Exhibit 10.2

June 14, 2016

Mr. Michael R. Dunn

c/o Regional Management Corp.

509 West Butler Road

Greenville, SC 29607

 

  Re: Chief Executive Officer Transition Matters

Dear Mike:

This Letter Agreement (the “Letter Agreement”), effective as of August 1, 2016
(the “Effective Date”), sets forth certain understandings, agreements, and
obligations between you and Regional Management Corp. (the “Corporation”)
related to your transition from Chief Executive Officer of the Corporation to
Executive Chairman of the Board of Directors of the Corporation (the “Board”).

1. Appointment as Executive Chair. You will be appointed by the Board as
Executive Chairman of the Board and will resign as Chief Executive Officer of
the Corporation and any other officer or director positions you hold with its
subsidiaries effective upon the appointment of Peter R. Knitzer as Chief
Executive Officer of the Corporation. As Executive Chairman, you will remain an
employee of the Corporation. Your duties as Executive Chairman will include
working with the Chief Executive Officer on executive transition matters and
such other duties and responsibilities as may be established by the Board that
are consistent with the position of Executive Chairman. You will continue as
Executive Chairman until December 31, 2016 (or such later date as may be
mutually agreed to by you and the Board), at which time your employment with the
Corporation shall terminate (such date, the “Termination Date”). Following the
Termination Date, you will continue to serve as a member of the Board (in a
non-employee capacity), subject to nomination for re-election by the Board and
continued election by the Corporation’s stockholders.

2. Effect of Employment Agreement; Consideration. As you know, you and the
Corporation entered into an Employment Agreement dated January 12, 2015 (the
“Employment Agreement”), which sets forth certain terms and conditions related
to your employment during the “Employment Period” as defined in the Employment
Agreement. You and the Corporation acknowledge and agree that, as of the
Effective Date and except as otherwise set forth in this Letter Agreement, the
Employment Agreement will terminate, the rights and obligations thereunder of
you and the Corporation will terminate as of such date, and you hereby agree to
waive and release any rights or claims related to the Employment Agreement
except as provided in this Letter Agreement. Notwithstanding the preceding
sentence, however, the provisions of Article III (“Covenants”) (as modified by
the next succeeding sentence) and Section 4.6 (“Choice of Law; Forum Selection;
Jury Trial Waiver”) will continue in effect (consistent with the provisions of
Section 3.12 of the Employment Agreement), and for the purposes of Article III,
the “Employment Period” shall include such period during which you are employed
by the Corporation as Executive Chairman through the Termination Date,
notwithstanding the termination of the other provisions of the Employment
Agreement or your ceasing to serve as Chief Executive Officer. Notwithstanding
the foregoing, (i) nothing in this Letter Agreement prohibits you from reporting
possible violations of federal law or regulation to any governmental agency or
entity, including but not limited to

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the Department of Justice, the Securities and Exchange Commission, the Congress,
or any agency Inspector General, or making other disclosures that are protected
under the whistleblower provisions of federal law or regulation, and you
acknowledge and understand that you do not need the prior authorization of the
Corporation to make any such reports or disclosures and are not required to
notify the Corporation that you have made or will make such reports or
disclosures; and (ii) you will not be held criminally or civilly liable under
any federal or state trade secret law for the disclosure of a trade secret that
(A) is made (X) in confidence to a federal, state, or local government official,
either directly or indirectly, or to an attorney, and (Y) solely for the purpose
of reporting or investigating a suspected violation of law; or (B) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such
filing is made under seal. You agree that your transition from Chief Executive
Officer to Executive Chairman (and any subsequent transition, such as to a
non-employee director) is voluntary and does not constitute an “Involuntary
Termination” under the Employment Agreement. You also acknowledge and agree that
you are not entitled to any severance or other payments other than as provided
in this Letter Agreement, including but not limited to under the provisions of
Section 2.7 of the Employment Agreement. You further acknowledge that you are
receiving valuable consideration in exchange for agreeing to the terms of this
Letter Agreement.

3. Salary. In consideration for your services as Executive Chairman, you will be
paid a monthly salary of $100,000 (pro-rated for any partial month). Such salary
will be paid to you periodically in accordance with the normal payroll practices
of the Corporation. Your right to salary will terminate upon the termination of
your employment with the Corporation on the Termination Date.

4. Bonuses. You will remain eligible to receive (i) an “Annual Bonus” (as
defined under the Employment Agreement) for the 2016 fiscal year, if and to the
extent earned under the Corporation’s Annual Incentive Plan, as amended, if
employed by the Corporation on December 31, 2016, and (ii) a “Completion Bonus”
(as defined under the Employment Agreement) in an amount of up to $500,000, as
determined by the Compensation Committee of the Board (the “Committee”), subject
to your continued employment with the Corporation through December 31, 2016.
Consistent with the terms of the Employment Agreement, the Completion Bonus will
be payable solely at the discretion of the Committee based upon a review of your
performance, taking into consideration those factors that the Committee may
establish or otherwise deem relevant, including but not limited to your
contributions to the Corporation’s financial performance and the accomplishment
of the Corporation’s short-term and long-term strategic objectives. The Annual
Bonus and the Completion Bonus, each if earned as provided herein, will be paid
no later than March 10, 2017, and, with respect to the Annual Bonus, otherwise
in accordance with the terms of the Annual Incentive Plan.

5. Long-Term Incentive Awards. As you know, you have been granted certain
long-term incentive awards under the Corporation’s 2011 Stock Incentive Plan
(the “2011 Plan”) and 2015 Long-Term Incentive Plan (the “2015 Plan,” and,
together with the 2011 Plan, the “Stock Plans”) and related award agreements.
For the purposes of the Stock Plans and related nonqualified stock option
agreements, your employment or service will be deemed to continue in effect as
long as you are an employee of or in service to the Corporation, and your
transition from employee to non-employee director will not be deemed a
termination under such Stock Plans and option agreements. Your option agreements
shall be deemed amended if and to the extent necessary to conform to the
foregoing or to the provisions of Section 6 below. Consistent with the
Committee’s authority under the 2015 Plan, with respect to the
performance-contingent restricted stock unit awards and cash-settled performance
share/unit awards granted under the 2015 Plan, such awards will continue to vest
only while you remain an employee of the Corporation through the Termination
Date, and your eligibility to earn such awards (or portions thereof) will be
determined based on the Termination Date and the provisions of the related award
agreements, including the pro-rata vesting provisions and the attainment of the
performance goals specified therein. Your performance-contingent restricted
stock unit agreements and cash-settled performance share/unit

 

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agreements will be deemed amended if and to the extent necessary to conform to
the foregoing. Provided you are employed by the Corporation through November 24,
2016, the Corporation acknowledges and agrees that any termination of your
employment with the Corporation other than for “Cause” (as defined under the
applicable Stock Plan and related award agreement) after November 24, 2016 will
be treated as a “Retirement” and a “Qualifying Termination” under all of the
Stock Plans (as such terms are defined under the Stock Plans).

6. Attorney Fee Reimbursement; Other Benefits; Employment At-Will. The
Corporation shall pay the reasonable fees and expenses of your attorney not to
exceed $10,000 in connection with the review and negotiation of this Letter
Agreement. Your entitlement to benefits under other benefit plans and programs
will be as provided in Section 2.5(a) of the Employment Agreement. You
acknowledge and agree that your employment is at-will and may be terminated by
you or the Corporation, for any reason or no reason, at any time; provided that,
if the Corporation terminates your employment other than for “Cause” (as defined
under the applicable Stock Plan and related award agreement) prior to November
24, 2016, such termination will be treated as a “Retirement” and a “Qualifying
Termination” under all of the Stock Plans (as such terms are defined under the
Stock Plans).

7. Withholding and Taxes. All amounts payable or that become payable under this
Letter Agreement will be subject to any deductions and withholdings previously
authorized by you or required by law. You will be responsible for any and all
taxes resulting from the benefits provided under the Letter Agreement and/or the
Employment Agreement. The Corporation makes no undertakings regarding, and has
no obligation to achieve, any certain tax results for you related to the
benefits provided herein.

8. Waiver and Release. You acknowledge and agree that the Corporation may at any
time require, as a condition to receipt of benefits payable under this Letter
Agreement, that you (or a representative of your estate) execute a waiver and
release discharging the Corporation and its subsidiaries, and their respective
affiliates, and its and their officers, directors, managers, employees, agents
and representatives and the heirs, predecessors, successors and assigns of all
of the foregoing, from any and all claims, actions, causes of action or other
liability, whether known or unknown, contingent or fixed, arising out of or in
any way related to your employment, or the ending of your employment with the
Corporation or the benefits thereunder, including, without limitation, any
claims under this Letter Agreement or other related instruments. The waiver and
release will be in a form determined by the Corporation and shall be executed
prior to the expiration of the time period provided for payment of such
benefits.

9. Indemnification. You will continue to be indemnified and held harmless by the
Corporation for any third-party claims made against you as an employee,
executive and/or director of the Corporation in accordance with the
Corporation’s amended and restated bylaws in effect on the date hereof.

10. Compensation as a Non-Employee Director. In the event that you cease to
serve as Executive Chairman (or in any other employee capacity) but remain a
member of the Board as a non-employee director, you will be entitled to such
compensation and benefits as may be established from time to time by the Board
for non-employee directors.

11. Amendment and Termination; Entire Agreement. This Letter Agreement may be
amended or terminated by a written agreement between you and the Chairman of the
Committee, acting on behalf of the Corporation. Except as otherwise provided
herein, this Letter Agreement contains the entire agreement of you and the
Corporation related to the subject matter hereof and supersedes all prior
agreements and understandings with respect to such subject matter, and you and
the Corporation have made no agreements, representations or warranties related
to the subject matter of this Letter Agreement that are not set forth herein.

 

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12. Compliance with Code Section 409A; Recoupment, Ownership and Other Policies
or Agreements. The Corporation and you agree that you both will cooperate in
good faith so that no compensation paid to you by the Corporation under this
Agreement will violate Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), and the regulations promulgated thereunder; provided,
however, that, you acknowledge and agree that in the event that this Letter
Agreement or any benefit described herein shall be deemed not to comply with
Code Section 409A, then neither the Corporation, the Board, the Committee nor
its or their designees or agents shall be liable to you or other persons for
actions, decisions or determinations made in good faith. As a condition to
entering into this Letter Agreement, you agree that you will abide by all
provisions of any equity retention policy, compensation recovery policy, stock
ownership guidelines and/or other similar policies maintained by the
Corporation, each as in effect from time to time and to the extent applicable to
you from time to time. In addition, you will be subject to such compensation
recovery, recoupment, forfeiture or other similar provisions as may apply at any
time to you under applicable law.

On behalf of the Board and the Corporation, we thank you for your service as
Chief Executive Officer and look forward to your continued service as Executive
Chairman. If the terms of this Letter Agreement are acceptable, please sign the
letter below and return it to me at your earliest opportunity.

 

Sincerely,

/s/ Steven J. Freiberg

Steven J. Freiberg Chairman of the Compensation Committee of the Board of
Directors

I have read and understand the provisions of this Letter Agreement and I hereby
agree to the terms of the Letter Agreement.

 

Signature:

/s/ Michael R. Dunn

Michael R. Dunn Date: June 14, 2016

 

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