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Exhibit 10.7
 
FIRST SECURITY GROUP, INC.
RESTRICTED STOCK AWARD

This RESTRICTED STOCK AWARD (the “Award”) is made and entered into as of the
26th day of February, 2003 by and between First Security Group, Inc. (the
“Company”), a Tennessee corporation, and _____________________________ (the
“Director”).

Upon and subject to the Additional Terms and Conditions attached hereto and
incorporated herein by reference as part of this Award, the Company hereby
awards as of the Grant Date to the Director the Restricted Shares described
below pursuant to the First Security Group, Inc. 2002 Long-Term Incentive Plan
(the “Plan”) in consideration of the Director’s past and future services to the
Company.

 
A.
Grant Date:  .

 
B.
Restricted Shares: ______________ shares of the Company’s common stock (“Common
Stock”), $.01 par value per share.

 
C.
Vesting Schedule: The Restricted Shares shall vest or be forfeited back to the
Company, as the case may be, according to the Vesting Schedule attached hereto
as Schedule 1 hereto (the “Vesting Schedule”). The Restricted Shares which have
become vested pursuant to the Vesting Schedule are herein referred to as the
“Vested Restricted Shares.”

IN WITNESS WHEREOF, the Company has signed and sealed this Award as of the Grant
Date set forth above.

 
FIRST SECURITY GROUP, INC.
           
By:
             
Title:
   

ATTEST:

By: ________________________________

Title: ______________________________
[CORPORATE SEAL] 

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ADDITIONAL TERMS AND CONDITIONS OF
FIRST SECURITY GROUP, INC.
RESTRICTED STOCK AWARD

1.    Restricted Shares Held by the Share Custodian. Director hereby authorizes
and directs the Company to deliver any share certificate issued by the Company
to evidence Restricted Shares to the Secretary of the Company or such other
officer of the Company as may be designated by the Committee (the “Share
Custodian”) to be held by the Share Custodian until the Restricted Shares become
Vested Restricted Shares or, if applicable, until forfeited, all in accordance
with the Vesting Schedule. Director hereby irrevocably appoints the Share
Custodian, and any successor thereto, as the true and lawful attorney-in-fact of
the Director with full power and authority to execute any stock transfer power
or other instrument necessary to transfer the Restricted Shares to the Company
upon any forfeiture of the Restricted Shares, in the name, place, and stead of
the Director. The term of such appointment shall commence on the Grant Date and
shall continue until the Restricted Shares are delivered to the Director as
provided above or to the Company upon a forfeiture of the Restricted Shares. Any
shares of Common Stock or other securities issued with respect to the Restricted
Shares on account of an event described in Section 5 below shall be subject to
the provisions of this Award and the Director agrees that any certificate
representing such shares of Common Stock or other securities issued as a result
thereof shall be delivered to the Share Custodian and shall be subject to all of
the provisions of this Award as if initially granted hereunder. For purposes of
this Award, such shares of Common Stock also shall be deemed to be Restricted
Shares. To effect the provisions of this Section, the Director shall complete an
irrevocable stock power in favor of the Share Custodian in the form attached
hereto as Exhibit A.

2.    Dividends and Voting. During the period that the Share Custodian holds the
Restricted Shares subject to Section 1 above, the Director shall be entitled to
all rights applicable to shares of Common Stock not so held, except as provided
in this Award. In that regard, the Director shall be entitled to dividends paid
on all Restricted Shares as and when declared and paid and shall be entitled to
vote the Restricted Shares unless and until they are forfeited.

3.    Restrictions on Transfer of Restricted Shares.

(a)    General Restrictions. Except as provided by this Award, the Director
shall not have the right to make or permit to exist any transfer or
hypothecation, whether outright or as security, with or without consideration,
voluntary or involuntary, of all or any part of any right, title or interest in
or to any Restricted Shares. Any such disposition not made in accordance with
this Award shall be deemed null and void. The Company will not recognize, or
have the duty to recognize, any disposition not made in accordance with the Plan
and this Award, and any Restricted Shares so transferred will continue to be
bound by the Plan and this Award. The Director (and any subsequent holder of
Restricted Shares) may not sell, pledge or otherwise directly or indirectly
transfer (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) any interest in or any beneficial interest
in any Restricted Shares except pursuant to the provisions of this Award. Any
sale, pledge or other transfer (or any attempt to effect the same) of any
Restricted Shares in violation of any provision of the Plan or this Award shall
be void, and the Company shall not record such transfer, assignment, pledge or
other disposition on its books or treat any purported transferee of such
Restricted Shares as the owner of such Restricted Shares for any purpose.

Additional Terms and Conditions - Page 1 of 4

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(b)    Certain Permitted Transfers. The restrictions contained in this Section 3
will not apply with respect to transfers of the Restricted Shares pursuant to
applicable laws of descent and distribution; provided that the restrictions
contained in this Section 3 will continue to be applicable to the Restricted
Shares after any such transfer; and provided further that the transferees of
such the Restricted Shares must agree in writing to be bound by the provisions
of the Plan and this Award.

4.    Additional Restrictions on Transfer.
 
(a)    In addition to any legends required under applicable securities laws, the
certificates representing the Restricted Shares shall be endorsed with the
following legend and the Director shall not make any transfer of the Restricted
Shares without first complying with the restrictions on transfer described in
such legend

TRANSFER IS RESTRICTED
 

  THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND FORFEITURE PROVISIONS WHICH ALSO APPLY TO THE TRANSFEREE AS SET
FORTH IN A RESTRICTED STOCK AWARD, DATED _________________, A COPY OF WHICH IS
AVAILABLE FROM THE COMPANY.  

 
(b)    Opinion of Counsel. No holder of Restricted Shares may sell, transfer,
assign, pledge or otherwise dispose of (whether with or without consideration
and whether voluntarily or involuntarily or by operation of law) any interest in
or any beneficial interest in any Restricted Shares, except pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the “Securities Act”), without first delivering to the Company an opinion of
counsel (reasonably acceptable in form and substance to the Company) that
neither registration nor qualification under the Securities Act and applicable
state securities laws is required in connection with such transfer.

5.    Change in Capitalization.
 
(a)    The number and kind of Restricted Shares shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or combination of shares or the payment of a
stock dividend in shares of Common Stock to holders of outstanding shares of
Common Stock or any other increase or decrease in the number of shares of Common
Stock outstanding if effected without receipt of consideration by the Company.
No fractional shares shall be issued in making such adjustment. All adjustments
made by the Committee under this Section shall be final, binding and conclusive.

Additional Terms and Conditions - Page 2 of 4

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(b)    In the event of a merger or consolidation, extraordinary dividend
(including a spin-off), reorganization or other change in the corporate
structure of the Company or a tender offer for shares of Common Stock, an
appropriate adjustment may be made with respect to the Restricted Shares such
that other securities, cash or other property may be substituted for the Common
Stock held by the Director pursuant to the this Award.
 
(c)    The existence of the Plan and this Award shall not affect the right or
power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure, any merger
or consolidation of the Company, any issue of debt or equity securities having
preferences or priorities as to the Common Stock or the rights thereof, the
dissolution or liquidation of the Company, any sale or transfer of all or part
of its business or assets, or any other corporate act or proceeding.

6.    Governing Laws. This Award shall be construed, administered and enforced
according to the laws of the State of Tennessee; provided, however, no
Restricted Shares shall be issued except, in the reasonable judgment of the
Committee, in compliance with exemptions under applicable state securities laws
of the state in which the Director resides, and/or any other applicable
securities laws.

7.    Successors. This Award shall be binding upon and inure to the benefit of
the heirs, legal representatives, successors, and permitted assigns of the
parties.

8.    Notice. Except as otherwise specified herein, all notices and other
communications under this Award shall be in writing and shall be deemed to have
been given if personally delivered or if sent by registered or certified United
States mail, return receipt requested, postage prepaid, addressed to the
proposed recipient at the last known address of the recipient. Any party may
designate any other address to which notices shall be sent by giving notice of
the address to the other parties in the same manner as provided herein.

9.    Severability. In the event that any one or more of the provisions or
portion thereof contained in this Award shall for any reason be held to be
invalid, illegal, or unenforceable in any respect, the same shall not invalidate
or otherwise affect any other provisions of this Award, and this Award shall be
construed as if the invalid, illegal or unenforceable provision or portion
thereof had never been contained herein.

10.    Entire Agreement. Subject to the terms and conditions of the Plan, this
Award expresses the entire understanding and agreement of the parties with
respect to the subject matter. This Award 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.

11.    Violation. Any disposition of the Restricted Shares or any portion
thereof shall be a violation of the terms of this Award and shall be void and
without effect.

Additional Terms and Conditions - Page 3 of 4

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12.    Headings and Capitalized Terms. Paragraph headings used herein are for
convenience of reference only and shall not be considered in construing this
Award. Capitalized terms used, but not defined, in this Award shall be given the
meaning ascribed to them in the Plan.

13    Specific Performance. In the event of any actual or threatened default in,
or breach of, any of the terms, conditions and provisions of this Award, the
party or parties who are thereby aggrieved shall have the right to specific
performance and injunction in addition to any and all other rights and remedies
at law or in equity, and all such rights and remedies shall be cumulative.

14.    No Right to Continued Retention. Neither the establishment of the Plan
nor the award of Restricted Shares hereunder shall be construed as giving
Director the right to any continued service relationship with the Company or any
affiliate of the Company.

Additional Terms and Conditions - Page 4 of 4

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SCHEDULE 1

FIRST SECURITY GROUP, INC.
2002 LONG-TERM INCENTIVE PLAN
RESTRICTED STOCK AWARD

Vesting Schedule

I.
The Restricted Shares shall become vested in accordance with the following
Vesting Schedule:

     
Percentage of Restricted Shares
   
Months of Vesting Service
 
which are Vested Restricted Shares
 

II.  
The Director shall receive credit for one Month of Vesting Service for each full
consecutive calendar month beginning ___________________ and ending on the date
the Director is neither a director of the Company nor of any wholly-owned
subsidiary of the Company, regardless of the reason. Except as provided in
Paragraph III below, the Restricted Shares shall be forfeited if they have not
become vested at the time the Director is neither a director of the Company nor
of any wholly-owned subsidiary of the Company, regardless of the reason.

III.  
The Restricted Shares also shall become Vested Restricted Shares if the Director
ceases to serve upon the Board of Directors of the Company or the board of
directors of any wholly-owned subsidiary prior to end of _______________________
by reason of his death or Disability.

Schedule 1-Page of 1

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EXHIBIT A

IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to First
Security Group, Inc., a Tennessee corporation (the “Company”), ______ shares of
the Common Stock, $.01 par value per share, of the Company registered in the
name of the undersigned on the stock transfer records of the Company and
represented by Stock Certificate No. ____________________ of the Company; and
the undersigned does hereby irrevocably constitute and appoint
_______________________________________, his attorney-in-fact, to transfer the
aforesaid shares on the books of the Company, with full power of substitution;
and the undersigned does hereby ratify and confirm all that said
attorney-in-fact lawfully shall do by virtue hereof.

Date:
   
Signed:
                 
Print Name:
 

IN THE PRESENCE OF:

_______________________________
(Print Name)

_______________________________
(Signature)