Exhibit 10.2

FORM OF RESTRICTED STOCK AGREEMENT FOR USE WITH THE INCENTIVE PLAN

SIGNATURE GROUP HOLDINGS, INC.

2006 PERFORMANCE INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

THIS RESTRICTED STOCK AWARD AGREEMENT (this “Award Agreement”) is dated as of
                     (the “Award Date”) by and between Signature Group Holdings,
Inc., a Nevada corporation (the “Corporation”), and                      (the
“Grantee”).

WITNESSETH

WHEREAS, pursuant to the Signature Group Holdings, Inc. 2006 Performance
Incentive Plan (the “Plan”), as amended, the Corporation hereby grants to the
Grantee, effective as of the date hereof, a restricted stock award (the
“Award”), upon the terms and conditions set forth herein and in the Plan; and

NOW THEREFORE, in consideration of services rendered and to be rendered by the
Grantee, and the mutual promises made herein and the mutual benefits to be
derived therefrom, the parties agree as follows:

1. Defined Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meaning given to such terms in the Plan.

2. Grant. Subject to the terms of this Award Agreement, the Corporation hereby
grants to the Grantee an Award with respect to an aggregate of             
restricted shares of Common Stock of the Corporation (the “Restricted Stock”).

3. Vesting. Subject to Section 8 below, the Award shall vest, and restrictions
(other than those set forth in Section 8.1 of the Plan) shall lapse on
                    .

4. Continuance of Employment or Service. The vesting schedule requires continued
employment or service through each applicable vesting date as a condition to the
vesting of the applicable installment of the Award and the rights and benefits
under this Award Agreement. Employment or service for only a portion of the
vesting period, even if a substantial portion, will not entitle the Grantee to
any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
in Section 8 below or under the Plan.

Nothing contained in this Award Agreement or the Plan constitutes an employment
or service commitment by the Corporation or any of its Subsidiaries, affects the
Grantee’s status, if he or she is an employee, as an employee at will who is
subject to termination without cause, confers upon the Grantee any right to
remain employed by or in service to the Corporation or any of its Subsidiaries,
interferes in any way with the right of the Corporation or any of its
Subsidiaries at any time to terminate such employment or services, or affects
the right of the Corporation or any of its Subsidiaries to increase or decrease
the Grantee’s other compensation or benefits. Nothing in this paragraph,
however, is intended to adversely affect any independent contractual right of
the Grantee under any written employment agreement or other agreement with the
Corporation.

5. Dividend and Voting Rights. After the Award Date, the Grantee shall be
entitled to cash dividends and voting rights with respect to the shares of
Restricted Stock subject to the Award even though such shares are not vested,
provided that such rights shall terminate immediately as to any shares of
Restricted Stock that are forfeited pursuant to Section 9 hereof.

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6. Restrictions on Transfer. Prior to the time that they have become vested
pursuant to Section 3 hereof, or Section 7 of the Plan, neither the Restricted
Stock, nor any interest therein, amount payable in respect thereof, or
Restricted Property (as defined in Section 9 hereof) may be sold, assigned,
transferred, pledged or otherwise disposed of, alienated or encumbered, either
voluntarily or involuntarily. The transfer restrictions in the preceding
sentence shall not apply to (a) transfers to the Corporation or (b) transfers by
will or the laws of descent and distribution.

7. Stock Certificates.

(a) Book Entry Form. The Corporation shall, in its discretion, issue the shares
of Restricted Stock subject to the Award either (i) in certificate form as
provided in Section 7(b) below or (ii) in book entry form, registered in the
name of the Grantee with notations regarding the applicable restrictions on
transfer imposed under this Award Agreement.

(b) Certificates to be Held by Corporation; Legend. Any certificates
representing shares of Restricted Stock that may be delivered to the Grantee by
the Corporation prior to vesting shall be immediately redelivered by the Grantee
to the Corporation to be held by the Corporation until the restrictions on such
shares shall have lapsed and the shares shall thereby have become vested or the
shares represented thereby have been forfeited hereunder. Such certificates
shall bear the following legend and any other legends the Corporation may
determine to be necessary or advisable to comply with all applicable laws,
rules, and regulations:

“The ownership of this certificate and the shares of stock evidenced hereby and
any interest therein are subject to substantial restrictions on transfer under
an Agreement entered into between the registered owner and Signature Group
Holdings, Inc. A copy of such Agreement is on file in the office of the
Secretary of Signature Group Holdings, Inc.”

(c) Delivery of Certificates upon Vesting. Promptly after the vesting of any
shares of Restricted Stock pursuant to Section 3 hereof, the Change in Control
Agreement, or Section 7 of the Plan and the satisfaction of any and all related
tax withholding obligations pursuant to Section 11 hereof, the Corporation
shall, as applicable, either remove the notations on any shares of Restricted
Stock issued in book entry form that have vested or deliver to the Grantee a
certificate or certificates evidencing the number of shares of Restricted Stock
that have vested (or, in either case, such lesser number of shares as may be
permitted pursuant to Section 8.5 of the Plan). The Grantee (or the beneficiary
or personal representative of the Grantee in the event of the Grantee’s death or
disability, as the case may be) shall deliver to the Corporation any written
statements or agreements required pursuant to Section 8.1 of the Plan. The
shares so delivered shall no longer be restricted shares hereunder.

(d) Stock Power; Power of Attorney. Concurrent with the execution and delivery
of this Award Agreement, the Grantee shall deliver to the Corporation an
executed stock power in the form attached hereto as Attachment A, in blank, with
respect to the Restricted Stock. The Grantee, by acceptance of the Award, shall
be deemed to appoint, and does so appoint by execution of this Award Agreement,
the Corporation and each of its authorized representatives as the Grantee’s
attorney(s)-in-fact to effect any transfer of unvested forfeited shares (or
shares otherwise reacquired by the Corporation hereunder) to the Corporation as
may be required pursuant to the Plan or this Award Agreement and to execute such
documents as the Corporation or such representatives deem necessary or advisable
in connection with any such transfer.

8. Effect of Termination of Employment or Services. If the Grantee ceases to be
employed by or ceases to provide services to the Corporation or a Subsidiary
(the date of such termination of employment or service is referred to as the
Grantee’s “Severance Date”), the Grantee’s shares of Restricted Stock (and
related Restricted Property as defined in Section 9 hereof) shall be forfeited
to the Corporation to the extent such shares have not become vested pursuant to
Section 3 hereof or Section 7 of the Plan upon the Severance Date (regardless of
the reason for such termination of employment or service, whether with or
without cause, voluntarily, or involuntarily, or due to death or disability).
Upon the occurrence of any forfeiture of shares of Restricted Stock hereunder,
such unvested, forfeited shares and related Restricted Property shall be
automatically transferred to the Corporation as of the Severance Date, without
any other action by the Grantee (or the Grantee’s beneficiary

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or personal representative in the event of the Grantee’s death or disability, as
applicable). No consideration shall be paid by the Corporation with respect to
such transfer. The Corporation may exercise its powers under Section 7(d) hereof
and take any other action necessary or advisable to evidence such transfer. The
Grantee (or the Grantee’s beneficiary or personal representative in the event of
the Grantee’s death or disability, as applicable) shall deliver any additional
documents of transfer that the Corporation may request to confirm the transfer
of such unvested, forfeited shares and related Restricted Property to the
Corporation.

9. Adjustments upon Specified Events. Upon the occurrence of certain events
relating to the Corporation’s stock contemplated by Section 7.1 of the Plan, the
Administrator will make adjustments if appropriate in the number and kind of
securities that may become vested under the Award. If any such adjustment is
made under Section 7.1 of the Plan or an event described in Section 7.3 of the
Plan shall occur, and the shares of Restricted Stock are not fully vested upon
such event or prior thereto, the restrictions applicable to such shares of
Restricted Stock shall continue in effect with respect to any consideration,
property or other securities (the “Restricted Property” and, for the purposes of
this Award Agreement, “Restricted Stock” shall include “Restricted Property,”
unless the context otherwise requires) received in respect of such Restricted
Stock. Such Restricted Property shall vest at such times and in such proportion
as the shares of Restricted Stock to which the Restricted Property is
attributable vest, or would have vested pursuant to the terms hereof if such
shares of Restricted Stock had remained outstanding. To the extent that the
Restricted Property includes any cash (other than regular cash dividends
provided for in Section 5 hereof), such cash shall be invested, pursuant to
policies established by the Administrator, in interest bearing, FDIC-insured
(subject to applicable insurance limits) deposits of a depository institution
selected by the Administrator, the earnings on which shall be added to and
become a part of the Restricted Property.

10. Tax Withholding. The Corporation (or any of its Subsidiaries last employing
the Grantee) shall be entitled to require a cash payment by or on behalf of the
Grantee and/or to deduct from other compensation payable to the Participant any
sums required by federal, state or local tax law to be withheld with respect to
the vesting of any Restricted Stock. Alternatively, the Grantee or other person
in whom the Restricted Stock vests may irrevocably elect, in such manner and at
such time or times prior to any applicable tax date as may be permitted or
required under Section 8.5 of the Plan and rules established by the
Administrator, to have the Corporation withhold and reacquire shares of
Restricted Stock at their fair market value at the time of vesting to satisfy
any withholding obligations of the Corporation or its Subsidiaries with respect
to such vesting. Any election to have shares so held back and reacquired shall
be subject to such rules and procedures, which may include prior approval of the
Administrator, as the Administrator may impose, and shall not be available if
the Participant makes or has made an election pursuant to Section 83(b) of the
Code with respect to such Award.

11. Notices. Any notice to be given under the terms of this Award Agreement
shall be in writing and addressed to the Corporation at its principal office to
the attention of the Secretary, and to the Grantee at the Grantee’s last address
reflected on the Corporation’s payroll records, or at such other address as
either party may hereafter designate in writing to the other. Any notice shall
be delivered in person or shall be enclosed in a properly sealed envelope,
addressed as aforesaid, registered or certified, and deposited (postage and
registry or certification fee prepaid) in a post office or branch post office
regularly maintained by the United States Government. Any such notice shall be
given only when received, but if the Grantee is no longer employed by or ceases
to provide services to the Corporation or a Subsidiary, notice shall be deemed
to have been duly given five business days after the date mailed in accordance
with the foregoing provisions of this Section 11.

12. Plan. The Award and all rights of the Grantee under this Award Agreement are
subject to all of the terms and conditions of the provisions of the Plan,
incorporated herein by this reference. The Grantee agrees to be bound by the
terms of the Plan and this Award Agreement. The Grantee acknowledges reading and
understanding the Plan, the Prospectus for the Plan, and this Award Agreement.
In the event of a conflict or inconsistency between the terms and condition of
this Award Agreement and of the Plan, the terms and conditions of the Plan shall
govern. Unless otherwise expressly provided in other sections of this Award
Agreement, provisions of the Plan that confer discretionary authority on the
Board or the Administrator do not (and shall not be deemed to) create any rights
in the Grantee unless such rights are expressly set forth herein or are
otherwise in the sole discretion of the Board or the Administrator so conferred
by appropriate action of the Board or the Administrator under the Plan after the
date hereof.

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13. Entire Agreement. This Award Agreement and the Plan together constitute the
entire agreement with respect to the subject matter hereof and supersede all
prior understandings and agreements, written or oral, of the parties hereto with
respect to the subject matter hereof. The Plan may be amended pursuant to
Section 8.6 of the Plan. This Award Agreement may be amended by the Board from
time to time. Any such amendment must be in writing and signed by the
Corporation. Any such amendment that materially and adversely affects the
Grantee’s rights under this Agreement requires the consent of the Grantee in
order to be effective with respect to the Award. The Corporation may, however,
unilaterally waive any provision hereof in writing to the extent such waiver
does not adversely affect the interests of the Grantee hereunder, but no such
waiver shall operate as or be construed to be a subsequent waiver of the same
provision or a waiver of any other provision hereof.

14. Counterparts. This Award Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.

15. Section Headings. The section headings of this Award Agreement are for
convenience of reference only and shall not be deemed to alter or affect any
provision hereof.

16. Governing Law. This Award Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada without regard to
conflict of law principles thereunder.

[Signature Page Follows]

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CONSENT OF SPOUSE

In consideration of the execution of the foregoing Restricted Stock Award
Agreement by Signature Group Holdings Inc., I,                     , the spouse
of the Grantee therein named, do hereby join with my spouse in executing the
foregoing Restricted Stock Award Agreement and do hereby agree to be bound by
all of the terms and provisions thereof and of the Plan.

Dated:             ,         

 

 

Signature of Spouse

 

Print Name

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ATTACHMENT A

STOCK POWER

FOR VALUE RECEIVED and pursuant to that certain Restricted Stock Award Agreement
between Signature Group Holdings, Inc., a Nevada corporation (the
“Corporation”), and the individual named below (the “Individual”) dated as of
                    , the Individual, hereby sells, assigns and transfers to the
Corporation, an aggregate                      shares of Common Stock of the
Corporation, standing in the Individual’s name on the books of the Corporation
and represented by stock certificate number(s)                      to which
this instrument is attached, or in book entry form to which this instrument
pertains, and hereby irrevocably constitutes and appoints Signature Group
Holdings, Inc. as his or her attorney in fact and agent to transfer such shares
on the books of the Corporation, with full power of substitution in the
premises.

Dated:             ,         

 

 

Signature

 

Print Name

(Instruction: Please do not fill in any blanks other than the signature line and
printed name. The purpose of the assignment is to enable the Corporation to
exercise its sale/purchase option set forth in the Restricted Stock Award
Agreement without requiring additional signatures on the part of the
Individual.)