Exhibit 10.4

LM FUNDING AMERICA, INC.

2015 OMNIBUS INCENTIVE PLAN

1. Purpose, Effective Date and Definitions.

(a) Purpose. This LM Funding America, Inc. 2015 Omnibus Incentive Plan has two
complementary purposes: (i) to attract, retain, focus and motivate executives
and other selected employees, directors, consultants and advisors and (ii) to
increase stockholder value. The Plan will accomplish these objectives by
offering participants the opportunity to acquire shares of the Company’s common
stock, receive monetary payments based on the value of such common stock or
receive other incentive compensation on the terms that this Plan provides.

(b) Effective Date. This Plan is effective as of October 21, 2015 (the
“Effective Date”).

(c) Definitions. Capitalized terms used and not otherwise defined in various
sections of the Plan have the meanings given in Section 18.

2. Administration.

(a) Administration. In addition to the authority specifically granted to the
Administrator in this Plan, the Administrator has full discretionary authority
to administer this Plan, including but not limited to the authority to:
(i) interpret the provisions of this Plan or any agreement covering an Award;
(ii) prescribe, amend and rescind rules and regulations relating to this Plan;
(iii) correct any defect, supply any omission, or reconcile any inconsistency in
the Plan, any Award or any agreement covering an Award in the manner and to the
extent it deems desirable to carry this Plan or such Award into effect; and
(iv) make all other determinations necessary or advisable for the administration
of this Plan. All Administrator determinations shall be made in the sole
discretion of the Administrator and are final and binding on all interested
parties.

Notwithstanding any provision of the Plan to the contrary, the Administrator
shall have the discretion to grant an Award with any vesting condition, any
vesting period or any performance period if the Award is granted to a newly
hired or promoted Participant, or accelerate or shorten the vesting or
performance period of an Award, in connection with a Participant’s death,
Disability, Retirement or termination by the Company or an Affiliate without
Cause or a Change of Control.

Notwithstanding the above statement or any other provision of the Plan, once
established, the Administrator shall have no discretion to increase the amount
of compensation payable under an Award that is intended to be performance-based
compensation under Code Section 162(m), although the Administrator may decrease
the amount of compensation a Participant may earn under such an Award.

(b) Delegation to Other Committees or Officers. To the extent applicable law
permits, the Board may delegate to another committee of the Board, or the
Committee may delegate to one or more officers of the Company, any or all of
their respective authority and responsibility as an Administrator of the Plan;
provided that no such delegation is permitted with respect to Stock-based Awards
made to Section 16 Participants at the time any such delegated authority or
responsibility is exercised unless the delegation is to another committee of the
Board consisting entirely of Non-Employee Directors. If the Board or the
Committee has made such a delegation, then all references to the Administrator
in this Plan include such other committee or one or more officers to the extent
of such delegation.

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(c) No Liability; Indemnification. No member of the Board or the Committee, and
no officer or member of any other committee to whom a delegation under
Section 2(b) has been made, will be liable for any act done, or determination
made, by the individual in good faith with respect to the Plan or any Award. The
Company will indemnify and hold harmless each such individual as to any acts or
omissions, or determinations made, with respect to this Plan or any Award to the
maximum extent that the law and the Company’s by-laws permit.

3. Eligibility. The Administrator may designate any of the following as a
Participant from time to time, to the extent of the Administrator’s authority:
any officer or other employee of the Company or its Affiliates; any individual
that the Company or an Affiliate has engaged to become an officer or employee;
any consultant or advisor who provides services to the Company or its
Affiliates; or any Director, including a Non-Employee Director. The
Administrator’s granting of an Award to a Participant will not require the
Administrator to grant an Award to such individual at any future time. The
Administrator’s granting of a particular type of Award to a Participant will not
require the Administrator to grant any other type of Award to such individual.

4. Types of Awards; Assistance to Participants.

(a) Grants of Awards. Subject to the terms of this Plan, the Administrator may
grant any type of Award to any Participant it selects, but only employees of the
Company or a Subsidiary (that qualifies under Code Section 422) may receive
grants of incentive stock options within the meaning of Code Section 422. Awards
may be granted alone or in addition to, in tandem with, or (subject to the
prohibition on repricing set forth in Section 14(e)) in substitution for any
other Award (or any other award granted under another plan of the Company or any
Affiliate, including the plan of an acquired entity).

(b) Assistance. On such terms and conditions as shall be approved by the
Administrator, the Company or any Subsidiary may directly or indirectly lend
money to any Participant or other person to accomplish the purposes of the Plan,
including to assist such Participant or other person to acquire Shares upon the
exercise of Options, provided that such lending is not permitted to the extent
it would violate terms of the Sarbanes-Oxley Act of 2002 or any other law,
regulation or other requirement applicable to the Company or any Subsidiary.

5. Shares Reserved under this Plan.

(a) Plan Reserve. Subject to adjustment as provided in Section 16, an aggregate
of 600,000 Shares are reserved for issuance under this Plan, all of which may be
issued upon the exercise of incentive stock options. The Shares reserved for
issuance may be either authorized and unissued Shares or shares reacquired at
any time and now or hereafter held as treasury stock. The aggregate number of
Shares reserved under this Section 5(a) shall be depleted by the maximum number
of Shares, if any, that may be issuable under an Award as determined at the time
of grant. For purposes of determining the aggregate number of Shares reserved
for issuance under this Plan, any fractional Share shall be rounded to the next
highest full Share.

 

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(b) Replenishment of Shares Under this Plan. If (i) an Award lapses, expires,
terminates or is cancelled without the issuance of Shares under the Award
(whether due currently or on a deferred basis), (ii) it is determined during or
at the conclusion of the term of an Award that all or some portion of the Shares
with respect to which the Award was granted will not be issuable, or that other
compensation with respect to the Shares covered by the Award will not be
payable, on the basis that the conditions for such issuance will not be
satisfied, (iii) Shares are forfeited under an Award, (iv) Shares are issued
under any Award and the Company subsequently reacquires them pursuant to rights
reserved upon the issuance of the Shares or (v) Shares are tendered to satisfy
the exercise price of an Award or federal, state or local tax withholding
obligations, then such Shares shall be recredited to the Plan’s reserve and may
again be used for new Awards under this Plan, but Shares recredited to the
Plan’s reserve pursuant to clause (iv) or (v) may not be issued pursuant to
incentive stock options.

6. Options. Subject to the terms of this Plan, the Administrator will determine
all terms and conditions of each Option, including but not limited to:
(a) whether the Option is an “incentive stock option” which meets the
requirements of Code Section 422, or a “nonqualified stock option” which does
not meet the requirements of Code Section 422; (b) the grant date, which may not
be any day prior to the date that the Administrator approves the grant; (c) the
number of Shares subject to the Option; (d) the exercise price, which may not be
less than the Fair Market Value of the Shares subject to the Option as
determined on the date of grant; (e) the terms and conditions of vesting and
exercise; and (f) the term, except that an Option must terminate no later than
ten (10) years after the date of grant. In all other respects, the terms of any
incentive stock option should comply with the provisions of Code Section 422
except to the extent the Administrator determines otherwise. Except to the
extent the Administrator determines otherwise, a Participant may exercise an
Option in whole or part after the right to exercise the Option has accrued,
provided that any partial exercise must be for one hundred (100) Shares or
multiples thereof. If an Option that is intended to be an incentive stock option
fails to meet the requirements thereof, the Option shall automatically be
treated as a nonqualified stock option to the extent of such failure. Unless
restricted by the Administrator, and subject to such procedures as the
Administrator may specify, the payment of the exercise price of Options may be
made by (x) delivery of cash or other Shares or other securities of the Company
(including by attestation) having a then Fair Market Value equal to the purchase
price of such Shares or (y) by delivery to the Company or its designated agent
of an executed irrevocable option exercise form together with irrevocable
instructions to a broker-dealer to sell or margin a sufficient portion of the
Shares and deliver the sale or margin loan proceeds directly to the Company to
pay for the exercise price. To the extent permitted by the Administrator, the
payment of the exercise price of the Options may also be made by surrendering
the right to receive Shares otherwise deliverable to the Participant upon
exercise of the Award having a Fair Market Value at the time of exercise equal
to the total exercise price or by any combination of such method and the methods
described in the preceding sentence. Except to the extent otherwise set forth in
an Award agreement, a Participant shall have no rights as a holder of Stock as a
result of the grant of an Option until the Option is exercised, the exercise
price and applicable withholding taxes are paid and the Shares subject to the
Option are issued thereunder.

7. Stock Appreciation Rights. Subject to the terms of this Plan, the
Administrator will determine all terms and conditions of each SAR, including but
not limited to: (a) whether the SAR is granted independently of an Option or
relates to an Option; (b) the grant date, which may not be any day prior to the
date that the Administrator approves the grant; (c) the number of Shares to
which the SAR relates; (d) the grant price, provided that the grant price shall
not be less than the Fair Market Value of the Shares subject to the SAR as
determined on the date of grant; (e) the terms and conditions of exercise or
maturity, including vesting; (f) the term, provided that an SAR must terminate
no later than ten (10) years after the date of grant; and (g) whether the SAR
will be settled in cash, Shares or a combination thereof. If an SAR is granted

 

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in relation to an Option, then unless otherwise determined by the Administrator,
the SAR shall be exercisable or shall mature at the same time or times, on the
same conditions and to the extent and in the proportion, that the related Option
is exercisable and may be exercised or mature for all or part of the Shares
subject to the related Option. Upon exercise of any number of SARs, the number
of Shares subject to the related Option shall be reduced accordingly and such
Option may not be exercised with respect to that number of Shares. The exercise
of any number of Options that relate to an SAR shall likewise result in an
equivalent reduction in the number of Shares covered by the related SAR.

8. Performance and Stock Awards. Subject to the terms of this Plan, the
Administrator will determine all terms and conditions of each award of Shares,
Restricted Stock, Restricted Stock Units, Performance Shares or Performance
Units, including but not limited to: (a) the number of Shares and/or units to
which such Award relates; (b) whether, as a condition for the Participant to
realize all or a portion of the benefit provided under the Award, one or more
Performance Goals must be achieved during such period as the Administrator
specifies; (c) whether the restrictions imposed on Restricted Stock or
Restricted Stock Units shall lapse, and all or a portion of the Performance
Goals subject to an Award shall be deemed achieved, upon a Participant’s death,
Disability or Retirement; (d) the length of the vesting and/or performance
period and, if different, the date on which payment of the benefit provided
under the Award will be made; (e) with respect to Performance Units, whether to
measure the value of each unit in relation to a designated dollar value or the
Fair Market Value of one or more Shares; and (f) with respect to Restricted
Stock Units and Performance Units, whether to settle such Awards in cash, in
Shares (including Restricted Stock), or a combination thereof.

9. Annual Incentive Awards. Subject to the terms of this Plan, the Administrator
will determine all terms and conditions of an Annual Incentive Award, including
but not limited to the Performance Goals, performance period, the potential
amount payable, and the timing of payment; provided that the Administrator must
require that payment of all or any portion of the amount subject to the Annual
Incentive Award is contingent on the achievement of one or more Performance
Goals during the period the Administrator specifies, although the Administrator
may specify that all or a portion of the Performance Goals subject to an Award
are deemed achieved upon a Participant’s death, Disability or Retirement
(except, in the case of an Award intended to constitute performance-based
compensation under Code Section 162(m), to the extent inconsistent with the
applicable requirements of Code Section 162(m)), or such other circumstances as
the Administrator may specify.

10. Long-Term Incentive Awards. Subject to the terms of this Plan, the
Administrator will determine all terms and conditions of a Long-Term Incentive
Award, including but not limited to the Performance Goals, performance period
(which must be more than one year), the potential amount payable, and the timing
of payment; provided that the Administrator must require that payment of all or
any portion of the amount subject to the Long-Term Incentive Award is contingent
on the achievement of one or more Performance Goals during the period the
Administrator specifies, although the Administrator may specify that all or a
portion of the Performance Goals subject to an Award are deemed achieved upon a
Participant’s death, Disability or Retirement (except, in the case of an Award
intended to constitute performance-based compensation under Code Section 162(m),
to the extent inconsistent with the applicable requirements of Code
Section 162(m)), or such other circumstances as the Administrator may specify.

 

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11. Dividend Equivalent Units. Subject to the terms of this Plan, the
Administrator will determine all terms and conditions of each award of Dividend
Equivalent Units, including but not limited to whether: (a) such Award will be
granted in tandem with another Award; (b) payment of the Award will be made
concurrently with dividend payments or credited to an account for the
Participant which provides for the deferral of such amounts until a stated time;
(c) the Award will be settled in cash or Shares; and (d) as a condition for the
Participant to realize all or a portion of the benefit provided under the Award,
one or more Performance Goals must be achieved during such period as the
Administrator specifies; provided that Dividend Equivalent Units may not be
granted in connection with an Option, Stock Appreciation Right or other “stock
right” within the meaning of Code Section 409A; and provided further that no
Dividend Equivalent Unit granted in tandem with another Award shall include
vesting provisions more favorable to the Participant than the vesting
provisions, if any, to which the tandem Award is subject.

12. Other Stock-Based Awards. Subject to the terms of this Plan, the
Administrator may grant to Participants other types of Awards, which may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, Shares, either alone or in addition to or in conjunction
with other Awards, and payable in Stock or cash. Without limitation except as
provided herein (and subject to the limitations of Section 14(e)), such Award
may include the issuance of shares of unrestricted Stock, which may be awarded
in payment of director fees, in lieu of cash compensation, in exchange for
cancellation of a compensation right, as a bonus, or upon the attainment of
Performance Goals or otherwise, or rights to acquire Stock from the Company. The
Administrator shall determine all terms and conditions of the Award, including
but not limited to, the time or times at which such Awards shall be made, and
the number of Shares to be granted pursuant to such Awards or to which such
Award shall relate; provided that any Award that provides for purchase rights
shall be priced at 100% of Fair Market Value on the date of the Award.

13. Restrictions on Transfer, Encumbrance and Disposition. No Award granted
under this Plan may be sold, assigned, mortgaged, pledged, exchanged,
hypothecated or otherwise transferred, or encumbered or disposed of, by a
Participant other than by will or the laws of descent and distribution, and
during the lifetime of the Participant such Awards may be exercised only by the
Participant or the Participant’s legal representative or by the permitted
transferee of such Participant as hereinafter provided (or by the legal
representative of such permitted transferee). Notwithstanding the foregoing, a
Participant may transfer an Award to the extent expressly permitted by the
Administrator. Subsequent transfers of transferred Awards are prohibited except
transfers otherwise made in accordance with this Section 13. Any attempted
transfer not permitted by this Section 13 shall be null and void and have no
legal effect. The restrictions set forth in this Section 13, and any risk of
forfeiture applicable to an Award, shall be enforceable against any transferee
of an Award.

14. Termination and Amendment of Plan; Amendment, Modification or Cancellation
of Awards.

(a) Term of Plan. Unless the Board earlier terminates this Plan pursuant to
Section 14(b), this Plan will terminate when all Shares reserved for issuance
have been issued. If the term of this Plan extends beyond ten (10) years from
the Effective Date, no incentive stock options may be granted after such time
unless the stockholders of the Company have approved an extension of this Plan.
In addition, no Award may constitute qualified performance-based compensation
within the meaning of Code Section 162(m) unless, to the extent required by Code
Section 162(m) for such Award to constitute qualified performance-based
compensation, the material terms of the Performance Goals applicable to such
Award are disclosed to and reapproved by the stockholders of the Company no
later than the first stockholder meeting that occurs in the fifth (5th) year
following the year in which the stockholders previously approved the Performance
Goals.

 

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(b) Termination and Amendment. The Board or the Administrator may amend, alter,
suspend, discontinue or terminate this Plan at any time, subject to the
following limitations:

(i) the Board must approve any amendment of this Plan to the extent the Company
determines such approval is required by: (A) prior action of the Board,
(B) applicable corporate law, or (C) any other applicable law;

(ii) stockholders must approve any amendment of this Plan to the extent the
Company determines such approval is required by: (A) Section 16 of the Exchange
Act, (B) the Code, (C) the listing requirements of any principal securities
exchange or market on which the Shares are then traded, or (D) any other
applicable law; and

(iii) stockholders must approve any of the following Plan amendments: (A) an
amendment to materially increase any number of Shares specified in Section 5(a)
(except as permitted by Section 16) or (B) an amendment that would diminish the
protections afforded by Section 14(e).

(c) Amendment, Modification, Cancellation and Disgorgement of Awards.

(i) Except as provided in Section 14(e) and subject to the requirements of this
Plan, the Administrator may modify, amend or cancel any Award, or waive any
restrictions or conditions applicable to any Award or the exercise of the Award;
provided that, except as otherwise provided in the Plan or the Award agreement,
any modification or amendment that materially diminishes the rights of the
Participant, or the cancellation of the Award, shall be effective only if agreed
to by the Participant or any other person(s) as may then have an interest in the
Award, but the Administrator need not obtain Participant (or other interested
party) consent for the modification, amendment or cancellation of an Award
pursuant to the provisions of subsection (ii) or Section 16 or as follows:
(A) to the extent the Administrator deems such action necessary to comply with
any applicable law or the listing requirements of any principal securities
exchange or market on which the Shares are then traded; (B) to the extent the
Administrator deems necessary to preserve favorable accounting or tax treatment
of any Award for the Company; or (C) to the extent the Administrator determines
that such action does not materially and adversely affect the value of an Award
or that such action is in the best interest of the affected Participant (or any
other person(s) as may then have an interest in the Award). Notwithstanding the
foregoing, unless determined otherwise by the Administrator, any such amendment
shall be made in a manner that will enable an Award intended to be exempt from
Code Section 409A to continue to be so exempt, or to enable an Award intended to
comply with Code Section 409A to continue to so comply.

(ii) Notwithstanding anything to the contrary in an Award agreement, the
Administrator shall have full power and authority to terminate or cause the
Participant to forfeit the Award, and require the Participant to disgorge to the
Company any gains attributable to the Award, if the Participant engages in any
action constituting, as determined by the Administrator in its discretion, Cause
for termination, or a breach of any Award agreement or any other agreement
between the Participant and the Company or an Affiliate concerning
noncompetition, nonsolicitation, confidentiality, trade secrets, intellectual
property, nondisparagement or similar obligations.

 

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(iii) Any Awards granted pursuant to this Plan, and any Stock issued or cash
paid pursuant to an Award, shall be subject to any recoupment or clawback policy
that is adopted by, or any recoupment or similar requirement otherwise made
applicable by law, regulation or listing standards to, the Company from time to
time.

(d) Survival of Authority and Awards. Notwithstanding the foregoing, the
authority of the Board and the Administrator under this Section 14 and to
otherwise administer the Plan with respect to then-outstanding Awards will
extend beyond the date of this Plan’s termination. In addition, termination of
this Plan will not affect the rights of Participants with respect to Awards
previously granted to them, and all unexpired Awards will continue in force and
effect after termination of this Plan except as they may lapse or be terminated
by their own terms and conditions.

(e) Repricing and Backdating Prohibited. Notwithstanding anything in this Plan
to the contrary, and except for the adjustments provided for in Section 16,
neither the Administrator nor any other person may (i) amend the terms of
outstanding Options or SARs to reduce the exercise or grant price of such
outstanding Options or SARs; (ii) cancel outstanding Options or SARs in exchange
for Options or SARs with an exercise or grant price that is less than the
exercise or grant price of the original Options or SARs; or (iii) cancel
outstanding Options or SARs with an exercise or grant price above the current
Fair Market Value of a Share in exchange for cash or other securities. In
addition, the Administrator may not make a grant of an Option or SAR with a
grant date that is effective prior to the date the Administrator takes action to
approve such Award.

(f) Foreign Participation. To assure the viability of Awards granted to
Participants employed or residing in foreign countries, the Administrator may
provide for such special terms as it may consider necessary or appropriate to
accommodate differences in local law, tax policy, accounting or custom.
Moreover, the Administrator may approve such supplements to, or amendments,
restatements or alternative versions of, this Plan as it determines is necessary
or appropriate for such purposes. Any such amendment, restatement or alternative
versions that the Administrator approves for purposes of using this Plan in a
foreign country will not affect the terms of this Plan for any other country. In
addition, all such supplements, amendments, restatements or alternative versions
must comply with the provisions of Section 14(b)(ii).

(g) Code Section 409A. The provisions of Code Section 409A are incorporated
herein by reference to the extent necessary for any Award that is subject to
Code Section 409A to comply therewith.

15. Taxes.

(a) Withholding. In the event the Company or one of its Affiliates is required
to withhold any Federal, state or local taxes or other amounts in respect of any
income recognized by a Participant as a result of the grant, vesting, payment or
settlement of an Award or disposition of any Shares acquired under an Award, the
Company or its Affiliate may deduct (or require an Affiliate to deduct) from any
cash payments of any kind otherwise due the Participant, or with the consent of
the Administrator, Shares otherwise deliverable or vesting under an Award, to
satisfy such tax or other obligations. Alternatively, the Company or its
Affiliate may require such Participant to pay to the Company or its Affiliate,
in cash, promptly on demand, or make other

 

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arrangements satisfactory to the Company or its Affiliate regarding the payment
to the Company or its Affiliate of the aggregate amount of any such taxes and
other amounts. If Shares are deliverable upon exercise or payment of an Award,
then, unless restricted by the Administrator and subject to such procedures as
the Administrator may specify, a Participant may satisfy all or a portion of the
Federal, state and local withholding tax obligations arising in connection with
such Award by electing to deliver other previously owned Shares. To the extent
expressly permitted by the Administrator, a Participant may satisfy all or a
portion of the Federal, state and local withholding tax obligations arising in
connection with an Award by having the Company or its Affiliate withhold Shares
otherwise issuable under the Award or tendering back Shares received in
connection with such Award. Notwithstanding anything to the contrary herein, the
amount to be withheld may not exceed the total minimum federal, state and local
tax withholding obligations associated with the transaction to the extent needed
for the Company and its Affiliates to avoid an accounting charge. If an election
is provided, the election must be made on or before the date as of which the
amount of tax to be withheld is determined and otherwise as the Administrator
requires. In any case, the Company and its Affiliates may defer making payment
or delivery under any Award if any such tax may be pending unless and until
indemnified to its satisfaction.

(b) No Guarantee of Tax Treatment. Notwithstanding any provisions of the Plan,
the Company does not guarantee to any Participant or any other Person with an
interest in an Award that (i) any Award intended to be exempt from Code
Section 409A shall be so exempt, (ii) any Award intended to comply with Code
Section 409A or Code Section 422 shall so comply, or (iii) any Award shall
otherwise receive a specific tax treatment under any other applicable tax law,
nor in any such case will the Company or any Affiliate be required to indemnify,
defend or hold harmless any individual with respect to the tax consequences of
any Award.

16. Adjustment Provisions; Change of Control.

(a) Adjustment of Shares. If: (i) the Company shall at any time be involved in a
merger or other transaction in which the Shares are changed or exchanged;
(ii) the Company shall subdivide or combine the Shares or the Company shall
declare a dividend payable in Shares, other securities (other than stock
purchase rights issued pursuant to a stockholder rights agreement) or other
property; (iii) the Company shall effect a cash dividend the amount of which, on
a per Share basis, exceeds ten percent (10%) of the Fair Market Value of a Share
at the time the dividend is declared, or the Company shall effect any other
dividend or other distribution on the Shares in the form of cash, or a
repurchase of Shares, that the Board determines by resolution is special or
extraordinary in nature or that is in connection with a transaction that the
Company characterizes publicly as a recapitalization or reorganization involving
the Shares; or (iv) any other event shall occur, which, in the case of this
clause (iv), in the judgment of the Administrator necessitates an adjustment to
prevent dilution or enlargement of the benefits or potential benefits intended
to be made available under this Plan, then the Administrator shall, in such
manner as it may deem equitable to prevent dilution or enlargement of the
benefits or potential benefits intended to be made available under this Plan,
adjust as applicable: (A) the number and type of shares subject to this Plan
(including the number and type of shares described in Sections 5(a) and (b)) and
which may after the event be made the subject of Awards; (B) the number and type
of shares subject to outstanding Awards; (C) the grant, purchase, or exercise
price with respect to any Award; and (D) to the extent such discretion does not
cause an Award that is intended to qualify as performance-based compensation
under Code Section 162(m) to lose its status as such, the Performance Goals of
an Award. In any such case, the Administrator may also (or in lieu of the
foregoing) make provision for a cash payment to the holder of an outstanding
Award in exchange for the

 

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cancellation of all or a portion of the Award (without the consent of the holder
of an Award) in an amount determined by the Administrator effective at such time
as the Administrator specifies (which may be the time such transaction or event
is effective). However, in each case, with respect to Awards of incentive stock
options, no such adjustment may be authorized to the extent that such authority
would cause this Plan to violate Code Section 422(b). Further, the number of
Shares subject to any Award payable or denominated in Shares must always be a
whole number. In any event, previously granted Options or SARs are subject to
only such adjustments as are necessary to maintain the relative proportionate
interest the Options and SARs represented immediately prior to any such event
and to preserve, without exceeding, the value of such Options or SARs.

Without limitation, in the event of any reorganization, merger, consolidation,
combination or other similar corporate transaction or event, whether or not
constituting a Change of Control (other than any such transaction in which the
Company is the continuing corporation and in which the outstanding Stock is not
being converted into or exchanged for different securities, cash or other
property, or any combination thereof), the Administrator may substitute, on an
equitable basis as the Administrator determines, for each Share then subject to
an Award and the Shares subject to this Plan (if the Plan will continue in
effect), the number and kind of shares of stock, other securities, cash or other
property to which holders of Stock are or will be entitled in respect of each
Share pursuant to the transaction.

Notwithstanding the foregoing, in the case of a stock dividend (other than a
stock dividend declared in lieu of an ordinary cash dividend) or subdivision or
combination of the Shares (including a reverse stock split), if no action is
taken by the Administrator, adjustments contemplated by this subsection that are
proportionate shall nevertheless automatically be made as of the date of such
stock dividend or subdivision or combination of the Shares.

(b) Issuance or Assumption. Notwithstanding any other provision of this Plan,
and without affecting the number of Shares otherwise reserved or available under
this Plan, in connection with any merger, consolidation, acquisition of property
or stock, or reorganization, the Administrator may authorize the issuance or
assumption of awards under this Plan upon such terms and conditions as it may
deem appropriate.

(c) Change of Control. Unless otherwise expressly provided in an Award agreement
or another contract, including an employment agreement, or under the terms of a
transaction constituting a Change of Control, the Administrator may provide for
the acceleration of the vesting or earning and, if applicable, exercisability of
any outstanding Award, or portion thereof, or the lapsing of any conditions or
restrictions on or the time for payment in respect of any outstanding Award, or
portion thereof, upon a Change of Control or the termination of the
Participant’s employment following a Change of Control. In addition, unless
otherwise expressly provided in an Award agreement or another contract,
including an employment agreement, or under the terms of a transaction
constituting a Change of Control, without limitation of the foregoing, the
Administrator may provide that any or all of the following shall occur in
connection with a Change of Control: (a) the substitution for the Shares subject
to any outstanding Award, or portion thereof, of stock or other securities of
the surviving corporation or any successor corporation to the Company, or a
parent or subsidiary thereof, in which event the aggregate purchase or exercise
price, if any, of such Award, or portion thereof, shall remain the same, (b) the
conversion of any outstanding Award, or portion thereof, into a right to receive
cash or other property upon or following the consummation of the Change of
Control in an amount equal to the value of the consideration to be received by
holders of Shares in connection with such transaction for one Share, less the
per share purchase or exercise price of such Award, if any,

 

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multiplied by the number of Shares subject to such Award, or a portion thereof,
(c) acceleration of the vesting (and, as applicable, the exercisability) of any
and/or all outstanding Awards, (d) the cancellation of any outstanding and
unexercised Awards upon or following the consummation of the Change of Control
(without the consent of an Award holder or any person with an interest in an
Award), (e) in the case of Options or SARs, the cancellation of all outstanding
Options or SARs in exchange for a cash payment equal to the excess of the Change
of Control Price over the exercise price of the Shares subject to such Option or
SAR upon the Change of Control (or for no cash payment if such excess is zero),
and/or (f) the cancellation of any Awards in exchange for a cash payment based
on the value of the Award as of the date of the Change of Control (or for no
payment if the Award has no value).

For purposes of this Section 16, the “value” of a Performance Share shall be
equal to, and the “value” of a Performance Unit for which the value is equal to
the Fair Market Value of Shares shall be based on, the Change of Control Price.
Notwithstanding anything to the contrary in this Section 16(c), the terms of any
Awards that are subject to Code Section 409A shall govern the treatment of such
Awards upon a Change of Control, and the terms of this Section 16(c) shall not
apply, to the extent required for such Awards to remain compliant with Code
Section 409A, as applicable.

(d) Application of Limits on Payments.

(i) Determination of Cap or Payment. Except to the extent the Participant has in
effect an employment or similar agreement with the Company or any Affiliate or
is subject to a policy that provides for a more favorable result to the
Participant upon a Change of Control, if any payments or benefits paid by the
Company pursuant to this Plan, including any accelerated vesting or similar
provisions (“Plan Payments”), would cause some or all of the Plan Payments in
conjunction with any other payments made to or benefits received by a
Participant in connection with a Change of Control (such payments or benefits,
together with the Plan Payments, the “Total Payments”) to be subject to the tax
(“Excise Tax”) imposed by Code Section 4999 but for this Section 16(d), then,
notwithstanding any other provision of this Plan to the contrary, the Total
Payments shall be delivered either (A) in full or (B) in an amount such that the
value of the aggregate Total Payments that the Participant is entitled to
receive shall be One Dollar ($1.00) less than the maximum amount that the
Participant may receive without being subject to the Excise Tax, whichever of
(A) or (B) results in the receipt by the Participant of the greatest benefit on
an after-tax basis (taking into account applicable federal, state and local
income taxes and the Excise Tax).

(ii) Procedures.

(A) If a Participant or the Company believes that a payment or benefit due the
Participant will result in some or all of the Total Payments being subject to
the Excise Tax, then the Company, at its expense, shall obtain the opinion
(which need not be unqualified) of nationally recognized tax counsel (“National
Tax Counsel”) selected by the Company (which may be regular outside counsel to
the Company), which opinion sets forth (1) the amount of the Base Period Income
(as defined below), (2) the amount and present value of the Total Payments,
(3) the amount and present value of any excess parachute payments determined
without regard to any reduction of Total Payments pursuant to Section 6(a)(ii),
and (4) the net after-tax proceeds to the Participant, taking into

 

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account applicable federal, state and local income taxes and the Excise Tax if
(x) the Total Payments were delivered in accordance with Section 16(d)(i)(A) or
(y) the Total Payments were delivered in accordance with Section 16(d)(i)(B).
The opinion of National Tax Counsel shall be addressed to the Company and the
Participant and shall be binding upon the Company and the Participant. If such
National Tax Counsel opinion determines that Section 16(d)(i)(B) applies, then
the Plan Payments or any other payment or benefit determined by such counsel to
be includable in the Total Payments shall be reduced or eliminated so that under
the bases of calculations set forth in such opinion there will be no excess
parachute payment. In such event, payments or benefits included in the Total
Payments shall be reduced or eliminated by applying the following principles, in
order: (1) the payment or benefit with the higher ratio of the parachute payment
value to present economic value (determined using reasonable actuarial
assumptions) shall be reduced or eliminated before a payment or benefit with a
lower ratio; (2) the payment or benefit with the later possible payment date
shall be reduced or eliminated before a payment or benefit with an earlier
payment date; and (3) cash payments shall be reduced prior to non-cash benefits;
provided that if the foregoing order of reduction or elimination would violate
Code Section 409A, then the reduction shall be made pro rata among the payments
or benefits included in the Total Payments (on the basis of the relative present
value of the parachute payments).

(B) For purposes of this Section 16: (1) the terms “excess parachute payment”
and “parachute payments” shall have the meanings given in Code Section 280G and
such “parachute payments” shall be valued as provided therein; (2) present value
shall be calculated in accordance with Code Section 280G(d)(4); (3) the term
“Base Period Income” means an amount equal to the Participant’s “annualized
includible compensation for the base period” as defined in Code
Section 280G(d)(1); (4) for purposes of the opinion of National Tax Counsel, the
value of any noncash benefits or any deferred payment or benefit shall be
determined by the Company’s independent auditors in accordance with the
principles of Code Sections 280G(d)(3) and (4); and (5) the Participant shall be
deemed to pay federal income tax and employment taxes at the highest marginal
rate of federal income and employment taxation, and state and local income taxes
at the highest marginal rate of taxation in the state or locality of the
Participant’s domicile, net of the maximum reduction in federal income taxes
that may be obtained from the deduction of such state and local taxes.

(C) If National Tax Counsel so requests in connection with the opinion required
by this Section 16(d)(ii), the Company shall obtain, at the Company’s expense,
and the National Tax Counsel may rely on, the advice of a firm of recognized
executive compensation consultants as to the reasonableness of any item of
compensation to be received by the Participant solely with respect to its status
under Code Section 280G.

 

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(D) The Company agrees to bear all costs associated with, and to indemnify and
hold harmless the National Tax Counsel from, any and all claims, damages and
expenses resulting from or relating to its determinations pursuant to this
Section 16, except for claims, damages or expenses resulting from the gross
negligence or willful misconduct of such firm.

(E) This Section 16 shall be amended to comply with any amendment or successor
provision to Code Section 280G or Code Section 4999. If such provisions are
repealed without successor, then this Section 16(d) shall be cancelled without
further effect.

17. Miscellaneous.

(a) Other Terms and Conditions. The Administrator may provide in any Award
agreement such other provisions (whether or not applicable to the Award granted
to any other Participant) as the Administrator determines appropriate to the
extent not otherwise prohibited by the terms of the Plan.

(b) Employment and Service. The issuance of an Award shall not confer upon a
Participant any right with respect to continued employment or service with the
Company or any Affiliate, or the right to continue as a Director. Unless
determined otherwise by the Administrator, for purposes of the Plan and all
Awards, the following rules shall apply:

(i) a Participant who transfers employment between the Company and its
Affiliates, or between Affiliates, will not be considered to have terminated
employment;

(ii) a Participant who ceases to be a Non-Employee Director because he or she
becomes an employee of the Company or an Affiliate shall not be considered to
have ceased service as a Director with respect to any Award until such
Participant’s termination of employment with the Company and its Affiliates;

(iii) a Participant who ceases to be employed by the Company or an Affiliate and
immediately thereafter becomes a Non-Employee Director, a non-employee director
of an Affiliate, or a consultant to the Company or any Affiliate shall not be
considered to have terminated employment until such Participant’s service as a
director of, or consultant to, the Company and its Affiliates has ceased; and

(iv) a Participant employed by an Affiliate will be considered to have
terminated employment when such entity ceases to be an Affiliate.

Notwithstanding the foregoing, for purposes of an Award that is subject to Code
Section 409A, if a Participant’s termination of employment or service triggers
the payment of compensation under such Award, then the Participant will be
deemed to have terminated employment or service upon his or her “separation from
service” within the meaning of Code Section 409A. Notwithstanding any other
provision in this Plan or an Award to the contrary, if any Participant is a
“specified employee” within the meaning of Code Section 409A as of the date of
his or her “separation from service” within the meaning of Code Section 409A,
then, to the extent required by Code Section 409A, any payment made to the
Participant on account of such separation from service shall not be made before
a date that is six months after the date of the separation from service.

 

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(c) No Fractional Shares. No fractional Shares or other securities may be issued
or delivered pursuant to this Plan, and the Administrator may determine whether
cash, other securities or other property will be paid or transferred in lieu of
any fractional Shares or other securities, or whether such fractional Shares or
other securities or any rights to fractional Shares or other securities will be
canceled, terminated or otherwise eliminated.

(d) Unfunded Plan; Awards Not Includable for Benefits Purposes. This Plan is
unfunded and does not create, and should not be construed to create, a trust or
separate fund with respect to this Plan’s benefits. This Plan does not establish
any fiduciary relationship between the Company and any Participant or other
person. To the extent any person holds any rights by virtue of an Award granted
under this Plan, such rights are no greater than the rights of the Company’s
general unsecured creditors. Income recognized by a Participant pursuant to an
Award shall not be included in the determination of benefits under any employee
pension benefit plan (as such term is defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended) or group insurance or other
benefit plans applicable to the Participant which are maintained by the Company
or any Affiliate, except as may be provided under the terms of such plans or
determined by resolution of the Board.

(e) Requirements of Law and Securities Exchange. The granting of Awards and the
issuance of Shares in connection with an Award are subject to all applicable
laws, rules and regulations and to such approvals by any governmental agencies
or national securities exchanges as may be required. Notwithstanding any other
provision of this Plan or any award agreement, the Company has no liability to
deliver any Shares under this Plan or make any payment unless such delivery or
payment would comply with all applicable laws and the applicable requirements of
any securities exchange or similar entity, and unless and until the Participant
has taken all actions required by the Company in connection therewith. The
Company may impose such restrictions on any Shares issued under the Plan as the
Company determines necessary or desirable to comply with all applicable laws,
rules and regulations or the requirements of any national securities exchanges.

(f) Governing Law; Venue. This Plan, and all agreements under this Plan, will be
construed in accordance with and governed by the laws of the State of Delaware,
without reference to any conflict of law principles. Any legal action or
proceeding with respect to this Plan, any Award or any award agreement, or for
recognition and enforcement of any judgment in respect of this Plan, any Award
or any award agreement, may only be brought and determined in (i) a court
sitting in the State of Delaware, and (ii) a “bench” trial, and any party to
such action or proceeding shall agree to waive its right to a jury trial.

(g) Limitations on Actions. Any legal action or proceeding with respect to this
Plan, any Award or any award agreement, must be brought within one year (365
days) after the day the complaining party first knew or should have known of the
events giving rise to the complaint.

(h) Construction. 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 in the singular or plural,
they shall be construed as though they were used in the plural or singular, as
the case may be, in all cases where they would so apply. Titles of sections are
for general information only, and this Plan is not to be construed with
reference to such titles.

 

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(i) Severability. If any provision of this Plan or any award agreement or any
Award (a) is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any person or Award, or (b) would disqualify this
Plan, any award agreement or any Award under any law the Administrator deems
applicable, then such provision should be construed or deemed amended to conform
to applicable laws, or if it cannot be so construed or deemed amended without,
in the determination of the Administrator, materially altering the intent of
this Plan, award agreement or Award, then such provision should be stricken as
to such jurisdiction, person or Award, and the remainder of this Plan, such
award agreement and such Award will remain in full force and effect.

18. Definitions. Capitalized terms used in this Plan or any Award agreement have
the following meanings, unless the Award agreement otherwise provides:

(a) “Administrator” means the Committee; provided that, to the extent the Board
has retained authority and responsibility as an Administrator of the Plan, the
term “Administrator” shall also mean the Board or, to the extent the Committee
has delegated authority and responsibility as an Administrator of the Plan to
one or more officers of the Company as permitted by Section 2(b), the term
“Administrator” shall also mean such officer or officers.

(b) “Affiliate” shall have the meaning given in Rule 12b-2 under the Exchange
Act. Notwithstanding the foregoing, for purposes of determining those
individuals to whom an Option or Stock Appreciation Right may be granted, the
term “Affiliate” means any entity that, directly or through one or more
intermediaries, is controlled by, controls, or is under common control with, the
Company within the meaning of Code Sections 414(b) or (c); provided that, in
applying such provisions, the phrase “at least 20 percent” shall be used in
place of “at least 80 percent” each place it appears therein.

(c) “Award” means a grant of Options, Stock Appreciation Rights, Performance
Shares, Performance Units, Restricted Stock, Restricted Stock Units, Shares, an
Annual Incentive Award, a Long-Term Incentive Award, Dividend Equivalent Units
or any other type of award permitted under the Plan.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” means any of the following as determined by the Company: (i) with
respect to Participants other than Non-Employee Directors, (A) the failure of
the Participant to perform or observe any of the material terms or provisions of
any written employment agreement between the Participant and the Company or its
Affiliates or, if no written agreement exists, the gross dereliction of the
Participant’s duties (for reasons other than the Participant’s Disability) with
respect to the Company or its Affiliates; (B) the failure of the Participant to
comply fully with the lawful directives of the Board or the board of directors
of an Affiliate of the Company, as applicable, or the officers or supervisory
employees to whom the Participant reports; (C) the Participant’s dishonesty,
misconduct, misappropriation of funds, or disloyalty or disparagement of the
Company, any of its Affiliates or its management or employees; or (D) other
proper cause determined in good faith by the Administrator; or (ii) with respect
to Non-Employee Directors, (A) fraud or intentional misrepresentation;
(B) embezzlement, misappropriation or conversion of assets or opportunities of
the Company or any of its Affiliates; or (C) any other gross or willful
misconduct as determined by the Committee, in its sole and conclusive
discretion.

 

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(f) “Change of Control” means the first to occur of the following with respect
to the Company (which, for purposes of this definition, shall be included in
references to “the Company”):

(i) Any “Person,” as that term is defined in Sections 13(d) and 14(d) of the
Exchange Act (but excluding (A) the Company; (B) any trustee or other fiduciary
holding securities under an employee benefit plan of the Company; (C) any
corporation owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as they own the stock of the Company; or
(D) either of Bruce M. Rodgers or Carollinn Gould or any of their respective
Affiliates or family members), is or becomes the “Beneficial Owner” (as that
term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company’s then outstanding securities; or

(ii) The Company is merged or consolidated with any other corporation or other
entity, other than: (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation; or
(B) the Company engages in a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no “Person”
(as defined above) acquires fifty percent (50%) or more of the combined voting
power of the Company’s then outstanding securities. Notwithstanding the
foregoing, a merger or consolidation involving the Company shall not be
considered a “Change of Control” if the Company is the surviving corporation and
shares of the Stock are not converted into or exchanged for stock or securities
of any other corporation, cash or any other thing of value, unless persons who
beneficially owned shares of the Stock outstanding immediately prior to such
transaction own beneficially less than a majority of the outstanding voting
securities of the Company immediately following the merger or consolidation;

(iii) The Company or any Affiliate sells, assigns or otherwise transfers assets
in a transaction or series of related transactions, if the aggregate market
value of the assets so sold, assigned or otherwise transferred exceeds fifty
percent (50%) of the Company’s consolidated book value, determined by the
Company in accordance with generally accepted accounting principles, measured at
the time at which such transaction occurs or the first of such series of related
transactions occurs; provided that such a transfer effected pursuant to a
spin-off or split-up where stockholders of the Company retain ownership of the
transferred assets proportionate to their pro rata ownership interest in the
Company shall not be deemed a “Change of Control”;

(iv) The Company dissolves and liquidates substantially all of its assets; or

(v) At any time after the Effective Date when the “Continuing Directors” cease
to constitute a majority of the Board. For this purpose, a “Continuing Director”
shall mean: (A) the individuals who, at the Effective Date, constitute the
Board; and (B) any new Directors (other than Directors designated by a person
who has entered into an agreement with the Company to effect a transaction
described in clause (i), (ii), or (iii) of this definition) whose appointment to
the Board or nomination for election by Company stockholders was approved by a
vote of at least two-thirds of the then-serving Continuing Directors.

 

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If an Award is considered deferred compensation subject to the provisions of
Code Section 409A, then the Administrator may include an amended definition of
“Change of Control” in the Award agreement issued with respect to such Award as
necessary to comply with, or as necessary to permit a deferral under, Code
Section 409A.

(g) “Change of Control Price” means the highest of the following: (i) the Fair
Market Value of the Shares, as determined on the date of the Change of Control;
(ii) the highest price per Share paid in the Change of Control transaction; or
(iii) the Fair Market Value of the Shares, calculated on the date of surrender
of the relevant Award in accordance with Section 16(c), but this clause
(iii) shall not apply if in the Change of Control transaction, or pursuant to an
agreement to which the Company is a party governing the Change of Control
transaction, all of the Shares are purchased for and/or converted into the right
to receive a current payment of cash and no other securities or other property.

(h) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to
a specific provision of the Code includes any successor provision and the
regulations promulgated under such provision.

(i) “Committee” means the Compensation Committee of the Board, or such other
committee of the Board that is designated by the Board with the same or similar
authority. The Committee shall consist only of Non-Employee Directors (not fewer
than two (2)) who also qualify as Outside Directors to the extent necessary for
the Plan to comply with Rule 16b-3 promulgated under the Exchange Act or any
successor rule and to permit Awards that are otherwise eligible to qualify as
“performance-based compensation” under Section 162(m) of the Code to so qualify.

(j) “Company” means LM Funding America, Inc., a Delaware corporation, or any
successor thereto.

(k) “Director” means a member of the Board; “Non-Employee Director” means a
Director who is not also an employee of the Company or its Subsidiaries; and
“Outside Director” means a Director who qualifies as an outside director within
the meaning of Code Section 162(m).

(l) “Disability” means disability as defined in the Company’s long-term
disability plan covering exempt salaried employees, except as otherwise
determined by the Administrator and set forth in an Award agreement. The
Administrator shall make the determination of Disability and may request such
evidence of disability as it reasonably determines.

(m) “Dividend Equivalent Unit” means the right to receive a payment, in cash or
Shares, equal to the cash dividends or other distributions paid with respect to
a Share as described in Section 11.

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act includes any successor
provision and the regulations and rules promulgated under such provision.

(o) “Fair Market Value” means, per Share on a particular date, the last sales
price on such date on the national securities exchange on which the Stock is
then traded, as reported in The Wall Street Journal, or if no sales of Stock
occur on the date in question, on the last preceding date on which there was a
sale on such exchange. If the Shares are not listed on a national securities
exchange, but are traded in an over-the-counter market, the last sales price
(or, if there is no last sales price reported, the average of the closing bid
and asked prices) for the Shares on the particular date, or on the last
preceding date on which there was a sale of Shares on that market, will be used.
If the Shares are neither listed on a national securities exchange nor traded in
an over-the-counter market, the price determined by the Administrator, in its
discretion, will be used. If an actual sale of a Share occurs on the market,
then the Company may consider the sale price to be the Fair Market Value of such
Share.

 

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(p) “Incentive Award” means the right to receive a cash payment to the extent
Performance Goals are achieved (or other requirements are met), and shall
include “Annual Incentive Awards” as described in Section 9 and “Long-Term
Incentive Awards” as described in Section 10.

(q) “Option” means the right to purchase Shares at a stated price for a
specified period of time.

(r) “Participant” means an individual selected by the Administrator to receive
an Award.

(s) “Performance Goals” means any goals the Administrator establishes that
relate to one or more of the following with respect to the Company or any one or
more of its Subsidiaries, Affiliates or other business units: book value;
revenue; cash flow; total stockholder return; dividends; debt; net cash provided
by operating activities; net cash provided by operating activities less net cash
used in investing activities; ratio of debt to debt plus equity; profit before
tax; gross profit; net profit; net operating profit; net operating profit after
taxes; net sales; earnings before interest and taxes; earnings before interest,
taxes, depreciation and amortization; Fair Market Value of Shares; basic
earnings per share; diluted earnings per share; return on stockholder equity;
return on average equity; return on average total capital employed; return on
net assets employed before interest and taxes; economic value added; return on
year-end equity; capital; cost of capital; cost of equity; cost of debt; taxes;
market share; operating ratios; combined ratio; loss ratio, net plus the expense
ratio; customer satisfaction; customer retention; customer loyalty; strategic
business criteria based on meeting specified revenue goals; market penetration
goals; investment performance goals; business expansion goals or cost targets;
accomplishment of mergers, acquisitions, dispositions or similar extraordinary
business transactions; profit returns and margins; financial return ratios;
market performance and/or goals or returns or a combination of the foregoing. As
to each Performance Goal, the relevant measurement of performance shall be
computed in accordance with generally accepted accounting principles to the
extent applicable, but, unless otherwise determined by the Administrator, will
exclude the effects of the following: (i) charges for reorganizing and
restructuring; (ii) discontinued operations; (iii) asset write-downs; (iv) gains
or losses on the disposition of a business; (v) changes in tax or accounting
principles, regulations or laws; (vi) mergers, acquisitions, dispositions or
recapitalizations; (vii) impacts on interest expense, preferred dividends and
share dilution as a result of debt and capital transactions; and
(viii) extraordinary, unusual and/or non-recurring items of income, expense,
gain or loss, that, in case of each of the foregoing, the Company identifies in
its publicly filed periodic or current reports, its audited financial
statements, including notes to the financial statements, or the Management’s
Discussion and Analysis section of the Company’s annual report. With respect to
any Award intended to qualify as performance-based compensation under Code
Section 162(m), such exclusions shall be made only to the extent consistent with
Code Section 162(m). To the extent consistent with Code Section 162(m), the
Administrator may also provide for other adjustments to Performance Goals in the
Award agreement or plan document evidencing any Award. In addition, the
Administrator may appropriately adjust any evaluation of performance under a
Performance Goal to exclude any of the following events that occurs during a
performance period: (i) litigation, claims, judgments or settlements; (ii) the
effects of changes in other laws or regulations affecting reported results; and
(iii) accruals of any amounts for

 

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payment under this Plan or any other compensation arrangements maintained by the
Company; provided that, with respect to any Award intended to qualify as
performance-based compensation under Code Section 162(m), such adjustment may be
made only to the extent consistent with Code Section 162(m). Where applicable,
the Performance Goals may be expressed, without limitation, in terms of
attaining a specified level of the particular criterion or the attainment of an
increase or decrease (expressed as absolute numbers, averages and/or
percentages) in the particular criterion or achievement in relation to a peer
group or other index. The Performance Goals may include a threshold level of
performance below which no payment will be made (or no vesting will occur),
levels of performance at which specified payments will be paid (or specified
vesting will occur), and a maximum level of performance above which no
additional payment will be made (or at which full vesting will occur). In
addition, in the case of Awards that the Administrator determines at the date of
grant will not be considered “performance-based compensation” under Code
Section 162(m), the Administrator may establish other Performance Goals and
provide for other exclusions or adjustments not listed in this Plan.

(t) “Performance Shares” means the right to receive Shares to the extent
Performance Goals are achieved (or other requirements are met) as described in
Section 8.

(u) “Performance Unit” means the right to receive a cash payment and/or Shares
valued in relation to a unit that has a designated dollar value or the value of
which is equal to the Fair Market Value of one or more Shares, to the extent
Performance Goals are achieved (or other requirements are met) as described in
Section 8.

(v) “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, or any group of Persons
acting in concert that would be considered “persons acting as a group” within
the meaning of Treas. Reg. § 1.409A-3(i)(5).

(w) “Plan” means this LM Funding America, Inc. 2015 Omnibus Incentive Plan, as
may be amended from time to time.

(x) “Restricted Stock” means a Share that is subject to a risk of forfeiture or
restrictions on transfer, or both a risk of forfeiture and restrictions on
transfer, as described in Section 8.

(y) “Restricted Stock Unit” means the right to receive a cash payment and/or
Shares equal to the Fair Market Value of one Share that is subject to a risk of
forfeiture or restrictions on transfer, or both a risk of forfeiture and
restrictions on transfer, as described in Section 8.

(z) “Retirement” means termination of employment or service with the Company and
its Affiliates on or after the date the Participant has both attained age sixty
(60) and completed ten (10) years of service with the Company and its
Affiliates.

(aa) “Section 16 Participants” means Participants who are subject to the
provisions of Section 16 of the Exchange Act.

(bb) “Share” means a share of Stock.

(cc) “Stock” means the Common Stock, par value $0.001, of the Company.

 

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(dd) “Stock Appreciation Right” or “SAR” means the right to receive cash, and/or
Shares with a Fair Market Value, equal to the appreciation of the Fair Market
Value of a Share during a specified period of time.

(ee) “Subsidiary” means any corporation, limited liability company or other
limited liability entity in an unbroken chain of entities beginning with the
Company if each of the entities (other than the last entities in the chain) owns
the stock or equity interest possessing more than fifty percent (50%) of the
total combined voting power of all classes of stock or other equity interests in
one of the other entities in the chain.

 

19