Exhibit 10.12

ENCORE CAPITAL GROUP, INC.
PERFORMANCE STOCK GRANT NOTICE
(2005 STOCK INCENTIVE PLAN, AS AMENDED)
Encore Capital Group, Inc. (the “Company”), pursuant to its 2005 Stock Incentive
Plan, as amended (the “Plan”), hereby awards to Participant a Performance Stock
Award for the number of shares of the Company’s stock set forth below (the
“Award”). The Award is subject to all of the terms and conditions as set forth
herein and in the Plan and the Performance Stock Agreement, both of which are
attached hereto and incorporated herein in their entirety. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Plan or the
Performance Stock Agreement. In the event of any conflict between the terms in
the Award and the Plan, the terms of the Plan shall control.
Participant:
Kenneth A. Vecchione
Date of Grant:
June 4, 2013
Vesting Commencement Date:
See Vesting Schedule below
Number of Shares Subject to Award:
Minimum 13,587
 
Target 27,175
 
Maximum 54,350
Consideration:
Participant’s Services
Vesting Schedule:
4,529 shares will vest if the sum of FY 2013 3Q and 4Q EPS equals $1.67
 
9,058 shares will vest if the sum of FY 2013 3Q and 4Q EPS equal$1.70
 
18,116 shares will vest if the sum of FY 2013 3Q and 4Q EPS equals $1.79
 
If the sum of FY 2013 3Q and 4Q EPS is between $1.67 and $1.70, then the number
of shares between 4,529 and 9,058 that will vest will be determined by linear
interpolation.
 
If the sum of FY 2013 3Q and 4Q EPS is between $1.70 and $1.79, then the number
of shares between 9,058 and 18,116 that will vest will be determined by linear
interpolation.
 
4,529 shares will vest if FY 2014 EPS equals $3.68
 
9,058 shares will vest if FY 2014 EPS equals $3.81
 
18,117 shares will vest if FY 2014 EPS equals $4.30
 
If FY 2014 EPS is between $3.68 and $3.81, then the number of shares between
4,529 and 9,058 that will vest will be determined by linear interpolation.
 
If FY 2014 EPS is between $3.81 and $4.30, then the number of shares between
9,058 and 18,117 that will vest will be determined by linear interpolation.
 
4,529 shares will vest if FY 2015 EPS equals $3.97
 
9,059 shares will vest if FY 2015 EPS equals $4.26
 
18,117 shares will vest if FY 2015 EPS equals $5.17
 
If FY 2015 EPS is between $3.97 and $4.26, then the number of shares between
4,529 and 9,059 that will vest will be determined by linear interpolation.
 
If FY 2015 EPS is between $4.26 and $5.17, then the number of shares between
9,059 and 18,117 that will vest will be determined by linear interpolation.

 

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In addition, if the sum of FY 2013 3Q and 4Q EPS, FY 2014 EPS and FY 2015 EPS
equals $9.32, then 13,587 shares will vest (less any shares already vested ). If
the sum of FY 2013 3Q and 4Q EPS, FY 2014 EPS and FY 2015 EPS equals $9.77, then
27,175 shares will vest (less any shares already vested). If the sum of FY 2013
3Q and 4Q EPS, FY 2014 EPS and FY 2015 EPS equals $11.26, then 54,350 shares
will vest (including already vested portions of the Award). If the sum of FY
2013 3Q and 4Q EPS, FY 2014 EPS and FY 2015 EPS is between $9.32 and $9.77, then
the number of shares that will vest will be determined by linear interpolation
(less any already vested shares). If the sum of FY 2013 3Q and 4Q EPS, FY 2014
EPS and FY 2015 EPS is between $9.77 and $11.26, then the number of shares that
will vest will be determined by linear interpolation (less any already vested
shares).
 
Within 15 days of the release of the Company’s audited financial statements for
the applicable fiscal year, the Committee will certify in writing whether the
EPS goal for such fiscal year has been met and determine the number of shares,
if any, that will vest based on the EPS achieved for such fiscal year. If the
shares have not already been distributed to the Participant, the Company shall
distribute such shares to the Participant within 10 days of the Committee’s
written certification.
 
In addition, the vesting of the shares may accelerate in the sole discretion of
the Committee and upon certain events described in the Performance Stock
Agreement. Notwithstanding the foregoing, vesting shall terminate upon the
Participant’s termination of Continuous Service.

Additional Terms/Acknowledgements: Participant acknowledges receipt of, and
understands and agrees to, this Performance Stock Grant Notice, the Performance
Stock Agreement and the Plan. Participant further acknowledges that as of the
Date of Grant, this Performance Stock Grant Notice, the Performance Stock
Agreement and the Plan set forth the entire understanding between Participant
and the Company regarding the Award and supersede all prior oral and written
agreements on that subject.
Participant further agrees that the Company may deliver by e-mail all documents
relating to the Plan or this Award (including without limitation, prospectuses
required by the Securities and Exchange Commission) and all other documents that
the Company is required to deliver to its security holders (including without
limitation, annual reports and proxy statements). Participant also agrees that
the Company may deliver these documents by posting them on a website maintained
by the Company or by a third party under contract with the Company. If the
Company posts these documents on a website, it will notify Participant by
e-mail.
ENCORE CAPITAL GROUP, INC.:
PARTICIPANT:
 
 
/s/ George Lund
/s/ Kenneth A. Vecchione
George Lund
Kenneth A. Vecchione
Title: Executive Chairman    
Date: June 4, 2013    
Date: June 4, 2013    
 

    

ATTACHMENTS:
Performance Stock Agreement

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ATTACHMENT I
ENCORE CAPITAL GROUP, INC.
2005 STOCK INCENTIVE PLAN, AS AMENDED
PERFORMANCE STOCK AGREEMENT
Pursuant to the Performance Stock Grant Notice (“Grant Notice”) and this
Performance Stock Agreement and in consideration of your services, Encore
Capital Group, Inc. (the “Company”) has awarded you a performance stock award
(the “Award”) under its 2005 Stock Incentive Plan, as amended (the “Plan”) for
the number of shares of the Company’s Stock as indicated in the Grant Notice.
Your Award is granted to you effective as of the Date of Grant set forth in the
Grant Notice for this Award. Defined terms not explicitly defined in this
Performance Stock Agreement shall have the same meanings given to them in the
Plan. In the event of any conflict between the terms in this Performance Stock
Agreement and the Plan, the terms of the Plan shall control.
In consideration of the mutual covenants herein contained and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereto do hereby agree that the details of your Award are as follows:
1.VESTING.
(a)    In General. Subject to the limitations contained herein, your Award will
vest in accordance with the vesting schedule provided in the Grant Notice,
provided that vesting will cease upon the termination of your Continuous
Service. For purposes of this Award, “Continuous Service” means that your
service with the Company or an Affiliate, whether as an employee, director or
consultant, is not interrupted or terminated. A change in the capacity in which
you render service to the Company or an Affiliate as an employee, consultant or
director or a change in the entity for which you render such service, provided
that there is no interruption or termination of your service with the Company or
an Affiliate, shall not terminate your Continuous Service. For example, a change
in status from an employee of the Company to a consultant to an Affiliate or to
a director shall not constitute an interruption of Continuous Service. To the
extent permitted by law, the Board or its compensation committee or any officer
designated by the Board or its compensation committee, in that party’s sole
discretion, may determine whether Continuous Service shall be considered
interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave.
Notwithstanding the foregoing, a leave of absence shall be treated as Continuous
Service for purposes of vesting to such extent as may be provided in the
Company’s leave of absence policy, in the written terms of any leave of absence
agreement or policy applicable to you, or as otherwise required by law.
Notwithstanding the foregoing, in the event (i) of the termination of your
Continuous Service to the Company as a result of your death or Disability, or
(ii) your employment is terminated without Cause (as defined below) or you
resign your employment for Good Reason (as defined below), the Award shall be
deemed to be fully (100%) vested and eligible for settlement as

 

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of immediately prior to your death or Disability or as of your termination of
employment. The consummation of a Change of Control transaction in itself shall
not be deemed a termination of employment entitling you to vesting acceleration
hereunder even if such event results your being employed by a different entity.

For purposes of this Performance Stock Agreement, “Cause” and “Good Reason” are
both defined as such terms are defined in your letter agreement with the Company
dated April 8, 2013.
2.    NUMBER OF SHARES. The number of shares subject to your Award will be
determined by the achievement of the performance goals set forth in the Grant
Notice. In addition, the number of shares subject to your Award may be adjusted
from time to time for capitalization adjustments, as provided in the Plan.
3.    SECURITIES LAW COMPLIANCE. You may not be issued any shares under your
Award unless the shares are either: (i) then registered under the Securities
Act; or (ii) the Company has determined that such issuance would be exempt from
the registration requirements of the Securities Act. Your Award also must comply
with other applicable laws and regulations governing the Award, and you will not
receive such shares if the Company determines that such receipt would not be in
material compliance with such laws and regulations.
4.    LIMITATIONS ON TRANSFER. Your Award is not transferable, except by will or
by the laws of descent and distribution. In addition to any other limitation on
transfer created by applicable securities laws, you agree not to assign,
hypothecate, donate, encumber or otherwise dispose of any interest in any of the
shares of Stock subject to the Award until the shares are vested in accordance
with this Performance Stock Agreement. After the shares have vested, you are
free to assign, hypothecate, donate, encumber or otherwise dispose of any
interest in such shares provided that any such actions are in compliance with
the provisions herein and applicable securities laws.
5.    DIVIDENDS. You shall be entitled to receive payments equal to any cash
dividends and other distributions paid with respect to the shares covered by
your Award, provided that such distributions shall be converted into additional
shares covered by the Award. If such distributions are paid in cash, you shall
be credited with additional shares covered by the Award in an amount equal to
(i) the amount of the dividends or other distributions paid on that number of
shares equal to the aggregate number of shares covered by the Award as of that
date divided by (ii) the Fair Market Value of a share as of such date. The
additional shares credited shall be subject to the same vesting and forfeiture
restrictions as the shares covered by the Award with respect to which they
relate.
6.    RESTRICTIVE LEGENDS. The shares issued under your Award shall be endorsed
with appropriate legends determined by the Company.
7.    AWARD NOT A SERVICE CONTRACT.
(a)    Your Continuous Service with the Company or an Affiliate is not for any
specified term and may be terminated by you or by the Company or an Affiliate at
any time, for any reason, with or without cause and with or without notice.
Nothing in this Performance Stock

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Agreement (including, but not limited to, the vesting of your Award pursuant to
the schedule set forth in the Grant Notice), the Plan or any covenant of good
faith and fair dealing that may be found implicit in this Performance Stock
Agreement or the Plan shall: (i) confer upon you any right to continue in the
employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any
promise or commitment by the Company or an Affiliate regarding the fact or
nature of future positions, future work assignments, future compensation or any
other term or condition of employment or affiliation; (iii) confer any right or
benefit under this Performance Stock Agreement or the Plan unless such right or
benefit has specifically accrued under the terms of this Performance Stock
Agreement or Plan; or (iv) deprive the Company of the right to terminate you at
will and without regard to any future vesting opportunity that you may have.
(b)    By accepting this Award, you acknowledge and agree that the right to
continue vesting in the Award pursuant to the schedule set forth in the Grant
Notice is earned only by continuing as an employee, director or consultant at
the will of the Company (not through the act of being hired, being granted this
Award or any other award or benefit) and that the Company has the right to
reorganize, sell, spin-out or otherwise restructure one or more of its
businesses or Affiliates at any time or from time to time, as it deems
appropriate (a “reorganization”). You further acknowledge and agree that such a
reorganization could result in the termination of your Continuous Service, or
the termination of Affiliate status of your employer and the loss of benefits
available to you under this Performance Stock Agreement, including but not
limited to, the termination of the right to continue vesting in the Award. You
further acknowledge and agree that this Performance Stock Agreement, the Plan,
the transactions contemplated hereunder and the vesting schedule set forth
herein or any covenant of good faith and fair dealing that may be found implicit
in any of them do not constitute an express or implied promise of continued
engagement as an employee or consultant for the term of this Performance Stock
Agreement, for any period, or at all, and shall not interfere in any way with
your right or the Company’s right to terminate your Continuous Service at any
time, with or without cause and with or without notice.
8.    WITHHOLDING OBLIGATIONS.
(a)    On or before vesting of the shares pursuant to your Award, or at any time
thereafter as requested by the Company, you hereby authorize withholding from
payroll and/or any other amounts payable to you, provided that any such
withholding will not be in excess of the minimum statutory withholding
requirement, and otherwise agree to make adequate provision for any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with your Award. If permissible under applicable law, the Company may, in its
sole discretion: (i) sell or arrange for the sale, on your behalf, of shares
acquired by you to meet the withholding obligation and/or (ii) withhold in
shares, provided that only the amount of shares necessary to satisfy the minimum
withholding amount are withheld. The Company also reserves the right to require
that you assume liability for any tax- and/or social insurance-related charges
that may otherwise be due by the Company or an Affiliate with respect to the
Award, if the Company determines in its sole discretion that such charges may
legally be transferred to you. To the extent that liability for any such charges
is transferred to you, such charges will be subject to the applicable
withholding methods set forth in this Section 8.

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(b)    Unless the tax withholding obligations of the Company and/or any
Affiliate are satisfied, the Company shall have no obligation to remove the
restrictive legends from the shares of Stock subject to your Award.
9.    NOTICES. Any notices provided for in your Award or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the last address you
provided to the Company.
10.    MISCELLANEOUS.
(a)    The rights and obligations of the Company under your Award shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company’s successors and assigns.
(b)    For purposes of your personal tax planning, you may make an election
under Section 83(b) of the Code within 30 days of the date of grant; however,
this election by you will be in your sole discretion. We strongly advise you to
consult with your personal legal, tax and financial advisors before you make
such an election.
(c)    You agree upon request to execute any further documents or instruments
necessary or desirable in the sole determination of the Company to carry out the
purposes or intent of your Award.
(d)    You acknowledge and agree that you have reviewed your Award in its
entirety, have had an opportunity to obtain the advice of counsel prior to
executing and accepting your Award, and fully understand all provisions of your
Award.
(e)    The Committee may, to the extent permitted under Section 162(m) of the
Code , adjust performance goals to omit the effects of extraordinary items, gain
or loss on the disposal of a business segment, unusual or infrequently occurring
events and transactions and cumulative effects of changes in accounting
principles, including, but not limited to, asset write-downs, litigation or
claim judgments or settlements, changes in tax laws or other laws or provisions
affecting reported results, any reorganization and restructuring programs,
acquisitions or divestitures, and foreign exchange gains and losses.

11.    GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of
the Plan, the provisions of which are hereby made a part of your Award, and is
further subject to all interpretations, amendments, rules and regulations which
may from time to time be promulgated and adopted pursuant to the Plan. In the
event of any conflict between the provisions of your Award and those of the
Plan, the provisions of the Plan shall control.
12.    SEVERABILITY. If all or any part of this Performance Stock Agreement or
the Plan is declared by any court or governmental authority to be unlawful or
invalid, such unlawfulness or invalidity shall not invalidate any portion of
this Performance Stock Agreement or the Plan not declared to be unlawful or
invalid. Any Section of this Performance Stock Agreement

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(or part of such a Section) so declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of such
Section or part of a Section to the fullest extent possible while remaining
lawful and valid.
13.    EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of the Award subject to
this Performance Stock Agreement shall not be included as compensation,
earnings, salaries, or other similar terms used when calculating the Employee’s
benefits under any employee benefit plan sponsored by the Company or any
Affiliate, except as such plan otherwise expressly provides. The Company
expressly reserves its rights to amend, modify, or terminate any of the
Company’s or any Affiliate’s employee benefit plans.
14.    AMENDMENT. This Performance Stock Agreement may not be modified, amended
or terminated except by an instrument in writing, signed by you and by a duly
authorized representative of the Company. Notwithstanding the foregoing, this
Performance Stock Agreement may be amended solely by the Board by a writing
which specifically states that it is amending this Performance Stock Agreement,
so long as a copy of such amendment is delivered to you, and provided that no
such amendment adversely affecting your rights hereunder may be made without
your written consent. Without limiting the foregoing, the Board reserves the
right to change, by written notice to you, the provisions of this Performance
Stock Agreement in any way it may deem necessary or advisable to carry out the
purpose of the grant as a result of any change in applicable laws or regulations
or any future law, regulation, ruling, or judicial decision, provided that any
such change shall be applicable only to rights relating to that portion of the
Award which is then subject to restrictions as provided herein.

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