William E. McKnight Restated Employment Agreement


    EXHIBIT
      10.1
      


       

      RESTATED
        EMPLOYMENT AGREEMENT

       

      This
        EMPLOYMENT AGREEMENT is effective as of September 1, 2005 by and between
        Coastal
        Credit, L.L.C., a Virginia limited liability company (“Company”) and William E.
        McKnight (“Executive”).

       

      WHEREAS,
        Executive has served for many years as the Chief Executive Officer of the
        Company, and the Executive and the Company desire to confirm and restate
        the
        terms of Executive’s employment by the Company;

       

      WHEREAS,
        By entering into this Restated Employment Agreement, Executive and the Company
        hereby amend and restate the Employment Agreement between the parties, dated
        April 11, 1998, (“Prior Agreement”) in its entirety as set forth below.


       

      NOW,
        THEREFORE, the parties agree as follows:

       

      1. Definitions.
        The
        terms defined in this Section 1 shall have the respective meanings indicated
        below for all purposes of this Agreement.

       

      (a) Affiliate.
        “Affiliate” of a Person means a Person that directly or indirectly through one
        or more intermediaries, controls, is controlled by, or is under common control
        with, the first Person. “Control” means the possession, directly or indirectly,
        of the power to direct or cause the direction of the management policies
        of a
        Person, whether through the ownership of voting securities, by contract,
        as
        trustee or executor, or otherwise.

       

      (b) Cause.
“Cause”
        shall mean any one or more of the following:

       

      i. engaging
        in a material dishonest act, including without limitation any material
        misrepresentation or intentional omission to state a material fact to White
        River Capital, Inc. (“Parent”) or Parent Board, willful breach of fiduciary
        duty, misappropriation or fraud against the Company or any Affiliate of the
        Company;

       

      ii. any
        indictment or similar charge against Executive by a governmental authority
        alleging the commission of a felony, or a guilty plea or no-contest plea
        by
        Executive to a felony;

       

      iii. material
        failure by Executive to follow the Company’s general policies, directives or
        orders applicable to officers of the Company after failing to cure prior
        similar
        failures within thirty (30) days of receiving written notice thereof from
        the
        Parent authorized by the Parent Board;

       

      iv. intentional
        destruction or theft of the Company’s property or falsification of the Company’s
        documents;

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      v. a
        breach
        by Executive of the provisions of Section 12 or 13; or

       

      vi. a
        material breach by Executive of any other provision of this Agreement and
        the
        failure by Executive to cure such breach within thirty (30) days of the date
        on
        which the Company gives Executive notice thereof.

       

      (c) Change
        of Control.
“Change
        of Control” shall mean:

       

      i. the
        consummation of a plan of dissolution or liquidation of the Company or Parent;
        

       

      ii. the
        individuals who, as of the effective date hereof, are members of the Parent
        Board (“Incumbent Board”), cease for any reason to constitute at least a
        majority of the members of the Board; provided, however, that if the election,
        or nomination for election by the Parent’s shareholders, of any new director was
        approved by a vote of at least two-thirds of the Incumbent Board, such new
        director shall, for purposes of this Plan, be considered as a member of the
        Incumbent Board; provided, further, however, that no individual shall be
        considered a member of the Incumbent Board if such individual initially assumed
        office as a result of either an actual or threatened “election contest” or other
        actual or threatened solicitation of proxies or consents by or on behalf
        of an
        individual, entity or group (within the meaning of Section 13(d) or 14(d)
        of the
        Exchange Act) (a “Person”) other than the Parent Board (a “Proxy Contest”)
        including by reason of any agreement intended to avoid or settle any election
        contest or Proxy Contest; 

       

      iii. the
        consummation of a plan of reorganization, merger or consolidation involving
        the
        Company or the Parent, except for a reorganization, merger or consolidation
        where (A) the shareholders of the Company or the Parent, respectively,
        immediately prior to such reorganization, merger or consolidation own directly
        or indirectly at least a majority of the combined voting power of the
        outstanding voting securities of the company resulting from such reorganization,
        merger or consolidation (the “Surviving Company”) in substantially the same
        proportion as their ownership of voting securities of the Company or Parent,
        respectively, immediately prior to such reorganization, merger or consolidation,
        and (B) the individuals who were members of the Incumbent Board immediately
        prior to the execution of the agreement providing for such reorganization,
        merger or consolidation constitute at least a majority of the members of
        the
        board of directors of the Surviving Company, or of a company beneficially
        owning, directly or indirectly, a majority of the voting securities of the
        Surviving Company; 

       


      
        
          
          

        

        
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      iv. the
        sale
        of all or substantially all the assets of the Company to another Person outside
        the ordinary course of business; or 

       

      v. the
        acquisition by another Person of beneficial ownership (within the meaning
        of
        Rule 13d-3 promulgated under the Exchange Act) of stock representing more
        than
        fifty percent (50%) of the voting power of the Parent or the Company then
        outstanding by another Person, other than as a result of an original issuance
        of
        equity interests approved by the Incumbent Board.

       

      (d) Date
        of Termination.
“Date
        of Termination” shall mean in the case of Executive’s death, the date of death,
        in the case of Disability, thirty (30) days after Notice of Termination is
        given
        (provided Executive shall not have returned to the full-time performance
        of his
        duties during such thirty (30) day period), and in all other cases, the date
        specified in the Notice of Termination, which shall be at least thirty (30)
        days
        after the date of the Notice of Termination, unless the termination is by
        the
        Company for Cause.

       

      (e) Disability.
        “Disability” shall occur if as a result of Executive’s incapacity due to
        physical or mental illness, Executive shall have been absent from the full-time
        performance of his duties with the Company for three (3) consecutive
        months.

       

      (f) Good
        Reason.
“Good
        Reason” shall mean any one or more of the following bases for termination of
        Executive’s employment by Executive:

       

      i. the
        removal of Executive as Chief Executive Officer of Company without
        Cause;

       

      ii. the
        assignment to Executive of any duties inconsistent in any material respect
        with
        Executive’s position, authority, duties or responsibilities as contemplated by
        Section 5(a) of this Agreement, excluding for this purpose an isolated,
        insubstantial or inadvertent action not taken in bad faith and which is remedied
        by the Company promptly after receipt of notice thereof given by the
        Executive;

       

      iii. an
        action
        of Company that requires Executive to move from his permanent place of
        residence.

       

      iv. a
        Change
        of Control of the Company or Parent shall have occurred within the preceding
        12
        months; 

       

      v. any
        action by the Company to reduce Executive’s base compensation below the amount
        established in Section 6; failure by the Company to timely pay salary, bonus
        or
        incentive payments due Executive under Section 6; or failure by Company to
        establish the long-term incentive award called for by Section 6 within 120
        days
        of the effectiveness of this restated agreement. 

       


      
        
          
          

        

        
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      (g) Net
        Pre-Tax Income.
“Net
        Pre-Tax Income” shall mean net income of the Company before provision for
        federal or state taxes and after expenses paid by related parties that are
        appropriately and equitably allocated to the Company, all as determined in
        accordance with generally accepted accounting principles consistently
        applied.

       

      (h) Notice
        of Termination.
        Any
        termination of Executive’s employment by either the Company or Executive, except
        for a termination based on Executive’s death, shall be Communicated by a written
        Notice of Termination.

       

      (i) Parent
        Board.
“Parent
        Board” shall mean the Board of Directors of Parent or a duly authorized
        committee of such Board, in either case, acting, if appropriate due to
        Executive’s potential conflict of interest with respect to matters under this
        Agreement, without the participation of Executive. 

       

      (j) Person.
        “Person” shall mean any natural person, corporation, partnership, association,
        limited liability company, trust, governmental authority, or other
        entity.

       

      (k) Retirement.
        “Retirement” shall mean termination of Executive’s employment after Executive
        has attained age 65.

       

      2. Employment.
        The
        Company hereby employs Executive and Executive hereby accepts employment
        with
        the Company for the Term of this Agreement set forth in Section 3 below,
        in the
        position and with the duties and responsibilities set forth in Sections 4
        and 5
        below, and upon the other terms and conditions hereinafter stated.

       

      3. Term.
        This
        Agreement is for the period commencing on the date hereof (the “Commencement
        Date”) and terminating on December 31, 2008, or upon Executive’s earlier death,
        termination by reason of Disability or termination by either party pursuant
        to
        Section 10 (the “Initial Term”). The Initial Term shall be automatically
        extended for successive one-year periods (each a “Renewal Term,” with the
        Initial Term and any Renewal Terms collectively referred to herein as the
        “Term”), unless at least ninety (90) days prior to the end of the Initial Term
        or any Renewal Term, either party, by a written notice delivered to the other
        party, elects not to have the Term automatically extended.

       

      4. Position.
        Executive shall serve as President and Chief Executive Officer of the
        Company.

       

      5. Duties
        and Responsibilities.

       

      (a) The
        Company hereby engages Executive as a full-time executive employee and Executive
        accepts such employment, on the terms and subject to the conditions set forth
        in
        this Agreement. During the Term, Executive shall devote all of his business
        time
        and best efforts to, and shall perform faithfully, loyally and efficiently,
        his
        duties as President of the Company and shall exercise such powers and fulfill
        such responsibilities as may be duly assigned to or vested in him by the
        Operating Agreement or by the Parent as managing member of the 

       


      
        
          
          

        

        
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      Company
        as directed by the Parent Board consistent with the responsibilities of the
        President.

       

      (b) During
        the Term, Executive will not engage in other employment or consulting work
        or
        any trade or business for his own account or on behalf of any other Person.
        Notwithstanding the foregoing, Executive may (i) serve on such corporate,
        civic,
        industry or charitable boards or committees as are approved by the Managers
        and
        (ii) manage his own and his immediate family’s personal investments, provided
        that the activities permitted by clauses (i) and (ii) above shall not,
        individually or in the aggregate, interfere in any material respect with
        the
        performance of Executive’s responsibilities hereunder.

       

      6. Salary/Bonus.

       

      (a)
        For
        all services rendered by Executive under this Agreement, the Company shall
        pay
        to Executive an aggregate annual base salary of $300,000, payable, in equal
        installments, at least monthly, in accordance with the Company’s regular payroll
        procedures. Such initial base salary shall be retroactively effective from
        September 1, 2005. The Company shall review possible increases in Executive’s
        salary at least annually, with any such increases subject to the determination
        of the Parent as directed by the Parent Board in its sole
        discretion.

       

      (b)
        For
        calendar 2005, Executive will be eligible for an annual performance bonus
        of
        $300,000, prorated for the portion of 2005 after August 31. Thereafter,
        Executive will be eligible for an annual performance bonus of 3% of the annual
        consolidated Net Pre-Tax Income of the Company (unless an alternative basis
        for
        determining the annual performance bonus is agreed to in writing by the
        parties.)

       

      (c)
        In
        addition, simultaneously with the execution of this Agreement, the Company
        and
        Executive shall execute a long-term cash incentive award agreement, in the
        form
        of attached
        Exhibit
        A.
        This
        award agreement provides that on each of January 1, 2007, January 1, 2008
        and
        January 1, 2009 (each a “Vesting Date”), Executive shall receive a cash payment
        from the Company equal to the value of 33,333.33 shares of White River Capital,
        Inc. common stock, the value of which shall be determined based on the mean
        of
        the Fair Market Value (as defined in the White River Capital, Inc. Incentive
        Stock Plan) of a share of White River Capital, Inc. common stock for the
        20
        trading days immediately preceding the Vesting Date. 

       

      7. Employee
        Benefits.
        The
        Company shall provide or cause to be provided to Executive and to Executive’s
        dependents, at the Company’s expense, all disability, medical and dental
        benefits provided to other executives of the Company. During any waiting
        period
        for insurance eligibility, COBRA insurance costs for Executive and Executive’s
        dependents will be paid by the Company. In addition, the Company shall pay
        the
        Executive $800 per month as an automobile allowance to cover the cost of
        Executive’s use of an automobile for Company 

       


      
        
          
          

        

        
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      purposes.
        During the Term of this Agreement, Executive shall maintain insurance in
        connection with the automobile as required by state law and such other insurance
        as is reasonably satisfactory to the Company. If the terms of such insurance
        policy allow it, the Company shall be named as an additional insured on all
        such
        coverage.

       

      8. Vacation.
        Executive shall be entitled to four (4) weeks vacation during each consecutive
        twelve month period of employment beginning on the Commencement Date and
        each
        anniversary thereof. In the event that the full vacation is not taken by
        Executive during any such period, no vacation time shall accrue for use in
        future periods, except as approved by the Parent Board.

       

      9. Business
        Expenses.
        Executive will be reimbursed for all reasonable ordinary and necessary business
        expenses incurred by Executive in connection with Executive’s employment (to be
        supported by receipts and other documentation as required by the Internal
        Revenue Code of 1986, as amended, and in conformance with the Company’s normal
        procedures).

       

      10. Termination.
        Either
        the Company or Executive may terminate the employment of Executive at any
        time
        prior to the expiration of the Term of this Agreement, with or without Cause
        or
        Good Reason.

       

      11. Payments
        During Disability and Upon Termination or Expiration.
        Executive or his estate shall be entitled to the following during a period
        of
        Disability, upon Executive’s death, upon termination of Executive’s employment
        by Executive or the Company, or if the Term of this Agreement is not extended
        by
        reason of notice given by either party pursuant to Section 3 hereof, as the
        case
        may be:

       

      (a) During
        any period that Executive fails to perform his full-time duties with the
        Company
        as a result of incapacity due to physical or mental illness, until such time
        as
        Executive returns to the full-time performance of his duties or the Date
        of
        Termination if Executive’s employment is terminated for Disability, Executive
        shall continue to receive his base salary at the rate in effect at the
        commencement of any such period minus any disability benefits received by
        him
        under any insurance or disability plan of the Company. If terminated for
        Disability, Executive shall additionally be entitled to receive the severance
        compensation provided for in subsection 11(c)(i) (reduced by any disability
        benefits received by him under any insurance or disability plan of the Company),
        as well as subsections11(c) (ii), (iii) and (iv) hereof.

       

      (b) If
        (1)
        Executive’s employment is terminated by Executive without Good Reason and other
        than upon Retirement; (2) Executive’s employment is terminated by the Company
        for Cause; or (3) this Agreement is terminated by reason of Executive’s notice
        of non-renewal, as provided in Section 3 hereof, then Company shall pay
        Executive his full base salary through the Date of Termination at the rate
        in
        effect at the time Notice of Termination is given, plus all other amounts
        or
        benefits to which Executive is entitled through such date under any plan,
        arrangement or practice in effect at the time of such termination, minus
        any


       


      
        
          
          

        

        
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      amounts
        owed by Executive to the Company. Executive shall not be entitled to receive
        any
        bonus applicable to the period in which termination occurs, and the Company
        shall have no further obligations to Executive under this Agreement (other
        than
        under COBRA and for vested and accrued benefits and accrued and unpaid
        vacation). Notwithstanding the foregoing, if Executive’s employment is
        terminated by reason of Executive’s notice of non-renewal and the Term expires
        other than at the end of a full fiscal year of the Company, Executive shall
        be
        paid a pro rata portion of his performance bonus and a pro rata portion of
        the
        annual increment of his long-term cash incentive award that would otherwise
        vest
        for such year, if any, based on the number of months, including portions
        thereof, during which Executive was employed during the fiscal year in which
        his
        employment was terminated, based on the performance of the Company for said
        fiscal year as reflected in the Company’s financial statements for said fiscal
        year. For avoidance of doubt, if the Term expires at the end of a fiscal
        year
        due to Executive’s notice of non-renewal, Executive would be entitled to the
        full performance bonus payment and long-term cash incentive award otherwise
        earned for such year. 

       

      (c) If
        (1)
Executive’s
        employment is terminated by reason of Executive’s death; (2) Executive’s
        employment is terminated by the Company other than for Cause; (3) Executive’s
        employment is terminated by the Executive for Good Reason; or (4) this Agreement
        is terminated by reason of the Company’s notice of non-renewal, then Executive
        shall be entitled to the following:

       

      i. the
        Company shall pay to Executive any unpaid base salary through the Date of
        Termination and continue to pay Executive base salary through the end of
        the
        then-remaining Term of this Agreement (not less than a period of one year
        after
        the Date of Termination) at the rate in effect at the time Notice of Termination
        is given, payable consistent with the Company’s regular payroll
        practices;

       

      ii. Executive
        shall be entitled to any other compensation and benefits granted under this
        Agreement (other than base salary and performance bonus which are addressed
        in
        subparagraphs (i), (iii) and (iv) respectively), for and through the end
        of the
        then-remaining Term of this Agreement (not less than a period of one year
        after
        the Date of Termination). Such benefits shall be determined in accordance
        with
        the Company’s employee benefit plans and other applicable programs, policies and
        practices then in effect as though Executive was still then in the employ
        of the
        Company. The provisions of this Agreement, and any payment provided for
        hereunder, shall not reduce any amounts otherwise payable, or in any way
        diminish Executive’s existing rights, or rights which accrue solely as a result
        of the passage of time under any benefit plan, employment agreement or other
        contract, plan or arrangement; 

       

      iii. Executive
        shall be entitled to receive his prorated performance bonus, if any, for
        the
        fiscal year in which (or at the end of 

       


      
        
          
          

        

        
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      which)
        his employment was terminated, based on the performance of the Company for
        said
        fiscal year as reflected in the Company’s financial statements for said fiscal
        year; and

       

      iv. If
        the
        Date of Termination is prior to January 1, 2009, to the extent Executive’s
        benefits under the long-term incentive award provided for in Section 6 have
        not
        yet vested at the Date of Termination, such benefit shall accelerate and
        fully
        vest.

       

      (d) If
        Executive’s employment is terminated by Executive by reason of Executive’s
        Retirement, then Executive shall be entitled to receive the compensation
        provided for in subsections 11(c)(i), (ii) and (iii), hereof, plus, if such
        termination occurs prior to January 1, 2009, a pro rata portion of the annual
        increment of his long-term cash incentive award that would otherwise vest
        for
        such year, if any, based on the number of months, including portions thereof,
        during which Executive was employed during the fiscal year in which his
        employment was terminated.

       

      (e) In
        the
        event that compensation paid pursuant to Paragraph 11(c) (“Severance Pay”) is
        subject to an excise tax pursuant to Section 4999 of the Internal Revenue
        Code
        of 1986 (“Excise Tax”), as amended, then Executive shall be entitled to receive
        an additional Gross-Up Payment in an amount such that, after payment by
        Executive of all taxes (and any interest or penalties imposed with respect
        to
        such taxes), including, without limitation, any income taxes (and any interest
        and penalties imposed with respect thereto) and Excise Tax imposed upon the
        Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount
        of the
        Gross-Up Payment equal to the Excise Tax imposed upon the Severance Pay.
        The
        accounting firm employed by the Company shall make all determinations required
        herein, including whether and when a Gross-Up Payment is required, the amount
        of
        any such Gross-Up Payment and the assumptions to be utilized in arriving
        at such
        determination (except that Executive’s federal and state income taxes shall be
        assumed to be at the maximum rates). In the event that the accounting firm
        is
        serving as accountant or auditor to the individual, entity or group effecting
        the Change of Control, unless otherwise in writing by Executive, Company
        shall
        appoint another independent accounting firm reasonably acceptable to Executive
        to make the determinations required hereunder (which accounting firm shall
        then
        be referred to as the accounting firm hereunder). All fees and expenses of
        the
        accounting firm shall be borne solely by Company. The Gross-Up Payment shall
        be
        paid to Executive concurrently with the Severance Pay, unless Company at
        the
        same time as the payment of the Severance Pay provides Executive with the
        accounting firm’s opinion that Executive will not incur any Excise Tax on any
        part or all of the Severance Pay. Any such opinion shall be based upon the
        regulations under Section 280G and 4999 of the Internal Revenue Code of 1986,
        as
        amended and shall qualify as a covered, limited scope opinion under Circular
        230. If any such opinion applies only to part of the Severance Pay, Company
        shall pay Executive the Gross-Up Payment with respect to that part of the
        Severance Pay not covered by the 

       


      
        
          
          

        

        
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      opinion.
        Executive agrees (unless requested otherwise by Company) to use reasonable
        efforts to contest in good faith any subsequent determination by the Internal
        Revenue Service that Executive owes an amount of Excise Tax greater than
        the
        amount determined above; provided, that Executive shall be entitled to
        reimbursement by Company of all fees and expenses reasonable incurred by
        Executive in contesting such determination. In the event the Internal Revenue
        Service or any court of competent jurisdiction determines that Executive
        owes an
        amount of Excise Tax that is either greater or less than the amount previously
        taken into account in the Gross-Up Payment herein, Company shall promptly
        pay to
        Executive, or Executive shall promptly repay to Company, as the case may
        be, the
        amount of resulting excess or shortage in the Gross-Up Payment. Any payment
        Company is required to make to Executive pursuant to the preceding sentence
        shall include an additional amount such that after payment by Executive of
        all
        of Executive’s applicable federal, state and local taxes on such additional
        amount, Executive shall retain an amount equal to the total of Executive’s
        applicable federal, state and local taxes arising due to the later payment.
        If
        Executive collects any part or all of the Severance Pay provided herein,
        including the Gross-Up Payment, through a lawyer, Company shall pay all costs
        of
        any such collection or enforcement, including reasonable legal fees and other
        out of pocket expenses incurred by the Executive, up to that point when company
        offered to settle the dispute for an amount equal to the amount Executive
        is
        entitled to recover. The payment described herein shall be due Executive
        regardless of any subsequent employment obtained by Executive. 

       

      12. Non-Compete;
        Confidentiality.

       

      (a) During
        the Term hereof and for a period of two years after the Date of Termination
        or
        expiration of the Term of this Agreement, Executive shall not either on his
        own
        account, as a partner, joint venturer, employee, agent, salesman, officer,
        director or stockholder of a corporation (other than a beneficial holder
        of not
        more than two percent (2%) of the outstanding voting stock of a company having
        at least five hundred (500) holders of voting or economic interests) or
        otherwise, directly or indirectly enter into or engage in any business
        competitive with the business of the Company as such business exists on the
        date
        hereof (a “Competitive Business”) within any area where such business has been
        conducted prior to the date of termination. Notwithstanding the foregoing
        or
        anything in any other agreement (written or oral) between the parties to
        the
        contrary, if Executive’s employment is terminated by the Company other than for
        Cause, by Executive for Good Reason, or if this Agreement is terminated by
        reason of the Company’s notice of non-renewal, then Executive shall only be
        subject to the non-compete covenants set forth in this Section 12(a) for
        as long
        as the Company pays to Executive the salary and benefits set forth in this
        Agreement.

       


      
        
          
          

        

        
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      (b) Except
        as
        provided in the next two sentences, Executive covenants and agrees that all
        information, knowledge or data of or pertaining to the Company or any of
        its
        Affiliates, or pertaining to any other Person with which they or any of them
        may
        do business during the Term and which is not generally known in the relevant
        trade or industry (and whether relating to methods, merchandising, processes,
        techniques, discoveries, pricing, sales practices, marketing or any other
        proprietary matters) (the “Company Information”) shall be kept secret and
        confidential at all times during and after the termination or expiration
        of this
        Agreement and shall not be used or divulged by him outside the scope of his
        employment as contemplated by this Agreement, except as the Parent may otherwise
        expressly authorize. In the event that Executive is requested in a judicial,
        administrative or governmental proceeding to disclose any of the Company
        Information, Executive will promptly so notify the Company so that the Company
        may seek a protective order at the Company’s expense or other appropriate remedy
        and/or waive compliance with this Agreement. If such protective order or
        other
        remedy is not obtained or the Company waives compliance with this Agreement
        and
        disclosure of any of the Company Information is required, Executive may furnish
        the material so required to be furnished, but Executive will furnish only
        that
        portion of the Company Information which is legally required and will exercise
        his best efforts to obtain a protective order or other reliable assurance
        that
        confidential treatment will be accorded the Company Information
        furnished.

       

      13. Non-Solicitation/No-Hire.
        Executive agrees and acknowledges that the services of Executive pursuant
        to
        this Agreement are unique and extraordinary, and that the Company and its
        Affiliates will be dependent upon Executive for the development and growth
        of
        their business and related functions. If Executive’s employment with the Company
        is terminated for any reason, Executive agrees, for a period of two years
        following the Date of Termination or expiration of the Term of this Agreement,
        not to conduct or participate (directly or indirectly, including through
        one or
        more Affiliates) in:

       

      (a) Hiring,
        attempting to hire or assisting any other Person in hiring or attempting
        to
        hire, or inducing to leave the employ of the Company, any employee or officer
        of
        the Company, or any person who was an employee or officer of the Company
        within
        the six-month period prior to the Date of Termination or expiration of the
        Term
        of this Agreement; provided, however, that Executive may immediately seek
        to
        hire Nina White, without violating this Agreement.

       

      (b) Soliciting
        the business on behalf of himself or any other person with respect to a
        Competitive Business of the Company of either: (i) any vehicle dealers who
        were
        clients of the Company during the 12-month period prior to the Date of
        Termination (a “Specific Client”); or (ii) any Person whose business Executive
        (on behalf of the Company or otherwise) solicited by multiple contacts during
        the six-month period prior to the Date of Termination (a “Specific Contact”);
        or

       


      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      (c) Any
        activity for any Specific Client or Specific Contact which is the same as
        or
        similar to those activities Executive performed for the Company during the
        three-year period prior to the Date of Termination.

       

      Executive
        agrees that if Executive acts in violation of this Section, the number of
        days
        Executive is in such violation will be added to any periods of limitation
        on
        Executive’s activities specified herein. In addition, Executive agrees that
        during the duration of this Agreement and during the period of limitation
        on
        Executive’s activities specified in this Section, Executive shall promptly
        deliver a true and correct copy of this Agreement to any prospective employer
        or
        business partner of Executive.

       

      14. Monies
        Owed to the Company.
        Upon
        the termination of Executive’s employment with the Company, Executive hereby
        authorizes the Company to deduct from Executive’s final wages or other monies
        due to Executive all debts or financial obligations owed to the Company by
        Executive.

       

      15. Remedies.
        Executive understands and agrees that the Company will be irreparably damaged
        in
        the event that Sections 12 or 13 of this Agreement are violated. Executive
        agrees that the Company shall be entitled (in addition to any other remedy
        to
        which it may be entitled, at law or in equity) to an injunction to redress
        breaches of such Sections of this Agreement and to specifically enforce the
        terms and provisions thereof.

       

      16. Successors
        and Assigns.
        This
        Agreement is a personal contract, and the rights and interests of Executive
        hereunder and under the awards and plans referred to herein may not be sold,
        transferred, assigned, pledged, encumbered, or hypothecated by him, except
        as
        may be expressly permitted by the provisions of such awards or plans and
        that
        payments due Executive hereunder shall be payable to his heirs or fiduciaries
        upon his death. Except as may be expressly provided otherwise herein, this
        Agreement shall be binding upon the Company and inure to the benefit of the
        Company and its Affiliates, and its successors and assigns, including (but
        not
        limited to) any corporation or other entity which may acquire all or
        substantially all of the Company’s assets or business or into or with which the
        Company or an Affiliate may be consolidated or merged.

       

      17. Jurisdiction
        and Governing Law.
        Any
        controversy or claim arising out of or relating to this Agreement, or any
        breach
        thereof shall be governed by and construed in accordance with the laws of
        the
        Commonwealth of Virginia, without giving effect to principles of conflicts
        of
        laws thereof.

       

      18. Entire
        Agreement.
        This
        Agreement, the Asset Purchase Agreement and the Operating Agreement contain
        all
        the understandings between the parties hereto pertaining to the matters referred
        to herein, and supersede all undertakings and agreements, whether oral or
        in
        writing, previously entered into by them with respect thereto; Company and
        Executive are not relying on any such prior agreements or understandings
        in
        entering into this Agreement. This agreement supersedes and restates the
        Prior
        Agreement in its entirety. No representations or warranties of any kind or
        nature relating to the Company or any Affiliate or their respective businesses,
        assets, liabilities, operations, future plans or prospects have been made
        by or
        on 

       


      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      


      behalf
        of
        the Company or any Affiliate to Executive, nor have any representations or
        warranties of any kind or nature been made by Executive to the Company or
        any
        Affiliate.

      


      19. Amendment
        or Modification, Waiver.
        No
        provision of this Agreement may be amended or waived unless such amendment
        or
        waiver is agreed to in writing, signed by Executive and by a duly authorized
        officer of the Company. No waiver by any party hereto of any breach by another
        party hereto of any condition or provision of this Agreement to be performed
        by
        such other party shall be deemed a waiver of a similar or dissimilar condition
        or provision at the same time, any prior time or any subsequent
        time.

       

      20. Notices.
        Any
        notice to be given hereunder shall be in writing and delivered personally
        or by
        overnight courier or sent by registered or certified mail, postage prepaid,
        return receipt requested, addressed to the party concerned at the address
        indicated below or to such other address as such party may subsequently give
        notice of hereunder in writing:

       

      
        	 	
                To:

              	 
	 	 	 
	 	
                William.
                  E. McKnight

                2676
                  Blue Heron Court

                Virginia
                  Beach, Virginia 23454

              	 
	 	 	 
	 	
                With
                  a copy to:

              	 
	 	 	 
	 	
                Mr.
                  Thomas R. Frantz

                Williams
                  Mullen

                222
                  Central Park Avenue

                Virginia
                  Beach, Virginia 23462-3035

                Facsimile:
                  (757) 473-0395

              	 
	 	 	 
	 	
                To:

              	 
	 	 	 
	 	
                Coastal
                  Credit, L.L.C.

                c/o
                  White River Capital, Inc.

                6051
                  El Tordo

                P.O.
                  Box 1329

                Rancho
                  Santa Fe, CA 92067

                Attention:
                  John M. Eggemeyer III

                Facsimile:
                  (858) 756-8301

              	 
	 	 	 
	 	
                With
                  a copy to:

              	 
	 	 	 
	 	
                Barnes
                  & Thornburg LLP

                11
                  S. Meridian Street

                Indianapolis,
                  Indiana 46204

                Attention:
                  Eric R. Moy

                Facsimile:
                  (317) 231-7433

              	 


      

      


      


      



      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      


      Any
        notice delivered personally shall be deemed given on the date delivered,
        any
        notice transmitted by fax machine shall be deemed delivered upon receipt
        of
        confirmation of fax transmission, any notice delivered by overnight courier
        shall be deemed given the day after deposit with a courier, and any notice
        sent
        by registered or certified mail, postage prepaid, return receipt requested,
        shall be deemed given three days after mailing.

      


      21. Severability.
        If any
        provision of this Agreement or the application of any such provision to any
        party or circumstances shall be determined by any court of competent
        jurisdiction to be invalid and unenforceable to any extent, the remainder
        of
        this Agreement or the application of such provision to such person or
        circumstances other than those to which it is so determined to be invalid
        and
        unenforceable, shall not be affected thereby, and each provision hereof shall
        be
        validated and shall be enforced to the fullest extent permitted by
        law.

       

      22. Survivorship.
        The
        respective rights and obligations of the parties hereunder shall survive
        any
        termination of this Agreement to the extent necessary to the intended
        preservation of such rights and obligations.

       

      23. Headings.
        All
        descriptive headings of sections and paragraphs in this Agreement are intended
        solely for convenience, and no provision of this Agreement is to be construed
        by
        reference to the heading of any section or paragraph.

       

      24. Withholding
        Taxes.
        All
        payments to Executive under this Agreement shall be reduced by any applicable
        federal, state or city withholding taxes.

       

      This
        Agreement may be executed in counterparts, each of which shall be deemed
        an
        original and all of which together shall be one and the same
        agreement.

       

      


       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement this
        28th
        day of
        December, 2005, but effective as of the date first above written.

       

      


      
        	 	
                COASTAL
                  CREDIT, L.L.C.

              
	 	 	 
	 	
                By:

              	
                White
                  River Capital, Inc.

              
	 	
                Its:

              	
                Sole
                  Member

              
	 	 	 
	 	
                By:

              	
                /s/
                  John M. Eggemeyer, III

              
	 	 	
                John
                  M. Eggemeyer, III, Chief Executive Officer

              
	 	 	 
	 	 	 /s/
                William E. McKnight
	 	 	
                William
                  E. McKnight

              


      

      



      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      


      


      EXHIBIT
        A

      


      TERMS
        OF LONG TERM INCENTIVE CASH AWARD

      


      Pursuant
        to Section 6(c) of the accompanying Restated Employment Agreement (“Employment
        Agreement”), the Company and Executive hereby agree to the following terms and
        conditions of the long-term cash incentive award provided for
        therein:

      


      Definitions. 
        Unless otherwise defined herein, capitalized terms used herein have the
        definitions given them in the Employment Agreement, except that “Fair Market
        Value” has the meaning set forth in the White River Capital, Inc. 2005 Stock
        Incentive Plan, as amended. 

       

      Grant
        of Award. 
        Pursuant to the Employment Agreement the Company hereby grants to Executive
        a
        long-term cash incentive award based on the value of 100,000 shares of common
        stock of White River Capital, Inc., vesting and payable only as provided
        herein
        and in the Employment Agreement. Subject to acceleration of vesting, or
        forfeiture (in whole or in part), on the terms provided herein and the
        Employment Agreement, this award shall vest in three equal installments,
        as
        follows:

       

      
        	
                l

                 

              	
                the
                  value of 33,333.33 Shares shall vest on January 1, 2007

                 

              
	
                l

                 

              	
                the
                  value of 33,333.33 Shares shall vest on January 1, 2008

                 

              
	
                l

                 

              	
                the
                  value of 33,333.33 Shares shall vest on January 1, 2009

                 

              


      

      Each
        of
        January 1, 2007, January 1, 2008 and January 1, 2009 is a “Vesting Date”. On
        each Vesting Date, Executive shall earn and become entitled to receive a
        cash
        payment from the Company equal to the value of 33,333.33 shares of White
        River
        Capital, Inc. common stock. The value of the portion of the award vesting
        and
        becoming subject to payment on the Vesting Date or any other applicable date
        shall be determined based on the mean of the Fair Market Value of a share
        of
        White River Capital, Inc. common stock for the 20 trading days immediately
        preceding the Vesting Date or other determination date. 

       

      Risk
        of Forfeiture.
        Subject
        to the exceptions set forth in the Employment Agreement, summarized below,
        any
        unvested portion of this award shall be forfeited if Executive’s employment with
        the Company terminates prior to the vesting of such Shares. The risk of
        forfeiture of any portion of the award shall lapse upon vesting of such portion
        of the award as provided herein. Notwithstanding the foregoing general rule,
        vesting of this award may accelerate in whole or in part, in accordance with
        the
        Employment Agreement, as follows:

       

      Under
        Section 11(a) and (c), if Executive’s employment terminates due to death,
        Disability, termination by the Company without Cause, termination by Executive
        for Good Reason, or due to Company’s notice of non-renewal, any unvested portion
        of the award shall immediately vest and the value thereof shall be determined
        and become payable on such date.

       


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      


      Under
        Section 11(b) and (d), if Executive’s employment terminates because of
        Executive’s (i) non-renewal and the term of the Employment Agreement expires
        other than at the end of a full fiscal year of the Company, or (ii) Retirement,
        Executive shall be entitled to receive the value of that portion of the annual
        vesting increment of the award that would otherwise vest for the full year
        in
        which termination occurs based on the number of months, including portions
        thereof, during which Executive was employed during the fiscal year in which
        his
        employment was terminated. 

       

      No
        Rights as a Stockholder. 
        The value of the award is determined by reference to the value of White River
        common stock to provide for an incentive arrangement tied to the value of
        the
        consolidated enterprise toward which Executive is expected to contribute
        substantially. But the award does not represent shares or the right to receive
        shares of any entity at any time and, to the extent it becomes payable, shall
        consist only of the obligation of the Company to pay cash to the executive.
        Executive shall not be a shareholder by virtue of the award and shall have
        no
        rights to dividends and no voting rights by virtue of the award.

       

      Non-Transferability
        of Award. 
        Except as otherwise provided for in the Employment Agreement, this Award
        may not
        be sold, pledged, assigned, hypothecated, transferred, or disposed of in
        any
        manner other than by will or by the laws of descent and distribution.  If
        Executive transfers all or part of this Stock Award pursuant to the previous
        sentence and if permitted by the Employment Agreement, then the terms of
        this
        Agreement, and the Employment Agreement shall apply to the transferee to
        the
        same extent as to the Executive.

       

      Withholding
        Tax. 
        The Company’s obligation to pay the award shall be subject to the satisfaction
        of all applicable federal, state, and local income and employment tax
        withholding requirements.  

       

      Successors. 
        This Agreement shall inure to the benefit of and be binding upon the parties
        hereto and their legal representatives, heirs, and permitted transferees,
        successors and assigns.

       

      
        	
                DATED:

              	
                December
                  28, 2005

              	 


      

      


      


      
        	 	 	 	
                COASTAL
                  CREDIT L.L.C.

              
	 	 	 	 
	
                /s/
                  William E. McKnight

              	 	
                By:

              	
                White
                  River Capital, Inc.

              
	
                William
                  E. McKnight

              	 	
                Its:

              	
                Sole
                  Member

              
	 	 	 	 
	 	 	
                By:

              	
                /s/
                  John M. Eggemeyer, III

              
	 	 	 	
                John
                  M. Eggemeyer, III

              
	 	 	 	
                Chief
                  Executive Officer