EXHIBIT 10.1

FRANKLIN BANK CORP. DEFERRED COMPENSATION PLAN

W I T N E S S E T H:

     WHEREAS, Franklin Bank Corp. (the “Company”) desires to adopt and establish
a deferred compensation plan to provide certain key employees and members of the
Board of Directors of the Company and Franklin Bank, S.S.B. (the “Bank”) with
the opportunity to defer receipt of their compensation to a future date and
thereby reduce their current taxable income, earn a tax-free rate of growth on
monies deferred, and accumulate funds which can be used for retirement planning
or other future financial needs;

     NOW, THEREFORE, effective as of the date of the execution of this Plan as
set forth below, the Company hereby adopts and establishes this deferred
compensation plan as follows:

SECTION I

PURPOSE OF PLAN, EFFECTIVE DATE AND DEFINITIONS

1.1   Name and Purpose. The name of the plan is the Franklin Bank Corp. Deferred
Compensation Plan (the “Plan”). Its purpose is to provide certain key employees
of the Company and the Bank and members of the Board of Directors of the Company
and the Bank with the opportunity to defer receipt of their compensation to a
future date and thereby reduce their current taxable income, earn a tax-free
rate of growth on monies deferred, and accumulate funds which can be used for
retirement planning or other future financial needs.   1.2   Effective Date. The
Plan shall be effective as of the date of the execution of this Plan as set
forth below (“Effective Date”).   1.3   Definitions. For purposes of this Plan,
the following phrases or terms shall have the indicated meanings unless
otherwise clearly apparent from the context.

  (a)   “Account” means the balance of an account maintained by the Employer for
each Participant pursuant to Section IV and Section V. Separate Accounts shall
be maintained for each Participant. A Participant’s Account shall be utilized
solely as a device for measurement and determination of the amount to be paid to
the Participant pursuant to the Plan. A Participant’s Account shall not
constitute or be treated as a trust fund of any kind.     (b)   “Bank” means
Franklin Bank, S.S.B., a Texas state savings bank, and its successors and
assigns.     (c)   “Beneficiary” means the person, persons, trust or other
entity designated by the Participant, or as provided in Section 6.8, to receive
any benefits payable under the Plan. Any Participant’s beneficiary designation
shall be made in a written instrument filed with the Committee and shall become
effective only when received, accepted and acknowledged in writing by the
Committee.

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  (d)   “Annual Salary” means a Participant’s base salary designated under the
Employer’s policies and records as base salary, excluding overtime,
Discretionary Bonuses, commissions, and other extraordinary compensation. For
Board members, “Annual Salary” means all Board fees earned by a member of the
Board during a Plan Year.     (e)   “Board” means the Board of Directors of
Franklin Bank Corp.     (f)   “Code “ means the Internal Revenue Code of 1986,
as amended.     (g)   “Committee” means the Compensation Committee of the Board.
    (h)   “Company” means Franklin Bank Corp., a Delaware corporation, and its
successors and assigns.     (i)   “Change in Control” means the occurrence of
any of the following events:

(i) An acquisition (or a series of acquisitions during the 12-month period
ending on the date of the most recent acquisition) by any individual, entity or
group (within the meaning of Section 13(d) (3) or 14(d) (2) of the Exchange Act)
(a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 35% or more of either (1) the then
outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (2) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); excluding, however, the
following: (1) Any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company,
(2) Any acquisition by the Company, (3) Any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any entity
controlled by the Company, or (4) Any acquisition pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (iii) of this
Section 1.3(i); or

(ii) A majority of members of the Company’s Board is replaced during any
12-month period by directors whose appointment or election is not endorsed by a
majority of the members of the Board immediately prior to the first date of such
appointment or election; or

(iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (“Corporate
Transaction”); excluding, however, such a Corporate Transaction pursuant to
which (1) all or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of common stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation which
as a

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result of such transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, (2) no Person (other than the
Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Corporate Transaction) will beneficially own,
directly or indirectly, 35% or more of, respectively, the outstanding shares of
common stock of the corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such corporation
entitled to vote generally in the election of directors except to the extent
that such ownership existed prior to the Corporate Transaction, and
(3) individuals who were members of a majority of the Board immediately prior to
such Corporate Transaction will constitute at least a majority of the members of
the Board of the corporation resulting from such Corporate Transaction.

  (j)   “Discretionary Bonus” means a bonus paid by an Employer to a Participant
based on the quality of services performed by a Participant and/or financial
targets attained by an Employer over a period of at least twelve (12) months.  
  (k)   “Employer” means the Company, the Bank, or any other corporation or
business organization which agrees, with the consent of the Company, to become a
party to the Plan.     (l)   “Exchange Act” means the Securities Exchange Act of
1934, as amended.     (m)   “Participant” means an eligible employee of the
Employer or member of the Board who is selected by the Committee to participate
in the Plan and elects to participate in the Plan.     (n)   “Plan Year” means
the twelve (12) month period ending on the December 31 of each year during which
the Plan is in effect, provided that the first Plan Year shall commence on the
Effective Date and end on December 31, 2005.     (o)   “Payment Date” means a
date designated pursuant to Section 6.1 for the payment or the commencement of a
series of payments of all of a Participant’s Account.     (p)   “Termination of
Service” means, as applicable, cessation for any reason of (i) a Director’s
service as a member of the Board, or (ii) an employee’s service as an employee
of an Employer, as determined by the Committee in its sole discretion.     (q)  
“Trust” means the trust fund which may be established pursuant to the Plan.    
(r)   “Trustee” means the trustee named in the agreement establishing the Trust,
if any, and each successor and/or additional trustee as may be named pursuant to
the terms of the agreement establishing the Trust, if any.

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SECTION II

ADMINISTRATION OF THE PLAN

2.1   Committee. The Plan shall be administered by the Committee. All decisions
made by the Committee pursuant to the provisions of the Plan shall be made by a
majority of its members at a duly held regular or special meeting or by written
consent in lieu of any such meeting. A majority of the Committee shall
constitute a quorum and all decisions made by the Committee pursuant to
provisions of the Plan shall be made by a majority of the Committee members
present at any duly held regular or special meeting at which a quorum is present
or by the written consent of a majority of the Committee members in lieu of any
such meeting.   2.2   Committee Duties. The Committee shall also have the
authority to make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and decide or resolve any and
all questions, including interpretations of this Plan, as may arise in
connection with the Plan. The Committee shall have the sole discretionary
authority and all powers necessary to accomplish these purposes, including, but
not by way of limitation, the right, power, authority and duty:

  (a)   To make rules, regulations and procedures for the administration of the
Plan that are not inconsistent with the terms and provisions hereof, which
rules, regulations and procedures shall be evidenced in writing and copies
thereof shall be delivered to the Employer;     (b)   To construe and interpret
all terms, provisions, conditions and limitations of the Plan;     (c)   To
correct any defect, supply any omission, construe any ambiguous or uncertain
provisions, or reconcile any inconsistency that may appear in the Plan, in such
manner and to such extent as it shall deem expedient to carry the Plan into
effect;     (d)   To employ and compensate such accountants, attorneys, and
other agents and employees as the Committee may deem necessary or advisable in
the proper and efficient administration of the Plan;     (e)   To delegate any
administrative duties of the Committee under the Plan to another committee or
employees of the Company or the Bank;     (f)   To determine all questions
relating to eligibility;     (g)   To prepare, file and distribute, in such
manner as the Committee determines to be appropriate, such information and
material as is required by the reporting and disclosure requirements of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”); and    
(h)   To make a determination as to the right of any person to receive a benefit
under the Plan.

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2.3   Agent. In the administration of this Plan, the Committee may, from time to
time, employ an agent and delegate to it such administrative duties as it sees
fit and may, from time to time, consult with counsel who may be counsel to the
Employer.   2.4   Binding Effect of Decisions. The decision or action of the
Committee with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder shall be final, conclusive and binding upon
all persons having any interest in the Plan and shall not be subject to appeal
except as provided in Section XIV.   2.5   Indemnity of Committee. The Employer
shall indemnify and hold harmless the members of the Committee against any and
all claims, loss, damage, expense or liability arising from any action or
failure to act with respect to this Plan, except in the case of gross negligence
or willful misconduct by the Committee or any of its members.

SECTION III

ELIGIBILITY

For each Plan Year, a member of the Board or an employee of the Employer who has
been recommended by the Chief Executive Officer of the Company shall be eligible
to participate in the Plan if a Board member or such employee has been approved
to participate in the Plan by the Committee. In no event shall any employee of
the Employer become eligible to participate in the Plan if such employee would
not be considered a member of a select group of management or highly compensated
employees for purposes of ERISA. Should a Participant who is an employee of the
Employer cease to be considered a member of a select group of management or
highly compensated employees for purposes of ERISA prior to termination of
employment, disability, or death, the Participant shall not be eligible to make
any Participant Deferrals (as described in Section IV) for such Plan Year, and
any Participant Deferrals made during such Plan Year while the Participant is
not eligible to make such deferrals shall be paid to the Participant.

SECTION IV

PARTICIPANT DEFERRALS

4.1   Annual Salary Deferrals.

  (a)   Any eligible employee or Board member may irrevocably elect, prior to
the beginning of each Plan Year, but no later than December 31 preceding the
beginning of the Plan Year, to participate in the Plan and defer receipt of all
or part of the Annual Salary earned during the Plan Year that would otherwise
have been payable to him or her.     (b)   The election will be made on a
written form called a “Notice of Election to Defer,” signed by the Participant,
and delivered to the Committee. A separate election to defer all or part of an
Annual Salary shall be made for each Plan Year for which a Participant is
eligible to participate in the Plan.     (c)   Each deferral election will be
applicable only to compensation the Participant may earn for services performed
in the future and will be effective as soon after the

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      Effective Date as administratively possible for the first Plan Year and as
of January 1 for each Plan Year thereafter, provided that the signed Notice of
Election to Defer form has been received by the Committee by December 31 of the
preceding Plan Year.     (d)   Notwithstanding the above provisions of this
Section IV, in the calendar year in which the Plan first becomes effective or in
the year in which the Participant first becomes eligible to participate, an
election to defer receipt of all or part of the Annual Salary for services
performed in the balance of the year remaining may be made within 30 days after
the Participant is first eligible or the Plan is first effective, which election
shall be effective with respect to the Annual Salary payable with respect to
services rendered after the date of the election.     (e)   Nothing in this
Section IV prevents a Participant from filing an election not to participate for
a Plan Year and thereafter filing another election to participate in the Plan
for any subsequent Plan Year.

4.2   Discretionary Bonus Deferral.

  (a)   For each Plan Year, any eligible employee may irrevocably elect to defer
receipt of all of part of the Discretionary Bonus earned during the Plan Year. A
deferral election pursuant to this Section 4.2(b) shall be in writing at such
time and in such manner as the Committee shall prescribe, but must in any event
be made no later than six (6) months before the end of the performance period on
which such Discretionary Bonus is based.     (b)   The election will be made on
the “Notice of Election to Defer” form, signed by the Participant, and delivered
to the Committee. A separate election to defer all or part of a Discretionary
Bonus shall be made by a Participant each Plan Year.

4.3   Accounts. An Account shall be established for each Participant who elects
to defer his or her Annual Salary and/or Discretionary Bonus pursuant to
Sections 4.1 and 4.2. Amounts deferred pursuant to Sections 4.1 and 4.2, and the
earnings, gains and losses thereon, shall be credited to such Account.

SECTION V

EARNINGS

5.1   Earnings. A Participant’s Account shall be credited with earnings on the
calendar quarter ending balance at a rate equal to the three-year LIBOR rate, as
reported on the Bloomberg Monitor, on the last business day of each calendar
quarter.   5.2   Account Statements. The Company shall provide a quarterly
statement to a Participant showing such information as is appropriate, including
the aggregate amount credited to the Account of a Participant.

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SECTION VI

PAYMENTS AND BENEFITS

6.1   Payment Date.

  (a)   Designation of Date. The first deferral election made pursuant to
Section 4.1 or 4.2 shall include a designation of the Payment Date for the value
of a Participant’s Account. Such Payment Date shall be the first day of any
calendar quarter designated by a Participant for a calendar year.     (b)  
Adjustment of Date. No later than one year before the Payment Date initially
designated pursuant to Section 6.1(a) (or an adjusted Payment Date as herein
provided), the Participant may elect to adjust such Payment Date (or adjusted
Payment Date) to the first day of any calendar quarter following the fifth
anniversary of such Payment Date (or adjusted Payment Date).     (c)  
Limitation. A Participant may select a Payment Date that is no sooner than the
later to occur of (i) the first anniversary of the date of an election to defer
Annual Salary pursuant to Section 4.1(a), or (ii) the first anniversary of the
date of an election to defer a Discretionary Bonus pursuant to Section 4.2(b).  
  (d)   Methods of Payments. A Participant may elect, at the time a Payment Date
is elected pursuant to Section 6.1(a), to receive the amount which will become
payable as of such Payment Date or become payable as of a Participant’s
Termination of Service pursuant to Section 6.3(b) in no more than 10 annual
installments. Except as may be elected pursuant to this Section 6.1(d), all
amounts becoming payable under this Plan shall be paid in a single lump sum
payment.     (e)   Irrevocability. Except as otherwise provided in this
Section VI, a designation of a Payment Date and an election of installment
payments shall be irrevocable; provided, however, that payment may be made on a
different date as provided in Section 6.3.

6.2   Time of Payment. Except as provided in Section 6.3, 6.4, 6.5 and 6.6, the
amount credited to the Account of each Participant shall become payable to the
Participant as of the Payment Date (or adjusted Payment Date) designated
pursuant to Section 6.1. If the Participant has elected installment payments,
such payments shall begin within thirty days of the Payment Date. In any other
case, payment shall be made as a single lump sum within thirty days of the
Payment Date.   6.3   Termination of Service. In the event of a Participant’s
Termination of Service while amounts stand credited to his Account, such amounts
shall be disposed of as provided in this Section 6.3.

  (a)   Death of Participant. If the Participant’s Termination of Service is on
account of his death, or if he dies following Termination of Service but while
receiving installment payments, his Account shall be paid as soon as practicable
to his Beneficiary as a single lump sum.

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  (b)   Other Termination. If the Participant’s Termination of Service is for a
reason other than death, his Account balance shall be paid to him as a single
lump sum; provided, however, that if the Participant had elected installment
payments pursuant to Section 6.1(d) and such installment payments have or have
not commenced pursuant to Section 6.2, the Participant’s Account shall be paid
over the remaining installment period elected. All payments pursuant to the
previous sentence of this Section 6.3(b) shall be made or begin as soon as
reasonably possible after the Participant’s Termination of Service, but no later
than three months after the end of the month in which Termination of Service
occurs. Notwithstanding anything herein to the contrary, payments upon a
Termination of Service (other than death or disability) of a Participant who is
a “key employee” (as defined in Section 416(i) of the “Code”) shall not be made
or begin before the date which is six (6) months after the date of Termination
of Service (or, if earlier, the date of the Participant’s death).

6.4   Change in Control. A Participant’s Account balance shall be distributed to
him or her in a cash lump sum payment upon the occurrence of a Change in
Control.   6.5   Required Lump Sum Payment. Notwithstanding Sections 6.1, 6.2
and 6.3 above, if the entire Account of a Participant upon a Participant’s
Payment Date or Termination of Service is less than $50,000.00, the entire
Account balance of a Participant shall be paid and/or distributed in cash in one
lump sum payment to the Participant or his or her Beneficiary as soon as
administratively possible within sixty (60) days of the date of a Participant’s
Payment Date or Termination of Service.   6.6   Unforeseeable Emergency. In the
event of a Participant’s “Unforeseeable Emergency,” the Participant may submit a
written petition to the Committee for an early withdrawal from his or her
remaining Account balance. The Committee has sole discretion in the
determination of the merits of petitioner’s “Unforeseeable Emergency” petition.
Any early withdrawal approved by the Committee is limited to the amount
necessary to satisfy the emergency, including but not limited to amounts
necessary to pay taxes reasonably anticipated as a result of the distribution,
taking into account the extent to which such hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship).

As used in this Plan, the term “Unforeseeable Emergency” means severe financial
hardship to the Participant resulting from (1) an illness or accident of the
Participant, the Participant’s spouse, or a dependent (as defined in Code
Section 152(a)) of the Participant, (2) loss of the Participant’s property due
to casualty, (3) or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.

The need to send a Participant’s child to college or the desire to purchase a
home is not considered to be unforeseeable emergency.

6.7   Earnings Pending Distribution. The undistributable amount in the Account
of any Participant shall continue to accrue earnings as provided in Section V
until all benefits are paid under this Section VI.

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6.8   Beneficiary Designation. Each Participant shall have the right, at any
time, to designate a Beneficiary or Beneficiaries (both principal as well as
contingent) to whom payment under this Plan shall be paid in the event of
Participant’s death prior to complete distribution to Participant of the
benefits due Participant under the Plan.

  (a)   No Participant Designation. If a Participant fails to designate a
Beneficiary as provided above, or if Participant’s Beneficiary designation is
revoked without execution of a new designation, or if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, then Participant’s designated Beneficiary shall
be the Participant’s estate.

SECTION VII

DEFERRED COMPENSATION TRUST

7.1   Employer Establishment of Trust. Notwithstanding any other provision or
interpretation of this Plan, the Employer may establish or adopt a trust in
which to hold cash, insurance policies or other assets to be used to make
payments to the Participants of the benefits under this Plan; provided, however,
that the trust assets shall at all times remain subject to the claims of general
creditors of the Employer in the event of the Employer’s insolvency and/or
bankruptcy.   7.2   Trust Document. Participants shall be notified if and when a
trust is established and a copy of the trust document will be made available to
them on request.

SECTION VIII

OFFSET FOR OBLIGATIONS TO EMPLOYER

Any amount payable to a Participant pursuant to this Plan may be reduced at the
discretion of the Committee by the amount of any indebtedness that is due, owing
and unpaid by such Participant to the Employer or an affiliate of the Employer
at the time payment is to be made hereunder.

SECTION IX

LIABILITY OF EMPLOYER

Except as provided below, all liabilities created by this Plan for any Employer
participating in the Plan (“Participating Employer”) shall be determined
separately and, if a trust is established, shall be paid to and held by the
Trustee for the exclusive benefit of the Participant who is an employee of such
Participating Employer and the Beneficiaries of such Participant, subject to all
the terms and conditions of this Plan. No other Participating Employer shall be
held liable for any liabilities to be satisfied by any other Participant
Employer. On the basis of the information furnished by the Committee, the
Trustee, if any, shall keep separate books and records concerning the affairs of
each Participating Employer hereunder and as to the accounts and credits of the
Participants of each Participating Employer.

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SECTION X

BENEFIT PLANS

The amount of each Participant’s deferrals under Section IV shall not be deemed
to be compensation for the purpose of calculation of the amount of Participant
benefits or contributions under a pension plan or retirement plan (qualified
under Section 401(a) of the Code), the amount of life insurance payable under
any life insurance plan established or maintained by the Employer, or the amount
of any disability benefit payments payable under any disability plan established
or maintained by the Employer, except to the extent specifically provided in any
such plan.

SECTION XI

RIGHTS OF A PARTICIPANT

11.1   No Right to Employment. Establishment of the Plan shall not be construed
as giving any Participant the right to be retained in the Employer’s service or
employ or the right to receive any benefits not specifically provided by the
Plan.   11.2   Unsecured General Creditor Status of Employee. Income deferred
under this Plan will not be segregated from the general funds of the Employer
and no Participant will have any claim on any specific assets of the Employer.
To the extent that any Participant acquires a right to receive benefits under
this Plan, his or her right will be no greater than the right of any unsecured
general creditor of the Employer.   11.3   Benefits Not Transferable. To the
extent that any Participant acquires a right to receive benefits under this
Plan, his or her right is not assignable or transferable except to his or her
Beneficiary or estate as established pursuant to Sections 7.7 and 7.8.

SECTION XII

AMENDMENT AND TERMINATION

12.1   Amendment. The Plan may be amended from time to time by resolution of the
Committee. The amendment of any one or more provisions of the Plan shall not
affect the remaining provisions of the Plan. No amendment may reduce any
benefits accrued by any Participant prior to the amendment.   12.2  
Termination. The Committee has the right to terminate the Plan at any time. Any
Account balance accumulated prior to the Plan’s termination will continue to be
subject to the provisions of the Plan.

SECTION XIII

DETERMINATION OF BENEFITS

13.1   Claim. A person, or his or her duly authorized representative, who
believes that he is being denied a benefit to which he is entitled under the
Plan (hereinafter referred to as a

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    “Claimant”) may file a written request for such benefit with the Committee,
setting forth his claim. The request must be addressed to the Committee.  
13.2   General Claim Procedure.

  (a)   If a claim is denied in whole or in part, the Committee shall notify the
Claimant in writing, within a reasonable time but not later than 90 days after
receipt of the claim by the Committee. The Committee may, however, extend the
reply period for an additional 90 days if the Committee determines that special
circumstances require an extension of time for processing the claim and notifies
the Claimant in writing prior to the expiration of the initial 90-day period of
the special circumstances requiring the extension of time and the date by which
the Committee expects to render a decision.     (b)   The written notice of an
adverse benefit determination shall set forth, in a manner calculated to be
understood by the Claimant:

  (i)   The specific reason or reasons for such denial;     (ii)   The specific
reference to pertinent provisions of this Plan upon which such denial is based;
    (iii)   A description of any additional material or information necessary
for the Claimant to perfect his claim and an explanation of why such material or
such information is necessary; and     (iv)   A description of the Plan’s review
procedures and the time limits applicable to such procedures, including a
statement of the Claimant’s right to bring a civil action under section 502(a)
of the Employee Retirement Income Security Act of 1974 (“ERISA”) following an
adverse benefit determination on review.

  (c)   In the event that a period of time is extended due to a Claimant’s
failure to submit information necessary to decide a claim, the period for making
the benefit determination shall be tolled from the date on which the
notification of the extension is sent to the Claimant until the date on which
the Claimant responds to the request for additional information.

13.3   Request for Review. Within 60 days after the receipt by the Claimant of
the notice of adverse benefit determination, the Claimant may request in writing
that the Committee review its determination. Such request must be addressed to
the Committee. The Claimant shall be provided, upon request and free of charge,
reasonable access to, and copies of, all documents, records, and other
information relevant to the claim. The Claimant may submit written comments,
documents, records, and other information relating to the claim for benefits for
consideration by the Committee. If the Claimant does not request a review of the
Committee’s determination within such 60-day period, he shall be barred and
estopped from challenging the Committee’s determination. The Plan provides for
only one level of appeal.

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13.4   General Claim Review Procedure.

  (a)   Within and the time limits applicable to such procedures, including a
statement of the Claimant’s right to bring a civil action under section 502(a)
of the Employee Retirement Income Security Act of 1974 (“ERISA”) following an
adverse benefit determination on review. The Committee’s review of its initial
determination will take into account all comments, documents, records, and other
information submitted by the Claimant relating to the claim, without regard to
whether such information was submitted or considered in the initial benefit
determination.     (b)   In the case of adverse benefit determination on review,
the written notice of the Committee’s benefit determination on review shall set
forth, in a manner calculated to be understood by the Claimant:

  (i)   The specific reason or reasons for such denial;     (ii)   The specific
reference to pertinent provisions of this Plan upon which such denial is based;
    (iii)   A statement that the Claimant is entitled to receive, upon request
and free of charge, reasonable access to, and copies of, all documents, records,
and other information relevant to the claim for benefits;     (iv)   A statement
that the Claimant has the right to bring an action under section 502(a) of
ERISA.

  (c)   In the event that a period of time is extended due to a Claimant’s
failure to submit information necessary to decide a claim, the period for making
the benefit determination on review shall be tolled from the date on which the
notification of the extension is sent to the Claimant until the date on which
the Claimant responds to the request for additional information.

SECTION XIV

NOTICES

Notices and elections under this Plan must be in writing. A notice or election
is deemed delivered if it is delivered personally or mailed by registered or
certified mail to the person at his or her last known business address.

SECTION XV

GENERAL PROVISIONS

15.1   Controlling Law. The provisions of this Plan shall be subject to
regulation under ERISA. To the extent not preempted by federal law, this Plan
shall be construed and interpreted according to the laws of the State of Texas.

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15.2   Captions. The captions of Sections and paragraphs of this Plan are for
convenience of reference only and shall not control or affect the meaning or
construction of any of its provisions.   15.3   Facility of Payment. Any amounts
payable hereunder to any Participant who is under legal disability or who, in
the judgment of the Committee, is unable to properly manage his or her financial
affairs may be paid to the legal representative of such Participant or may be
applied for the benefit of such Participant in any manner which the Committee
may select, and any such payment shall be deemed to be payment for such
Participant’s account and shall be a complete discharge of all liability of the
Employer with respect to the amount so paid.   15.4   Withholding of Payroll
Taxes. To the extent required by the laws in effect at the time compensation or
deferred compensation payments are made, the Employer shall withhold from such
compensation, or from deferred compensation payments made hereunder, any taxes
required to be withheld for federal, state or local government purposes.  
15.5   Protective Provisions. A Participant will cooperate with the Employer by
furnishing any and all information requested by the Employer in order to
facilitate the payment of benefits hereunder, and by taking such physical
examinations as the Employer may deem necessary and taking such other action as
may be requested by the Employer.   15.6   Terms. Whenever any words are used
herein in the masculine, they shall be construed as though they were used in the
feminine in all cases where they would so apply; and wherever any words are used
herein in the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all cases where
they would so apply.   15.7   Successor. The provisions of this Plan shall bind
and inure to the benefit of the Company and its successors and assigns. The
terms successors and assigns as used herein shall include any corporate or other
business entity which shall, whether by merger, consolidation, purchase or
otherwise, acquire all or substantially all of the business and assets of the
Company and successors of any such company or other business entity.

SECTION XVI

UNFUNDED STATUS OF PLAN

It is the intention of the parties that the arrangements herein described be
unfunded for tax purposes and for purposes of Title I of ERISA. Plan
participants have the status of general unsecured creditors of the Employer. The
Plan constitutes a mere promise by the Employer to make payments in the future.

The Employer may establish a Trust(s) with a Trustee, pursuant to such terms and
conditions as are set forth in the Trust agreement(s), if any, to be entered
into between the Employer and the Trustee. The Trust is intended to be treated
as a “grantor” trust under the Code and the regulations thereunder, as amended
from time to time, and the establishment of the Trust is not intended to cause
Participants to realize current income on amounts contributed thereto, and the
Trust shall be so interpreted.

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SECTION XVII

RIGHTS TO BENEFITS

Subject to Section VIII, a Participant’s rights to benefit payments under the
Plan are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, hypothecation or encumbrance by Participant, or to
attachment or garnishment by creditors of the Participant or the Participant’s
Beneficiaries.

SECTION XVIII

BOARD APPROVAL

This Plan has been approved by the Board effective upon the execution hereof by
the Chief Executive Officer.

IN WITNESS WHEREOF, the Employer has caused this Plan to be executed this 14th
day of March, 2005.

     

  FRANKLIN BANK CORP.
 
   

  By: /s/ Anthony J. Nocella
 
  Name: Anthony J. Nocella

  Title: Chief Executive Officer

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