Exhibit 10.1

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”), is entered into as of June 14,
2016 (the “Effective Date”), between Peter R. Knitzer (“Executive”) and Regional
Management Corp., a Delaware corporation (the “Corporation”).

RECITALS

A. The Corporation believes that the future growth, profitability and success of
the business of the Corporation will be significantly enhanced by the employment
of Executive as Chief Executive Officer of the Corporation.

B. The Corporation desires to provide Executive with appropriate incentives and
rewards related to the performance by Executive and to encourage the employment
of Executive in the service of the Corporation, and Executive desires to accept
such employment, on the terms and conditions of this Agreement, from and after
the date of this Agreement.

C. The Corporation and Executive desire to enter into an employment agreement,
as evidenced in this Agreement, to reflect the terms of Executive’s employment.

Now, therefore, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the parties hereto hereby agree
as follows:

I. DEFINITIONS

1.1 Definitions. In addition to terms defined elsewhere in this Agreement, for
purposes of this Agreement, the following terms will have the following
respective meanings when used in this Agreement with initial capital letters:

(a) “Affiliate”: with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, “control,” when used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of any such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms “controlling” and “controlled” have the respective meanings correlative to
the foregoing. With respect to any natural Person, “Affiliate” will also include
such Person’s grandparents, any descendants of such Person’s grandparents, the
grandparents of such Person’s spouse and any descendants of the grandparents of
such Person’s spouse (in each case, whether by blood, adoption or marriage).

(b) “Agreement”: as defined in the introductory paragraph.

(c) “Annual Bonus”: as defined in Section 2.4(b).

(d) “Annual Incentive Plan”: the Annual Incentive Plan of the Corporation or any
successor plan thereto, as amended and/or restated.

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(e) “Average Bonus”: the average of the Annual Bonus paid to Executive for each
of the three fiscal years preceding the year in which Executive’s Termination
Date occurs (or the average of such lesser number of full fiscal year periods
that Executive is employed if less than three full fiscal years prior to the
Termination Date); provided that, if Executive’s employment terminates before
December 31, 2017, then the Average Bonus shall equal the Target Bonus.

(f) “Board”: the Board of Directors of the Corporation.

(g) “Business”: the business of providing installment, automobile purchase and
retail purchase loans and related payment protection insurance to consumers, and
“Business Services” means the services related to the Business.

(h) “Cause”: (i) the willful or grossly negligent material failure by Executive
to perform his duties hereunder (other than arising due to Executive’s
Disability); (ii) the conviction of Executive, or the entering into a plea
bargain or plea of nolo contendere by Executive, of any felony, or of a
misdemeanor involving the unlawful theft or conversion of substantial monies or
other property or any fraud or embezzlement offense; (iii) personally or on
behalf of another Person, willfully receiving a benefit relating to the
Corporation or its Subsidiaries or its funds, properties, opportunities or other
assets in violation of applicable law, or constituting fraud, embezzlement or
misappropriation; (iv) the willful or grossly negligent failure by Executive to
comply substantially with any lawful written policy of the Corporation or its
Subsidiaries that materially interferes with his ability to discharge his
duties, responsibilities or obligations under this Agreement; (v) the knowing
misstatement by Executive of the financial records of the Corporation or its
Subsidiaries or complicit actions in respect thereof; (vi) the material breach
by Executive of any of the terms of this Agreement; (vii) Executive’s habitual
drunkenness or substance abuse that interferes with his ability to discharge his
duties, responsibilities or obligations under this Agreement; (viii) the knowing
failure to disclose material financial or other information to the Board; or
(ix) Executive’s engagement in conduct that results in Executive’s obligation to
reimburse the Corporation for the amount of any bonus, incentive-based
compensation, equity-based compensation, profits realized from the sale of the
Corporation’s securities or other compensation pursuant to application of the
provisions of Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the
Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable
laws, rules or regulations, but, in each case for clauses (i) through
(ix) herein, only if (1) Executive has been provided with written notice of any
assertion that there is a basis for termination for Cause, which notice shall
specify in reasonable detail specific facts regarding any such assertion, and in
the case of non-willful behavior under clauses (i), (iii), (iv) or (vi),
Executive has failed to cure within 30 days of written notice to Executive,
(2) such written notice is provided to Executive a reasonable time before the
Board meets to consider any possible termination for Cause, (3) at or prior to
the meeting of the Board to consider the matters described in the written
notice, an opportunity is provided to Executive and his counsel to be heard
before the Board with respect to the matters described in the written notice,
(4) any resolution or other Board action held with respect to any deliberation
regarding or decision to terminate Executive for Cause is duly adopted by a vote
of a majority of the entire Board of the Corporation at a meeting of the Board
called and held and (5) Executive is promptly provided with a copy of the
resolution or other corporate action taken with respect to such termination. No
act or failure to act by Executive shall be considered willful unless done or
omitted to be done by him not in good faith and without reasonable belief that
his action or omission was in the best interests of the Corporation.
Notwithstanding the provisions of this Section 1.1(h), “Cause” will not be
deemed to have occurred solely as a result of Executive’s failure to follow any
Corporation policy or any Corporation instruction to Executive that would permit
Executive to terminate this Agreement under Section 2.7(a) because such policy
or instruction constitutes Good Reason.

 

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(i) “Commencement Date”: as defined in Section 2.1.

(j) “Compensation Committee”: Compensation Committee of the Board.

(k) “Confidential Information”: as defined in Section 3.2.

(l) “Corporation”: as defined in the introductory paragraph.

(m) “Corporation Employee”: as defined in Section 3.5.

(n) “Corporation IP”: as defined in Section 3.1(a).

(o) “Disability”: a physical or mental incapacity as a result of which Executive
becomes unable to continue to perform fully his material duties hereunder for 90
consecutive calendar days or for shorter periods aggregating 90 or more days in
any 12-month period or upon the determination by a licensed physician mutually
selected by Executive and the Corporation (with the Corporation responsible for
any expenses related thereto) that Executive will be unable to return to work
and perform his material duties on a full-time basis within 90 calendar days
following the date of such determination on account of mental or physical
incapacity; provided, that, if Executive and the Corporation cannot agree upon a
mutually acceptable licensed physician, then the determination of whether a
“Disability” has occurred shall be made by the majority vote of a panel of three
licensed physicians, with one physician selected by Executive, one physician
selected by the Corporation and the third physician mutually agreed upon by the
two physicians selected by Executive and the Corporation respectively (with each
party responsible for his or its related expenses and the parties being equally
responsible for the expenses related to the services of the third physician).

(p) “Effective Date”: as defined in the introductory paragraph.

(q) “Executive”: as defined in the introductory paragraph.

(r) “Employment Period”: as defined in Section 2.1.

(s) “Estate”: as defined in Section 2.7(d).

(t) “Good Reason”: the termination of Executive’s employment by Executive which
is due to (i) a material diminution of Executive’s responsibilities, position
(as Chief Executive Officer of the Corporation, its successor or ultimate parent
entity), office, title, reporting relationships or working conditions, authority
or duties, or the assignment to Executive of titles, authority, duties or
responsibilities that are materially inconsistent with this Agreement and are a
material diminution from his title and position as Chief Executive Officer of
the Corporation; or (ii) a material adverse change in the terms or status
(including a reduction of the Employment Period) of this Agreement; (iii) a
material reduction in Executive’s compensation package provided herein,
including Salary, Target Bonus, bonus opportunities or equity award
opportunities (other than a reduction in bonus opportunities or equity award
opportunities that applies to senior executive officers of the Corporation
generally or that is due, in the discretion of the Board or the Compensation
Committee, to the failure to attain performance or other business objectives,
and subject in all cases to the discretion of the Compensation Committee and
other

 

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terms of Section 2.4(d) herein); or (iv) an actual relocation of the
Corporation’s principal office (A) from Greenville, South Carolina, if
Executive’s principal residence was established in Greenville, South Carolina
prior thereto, or (B) from Greenville, South Carolina to any location outside of
the contiguous United States or west of Dallas, Texas, if Executive’s principal
residence was not established in Greenville, South Carolina prior thereto, and
in each case of clauses (i) through (iv) herein, without the written consent of
Executive. Notwithstanding the preceding, for any of the foregoing events to
constitute Good Reason, Executive must provide written notification of his
intention to resign for Good Reason within 30 days after Executive knows or has
reason to know of the occurrence of any such event, and the Corporation shall
have 30 days from the date of receipt of such notice to effect a cure of the
condition constituting Good Reason, and, upon cure thereof by the Corporation,
such event shall no longer constitute Good Reason.

(u) “Loan Source”: as defined in Section 3.4(a).

(v) “Person”: an individual, a corporation, a partnership, a limited liability
company, an association, a trust, a joint stock corporation, a joint venture, an
unincorporated organization or any federal, state, county, city, municipal or
other local or foreign government or any subdivision, authority, commission,
board, bureau, court, administrative panel or other instrumentality thereof.

(w) “Salary”: as defined in Section 2.4(a).

(x) “Severance Period”: as defined in Section 2.7(a).

(y) “Subsidiary”: with respect to any Person, (i) any corporation of which a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote generally in the election of
directors thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof or (ii) any limited liability company, partnership,
association or other business entity, of which a majority of the partnership or
other similar ownership interests thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more Subsidiaries of that
Person or a combination thereof. For purposes of this definition, a Person or
Persons will be deemed to have a majority ownership interest in a limited
liability company, partnership, association or other business entity if such
Person or Persons will be allocated a majority of limited liability company,
partnership, association or other business entity gains or losses, or is or
controls the managing member or general partner of such limited liability
company, partnership, association or other business entity.

(z) “Target Bonus”: as defined in 2.4(b).

(aa) “Termination Date”: as defined in Section 2.1.

II. TERMS OF EMPLOYMENT

2.1 Employment Period. The Corporation shall employ Executive, and Executive
accepts employment with the Corporation, upon the terms and conditions set forth
in this Agreement for the period beginning on Executive’s date of commencement
of employment, which date shall be on or before August 1, 2016 (the
“Commencement Date”). The term of the Agreement shall commence on the
Commencement Date, and the Agreement will terminate on the third anniversary of
the Commencement Date, unless sooner terminated in accordance with Section 2.7.
The term of this Agreement as determined under the preceding sentence is
referred to herein as the “Employment Period,” and the date on which Executive’s
employment terminates is referred to herein as the “Termination Date.”

 

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2.2 Duties During Employment Period. Executive will be an employee of, and serve
as the Chief Executive Officer of, the Corporation and will report directly to
the Executive Chairman of the Board or the Board, as determined from time to
time by the Board. In such capacity, Executive will perform such duties and
exercise such powers that are consistent with the position of Chief Executive
Officer in accordance with the amended and restated bylaws of the Corporation
and as are assigned to Executive by the Board. Executive agrees that to the best
of his ability and experience he shall at all times conscientiously perform all
of his duties and obligations under the terms of this Agreement.

2.3 Activities During Employment Period.

(a) Executive will devote all of his full business time, energy, ability,
attention and skill to his employment hereunder and to the Business of the
Corporation and, absent the prior written approval of the Board, which approval
shall not be unreasonably withheld, Executive will not engage in any business
activity, whether as an employee, investor, officer, director, consultant,
independent contractor or otherwise, that would interfere with his duties and
responsibilities pursuant to Section 2.2. Executive agrees to comply with all
lawful rules and policies established by the Corporation and its Subsidiaries
throughout the Employment Period.

(b) Provided that the following activities do not interfere with Executive’s
duties and responsibilities as Chief Executive Officer of the Corporation,
Executive may (i) engage in charitable and community affairs, trade activities
and trade organizations, and teach and/or lecture, so long as such activities
are consistent with his duties and responsibilities under this Agreement, (ii)
manage his personal investments, and (iii) serve on the boards of directors of
other companies with the Board’s prior written consent (which will not be
unreasonably withheld).

(c) Executive will act in accordance with laws, ordinances, regulations,
professional standards or rules of any governmental, regulatory or
administrative body, agent or authority, any court or judicial authority, or any
public, private or industry regulatory authority.

2.4 Compensation.

(a) Salary. For Executive’s services under this Agreement, the Corporation will
pay to Executive an annualized base salary (“Salary”) of $530,000 (prorated for
2016 and any other partial year based on a fraction, the numerator of which
shall be the number of days employed in such year and the denominator of which
shall be 365 (or 366 in a leap year)). The Board or the Compensation Committee
may review the amount of Salary from time to time and may adjust Salary upwards
after any such review, with any such upward adjustments effective as of the
dates determined by the Board or the Compensation Committee. Executive’s Salary
will be payable to Executive periodically in accordance with the normal
practices of the Corporation.

(b) Annual Bonus. For each calendar year during the Employment Period, Executive
shall be eligible for participation in the Annual Incentive Plan with a target
bonus thereunder equal to no less than one hundred percent (100%) of Executive’s
Salary in effect at the beginning of the calendar year (the “Target Bonus”) and
which will be prorated for 2016 and any other partial year based on a fraction,
the numerator of which shall be the number of days employed in such partial year
and the denominator of which shall be 365 (or 366 in a leap year). The
Compensation Committee shall establish and communicate to Executive performance
criteria for

 

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the Corporation and/or Executive and one or more formula(s) for determining the
annual bonus, if any, earned by Executive under the Annual Incentive Plan (the
“Annual Bonus”) for each calendar year. Unless otherwise addressed in
Section 2.7, if Executive is employed by the Corporation in good standing on the
last day of the applicable calendar year, Executive will be entitled to receive
an Annual Bonus for such year in an amount determined in accordance with such
formula(s) set by the Compensation Committee based on the actual performance of
the Corporation and/or Executive relative to the performance criteria
established by the Compensation Committee for that year. Any Annual Bonus due to
Executive pursuant to this Section 2.4(b) shall be paid in cash in a lump sum no
later than March 14 of the calendar year following the calendar year during
which Executive’s right to the Annual Bonus vests (or otherwise in a manner
compliant with, or exempt from, Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”)). Unless otherwise addressed under Section 2.7,
Annual Bonus entitlement vests and is fully payable if Executive is employed by
the Corporation on the last day of the applicable calendar year, even if
Executive is no longer employed at the time the Annual Bonus is scheduled to be
paid.

(c) Equity Compensation.

(i) Nonqualified Stock Option. The Corporation shall grant to Executive a
nonqualified stock option to purchase such number of shares of the Corporation’s
common stock as may be determined by dividing $950,000 by the fair value of each
option share (calculated on or as close in time as practicable to the grant date
in accordance with GAAP using the Black-Scholes option pricing model), at an
exercise price per share equal to the fair market value per share of the
Corporation’s common stock on the grant date, which grant date shall be a date
determined by the Compensation Committee to occur on or as soon as practicable
after the Commencement Date. The option shall vest with respect to (A) twenty
percent (20%) of the number of shares subject to the option on December 31,
2016, (B) forty percent (40%) of the number of shares subject to the option on
December 31, 2017 and (C) forty percent (40%) of the number of shares subject to
the option on December 31, 2018, so long as Executive’s employment continues
from the grant date until the applicable vesting date or as otherwise provided
in the applicable award agreement. The term of the option will be ten years from
the grant date, subject to earlier termination in the event Executive’s
employment terminates. The option shall be subject to the terms of Corporation’s
2015 Long-Term Incentive Plan, as it may be amended and/or restated (the “2015
Plan”), or any successor or other applicable plan or arrangement (the 2015 Plan
and such other plans or arrangements collectively, the “Stock Plan”), and
applicable nonqualified stock option award agreement in form acceptable to the
Compensation Committee.

(ii) Performance-Contingent Restricted Stock Unit (“RSU”) Award. Subject to
Executive’s continued employment from the Commencement Date until the grant date
and the availability of sufficient shares of the Corporation’s common stock
under the 2015 Plan, the Corporation shall grant to Executive an RSU award at
the time the Corporation makes its long-term incentive awards for 2017 to other
members of senior management. The number of shares subject to the RSU shall be
determined by dividing $950,000 by the closing price of the Corporation’s common
stock on or as close in time as practicable to the grant date. The RSU award
will be eligible for vesting on December 31, 2019, based upon the achievement,
if at all, of performance criteria established by the Compensation Committee and
Executive’s continued employment from the grant date until the vesting date or
as otherwise provided in the applicable award agreement. The RSU award
(including the distribution of any shares of the Corporation’s common stock
issuable pursuant thereto) shall be subject to the terms of the Stock Plan and
applicable restricted stock unit agreement in form acceptable to the
Compensation Committee.

 

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(iii) Cash-Settled Performance Unit Award (“Performance Unit Award”). Subject to
Executive’s continued employment from the Commencement Date until the grant
date, the Corporation shall grant to Executive a Performance Unit Award at the
time the Corporation makes its annual long-term incentive awards for 2017 to
other members of senior management. The Performance Unit Award shall be eligible
for vesting on December 31, 2019, if and to the extent the performance criteria
established by the Compensation Committee are met and subject to Executive’s
continued employment from the grant date until the vesting date or as otherwise
provided in the applicable award agreement. The target cash settlement value of
the Performance Unit Award at vesting shall be equal to $950,000. The
Performance Unit Award shall be subject to the terms of the Stock Plan and
applicable performance unit award agreement in form acceptable to the
Compensation Committee.

(iv) Commencing in 2018, and subject to Section 2.4(d) herein and Executive’s
continued employment, Executive shall be eligible to participate in and receive
equity and/or equity-based awards under the Stock Plan in the sole discretion of
the Board or the Compensation Committee. Any such equity awards described herein
shall be subject to the terms of the Stock Plan and applicable equity award
agreements in form acceptable to the Compensation Committee and such other terms
as may be established by the Compensation Committee.

(d) Future Compensation Opportunities. Commencing in 2018, and for the remainder
of the Employment Period, the Corporation undertakes and agrees to provide
Executive with an annual Base Salary, cash incentive compensation opportunity
and equity incentive compensation opportunity of no less than $3,000,000 in the
aggregate (prorated for any partial year); provided, however, that (i)
Executive’s Base Salary shall be subject to the provisions of Section 2.4(a)
herein, (ii) the Compensation Committee shall have sole discretion to determine
any allocation between cash incentive opportunities and equity incentive
opportunities, (iii) such cash incentive opportunities and equity incentive
opportunities shall be subject to the terms of the applicable Corporation plan
and any related award agreement, including any performance or multi-year service
criteria established by the Compensation Committee under any such plan or award
agreement, and (iv) the Compensation Committee shall have sole discretion to
determine if and to the extent that any such equity incentive opportunities
and/or cash incentive opportunities are deemed earned and payable based on the
attainment of performance criteria and such other terms and conditions as may be
established by the Compensation Committee (including, without limitation,
multi-year vesting requirements if applicable under any such plan or award
agreement and so determined by the Compensation Committee).

2.5 Benefits.

(a) Benefit Plans. Except as otherwise addressed in this Section 2.5, during the
Employment Period, Executive shall be entitled to participate in all pension,
medical, retirement and other benefit plans and programs generally available to
the Corporation’s other employees, provided that Executive meets all eligibility
requirements under those plans and programs. Executive shall be subject to the
terms and conditions of the plans and programs, including, without limitation,
the Corporation’s right to amend or terminate the plans and programs at any time
and without advance notice to the participants. Notwithstanding the foregoing,
Executive will not during the Employment Period be entitled to participate in
any severance pay plan of the Corporation. Executive’s severance benefits are to
be solely as set forth in Section 2.7.

 

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(b) Vacation; Leave. Executive shall be entitled to paid vacation time of not
less than 25 business days for each calendar year of the Employment Period
(prorated for 2016 and any other partial year, based on a fraction, the
numerator of which shall be the number of days employed in such partial year and
the denominator of which shall be 365 (or 366 in a leap year)). Executive shall
also be entitled to all paid holidays and to reasonable personal and sick leave
in accordance with the policies of the Corporation applicable to its executive
management. Unused vacation and personal and/or sick leave may not be carried
over by Executive from one calendar year to the next. Notwithstanding the
foregoing, such vacation, holidays and personal and/or sick leave shall not
accrue as a monetary liability of the Corporation.

(c) Expenses; Reimbursements. Subject to compliance with the Corporation’s
policies as from time to time in effect regarding the incurrence,
substantiation, verification and reimbursement of business expenses, the
Corporation will pay or reimburse Executive for all reasonable expenses incurred
in connection with the performance of Executive’s duties hereunder or for
promoting, pursuing or otherwise furthering the Business of the Corporation,
including Executive’s reasonable expenses for travel (including reasonable
expenses associated with Executive’s travel to and from his residence to the
Corporation’s headquarters in Greenville, South Carolina), entertainment and
similar items. Executive acknowledges and agrees that the provisions of
Section 2.5(d) below provide the exclusive reimbursement terms for Executive’s
use of any personal vehicles in connection with the performance of his duties as
an employee of the Corporation. All expenses eligible for reimbursements in
connection with Executive’s employment with the Corporation must be incurred by
Executive during the term of employment or service to the Corporation and must
be in accordance with the Corporation’s expense reimbursement policies. The
amount of reimbursable expenses incurred in one taxable year shall not affect
the expenses eligible for reimbursement in any other taxable year. Each category
of reimbursement shall be paid as soon as administratively practicable, but in
no event shall any such reimbursement be paid after the last day of Executive’s
taxable year following the taxable year in which the expense was incurred. No
right to reimbursement is subject to liquidation or exchange for other benefits.

(d) Mileage Reimbursement; Use of Cell Phone. The Corporation will, in
accordance with the Corporation’s general personal vehicle use reimbursement
policy (and consistent with the provisions of Section 2.5(c) herein), reimburse
Executive an amount equal to $0.50 (or such higher amount as may apply pursuant
to the Corporation’s mileage reimbursement policy as it may be in effect from
time to time) for each mile he drives a personal car in connection with the
performance of his duties as an employee of the Corporation. The Corporation
will provide Executive with a cell phone (including monthly service fees), the
reasonable costs of which shall be paid by the Corporation directly to the
service provider.

2.6 Deductions and Withholdings. All amounts payable or that become payable
under this Agreement will be subject to any deductions and withholdings
previously authorized by Executive or required by law. Executive will be
responsible for any and all taxes resulting from the benefits provided
hereunder.

2.7 Termination.

(a) Termination by the Corporation without Cause or by Executive for Good
Reason. The Corporation may terminate Executive’s employment hereunder without
Cause at any time,

 

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upon 30 calendar days’ written notice to Executive. Executive may terminate
Executive’s employment hereunder for Good Reason upon 30 calendar days’ written
notice to the Corporation. The Corporation may elect to pay to Executive his
portion of Salary for the notice period in lieu of permitting Executive to
continue working. If Executive is terminated by the Corporation without Cause,
or if Executive terminates his employment for Good Reason, the Corporation will
pay to Executive (i) accrued but unpaid Salary through the Termination Date,
(ii) two times Executive’s Salary in effect on the Termination Date to be paid
over a period of twenty-four (24) months from and after the Termination Date
(such 24-month period, the “Severance Period”), (iii) two times Executive’s
Average Bonus as determined as of the Termination Date, to be paid over the
Severance Period, (iv) a pro-rata portion of the Annual Bonus for the year in
which Executive’s Termination Date occurs, to the extent earned (such amount to
be calculated by determining the amount of the Annual Bonus earned as of the end
of the year in which the Termination Date occurs and pro-rating such amount by
the portion of such year Executive was employed by the Corporation), plus, if
Executive’s termination occurs after year end but before the Annual Bonus for
the preceding year is paid, the Annual Bonus for the preceding year and
(v) COBRA premiums as described in Section 2.7(f). Such Salary and Average Bonus
will be paid as and at such times as Executive would have otherwise received his
Salary had he remained an employee of the Corporation (that is, in accordance
with Corporation payroll practices), subject to execution of an irrevocable
release as provided in Section 4.18 and provided that such Salary and Average
Bonus shall be paid commencing with the first payroll date that occurs on or
after 45 calendar days following the Termination Date. Such Annual Bonus will be
paid as and at such time as Executive would have otherwise received his Annual
Bonus had he remained an employee of the Corporation, subject to execution of an
irrevocable release as provided in Section 4.18. In addition, under the
foregoing circumstances, the Corporation will pay to Executive all unreimbursed
expenses incurred by Executive prior to such termination for which Executive is
entitled to reimbursement pursuant to and in accordance with Section 2.5(c).
Further, during the Severance Period, the Corporation shall pay reasonable
outplacement service expenses of Executive in an amount not to exceed $25,000
per year. The payments to be made in accordance with this Section 2.7(a) will
constitute liquidated damages and Executive will not be entitled to any other
compensation from the Corporation under this Agreement or otherwise except as
provided in this Section 2.7(a). Further, the Corporation’s obligation to make
any payments under this Section 2.7(a), except for accrued but unpaid Salary
through the Termination Date, any Annual Bonus that was previously earned but
unpaid as of the Termination Date and reimbursement of unreimbursed expenses, is
contingent upon Executive’s compliance with Article III herein, and Executive
and the Corporation agree that the Corporation shall have the right, in addition
to any other rights of the Corporation, to terminate or suspend such payments in
the event of Executive’s breach of Article III herein. This Agreement in all
other respects will terminate on the Termination Date, except as otherwise
provided in this Agreement.

(b) Termination by the Corporation for Cause. The Corporation will have the
right to terminate Executive’s employment hereunder for Cause upon written
notice to Executive and Executive’s failure to cure during any applicable cure
period as set forth in this Agreement. If Executive’s employment is terminated
for Cause, the Corporation will pay to Executive (i) accrued but unpaid Salary
through the Termination Date (payable 45 calendar days after the Termination
Date) and (ii) all unreimbursed expenses incurred by Executive prior to the
Termination Date for which Executive is entitled to reimbursement pursuant to
and in accordance with Section 2.5(c). Upon termination of Executive’s
employment pursuant to this Section 2.7(b), except for the payments required by
this Section 2.7(b) or as required by applicable law, the Corporation will have
no additional obligations to Executive hereunder or otherwise, and except as
otherwise provided in this Agreement, this Agreement will terminate as of the
Termination Date.

 

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(c) Voluntary Termination by Executive. If Executive voluntarily terminates his
employment, the Corporation will pay to Executive (i) accrued but unpaid Salary
through the Termination Date, (ii) if Executive’s termination occurs after year
end but before the Annual Bonus for the preceding year is paid, the Annual Bonus
for the preceding year (payable in the case of (i) and (ii) 45 calendar days
after the Termination Date) and (iii) all expenses incurred by Executive prior
to the Termination Date for which Executive is entitled to reimbursement
pursuant to and in accordance with Section 2.5(c). Upon termination of
Executive’s employment pursuant to this Section 2.7(c), except for the payments
required by this Section 2.7(c) or as required by applicable law, the
Corporation will have no additional obligations to Executive hereunder or
otherwise, and, except as otherwise provided in this Agreement, this Agreement
will terminate.

(d) Termination by Death of Executive. If Executive dies during the Employment
Period, the Corporation will pay to such Person or Persons as Executive may
designate in writing or, in the absence of such designation, to the estate of
Executive (as the case may be, the “Estate”) the sum of (i) accrued but unpaid
Salary earned prior to Executive’s death, (ii) expenses incurred by Executive
prior to his death for which Executive is entitled to reimbursement pursuant to
and in accordance with Section 2.5(c), and (iii) a pro-rata portion of the
Annual Bonus for the year in which Executive’s death occurs, to the extent
earned (such amount to be calculated by determining the amount of the Annual
Bonus earned as of the end of the year in which the death occurs and pro-rating
such amount by the portion of such year Executive was employed by the
Corporation), plus, if Executive’s death occurs after year-end but before the
Annual Bonus for the preceding year is paid, the Annual Bonus for the preceding
year. The payments described in clauses (i) and (ii) in the preceding sentence
will be made within 45 calendar days following the date of Executive’s death.
Any Annual Bonus will be paid as and at such times as Executive would have
otherwise received his Annual Bonus had he remained an employee of the
Corporation. This Agreement in all other respects will terminate upon the death
of Executive and all rights of Executive and his heirs, legatees, descendants,
testamentary executors and testamentary administrators regarding compensation
and other benefits under this Agreement shall cease.

(e) Termination for Disability. The Corporation will have the right to terminate
Executive’s employment hereunder at any time upon the Disability of Executive
during the Employment Period. If Executive’s employment is terminated because of
Executive’s Disability, the Corporation will pay to Executive an amount equal to
Executive’s Salary in effect on the Termination Date and Average Bonus
(determined as of the Termination Date) for the Severance Period (that is, two
times Salary and Average Bonus); provided, however, that such payment of Salary
and Average Bonus will be reduced by the amount of any disability benefits paid
to Executive pursuant to any disability insurance, plan or policy then in effect
by the Corporation applicable to Executive. Such Salary and Average Bonus will
be paid to Executive as and at such times as Executive would have otherwise
received his Salary had he remained an employee of the Corporation (that is, in
accordance with Corporation payroll practices). In addition, the Corporation
will pay to Executive the sum of (i) accrued but unpaid Salary prior to
Executive’s Disability, (ii) all expenses incurred by Executive prior to his
termination due to Disability for which Executive is entitled to reimbursement
pursuant to and in accordance with Section 2.5(c) and (iii) a pro-rata portion
of the Annual Bonus for the year in which Executive’s termination due to
Disability occurs, to the extent earned (such amount to be calculated by
determining the amount of the Annual Bonus earned as of the end of the year in
which Executive’s termination

 

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due to Disability occurs and pro-rating such amount by the portion of such year
Executive was employed by the Corporation), plus, if Executive’s termination due
to Disability occurs after year-end but before the Annual Bonus for the
preceding year is paid, the Annual Bonus for the preceding year. The payments
described in clauses (i) and (ii) in the preceding sentence will be made within
45 calendar days following the date of Executive’s termination of employment due
to Disability. Any Annual Bonus will be paid as and at such times as Executive
would have otherwise received his Annual Bonus had he remained an employee of
the Corporation. During the Severance Period, the Corporation also shall pay
reasonable outplacement service expenses of Executive in an amount not to exceed
$25,000 per year. Further, the Corporation’s obligation to make any payments
under this Section 2.7(e), except for accrued but unpaid Salary through the
Termination Date, any Annual Bonus that was previously earned but unpaid as of
the Termination Date and reimbursement of unreimbursed expenses, is contingent
upon Executive’s compliance with Article III herein, and Executive and the
Corporation agree that the Corporation shall have the right, in addition to any
other rights of the Corporation, to terminate or suspend such payments in the
event of Executive’s breach of Article III herein. This Agreement in all other
respects will terminate upon the termination of Executive’s employment due to
Disability, except as otherwise provided in this Agreement.

(f) Payment of COBRA Premiums; No Effect on Vested and Accrued Benefits. During
the Severance Period and provided that Executive timely and properly elects
health continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”), the Corporation shall reimburse Executive
for the monthly COBRA premium paid by Executive for himself and his dependents
for continuation coverage under the Corporation’s group medical plan; provided,
however, that if at any time during the Severance Period Executive becomes
eligible to receive health insurance from a subsequent employer or is no longer
eligible to receive COBRA continuation coverage under the Corporation’s group
medical plan, the Corporation’s obligation to continue to reimburse Executive
for his COBRA premium payments shall terminate immediately. Such reimbursement
shall be paid to Executive on the 20th day of the month immediately following
the month in which Executive timely remits the required COBRA premium payment.
Notwithstanding anything to the contrary herein and subject to the terms of any
benefit plan or program of the Corporation, no termination of Executive’s
employment with the Corporation shall in any manner whatsoever result in any
termination, curtailment, reduction or cessation of any vested benefits or other
entitlements to which Executive is entitled under the terms of any such benefit
plan or program of the Corporation in respect of which Executive is a
participant as of the Termination Date.

(g) No Mitigation; No Offset. In the event of any termination of Executive’s
employment under this Section 2.7, Executive shall be under no obligation to
seek other employment and there shall be no offset against amounts due Executive
under this Agreement on account of any compensation attributable to any
subsequent employment that he may obtain, except as specifically provided in
this Section 2.7. Notwithstanding anything contained in this Agreement to the
contrary, all compensation and benefits payable under this Section 2.7 shall be
reduced by any other compensation and benefits payable under any severance or
change-in-control plan, program, policy or arrangement of the Corporation in
which Executive is a participant and under which he has actually and previously
received compensation and/or benefits.

 

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III. COVENANTS

3.1 Patents, Inventions and Other Intellectual Property.

(a) If at any time during the Employment Period or prior thereto at any time
that Executive was an employee, agent, director or officer of or consultant to
the Corporation or its Subsidiaries, Executive, whether alone or with any other
Person, makes, discovers, produces, conceives or first reduces to practice any
invention, process, development, design or improvement that relates to, affects,
or, in the opinion of the Board, is capable of being used or adapted for use in
or in connection with the Business or any product, process or intellectual
property right of the Corporation or its Subsidiaries, (i) Executive
acknowledges and agrees that such invention, process, development, design or
improvement (collectively, “Corporation IP”) will be the sole property of the
Corporation or such Subsidiaries, as appropriate, and is hereby irrevocably
assigned by Executive to the Corporation or such Subsidiaries, as appropriate,
and (ii) Executive will immediately disclose in confidence all Corporation IP to
the Corporation in writing. The Corporation shall have the right to use all such
Corporation IP, whether original or derivative, in any matter it chooses without
any related royalty, licensure or other obligation. Executive acknowledges that
all such Corporation IP shall be considered as “work made for hire” as provided
under the United States Copyright Act, 17 U.S.C. Section 101, et seq., and shall
belong exclusively to the Corporation. Executive agrees further that in the
event that any Corporation IP should be deemed not to be work made for hire
belonging exclusively to the Corporation, he shall promptly assign and transfer
such Corporation IP to the Corporation so that the Corporation shall be, in
fact, the exclusive owner.

(b) Executive will, if and when reasonably required to do so by the Corporation
(whether during the Employment Period or thereafter), at the Corporation’s
expense and, if after the expiration of the Employment Period, subject to
Executive’s availability and reimbursement by the Corporation of Executive’s
reasonable out-of-pocket expenses and payment to Executive of a reasonable per
diem to compensate Executive for time spent in connection therewith: (i) apply,
or join with the Corporation or a Subsidiary thereof, as appropriate, in
applying, for patents or other protection in any jurisdiction in the world for
any Corporation IP; (ii) execute or procure to be executed all instruments, and
do or procure to be done all things, that are necessary or, in the opinion of
the Corporation, advisable for vesting such patents or other protection in the
name of the Corporation or a Subsidiary thereof or any nominee thereof, or
subsequently for renewing and maintaining the same in the name of the
Corporation, a Subsidiary thereof or its nominees; and (iii) assist in defending
any proceedings relating to, or any application for, such patents or other
protection.

(c) Executive irrevocably appoints the Corporation as his attorney in his name
(with full power of substitution and resubstitution) and on his behalf to
execute all documents, and do all things, required in order to give full effect
to the provisions of this Section 3.1.

3.2 Confidentiality.

(a) Executive acknowledges that during the Employment Period and prior thereto
when he was an employee, agent, director, or officer of or consultant to the
Corporation, Executive has been given and will continue to have, in connection
with the conduct of the Business, access and exposure to trade secrets and other
confidential information in written, oral, electronic and other form regarding
the Corporation and its Subsidiaries, and their respective Affiliates,
businesses, operations, equipment, products and employees (“Confidential
Information”), including, but not limited to:

(i) the identities of customers and key accounts and relationships and potential
customers and key accounts and relationships, including, without limitation, the
identity of customers and key accounts and potential customers and key accounts

 

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cultivated or maintained by Executive while providing services at the
Corporation or its Subsidiaries, or that Executive cultivates or maintains while
providing services at the Corporation or its Subsidiaries using the
Corporation’s (or its Subsidiaries’) products, name and infrastructure, and the
identities of contact persons at those customers and key accounts and potential
customers and key accounts, as well as other such confidential information
related to the Business to which Executive is exposed during the course of his
employment or service;

(ii) the particular preferences, likes, dislikes and needs of those customers
and key accounts and relationships, and potential customers and key accounts and
contact persons with respect to service types, financing terms, pricing, sales
calls, timing, sales terms, rental terms, lease terms, service plans, and other
marketing terms and techniques;

(iii) the business methods, practices, strategies, forecasts, pricing, and
marketing techniques;

(iv) the identities of brokers, licensors, vendors and other suppliers and the
identities of contact persons at such brokers, licensors, vendors and other
suppliers;

(v) the identities of key sales representatives and personnel and other
employees;

(vi) advertising and sales materials, research, technology, intellectual
property rights, training materials and techniques, computer software and
related materials;

(vii) other facts and financial and other business information concerning such
Persons or relating to their business, operations, financial condition, results
of operations and prospects; and

(viii) all other information the Corporation or its Subsidiaries try to keep
confidential and that has commercial value or is of such a nature that its
unauthorized disclosure would be detrimental to the Corporation’s or any of its
Subsidiaries’ interests.

(b) Notwithstanding the foregoing, “Confidential Information” will not include
information that is approved for public release by the Corporation or its
subsidiaries or information that Executive can demonstrate (i) is already in or
has subsequently entered the public domain, other than as a result of any breach
of this Agreement by Executive; (ii) was in the possession of or known to
Executive prior to Executive’s employment or other service with the Corporation
and is not subject to confidentiality restrictions; (iii) was obtained from a
third party not in violation of any agreement with, or duty of confidentiality
to, the Corporation; or (iv) was independently developed by Executive without
use of or reference to the Corporation’s Confidential Information.

(c) During the Employment Period and thereafter, Executive will not at any time,
except as directed by the Corporation, use for himself or others, directly or
indirectly, any such Confidential Information, and, except as required by law or
as directed by the Corporation, Executive will not disclose such Confidential
Information, directly or indirectly, to any other Person or use, lecture upon or
publish any of the Confidential Information.

 

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(d) All physical property and all notes, memoranda, files, records, writings,
documents and other materials of any and every nature, written or electronic,
that Executive has prepared, developed or received, or will prepare, develop or
receive in the course of his association with the Corporation or its
Subsidiaries and that relate to or are useful in any manner to the Business or
any other business now or hereafter conducted by the Corporation or its
Subsidiaries, are and will remain the sole and exclusive property of such
Persons. Except as may be required in the performance of Executive’s duties
under this Agreement, Executive will not remove from such Person’s premises any
such physical property, the original, “soft copy” or any reproduction of any
such materials nor the information contained therein, and all such physical
property, materials and information in his possession or under his custody or
control will, on the Termination Date, be immediately turned over to the
Corporation or its Subsidiaries.

(e) Notwithstanding the foregoing, nothing in this Agreement prohibits Executive
from reporting possible violations of federal law or regulation to any
governmental agency or entity, including but not limited to the Department of
Justice, the Securities and Exchange Commission, the Congress or any agency
Inspector General, or making other disclosures that are protected under the
whistleblower provisions of federal law or regulation. Executive acknowledges
and understands that he does not need the prior authorization of the Corporation
to make any such reports or disclosures and is not required to notify the
Corporation that he has made or will make such reports or disclosures.

(f) Further, notwithstanding the foregoing, Executive will not be held
criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that (i) is made (A) in confidence to a federal,
state or local government official, either directly or indirectly, or to an
attorney, and (B) solely for the purpose of reporting or investigating a
suspected violation of law; or (ii) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.

(g) Further, Executive may disclose Confidential Information (i) to the extent
required by a court of law, by any governmental agency having supervisory
authority over the business of the Corporation or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction to
order him to divulge, disclose or make accessible such information (provided,
however, that the Corporation is given reasonable prior notice of such proposed
disclosure and a reasonable period of time to secure a protective order or take
other action to protect such Confidential Information (at the Corporation’s
expense)); or (ii) to Executive’s spouse, attorney and/or his personal tax and
financial advisors as necessary or appropriate to advance Executive’s tax,
financial and other personal planning (each, an “Exempt Person”), provided,
however, that (A) each such Exempt Person is notified of the confidential nature
of the Confidential Information, (B) such disclosure to an Exempt Person does
not violate applicable laws, rules or regulations and (C) any disclosure or use
of Confidential Information by an Exempt Person shall be deemed to be a breach
of this Section 3.2 by Executive.

3.3 Covenant Not to Compete. Executive agrees that during his employment with
the Corporation, and for a period of two (2) years immediately following the
termination thereof, whether voluntary or involuntary, he shall not, directly,
or indirectly, on behalf of himself or any other person or entity, (a) work,
whether on a full-time, part-time, consulting, or contractor basis, as a chief
executive officer or in another capacity similar to his management position with
the Corporation for, (b) provide Business Services consulting to, (c) operate or
manage, or (d) have an ownership interest in, any entity (including a sole
proprietorship) in the Non-Compete Territory (as hereinafter defined) that
provides Business Services that are competitive with those provided by the
Corporation or its Subsidiaries. Although Executive acknowledges the market area
of the Corporation and its Subsidiaries extends

 

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throughout much of the southern United States and he shall regularly be exposed
to customers, Loan Sources, and related Confidential Information throughout that
market area, the restriction in this Section 3.3 shall apply only to the area
that is within a twenty-five (25)-mile radius of any branch or other office of
the Corporation or its Subsidiaries (“Non-Compete Territory”). Moreover, the
restriction in this Section 3.3 shall not prevent Executive from owning, for
personal investment purposes, up to one percent (1%) of the stock of any entity
whose securities are listed on a national or regional securities exchange or
have been registered under Section 12(b) or (g) of the Securities Exchange Act
of 1934, as amended.

3.4 Covenant Not to Solicit Competitive Business Services Through or From Loan
Sources.

(a) Executive agrees that during his employment with the Corporation, and for a
period of two (2) years immediately following the termination thereof, whether
voluntary or involuntary, he shall not, directly or indirectly, on behalf of
himself or any other person or entity, solicit the provision of Business
Services that are competitive with those provided by the Corporation or its
Subsidiaries, through any Loan Source. “Loan Source,” as used in this Agreement,
shall mean any automobile dealership, online credit application network,
retailer or other Business Services source that the Corporation or its
Subsidiaries uses at any time during the last year of Executive’s employment
with the Corporation and that Executive has contact with or learns Confidential
Information about through his employment with the Corporation.

(b) Executive agrees that during his employment with the Corporation, and for a
period of two (2) years immediately following the termination thereof, whether
voluntary or involuntary, he shall not, directly or indirectly, on behalf of
himself or any other person or entity, solicit any Loan Source for the purpose
of providing Business Services that are competitive with those provided by the
Corporation or its Subsidiaries.

3.5 Covenant Not to Hire or Solicit Employees. Executive agrees that during his
employment with the Corporation, and for a period of two (2) years immediately
following the termination thereof, whether voluntary or involuntary, he shall
not, directly or indirectly, on behalf of himself or any other person or entity,
hire any Corporation Employee for, or solicit any Corporation Employee for the
purpose of offering employment with, any entity or person (including himself)
that provides installment, automobile purchase or retail purchase loans to
consumers that are competitive with those provided by the Corporation or its
Subsidiaries. “Corporation Employee,” as used in this Agreement, shall mean any
employee who is employed with the Corporation or any of its Subsidiaries at any
time during the last six (6) months of Executive’s employment with the
Corporation that Executive has contact with or learns Confidential Information
about through his employment with the Corporation.

3.6 Reasonableness of Restrictions.

(a) Executive has carefully read and considered the provisions of Sections 3.2,
3.3, 3.4 and 3.5 and, having done so, agrees that the restrictions, set forth in
these Sections, including, but not limited to, the time period of restriction
and the geographical area restriction, are fair and reasonable and are
reasonably required for the protection of the interests of the Corporation.

(b) In the event that, notwithstanding the foregoing, either Section 3.2, or
3.3, or 3.4 or 3.5 above shall be held to be invalid or unenforceable, the
remaining paragraph(s) thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable paragraph(s) had not been
included therein.

 

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(c) In the event that any provision of Sections 3.2, or 3.3, or 3.4 or 3.5 above
shall be held to be invalid or unenforceable, the remaining provisions thereof
shall nevertheless continue to be valid and enforceable as though the invalid or
unenforceable provision(s) had not been included therein.

(d) In the event that any provision of Sections 3.2 or 3.3 or 3.4 or 3.5
relating to the time period of restriction, the geographic area restriction
and/or related aspects is found by a court of competent jurisdiction to exceed
the maximum restrictiveness such court deems reasonable and enforceable, then it
is the express desire and intent of both the Corporation and Executive that such
provision not be rendered invalid thereby, but rather that the duration,
geographic area, scope, or nature of the restriction be deemed reduced or
modified to the extent necessary to render such provision reasonable, valid and
enforceable. The time period restriction, geographic area restriction and/or
related aspects deemed reasonable and enforceable by the court shall then
become, and thereafter be, the maximum restriction in such regard, and the
provision, as reformed, shall remain valid and enforceable. The Corporation and
Executive acknowledge that this Section 3.6(d) is contractual in nature and
expressly grant a court of competent jurisdiction the authority to effectuate
this contractual provision.

3.7 Non-Disparagement. During the term of Executive’s employment, and
thereafter, Executive shall not make any disparaging remarks, or any remarks
that could reasonably be construed as disparaging, regarding the Corporation,
its Subsidiaries, or its or their officers, directors, employees, stockholders,
representatives or agents. The Corporation shall, except to the extent otherwise
required by applicable laws, rules or regulations or as appropriate in the
exercise of the Board’s fiduciary duties (as determined by the Board with advice
of counsel), exercise reasonable efforts to cause the following individuals to
refrain from making any disparaging statements, orally or in writing, regarding
Executive from and after the termination of the Employment Period: the
Corporation’s executive officers and the members of the Board.

3.8 Use of Name. Executive will not have the rights to and may not use the name
“Regional Management Corp.” or any other name used by the Corporation or its
Subsidiaries or any derivative or abbreviation thereof in any manner, including
but not limited to in any activity prohibited under Sections 3.3, 3.4 or 3.5, or
in any manner that could reasonably be expected to be adverse to the interests
of the Corporation or its Subsidiaries. This covenant shall survive indefinitely
without limitation to time.

3.9 Breach of Restrictive Covenants. Executive acknowledges that this Agreement
is designed and intended only to protect the legitimate business interests of
the Corporation and that the restrictions imposed by this Agreement are
necessary, fair and reasonably designed to protect those interests. Executive
further acknowledges that the Corporation has given him access to certain
Confidential Information, and that the use of such Confidential Information by
him on behalf of some other entity (including himself) would cause irreparable
harm to the Corporation. Executive also acknowledges that the Corporation has
invested considerable time and resources in developing its relationships with
its Loan Sources and customers and in training Corporation Employees, the loss
of which similarly would cause irreparable harm to the Corporation.

Without limitation, Executive agrees that if he should breach or threaten to
breach any of the restrictive covenants contained in Sections 3.2, 3.3, 3.4, 3.5
and 3.7 of this Agreement, the Corporation may, in addition to seeking other
available remedies (including but in no way limited to the Corporation’s rights
under Sections 2.7(a) and (e)), apply, consistent with Section 4.7 below, for
the immediate entry of an injunction restraining any actual or threatened
breaches or violations of said provisions or terms by Executive.

 

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If, for any reason, any of the restrictive covenants or related provisions
contained in Sections 3.2, 3.3, 3.4, 3.5 or 3.7 of this Agreement should be held
invalid or otherwise unenforceable, it is agreed the court shall construe the
pertinent Section(s) or provision(s) so as to allow its enforcement to the
maximum extent permitted by applicable law. Executive further agrees that any
claimed Corporation breach of this Agreement shall not prevent, or otherwise be
a defense against, the enforcement of any restrictive covenant or other
Executive obligation herein.

3.10 Executive Representations. Executive represents that the restrictions on
his business provided in this Agreement are fair and protect the legitimate
business interests of the Corporation. Executive represents further that the
consideration for this Agreement is fair and adequate, and that even if the
restrictions in this Agreement are applied to him, he shall still be able to
earn a good and reasonable living from those activities, areas and opportunities
not restricted by this Agreement. In addition, Executive represents he has had
an opportunity to consult with independent counsel concerning this Agreement and
is not relying on the Corporation or its counsel for any related legal, tax or
other advice.

3.11 No Prior Obligations. The Corporation represents and warrants that it is
fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. Executive
represents he is not subject to any contractual or other obligation that
precludes him from entering into this Agreement or would in any way restrict his
work activities as required under this Agreement. Executive represents further
he does not possess any prior employer or other third-party proprietary
information and shall not use or disclose any such information in his work for
the Corporation. In the event that said representations should be untrue to any
material extent and a related action should be initiated against the
Corporation, Executive agrees to promptly indemnify the Corporation for any
resulting liability and costs, including attorneys’ fees, as they are incurred
in full.

3.12 Survival. The provisions contained in this Article III and in Section 4.4
and Section 4.7 will survive termination of this Agreement regardless of whether
such termination is initiated by the Corporation or Executive. In the event of
the termination of his employment with the Corporation and subsequent employment
with, or work for, another entity or person, Executive agrees to notify the
Corporation of his new employment or work, including the name and address of the
new employer or entity or person he intends to work for, before commencing work
for the new employer or other entity or person. In addition, Executive
authorizes the Corporation to provide notice of his obligations under this
Agreement, including a copy of this Agreement, to his new employer or other
entity or person for whom he intends to work or provide services.

IV. MISCELLANEOUS

4.1 Notices. All notices and other communications required or permitted
hereunder will be in writing and, unless otherwise provided in this Agreement,
will be deemed to have been duly given when delivered in person or by a
nationally recognized overnight courier service or when dispatched if during
normal business hours by electronic facsimile transfer (confirmed in writing by
mail simultaneously dispatched) to the appropriate party at the address
specified below:

 

  (a) If to the Corporation, to:

Regional Management Corp.

509 West Butler Road

Greenville, SC 29607

P.O. Box 776

Mauldin, SC 29662

Facsimile No.: (864) 422-8035

Attention: Brian J. Fisher, Vice President and General Counsel

 

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With a copy to:

Womble Carlyle Sandridge & Rice, LLP

One Wells Fargo Center

301 South College Street, Suite 3500

Charlotte, NC 28202-6037

Facsimile No.: (704) 338-7823

Attention: Jane Jeffries Jones

 

  (b) If to Executive, to:

Regional Management Corp.

509 West Butler Road

Greenville, SC 29607

P.O. Box 776

Mauldin, SC 29662

Facsimile No.: (864) 422-8035

Attention: Peter R. Knitzer

With a copy to:

Stewart Reifler, Esq.

Vedder Price P.C.

1633 Broadway, 47th Floor

New York, NY 10019

Facsimile No.: (212) 407-7799

or to such other address or addresses as any such party may from time to time
designate as to itself by like notice.

4.2 Amendments and Waivers.

(a) Any provision of this Agreement may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed, in the case of an
amendment, by each party to this Agreement, or in the case of a waiver, by the
party against whom the waiver is to be effective.

(b) No failure or delay by any party in exercising any right, power or privilege
hereunder will operate as a waiver thereof nor will any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
will be cumulative and not exclusive of any rights or remedies provided by law.

4.3 Expenses. Unless expressly set forth to the contrary elsewhere in this
Agreement, the parties will pay all of their respective expenses incurred in
connection with any legal proceeding concerning a dispute arising out of this
Agreement. Notwithstanding the foregoing, the Corporation shall pay the
reasonable fees and expenses of Executive’s attorney not to exceed $10,000 in
connection with the negotiation of this Agreement.

 

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4.4 Indemnification. The Corporation will provide indemnification no less
favorable than that set forth in the Corporation’s amended and restated bylaws
as in effect on the Effective Date. The Corporation agrees to use its best
efforts to maintain a directors’ and officers’ liability insurance policy
covering Executive to the extent the Corporation provides such coverage for its
other executive officers and such policy is available on commercially reasonable
terms.

4.5 Successors and Assigns. The provisions, obligations and rights of this
Agreement will be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs and administrators; provided
that Executive may not assign, delegate or otherwise transfer any of his rights
or obligations under this Agreement without the prior written consent of the
Corporation.

4.6 No Third Party Beneficiaries. Except as otherwise expressly provided for
herein, this Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein expressed or implied will give or be
construed to give to any Person, other than the parties hereto and such
permitted assigns, any legal or equitable rights hereunder.

4.7 Choice of Law; Forum Selection; Jury Waiver. This Agreement, including its
interpretation, performance, breach, or any statutory or other claim relating to
Executive’s employment with the Corporation, the termination thereof, or his
work for the Corporation, shall be governed by, and construed in accordance
with, the laws of the State of Delaware without giving any force or effect to
the provisions of any conflict of law rule thereof. The parties knowingly and
voluntarily agree that any controversy or dispute arising out of or otherwise
related to this Agreement, including any statutory or other claim relating to
Executive’s employment with the Corporation, the termination thereof, or his
work for the Corporation, shall be tried exclusively, without jury, and consent
to personal jurisdiction, in the state courts of Greenville, South Carolina or
the United States District Court for the District of South Carolina, Greenville
division.

4.8 Controlling Document. Except with respect to the Stock Plan or the Annual
Incentive Plan, if any provision of any agreement, plan, program, policy,
arrangement or other written document between or relating to the Corporation and
Executive conflicts with any provision of this Agreement, the provision of this
Agreement shall control and prevail. The provisions of the Stock Plan and the
Annual Incentive Plan shall control over this Agreement.

4.9 No Limitation of Rights. Nothing in this Agreement shall limit or prejudice
any rights of the Corporation under any other laws.

4.10 Counterparts. This Agreement may be signed in any number of counterparts,
including via facsimile transmission, each of which will be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.

4.11 Headings. The headings in this Agreement are for convenience of reference
only and will not control or affect the meaning or construction of any
provisions hereof.

4.12 Severability. If any provision of this Agreement or the application of any
such provision to any Person or circumstance is held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
hereof. If any provision of this Agreement is finally judicially determined to
be invalid, ineffective or

 

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unenforceable, the determination will apply only in the jurisdiction in which
such final adjudication is made, and such provision will be deemed severed from
this Agreement for purposes of such jurisdiction only, but every other provision
of this Agreement will remain in full force and effect, and there will be
substituted for any such provision held invalid, ineffective or unenforceable, a
provision of similar import reflecting the original intent of the parties to the
extent permitted under applicable law.

4.13 Certain Interpretive Matters.

(a) Unless the context otherwise requires, (i) all references to sections are to
sections of this Agreement, (ii) each term defined in this Agreement has the
meaning assigned to it, (iii) words in the singular include the plural and vice
versa, and (iv) the terms “herein,” “hereof,” “hereby,” “hereunder” and words of
similar import shall mean references to this Agreement as a whole and not to any
individual section or portion hereof. All references to $ or dollar amounts will
be to lawful currency of the United States.

(b) No provision of this Agreement will be interpreted in favor of, or against,
any of the parties hereto by reason of the extent to which any such party or his
or its counsel participated in the drafting thereof or by reason of the extent
to which any such provision is inconsistent with any prior draft hereof or
thereof.

4.14 Entire Agreement. This Agreement constitutes the entire agreement among the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both oral and written, including but not limited
to any term sheet or other similar summary of proposed terms, between the
parties with respect to the subject matter of this Agreement.

4.15 Full Understanding. Executive represents and agrees that Executive fully
understands Executive’s right to discuss all aspects of this Agreement with
Executive’s private attorney, and that to the extent, if any, that Executive
desired, Executive utilized this right. Executive further represents and agrees
that: (i) Executive has carefully read and fully understands all of the
provisions of this Agreement; (ii) Executive is competent to execute this
Agreement; (iii) Executive’s agreement to execute this Agreement has not been
obtained by any duress, and Executive freely and voluntarily enters into it;
(iv) Executive is not subject to any covenants, agreements or restrictions
arising out of Executive’s prior employment (other than with the Corporation)
that would be breached or violated by Executive’s execution of this Agreement or
performance of duties hereunder; and (v) Executive has read this document in its
entirety and fully understands the meaning, intent and consequences of this
document. Executive agrees and acknowledges that the obligations owed to
Executive under this Agreement are solely the obligations of the Corporation and
that none of the Corporation’s stockholders, directors or lenders will have any
obligation or liabilities in respect of this Agreement and the subject matter
hereof.

4.16 Code Section 409A. Notwithstanding any other provision in this Agreement to
the contrary, if and to the extent that Code Section 409A is deemed to apply to
any benefit under this Agreement, it is the general intention of the Corporation
that such benefits shall, to the extent practicable, comply with, or be exempt
from, Code Section 409A, and this Agreement shall, to the extent practicable, be
construed in accordance therewith. Deferrals of benefits distributable pursuant
to this Agreement that are otherwise exempt from Code Section 409A in a manner
that would cause Code Section 409A to apply shall not be permitted unless such
deferrals are in compliance with or otherwise exempt from Code Section 409A. In
the event that the Corporation (or a successor thereto) has any stock which is
publicly traded on an established securities market or otherwise and Executive
is determined to be a “specified employee” (as defined under Code Section 409A),
any payment of deferred compensation subject to Code Section 409A to be made to
Executive upon a separation from service may not be made before the date that is
six months after Executive’s separation from service (or death, if earlier). To
the extent that

 

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Executive becomes subject to the six-month delay rule, all payments of deferred
compensation subject to Code Section 409A that would have been made to Executive
during the six months following his separation from service, if any, will be
accumulated and paid to Executive during the seventh month following his
separation from service, and any remaining payments due will be made in their
ordinary course as described in this Agreement. For the purposes herein, the
phrase “termination of employment” or similar phrases will be interpreted in
accordance with the term “separation from service” as defined under Code
Section 409A if and to the extent required under Code Section 409A. Whenever
payments under the Agreement are to be made in installments, each such
installment shall be deemed to be a separate payment for purposes of Code
Section 409A. Further, (i) in the event that Code Section 409A requires that any
special terms, provisions or conditions be included in this Agreement, then such
terms, provisions and conditions shall, to the extent practicable, be deemed to
be made a part of this Agreement, and (ii) terms used in this Agreement shall be
construed in accordance with Code Section 409A if and to the extent
required. Further, in the event that this Agreement or any benefit thereunder
shall be deemed not to comply with Code Section 409A, then neither the
Corporation, the Board, the Compensation Committee nor its or their designees or
agents shall be liable to Executive or other person for actions, decisions or
determinations made in good faith.

4.17 Compliance with Recoupment, Ownership and Other Policies or Agreements. As
a condition to entering into this Agreement, Executive agrees that he shall
abide by all provisions of any equity retention policy, compensation recovery
policy, stock ownership guidelines and/or other similar policies maintained by
the Corporation, each as in effect from time to time and to the extent
applicable to Executive from time to time. In addition, Executive shall be
subject to such compensation recovery, recoupment, forfeiture or other similar
provisions as may apply at any time to Executive under applicable law.

4.18 Waiver and Release. Executive acknowledges and agrees that the Corporation
may at any time require, as a condition to receipt of benefits payable under
this Agreement, including but not limited to the payment of termination benefits
pursuant to Sections 2.7(a), 2.7(d), 2.7(e) and 2.7(f) herein, that Executive
(or a representative of his Estate) execute a waiver and release discharging the
Corporation and its Subsidiaries, and their respective Affiliates, and its and
their officers, directors, managers, employees, agents and representatives and
the heirs, predecessors, successors and assigns of all of the foregoing, from
any and all claims, actions, causes of action or other liability, whether known
or unknown, contingent or fixed, arising out of or in any way related to
Executive’s employment, or the ending of Executive’s employment with the
Corporation or the benefits thereunder, including, without limitation, any
claims under this Agreement or other related instruments. The waiver and release
shall be in a form substantially similar to the form of release attached to this
Agreement as Exhibit A and shall be executed prior to the expiration of the time
period provided for payment of such benefits (including those provided under
Section 2.7 herein).

4.19 Tax Matters. The Corporation has made no warranties or representations to
Executive with respect to the tax consequences (including but not limited to
income tax consequences) contemplated by this Agreement and/or any benefits to
be provided pursuant thereto. Executive acknowledges that there may be adverse
tax consequences related to the transactions contemplated hereby and that
Executive should consult with his own attorney, accountant and/or tax advisor
regarding the decision to enter into this Agreement and the consequences
thereof. Executive also acknowledges that the Corporation has no responsibility
to take or refrain from taking any actions in order to achieve a certain tax
result for Executive.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 

REGIONAL MANAGEMENT CORP. By:  

/s/ Steven J. Freiberg

Name:   Steven J. Freiberg Title:   Chair of the Compensation Committee of the
Board of Directors EXECUTIVE

/s/ Peter R. Knitzer

Peter R. Knitzer

(Signature Page to Employment Agreement)

 

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EXHIBIT A

RELEASE OF CLAIMS

This Release of Claims (“Agreement”) is made and entered into by and between
Regional Management Corp. (the “Corporation”) and Peter R. Knitzer (the
“Executive”).

BACKGROUND

A. The Corporation and Executive are parties to an Employment Agreement dated as
of June 14, 2016 (the “Employment Agreement”) that, among its terms, provides
that the Corporation will pay Executive certain individually tailored severance
benefits (the “Severance”) under certain circumstances in connection with the
termination of Executive’s employment thereunder.

B. Under the Employment Agreement, the Corporation is not obligated to pay the
Severance unless Executive has signed a release of claims in favor of the
Corporation. The parties intend this Agreement to be that release of claims.

NOW, THEREFORE, based on the foregoing and the terms and conditions below, the
Corporation and Executive, desiring to amicably resolve any and all existing and
potential disputes between them as of the date each executes this Agreement, and
in consideration of the obligations and undertakings set forth below and
intending to be legally bound, agree as follows.

1. Corporation’s Obligations. In return for “Executive’s Obligations” (as
defined in Section 2 below), and provided that Executive signs this Agreement
and does not exercise Executive’s rights to revoke or rescind Executive’s
waivers of certain discrimination claims (as described in Section 5 below), the
Corporation will pay to Executive the Severance.

2. Executive’s Obligations. In return for the Corporation’s Obligations in
Section 1 above, Executive knowingly and voluntarily agrees to the following:

(a) Executive hereby fully, finally and forever releases, waives, and
discharges, to the maximum extent that the law permits, any and all legal,
equitable and administrative claims, actions, causes of action, suits, debts,
accounts, judgments and demands (collectively, “Claims”) against the Corporation
or any of its direct or indirect subsidiaries or affiliates that Executive has
through the date on which Executive signs this Agreement. This full and final
release, waiver, and discharge extends to all and each of every legal, equitable
and administrative Claim(s) of any kind or nature whatsoever including, without
limitation, the following:

(i) All Claims that Executive has now, whether Executive now knows about or
suspects such claims;

(ii) All Claims for attorney’s fees;

(iii) All rights and Claims of age discrimination and retaliation under the Age
Discrimination in Employment Act (“ADEA”) as amended by the Older Workers
Benefit Protection Act of 1990 (“OWBPA”);

(iv) All rights and Claims of any other forms of discrimination and retaliation
of any kind or nature whatsoever under federal, state, or local law, including
but not limited to Claims of discrimination and retaliation under Title VII of
the Civil Rights Act of 1964, and the Americans With Disabilities Act (“ADA”);

 

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(v) All Claims, whether in contract or tort, arising out of Executive’s
employment and Executive’s separation from employment with the Corporation,
including but not limited to any alleged breach of contract, breach of implied
contract, wrongful or illegal termination, defamation, invasion of privacy,
fraud, promissory estoppel, and infliction of emotional distress;

(vi) All Claims for any other compensation, including but not limited to front
pay, back pay, bonus, fringe benefits, vacation pay, other paid time off,
severance pay, other severance benefits, incentive opportunity pay, other grants
of incentive compensation, grants of stock, and stock options;

(vii) All Claims under the Employee Retirement Security Act of 1974, as amended
(“ERISA”);

(viii) All Claims for any other alleged unlawful employment practices arising
out of or relating to Executive’s employment or separation from employment with
the Corporation;

(ix) All Claims for emotional distress, pain and suffering, compensatory
damages, punitive damages and liquidated damages; and

(x) All Claims for reinstatement or re-employment.

(b) Executive will not commence any civil actions against the Corporation except
as necessary to enforce his obligations under this Agreement and the Employment
Agreement. The Severance that Executive is receiving in the Employment Agreement
has a value that is greater than anything to which Executive is entitled. Other
than what Executive is receiving in the Employment Agreement, the Corporation
owes Executive nothing else in return for Executive’s Obligations.

(c) Executive relinquishes any right to future employment with the Corporation
and the Corporation shall have the right to refuse to re-employ Executive
without liability.

(d) Executive agrees to continue to adhere to the terms and conditions set forth
in Article III (Covenants) of the Employment Agreement. Executive agrees that
such terms and conditions are reasonable and necessary to protect the legitimate
interests of the Corporation and that any violation of Article III of the
Employment Agreement by Executive may cause substantial and irreparable harm to
the Corporation. Executive agrees that the Corporation may seek any remedies set
forth in Article III of the Employment Agreement should executive violate
Article III of the Employment Agreement. The Corporation and Executive
specifically agree that Article III of the Employment Agreement is incorporated
hereto by reference and integrated herein.

3. Certain Definitions. For purposes of Section 2, “Executive” means Peter R.
Knitzer and any person or entity that has or obtains any legal rights or claims
through Peter R. Knitzer. Further, the “Corporation” means Regional Management
Corp. and any parent, subsidiary, and affiliated organization or entity in the
present or past related to Regional Management Corp., and any past and present
officers, directors, members, governors, attorneys, employees, agents, insurers,
successors, and assigns of, and any person who acted on behalf of or instruction
of Regional Management Corp.

 

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4. Other Provisions.

(a) The Corporation has paid or will pay Executive in full for all reimbursable
business expenses, earned annualized salary, earned unpaid bonus pay, and any
other earnings through the last day of Executive’s employment.

(b) This Agreement does not prohibit Executive from filing an administrative
charge of discrimination with, or cooperating or participating in an
investigation or proceeding conducted by, the Equal Employment Opportunity
Commission or other federal or state regulatory or law enforcement agency.
However, Executive agrees not to seek or accept any money damages or other
relief should any such charge be filed.

(c) Nothing in this Agreement affects Executive’s rights in any qualified
retirement or welfare benefit plan or program in which Executive was a
participant while employed by the Corporation. The terms of such plans and
programs control Executive’s rights with respect thereto.

(d) The Corporation will indemnify Executive as permitted by and pursuant to any
agreement or policy that the Corporation has adopted relating to indemnification
of directors, officers, and employees; and as permitted by and pursuant to any
provision of the Corporation’s certificate or by-laws relating to such
indemnification.

(e) Executive will continue to be covered as permitted by and pursuant to any
policy of directors and/or officers liability insurance policy on the terms and
conditions of the applicable policy documents.

5. Executive’s Rights to Counsel, Consider, Revoke and Rescind.

(a) The Corporation hereby advises Executive to consult with an attorney prior
to signing this Agreement.

(b) Executive further understands that Executive has 21 days to consider
Executive’s release of rights and claims of age discrimination under the ADEA
and OWBPA, beginning the date on which Executive receives this Agreement.
Executive agrees that he was provided this Agreement on              , 20    
for consideration. If Executive signs this Agreement, Executive understands that
Executive is entitled to revoke Executive’s release of any rights or claims
under the ADEA and OWBPA within seven days after Executive has executed it, and
Executive’s release of any rights or claims under the ADEA and OWBPA will not
become effective or enforceable until the seven-day period has expired. To
revoke such release, Executive must put the rescission in writing and deliver it
to the Corporation by hand or mail within the seven day period. If Executive
delivers the rescission by mail it must be: (i) Postmarked within seven calendar
days after the date on which Executive signs this Agreement; (ii) addressed to
the Corporation, c/o General Counsel, 509 West Butler Road Greenville, SC 29607;
and (iii) sent by certified mail return receipt requested.

If Executive revokes or rescinds Executive’s waivers of discrimination claims as
provided above, Executive shall not be entitled to receive the Severance.

6. Non-Admission. The Corporation and Executive enter into this Agreement
expressly disavowing fault, liability and wrongdoing, liability at all times
having been denied. Neither this Agreement, nor anything contained in it, will
be construed as an admission by either of them of any liability, wrongdoing or
unlawful conduct whatsoever. If this Agreement is not executed, no term of this
Agreement will be deemed an admission by either party of any right that he/it
may have with or against the other.

 

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7. No Oral Modification or Waiver. This Agreement may not be changed orally. No
breach of any provision hereof can be waived by either party unless in
writing. Waiver of any one breach by a party will not be deemed to be a waiver
of any other breach of the same or any other provision hereof.

8. Governing Law. This Agreement will be governed by the substantive laws of the
State of Delaware without regard to conflicts of law principles.

9. Forum Selection-Jurisdiction and Venue. Executive and the Corporation
knowingly and voluntarily agree that any controversy or dispute arising out of
or otherwise related to this Agreement, including any employment or statutory
claim, shall be tried exclusively, without jury, and consent to personal
jurisdiction, in the state courts of Greenville, South Carolina or the United
States District Court for the District of South Carolina, Greenville division.

10. Counterparts. This Agreement may be executed in any number of counterparts,
and each such counterpart will be deemed to be an original instrument, and all
such counterparts together will constitute but one agreement.

11. Blue Pencil Doctrine. In the event that any provision of this Agreement is
unenforceable under applicable law, the validity or enforceability of the
remaining provisions will not be affected. To the extent any provision of this
Agreement is judicially determined to be unenforceable, a court of competent
jurisdiction may reform any such provision to make it enforceable. The
provisions of this Agreement will, where possible, be interpreted so as to
sustain its legality and enforceability.

12. Agreement Freely Entered Into. Executive and the Corporation have
voluntarily and free from coercion entered into this Agreement. Each has read
this Agreement carefully and understands all of its terms, and has had the
opportunity to discuss this Agreement with his/its own attorney prior to its
execution. In agreeing to sign this Agreement, neither party has relied on any
statements or explanations made by the other party, their respective agents or
attorneys except as set forth in this Agreement. Both parties agree to abide by
this Agreement.

 

Dated:  

 

By:  

 

  Peter R. Knitzer Dated:  

 

Regional Management Corp. By:  

 

 

 

  Its:  

 

 

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