Exhibit 10.1

 

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the
____ day of___________, between First Acceptance Corporation, a Delaware
corporation (the “Company”), and __________ (the “Participant”).

W I T N E S S E T H

In consideration of the mutual promises and covenants made herein and the mutual
benefits to be derived herefrom, the parties hereto agree as follows:

1.Grant and Vesting of Restricted Stock Units.

(a)Subject to the provisions of this Agreement and to the provisions of the
Amended and Restated First Acceptance Corporation 2002 Long Term Incentive Plan
(the “Plan”), the Company hereby grants to the Participant as of _________,
______ (the “Grant Date”), an Award under the Plan of ________ Restricted Stock
Units (the “Awarded Units”).  Each Awarded Unit shall be a notional share of
Common Stock, with the value of each Awarded Unit being equal to the Fair Market
Value of a share of Common Stock at any time.  All capitalized terms used
herein, to the extent not defined, shall have the meaning set forth in the
Plan.  

(b)Subject to the terms and conditions of this Agreement, one hundred percent
(100%) of the Awarded Units shall vest and no longer be subject to any
restriction (other than the restrictions set forth in Section 4(b) and Section 5
below) on the third anniversary of the  Date of Grant (the “Restriction
Period”), provided that the Participant is employed by (or, if the Participant
is an Outside Director or Consultant, is providing services to) the Company or
any of its Subsidiaries on such date.  

(c)Notwithstanding the foregoing, in the event of the Participant’s Termination
of Service during the Restriction Period due to death or Total and Permanent
Disability, Retirement or by the Company without Cause, a prorated portion of
the Awarded Units granted hereunder shall immediately vest and no longer be
subject to restriction, with such proration determined by multiplying the total
number of the Awarded Units granted hereunder by a fraction, the numerator of
which is the number of months during the Restriction Period that the Participant
was employed, including the full vesting month in which the Participant’s death
or Total and Permanent Disability, Retirement or Termination of Service without
Cause occurs, and the denominator of which is thirty-six (36).  Except as
provided in the preceding sentence, in the event of the Participant’s
Termination of Service during the Restriction Period, all unvested Awarded Units
shall be forfeited by the Participant for no consideration effective immediately
upon such termination.  Upon forfeiture, all of the Participant’s rights with
respect to the forfeited Awarded Units shall cease and terminate, without any
further obligation on the part of the Company.   Nothing in this Agreement or
the Plan shall confer upon the Participant any right to continue in the employ
of the Company or any of its Subsidiaries or interfere in any way with the right
of the Company or any such Subsidiaries to terminate the Participant’s
employment at any time.

(d)In the event of a Change in Control, to the extent not previously forfeited,
the Awarded Units shall immediately vest in full and no longer be subject to
restriction.

(e)Awarded Units which have become vested pursuant to the terms of this Section
1 are collectively referred to herein as “Vested RSUs.”  All other Awarded Units
are collectively referred to herein as “Unvested RSUs.”

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2.Issuance of Shares.  

The Company shall convert the Vested RSUs into the number of whole shares of
Common Stock equal to the number of Vested RSUs, subject to the provisions of
the Plan and this Agreement, including, without limitation, the forfeiture
provisions of Section 1(c) and Section 5, and the clawback provisions of Section
16, and shall either electronically register such shares of Common Stock in the
Participant’s name or issue certificates for the number of shares of Common
Stock equal to the Vested RSUs in the Participant’s name, on the first of the
following events:

(i)on the third anniversary of the Date of Grant;

(ii) within thirty (30) days following the Participant’s Termination of Service
due to death, Total and Permanent Disability, Retirement or by the Company
without Cause, provided, that if such thirty (30) day period begins in one
taxable year and ends in a second taxable year, the Vested RSUs shall be
converted into shares of Common Stock in the second taxable year; or

 

(iii)on the effective date of a Change in Control (so long as such Change in
Control qualifies as a permissible payment event pursuant to Section
409A(a)(2)(A)(v) of the Code and the regulations issued thereunder).

 

The Company shall electronically register such shares, or issue certificates for
the number of shares of Common Stock, equal to the Vested RSUs in the
Participant’s name or in the name of such person or persons to whom the
Participant’s rights under the Award passed by will or the applicable laws of
descent and distribution.  From and after the date of registration or receipt of
such shares of Common Stock, the Participant, or such person or persons to whom
the Participant’s rights under the Award passed by will or the applicable laws
of descent and distribution, as the case may be, shall have full rights of
transfer or resale with respect to such shares of Common Stock, subject to
Section 4(b) and Section 5 hereof and applicable state and federal regulations.

3.Who May Receive Converted Vested RSUs.  

During the lifetime of the Participant, the shares of Common Stock received upon
conversion of Vested RSUs may only be received by the Participant or the
Participant’s legal representative.  If the Participant dies prior to the date
his or her Vested RSUs are converted into shares of Common Stock as described in
Section 2 above, the shares of Common Stock relating to such converted Vested
RSUs may be received by any individual who is entitled to receive the property
of the Participant pursuant to the applicable laws of descent and distribution.

4. Nontransferability of the Restricted Stock Units.

(a)Subject to the provisions of the Plan and this Agreement, the Unvested RSUs
shall not be transferable by the Participant by means of sale, assignment,
exchange, encumbrance, pledge, or otherwise.

(b)Notwithstanding anything to the contrary contained herein, for the one year
period immediately following the end of the Restriction Period, the Vested RSUs
(and the shares of Common Stock received upon the conversion of the Vested RSUs
under Section 3) shall not be transferable by the Participant by means of sale,
assignment, exchange, or otherwise, provided that (i) nothing in this Section
4(b) shall prevent the Participant from pledging or encumbering such shares of
Common Stock during such one year period so long as such pledge or encumbrance
cannot cause a transfer or sale of the shares of Common Stock until after the
expiration of such one year period; (ii) in the event of the Participant’s death
during such one year period, such restrictions shall terminate on the
Participant’s death and the shares of Common Stock may be transferred to the
individual who is entitled to receive the property of the Participant pursuant
to the applicable laws of descent and distribution; (iii) nothing in this
Section 4(b) shall prevent the sale or transfer of the shares

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of Common Stock on, in connection with, or after a Change in Control; and (iv)
nothing in this Section 4(b) shall prevent the withholding of shares of Common
Stock deliverable upon vesting of the Awarded Units as provided in Section 9
below.

5.Non-Solicitation.

The Participant covenants and agrees that during his or her employment with the
Company or its Subsidiaries and for a period of twelve (12) months subsequent to
the Participant’s Termination of Service for any reason, whether involuntary or
voluntary, the Participant shall not directly or indirectly, as an owner,
stockholder, director, employee, partner, agent, broker, or consultant recruit,
hire or attempt to recruit or hire other employees of the Company or its
Subsidiaries, directly or by assisting other employees of the Company and its
Subsidiaries, nor shall the Participant contact or communicate with any other
employees of the Company or its Subsidiaries for the purpose of inducing other
employees to terminate their employment with the Company or its
Subsidiaries.  For purposes of this Section 5, “other employees” shall refer to
employees who are still actively employed by or doing business with the Company
or its Subsidiaries at the time of the attempted recruiting or hiring.
Notwithstanding anything to the contrary contained herein, in the event the
Participant fails to comply with the non-solicitation provisions set forth in
this Section 5, or the non-solicitation provisions contained in any written
agreement by and between the Participant and the Company or its Subsidiaries,
then (i) the Awarded Units shall immediately cease to vest as of the date of
such violation, and (ii) any Vested RSUs that had not been converted into shares
of Common Stock prior to the date of such violation and any Unvested RSUs shall
be immediately forfeited and this Agreement (other than the provisions of this
Section 5) will be terminated on the date of such violation.

6.Rights as a Stockholder.

The Participant will have no rights as a stockholder with respect to any shares
of Common Stock covered by this Agreement until the electronic registration of,
or the issuance of certificates for, such shares of Common Stock in the
Participant’s name with respect to the Awarded Units.  The Awarded Units shall
be subject to the terms and conditions of this Agreement regarding such shares
of Common Stock.  No adjustment shall be made for dividends or other rights for
which the record date is prior to the registration of, or the issues of
certificates for, such shares of Common Stock in the Participant’s name.

7.Adjustments.

Adjustments to the Awarded Units (or any of the shares of Common Stock covered
by the Awarded Units), if any, shall be made in accordance with Article XI of
the Plan.

8.Conditions for Issuance.  

The Committee may, in its discretion, require the Participant to represent to,
and agree with, the Company in writing that such person is acquiring the shares
of Common Stock without a view to the distribution thereof.  The certificates
for such shares of Common Stock may include any legend which the Committee deems
appropriate to reflect any restrictions on transfer.  Notwithstanding any other
provision of the Plan or this Agreement, the Company shall not be required to
issue or deliver any certificate or certificates for shares of Common Stock
under the Plan prior to fulfillment of all of the following conditions: (i)
listing, or approval for listing upon notice of issuance, of such shares of
Common Stock on the applicable exchange; (ii) any registration or other
qualification of such shares of Common Stock under any state or federal law or
regulation, or the maintaining in effect of any such registration or other
qualification which the Committee shall, in its absolute discretion upon the
advice of counsel, deem necessary or advisable; and (iii) obtaining any other
consent, approval, or permit from any state or federal governmental agency which
the Committee shall, in

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its absolute discretion after receiving the advice of counsel, determine to be
necessary or advisable. Notwithstanding any of the provisions hereof, the
Participant hereby agrees that he or she will not acquire any shares of Common
Stock, and that the Company will not be obligated to issue any shares of Common
Stock to the Participant hereunder, if the issuance of such shares of Common
Stock shall constitute a violation by the Participant or the Company of any
provision of any law or regulation of any governmental authority.  Any
determination in this connection by the Company shall be final, binding, and
conclusive.  The obligations of the Company and the rights of the Participant
are subject to all applicable laws, rules, and regulations.  

9. Taxes and Withholding.

No later than the date as of which an amount with respect to this Agreement
first becomes includible in the gross income of the Participant or subject to
withholding for federal, state, local, or foreign income or employment or other
tax purposes, the Participant shall pay to the Company or the applicable
Subsidiary, or make arrangements satisfactory to the Company regarding the
payment of, any federal, state, local, or foreign taxes of any kind required by
applicable law and regulations to be withheld with respect to such amount.
Unless the Participant has made separate arrangements satisfactory to the
Company, the Company may elect, but shall not be obligated, to withhold shares
of Common Stock deliverable upon vesting of the Awarded Units having a Fair
Market Value on the date of withholding equal to the minimum amount (and not any
greater amount) required to be withheld for tax purposes, all in accordance with
such procedures as the Committee establishes.  The obligations of the Company
under this Agreement and the Plan shall be conditional on compliance by the
Participant with this Section 9, and the Company and its Subsidiaries shall, to
the extent permitted by law, have the right to deduct any such taxes from any
payment otherwise payable to the Participant.  The Committee may establish such
procedures as it deems appropriate, including making irrevocable elections, for
the settlement of withholding obligations with shares of Common Stock.  

10.Notices.

All notices and other communications under this Agreement shall be in writing
and shall be given by hand delivery to the other party or by facsimile,
overnight courier, or registered or certified mail, return receipt requested,
postage prepaid, addressed as follows:

 

If to the Participant:

 

At the most recent address maintained by the
Company in its personnel records.

 

 

 

If to the Company:

 

First Acceptance Corporation

 

 

3813 Green Hills Village Drive

 

 

Nashville, Tennessee 37215

Attention:

 

Chief Financial Officer

 

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or to such other address or facsimile number as any party shall have furnished
to the other in writing in accordance with this Section 10.  Notice and
communications shall be effective when actually received by the addressee.

11.Successors and Assigns.

The terms of this Agreement shall be binding upon the Participant and upon the
Participant’s heirs, executors, administrators, personal representatives,
transferees, and successors in interest, and upon the Company and its successors
and assignees.  Notwithstanding anything to the contrary in this Agreement,
neither this Agreement nor any rights granted herein shall be assignable by the
Participant.

12.Laws Applicable to Construction.

The interpretation, performance, and enforcement of this Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws.  In addition to the terms
and conditions set forth in this Agreement, this Award is subject to the terms
and conditions of the Plan, as it may be amended from time to time, which are
hereby incorporated by reference.  

13.Severability.

The invalidity or enforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement.

14.Conflicts and Interpretation.

In the event of any conflict between this Agreement and the Plan, the Plan shall
control.  In the event of any ambiguity in this Agreement, or any matters as to
which this Agreement is silent, the Plan shall govern, including, without
limitation, the provisions thereof pursuant to which the Committee has the
power, among others, to (i) interpret the Plan; (ii) prescribe, amend, and
rescind rules and regulations relating to the Plan; and (iii) make all other
determinations deemed necessary or advisable for the administration of the
Plan.  The Participant hereby agrees to accept as binding, conclusive, and final
all decisions or interpretations of the Committee upon any question arising
under this Agreement.  

15.Amendment.

This Agreement may be unilaterally amended or modified by the Committee at any
time; provided that no amendment or modification shall cause a Performance Award
to cease to qualify for the exemption under Section 162(m) of the Code or,
without the Participant’s written consent, materially impair the rights of the
Participant as provided by this Agreement, except such an amendment made to
cause the terms of this Agreement or the Awarded Units granted hereunder to
comply with applicable law (including tax law), applicable exchange listing
standards, or accounting rules.  The waiver by either party of compliance with
any provision of this Agreement shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by such party
of a provision of this Agreement.

16.Clawback.

All Awarded Units granted pursuant to this Agreement shall be subject to any
clawback, recoupment, or forfeiture provisions (i) required by law or regulation
and applicable to the Company or its Subsidiaries as in effect from time to time
or (ii) set forth in any policies adopted or maintained by the Company or any of
its Subsidiaries as in effect from time to time.

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17.Headings.

The headings of paragraphs herein are included solely for convenience of
reference and shall not affect the meaning or interpretation of any of the
provisions of this Agreement.

18.Counterparts.

This Agreement may be executed in counterparts, which together shall constitute
one and the same original.

19.Entire Agreement.

This Agreement together with the Plan supersede any and all other prior
understandings and agreements, either oral or in writing, between the parties
with respect to the subject matter hereof and constitute the sole and only
agreements between the parties with respect to the said subject matter.  All
prior negotiations and agreements between the parties with respect to the
subject matter hereof are merged into this Agreement.  Each party to this
Agreement acknowledges that no representations, inducements, promises, or
agreements, orally or otherwise, have been made by any party or by anyone acting
on behalf of any party, which are not embodied in this Agreement or the Plan,
and that any agreement, statement, or promise that is not contained in this
Agreement or the Plan shall not be valid or binding or of any force or effect.

20. Section 409A; Six Month Delay.  

The Awarded Units granted under this Agreement are intended to be exempt from
Section 409A of the Code, and the provisions of this Agreement will be
administered, interpreted, and construed accordingly.  Notwithstanding anything
to the contrary contained herein, in the event any distribution made on account
of the Participant’s Termination of Service as provided in Section 1 above is
deemed to be subject to (and not otherwise exempt from) the requirements of
Section 409A of the Code and the Participant is deemed a “specified employee”
(within the meaning of Section 409A of the Code and the regulations issued
thereunder), then the Participant shall not be entitled to any such
distributions that are subject to Section 409A of the Code until the earliest
of: (i) the first day of the seventh month following the Participant’s
Termination of Service; (ii) the date of the Participant’s death; or (iii) such
earlier date as complies with the requirements of Section 409A of the Code.

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IN WITNESS WHEREOF, as of the date first above written, the Company has caused
this Agreement to be executed on its behalf by a duly authorized officer and the
Participant has hereunto set the Participant’s hand.

FIRST ACCEPTANCE CORPORATION

 

By:

 

 

Name:

 

Title:

 

 

 

Agreed and acknowledged:

 

PARTICIPANT

 

 

___________________________

Name: