9. No Right to Reelection as a Director. Neither the adoption of the Plan, the
issuance of any Common Shares hereunder, nor any other action taken relating to
the Plan shall impose any obligation on the Company or any Affiliate or
shareholder or the Board of Directors to nominate any Director for reelection as
a director by the shareholders of the Company or any Affiliate.
 
10. Withholdings. The Company shall have the right to require a Director to
remit to the Company amounts sufficient to satisfy any applicable withholding
requirements set forth in the Code, or under state or local law relating to
Common Shares issued to that Director. The Company shall have the right, to the
extent permitted by law, to deduct from any payment of any kind otherwise due to
an Director who receives Common Shares under the Plan any federal, state or
local taxes of any kind required by law to be withheld with respect to the
issuance of those Common Shares. Prior to an applicable Determination Date,
Director may elect to reduce the number of Common Shares to be received by the
Director under the Plan in order to satisfy any federal, state or local
withholding obligation.