Exhibit 10.3

FRANKLIN BANK CORP.
RESTRICTED STOCK AGREEMENT

          This Restricted Stock Agreement (“Agreement”), entered into on the
____ day of ___________, 2006 (the “Effective Date”), which is the date on which
the Grant described below was approved by the Compensation Committee (the
“Committee”) of the Board of Directors of Franklin Bank Corp., is between
Franklin Bank Corp., a Delaware corporation (the “Company”), and
____________________, (the “Employee”).

          WHEREAS, to carry out the purposes of the Franklin Bank Corp. 2006
Long-Term Incentive Plan (the “Plan”), shares of restricted Common Stock (as
defined below) are hereby granted to the Employee in accordance with this
Restricted Stock Agreement; and

          WHEREAS, the Company and Employee agree as follows:

          1.          Award of Common Stock.  The Company hereby grants (the
“Grant”) to Employee ________ shares (the “Shares”) of common stock, $0.01 par
value, of the Company (“Common Stock”), which shall be subject to the
restrictions on transferability set forth in Section 2(d) herein (the
“Restrictions”) and to the other provisions of this Agreement.

          2.          Restricted Period.

                       (a)          For a period of ____________ (___) years and
___________ (____) days commencing on the Effective Date (the “Restricted
Period”), the Shares shall be subject to the Restrictions and any other
restrictions as set forth herein.  The Restrictions shall expire as to all of
the Shares on _________________.  The Shares which are subject to the
Restrictions shall hereinafter be referred to as “Restricted Shares.”  The
Shares which are no longer subject to the Restrictions as set forth in
paragraphs (f) or (g) below shall hereinafter be referred to as “Transferable
Shares.”

                       (b)          The Company shall effect the issuance of the
Shares out of authorized but unissued shares of Common Stock or out of treasury
shares of Common Stock and shall also effect the issuance of a certificate or
certificates for the Shares.  Each certificate issued for Restricted Shares to
the Employee shall be registered in Employee’s name and shall be either
deposited with the Secretary of the Company or its designee in an escrow account
or held by the Secretary of the Company, at the election of the Company,
together with stock powers or other instruments of transfer appropriately
endorsed in blank by Employee (Employee hereby agreeing to execute such stock
powers or other instruments of transfer as requested by the Company).  Such
certificate or certificates shall remain in such escrow account or with the
Secretary of the Company until the earlier to occur of (i) the termination of
the Restricted Period or (ii) the expiration of the Restrictions as set forth in
paragraphs (f) or (g) below.  Certificates representing the Restricted Shares
shall bear a legend in substantially the following form:

-1-

--------------------------------------------------------------------------------

 

          THE TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK
REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING
FORFEITURE) OF THE FRANKLIN BANK CORP. 2006 LONG-TERM INCENTIVE PLAN AND AN
AWARD AGREEMENT.  COPIES OF SUCH PLAN AND AGREEMENT ARE ON FILE AT THE OFFICES
OF FRANKLIN BANK CORP., 9800 RICHMOND AVENUE, SUITE 680, HOUSTON, TEXAS 77042.

The Company may place appropriate stop transfer instructions with respect to the
Restricted Shares with the transfer agent for the Common Stock.  Upon Restricted
Shares becoming Transferable Shares, the Company shall effect, in exchange for
the legended certificates, the issuance and delivery of a certificate or
certificates for such Shares to the Employee free of the legend set forth above.

                       (c)          The Employee shall, during the Restricted
Period, have all of the other rights of a stockholder with respect to the Shares
including, but not limited to, the right to receive dividends, if any, as may be
declared on such Restricted Shares from time to time, and the right to vote (in
person or by proxy) such Restricted Shares at any meeting of stockholders of the
Company.

                       (d)          The Restricted Shares and the right to vote
the Restricted Shares and to receive dividends thereon, may not be sold,
assigned, transferred, exchanged, pledged, hypothecated, or otherwise encumbered
and no such sale, assignment, transfer, exchange, pledge, hypothecation, or
encumbrance, whether made or created by voluntary act of Employee or any agent
of Employee or by operation of law, shall be recognized by, or be binding upon,
or shall in any manner affect the rights of, the Company or any agent or any
custodian holding certificates for the Restricted Shares during the Restricted
Period, unless the Restrictions have then expired pursuant to the provisions of
paragraphs (f) or (g) below.  This provision shall not prohibit Employee from
granting revocable proxies in customary form to vote the Shares.

                       (e)          If the status of employment (hereinafter
referred to as “employment”) of Employee with the Company or its Affiliates (as
defined in Section 6 herein) shall terminate, prior to the expiration of the
Restricted Period for any reason other than the death, Disability, or Normal
Retirement of Employee, or upon the occurrence of a Change of Control (which
events are governed by Sections 2(f) or 2(g) hereof), then, in that event, any
Restricted Shares outstanding shall thereupon be forfeited by Employee to the
Company, without payment of any consideration or further consideration by the
Company, and neither the Employee not any successors, heirs, assigns or legal
representatives of Employee shall thereafter have any further rights or interest
in the Restricted Shares or certificates therefor, and Employee’s name shall
thereupon be deleted from the list of the Company’s stockholders with respect to
the Restricted Shares. 

                       (f)          If the employment of Employee with the
Company or its Affiliates shall terminate by reason of death, Disability or
Normal Retirement, any Restrictions on the Restricted Shares shall be deemed to
have expired as to the Restricted Shares as of the date of any such occurrence,
and the Restricted Shares shall thereby be Transferable Shares.  For purposes of
this Agreement, “Normal Retirement” shall mean retirement from active employment
with the Company at or after the age of 65 or such other age as may be
established by the Committee. 

-2-

--------------------------------------------------------------------------------

                       (g)          Upon the occurrence of a Change of Control,
any Restrictions on the Restricted Shares set forth in this Agreement shall be
deemed to have expired, and the Restricted Shares shall thereby be Transferable
Shares. 

                       (h)          If the employment of Employee with the
Company shall terminate prior to the expiration of the Restricted Period, and
there exists a dispute between Employee and the Company as to the satisfaction
of the conditions to the release of the Shares from the Restrictions hereunder
or the terms and conditions of the Grant, the Shares shall remain subject to the
Restrictions until the resolution of such dispute, regardless of any intervening
expiration of the Restricted Period, except that any dividends that may be
payable to the holders of record of Common Stock as of a date during the period
from termination of Employee’s employment to the resolution of such dispute
shall:

 

              (i)          to the extent to which such dividends would have been
payable to Employee on the Shares, be held by the Company as part of its general
funds, and shall be paid to or for the account of Employee only upon, and in the
event of, a resolution of such dispute in a manner favorable to Employee, and

 

 

 

              (ii)         be canceled upon, and in the event of, a resolution
of such dispute in a manner unfavorable to Employee.

          3.          Taxes.  To the extent that the receipt of the Restricted
Shares, Transferable Shares, or the lapse of any Restrictions results in income
to Employee for federal or state income tax purposes, Employee shall deliver to
the Company at the time of such receipt or lapse, as the case may be, such
amount of money or, if the Company so determines, shares of unrestricted Common
Stock as the Company may require to meet its obligation under applicable tax
laws or regulations, and, if Employee fails to do so, the Company is authorized
to withhold from any cash or Common Stock remuneration then or thereafter
payable to Employee any tax required to be withheld by reasons of such resulting
compensation income.  Employee agrees to notify the Company promptly of any tax
election made by Employee with respect to the Shares.

          4.          Changes in Capital Structure.  If the outstanding shares
of Common Stock shall at any time be changed or exchanged or augmented by
declaration of a stock dividend, stock split, combination of shares, merger,
consolidation, recapitalization or similar event, the Shares, being outstanding
shares of Common Stock, shall be treated in the same manner as all other issued
and outstanding shares.  Any cash, property or securities into which the Shares
are so changed or exchanged or so augmenting the Shares or so issued in respect
of the Shares shall be subject to the Restrictions in the same manner as the
Shares.

          5.          Compliance with Securities Laws.

                       (a)          If a registration statement under the
Securities Act of 1933, as amended, is not effective with respect to the Shares,
Employee (i) represents and warrants to the Company that Employee is acquiring
the Shares for his own account, for investment, and without a view to any sale
or distribution thereof in violation of any federal or state securities laws,
and (ii) understands that the Grant of the Shares to Employee has not been
registered under the Securities Act of 1933, as amended, or the securities laws
of any state, and, accordingly, that in addition to the other restrictions
placed on the Shares by this Agreement, the Shares may not be offered, sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered
in absence of either an effective registration statement under the Securities
Act of 1933, as amended, and applicable state securities laws or an opinion of
counsel satisfactory to the Company that such registration is not required.

-3-

--------------------------------------------------------------------------------

                       (b)          If a registration statement under the
Securities Act of 1933, as amended, is not effective with respect to the Shares,
Employee agrees that the certificates representing the Shares (whether the
Shares are Restricted Shares or Transferable Shares) may bear any legend
required by law or which the Committee deems appropriate to reflect any
restrictions on transfer.

                       (c)          Upon the execution of this Agreement and
receipt of any certificates for the Shares pursuant to this Agreement, Employee
(or Employee’s legal representative upon Employee’s death or disability) will
make and enter into such additional written representations, warranties and
agreements as the Company may reasonably request in order to comply with
applicable securities laws or with this Agreement or the Plan.

          6.          Employment Relationship.  Employee shall be considered to
be in the employment of the Company as long as he remains as an employee of the
Company or its Affiliates.  Any questions as to whether and when there has been
a termination of such employment, and the cause of such termination, shall be
determined by the Company, with the advice of the employing corporation (if an
Affiliate of the Company), and the Company’s determination shall be final.  For
purposes of this Agreement, “Affiliates” shall mean any “parent corporation” of
the Company and any “subsidiary corporation” of the Company within the meaning
of Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended.  Nothing contained herein shall be construed as conferring upon
Employee the right to continue in the employ of the Company, nor shall anything
herein be construed or interpreseted to limit the “employment at will”
relationship between Employee and the Company.

          7.          Binding Effect. The terms and conditions hereof shall be
binding upon, and inure to the benefit of, all successors of Employee,
including, without limitation, Employee’s estate and the executors,
administrators, or trustees thereof, heirs and legatees, and any receiver,
trustee in bankruptcy, or representative of creditors of Employee.  This
Agreement shall be binding upon and inure to the benefit of any successors to
the Company.

          8.          Notice.  All notices, requests, demands and other
communications given under or by reason of this Agreement shall be in writing
and shall be deemed given when delivered in person or when mailed, by certified
mail (return receipt requested), postage prepaid, addressed as follows (or to
such other address as a party may specify by notice pursuant to this provision):

 

(a)

To the Company:

 

 

 

Franklin Bank Corp.

 

 

9800 Richmond Avenue, Suite 680

 

 

Houston, Texas 77042

 

 

 

 

 

 

 

To the Employee:

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

 

-4-

--------------------------------------------------------------------------------

          9.          Resolution of Disputes.  As a condition to the granting of
the Shares, the Employee, his or her legal representatives, heirs, successors
and other transferees agree that any dispute or disagreement which may arise
hereunder shall be determined by the Committee in its sole discretion and
judgment, and that any such determination any interpretation by the Committee of
the terms of this Agreement shall be final and shall be binding and conclusive,
for all purposes, upon the Company, Employee, his or her legal representatives,
heirs, successors and other transferees.  

          10.          Entire Agreement and Amendments. This Agreement contains
the entire agreement of the parties relating to the matters contained herein and
supersedes all prior agreements and understandings, oral or written, between the
parties with respect to the subject matter hereof.  This Agreement may be
changed only by an agreement in writing signed by the party against whom
enforcement of any waiver, change, modification, extension or discharge is
sought.

          11.          Separability.  If any provision of the Agreement is
rendered or declared illegal or unenforceable by reason of any existing or
subsequently enacted legislation or by the decision of any arbitrator or by
decree of a court of last resort, the parties shall promptly meet and negotiate
substitute provisions for those rendered or declared illegal or unenforceable to
preserve the original intent of this Agreement to the extent legally possible,
but all other provisions of this Agreement shall remain in full force and
effect.

          12.          Agreement Subject to Plan.  This Agreement is subject to
the Plan.  The terms and provisions of the Plan (including any subsequent
amendments thereto) are hereby incorporated herein by reference thereto.  In the
event of a conflict between any term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the Plan will
govern and prevail.  All definitions of words and terms contained in the Plan
shall be applicable to this Agreement.

          13.          Governing Law.  The execution, validity, interpretation,
and performance of this Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without reference to
principles of conflict of laws, except to the extent preempted by federal law.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed by one of its officers thereunto duly authorized, and Employee has
executed this Agreement, all as of the day and year first above written.

 

FRANKLIN BANK CORP.

 

 

 

 

By:

 

 

 

--------------------------------------------------------------------------------

 

 

Authorized Officer

 

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

--------------------------------------------------------------------------------

 

Name:

 

-5-

--------------------------------------------------------------------------------