Exhibit 10.2

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IMH FINANCIAL CORPORATION
ANNUAL INCENTIVE COMPENSATION PLAN

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INTRODUCTION; PURPOSE
The IMH Financial Corporation Annual Incentive Plan (the “Plan”), as described
in this Plan document, is intended to provide annual cash-based incentive awards
(“Incentive Compensation”) to eligible participants (as described below). The
amount, if any, payable to a participant under the Plan will depend on the
participant’s percentage interest in the “Executive Bonus Pool” and the
Company’s “Modified Pre-Tax Earnings” for each “Plan Year” (as such terms are
defined below). The Plan is effective as of August 1, 2014.
PLAN YEAR
The term “Plan Year” means the initial short “Plan Year” beginning August 1,
2014 and ending December 31, 2014 and each calendar year thereafter.
ELIGIBILITY
The following individuals are eligible to participate in the Plan: (1) the
Company’s Chief Executive Officer; (2) the Company’s Chief Financial Officer;
(3) the Company’s General Counsel; (4) the Company’s Head of Originations; and
(5) any other employee designated by the Compensation Committee of the Company’s
Board of Directors (the “Committee”) as a participant in the Plan. The
designation of an individual as a participant shall be evidenced in an
employment agreement or other written instrument signed by a representative of
the Committee and delivered to the participant. Oral designations are not
permitted and will be given no effect.
ESTABLISHMENT OF EXECUTIVE BONUS POOL
For each Plan Year the Committee will approve a Modified Pre-Tax Earnings
budget, an Executive Bonus Pool (which typically will be expressed as a
percentage of the actual Modified Pre-Tax Earnings for the Plan Year) and each
participant’s percentage interest in the Executive Bonus Pool. If the Company
achieves Modified Pre-Tax Earnings of at least 60% but less than 100% of the
annual budgeted amount for a particular Plan Year, a sliding scale substantially
in the form of attached Table I will be used to determine the Executive Bonus
Pool for that Plan Year. If the Company achieves Modified Pre-Tax Earnings in
excess of the annual budgeted amount for a particular Plan Year, the Committee,
in the exercise of its discretion, may increase the Executive Bonus Pool for
that Plan Year.

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Exhibit 10.2

Beginning in the 2015 Plan Year, the budgeted Modified Pre-Tax Earnings, the
potential size of the Pool, the sliding scale and each participant’s percentage
interest in the Pool will be communicated by the Committee to the participants
within 90 days following the commencement of the applicable Plan Year. The
sliding scale and the percentage interest need not be the same for each
participant.
The Executive Bonus Pool will equal 10% of the Company’s Modified Pre-Tax
Earnings.
For purposes of the Plan, “Modified Pre-Tax Earnings” means the Company’s
pre-tax earnings, computed in accordance with Generally Accepted Accounting
Principles (GAAP), adjusted by adding back depreciation, amortization and
non-cash stock-based compensation charges. Also, on a case-by-case basis
one-time or other unique charges may, with the approval of the Compensation
Committee, be disregarded for purposes of computing Modified Pre-Tax Earnings.
The preferred stock redemption premium is expected to be charged directly to
equity. If the preferred stock redemption is charged to earnings, then such
charge will be an addition to the Company’s Modified Pre-Tax Earnings.
No Incentive Compensation will be payable pursuant to the Plan for any Plan Year
unless the Committee determines that at least 60% of the Modified Pre-Tax
Earnings budget established for that Plan Year has been achieved.
In an employment agreement, the Committee may modify the Plan as it applies to
the individual covered by that employment agreement. In cases of conflict, the
terms of an employment agreement will control over conflicting provisions of the
Plan.
PAYMENT OF INCENTIVE COMPENSATION
To the extent Incentive Compensation is payable pursuant to the Plan, the
Company will make the payment due to a participant in a single lump sum, subject
to applicable withholding, on or before March 15 of the year following the year
in which the Incentive Compensation is earned, unless the participant has
properly elected to defer the payment pursuant to the IMH Financial Corporation
Deferred Compensation Plan.
TERMINATION OF EMPLOYMENT
Unless otherwise determined by the Committee, any participant who voluntarily
terminates employment on or before the day on which the Incentive Compensation
is paid for a particular Plan Year will forfeit his or her right to receive the
Incentive Compensation. If a participant’s employment is involuntarily
terminated without “Cause” on or before May 31 of any Plan Year, or if a
participant’s employment is involuntarily terminated for “Cause” on or before
the day on which Incentive Compensation is paid for a particular Plan Year, the
participant will forfeit his or her right to receive any Incentive Compensation
for that Plan Year. If a participant’s employment is involuntarily terminated
after May 31 of any Plan Year for any reason other than “Cause,” the participant
will

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Exhibit 10.2

receive a pro rata Incentive Compensation payment for that year, at the same
time as Incentive Compensation is paid to other participants for that Plan Year,
with the amount to be determined by multiplying the Incentive Compensation
otherwise payable to the participant for the Plan Year by a fraction, the
numerator of which is the number of calendar days elapsed during the Plan Year
prior to the participant’s termination of employment and the denominator of
which is 365 (or 366 in the case of a leap year). For the initial Plan Year, the
fraction referred to in the preceding sentence will be adjusted appropriately.
For purposes of the Plan, “Cause” means a determination by 66-2/3% or more of
the Board members (not including the Executive), that Executive has engaged in
the following conduct: (A) the Executive’s willful and continued failure to use
his best efforts to perform his reasonably assigned duties (other than on
account of Disability); (B) the Executive is convicted of, or enters a guilty
plea to, a felony involving moral turpitude; or (C) the Executive engages in
(1) intentional gross negligence causing material harm to the Company or any
affiliate, or its or their business or reputation, (2) intentional, willful and
material misconduct, or (3) intentional, willful and material breach of
fiduciary duty; or (4) the Executive intentionally, willfully and materially
breaches the restrictive covenants included in any agreement between the
participant and the Company. The Board’s determination that Cause exists under
(A) or (C) above may only be made after providing at least 30 days’ notice to
Executive of its intent to terminate Executive for Cause and permitting the
Executive the right, either individually or through his counsel, to present
evidence to the contrary to the Board.
ADMINISTRATION; CONSTRUCTION AND INTERPRETATION
The Committee has the power and discretion to perform the duties assigned to the
Company under this Plan and any other duties required for proper administration
of the Plan. Without limiting the generality of the foregoing, the Committee has
the power and discretion to construe and interpret the Plan and to decide all
questions and disputes arising under the Plan. The Committee may, in its
discretion, delegate any or all of its duties under the Plan.
SECTION 409A COMPLIANCE
This Plan shall be operated in compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) or an exception thereto and each
provision of the Plan shall be interpreted, to the extent possible, to comply
with Section 409A or an exception thereto. Nevertheless, the Company does not
and cannot guarantee any particular tax effect or treatment of the amounts due
under the Plan. Except for the Company’s responsibility to withhold applicable
income and employment taxes from compensation paid or provided to the
participants, the Company will not be responsible for the payment of any
applicable taxes on compensation paid or provided pursuant to the Plan.

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Exhibit 10.2

AMENDMENT AND TERMINATION
The Company has the right at any time, and for any reason, to adjust, amend,
suspend or terminate the Plan. The Company will not adjust, amend, suspend or
terminate the Plan in a manner that results in a violation of Section 409A or
any other provision of applicable law.
ETHICS; CLAWBACK
The purpose of the Plan is to fairly reward individual and Company performance.
Any participant who manipulates or attempts to manipulate the Plan or the
Company’s reported performance for personal gain will forfeit the right to
receive an Incentive Compensation payment. By accepting the opportunity to
receive Incentive Compensation, each participant agrees to be bound by, and
comply with, any Company policy or applicable law that calls for the recapture
or clawback of all or any portion of an Incentive Compensation payment,
including, but not limited to, the Sarbanes-Oxley Act of 2002 and the final
rules issued by the Securities and Exchange Commission pursuant to Section 954
of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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Exhibit 10.2

Table I

Executive Bonus Pool Calculation for Performance Less Than Budgeted
Modified Pre-Tax Earnings (“MPE”)
Tier
% of Budgeted MPE Achieved
Executive Bonus
Pool as % of Budgeted MPE Attained1
From
To
0
0%
59.99%
0%
1
60%
64.99%
5%
2
65%
69.99%
5.625%
3
70%
74.99%
6.25%
4
75%
79.99%
6.875%
5
80%
84.99%
7.5%
6
85%
89.99%
8.125%
7
90%
94.99%
8.75%
8
95%
99.99%
9.375%
9
100%
 
10%

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1 The Executive Bonus Pool will equal a percentage of the attained MPE. Unless
the Committee determines otherwise in accordance with the provisions of the
Plan, MPE in excess of the Budgeted MPE will be disregarded.

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