exv10w5






Exhibit 10.5




REGIONAL MANAGEMENT CORP.

2011 STOCK INCENTIVE PLAN




1. Purpose of the Plan




     The purpose of the Plan is to aid the Company and its Affiliates in recruiting and retaining
key employees, directors or other service providers and to motivate such employees, directors or
other service providers to exert their best efforts on behalf of the Company and its Affiliates by
providing incentives through the granting of Awards. The Company expects that it will benefit from
the added interest which such key employees, directors or service providers will have in the
welfare of the Company as a result of their proprietary interest in the Company’s success.



2. Definitions




     The following capitalized terms used in the Plan have the respective meanings set forth in
this Section:



     (a) Act: The Securities Exchange Act of 1934, as amended, or any successor statute
thereto.



     (b) Affiliate: With respect to any Person, any other Person, directly or indirectly,
controlling, controlled by, or under common control with such Person or any other Person designated
by the Committee in which any Person has an interest.



     (c) Award: An Option, Stock Appreciation Right, Other Stock-Based Award or
Performance-Based Award granted pursuant to the Plan.



     (d) Board: The Board of Directors of the Company.



     (e) Change in Control: The occurrence of any of the following events:




     (i) any Person or Group, other than the Permitted Holders, is or becomes the
“beneficial owner” (as defined in rules 13d-3 and 13d-5 under the Act) directly or
indirectly of more than 50% of the total voting power of the voting stock of the Company (or
any entity which controls the Company), including by way of merger, consolidation, tender or
exchange offer, or otherwise;




     (ii) a reorganization, recapitalization, merger or consolidation (a “Corporate
Transaction”) involving the Company, unless securities representing 50% or more of the
combined voting power of the then outstanding voting securities entitled to vote generally
in the election of directors of the Company or the corporation resulting from such Corporate
Transaction (or the parent of such corporation) are held subsequent to such transaction by
the Person or Persons who were the “beneficial owners” of the outstanding voting securities
entitled to vote generally in the election of directors of the Company immediately prior to
such Corporate Transaction, in substantially the same proportions as their ownership
immediately prior to such Corporate Transaction;









 



2



     (iii) the sale or disposition, in one or a series of related transactions, of all or
substantially all, of the assets of the Company to any Person or Group other than the
Permitted Holders; or




     (iv) during any period of 12 months, individuals who at the beginning of such period
constituted the Board (together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by a vote of a
majority of the directors of the Company, then still in office, who were either directors at
the beginning of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board, then in office.



     (f) Code: The Internal Revenue Code of 1986, as amended, or any successor thereto,
and the regulations and guidance promulgated thereunder.



     (g) Committee: The Compensation Committee of the Board (or a subcommittee thereof),
or such other committee of the Board (including, without limitation, the full Board) to which the
Board has delegated power to act under or pursuant to the provisions of the Plan.



     (h) Company: Regional Management Corp., a Delaware corporation.



     (i) Disability: Unless otherwise agreed by the Company (or any of its Affiliates) in a
written employment agreement or employment letter with such Participant, or as specified in an
Award Agreement, “Disability” shall have the meaning of such term as set forth in Section 409A of
the Code. The Disability determination shall be in the sole discretion of the Committee.



     (j) Effective Date: The date the Board approves the Plan, or such later date as is
designated by the Board.



     (k) Employment: The term “Employment” as used herein shall be deemed to refer to (i)
a Participant’s employment if the Participant is an employee of the Company or any of its
Affiliates, (ii) a Participant’s services, if the Participant is another form of service provider
to the Company or any of its Affiliates and (iii) a Participant’s services as a non-employee
director, if the Participant is a non-employee member of the Board or the board of directors of an
Affiliate; provided, however, that unless otherwise determined by the Committee, a change in a
Participant’s status from employee to non-employee shall constitute a termination of employment
hereunder.



     (l) Fair Market Value: On a given date, (i) if there should be a public market for
the Shares on such date, the closing price of the Shares as reported on such date on the Composite
Tape of the principal national securities exchange on which such Shares are listed or admitted to
trading, or if the Shares are not listed or admitted on any national securities exchange but are
quoted on an inter-dealer quotation system, the final ask price of the Shares on such system on
such date, or, if no sale of Shares shall have been reported on the Composite Tape of any national
securities exchange or quoted on an inter-dealer quotation system on such date, then the closing
price or final ask price on the immediately preceding date on which sales of the Shares have been
so reported or quoted shall be used, and (ii) if there should not be a public market for









 



3

the Shares on such date, the Fair Market Value shall be the fair market value of the Shares as
determined by the Committee in good faith.




     (m) “Group” shall mean “group,” as such term is used for purposes of Section 13(d) or
14(d) of the Exchange Act.



     (n) ISO: An Option that is also an incentive stock option granted pursuant to Section
6(d) of the Plan.



     (o) Option: A stock option granted pursuant to Section 6 of the Plan.



     (p) Option Price: The purchase price per Share of an Option, as determined pursuant
to Section 6(a) of the Plan.



     (q) Other Stock-Based Awards: Awards granted pursuant to Section 8 of the Plan.



     (r) Participant: An employee, director or other service provider of the Company or
any of its Affiliates who is selected by the Committee to participate in the Plan.



     (s) Performance-Based Awards: Certain Other Stock-Based Awards granted pursuant to
Section 9 of the Plan.



     (t) Permitted Holder:
Any and all of (i) Palladium Equity Partners III, L.P., a Delaware
limited partnership or its Affiliates (“Palladium”), (ii) Parallel 2005 Equity Fund, L.P., a Delaware limited partnership or its Affiliates (“Parallel”), (iii) an
employee benefit plan (or trust forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power of its voting equity securities
or equity interest is owned, directly or indirectly, by the Company, or (iv) any Group that
includes Palladium or Parallel, or any Person with more than 50% of the combined voting power of
the then outstanding voting securities of which are owned by Palladium, Parallel or any such Group.



     (u) Person: A “person”, as such term is used for purposes of Section 13(d) or 14(d)
of the Act.



     (v) Plan: The Regional Management Corp. 2011 Stock Incentive Plan, as it may be
amended from time to time.



     (w) Service Recipient: The Company or any Affiliate of the Company that satisfies the
definition of “service recipient” within the meaning of Treasury Regulation Section 1.409A-1 (or
any successor regulation), with respect to which the person is a “service provider” within the
meaning of such Treasury Regulation Section 1.409A-1 (or any successor regulation).



     (x) Shares: Shares of common stock of the Company.



     (y) Stock Appreciation Right: A stock appreciation right granted pursuant to Section
7 of the Plan.









 



4


     (z) Subsidiary: A subsidiary corporation, as defined in Section 424(f) of the Code
(or any successor section thereto).



3. Shares Subject to the Plan




     (a) Subject to Section 10, the total number of Shares which may be issued under the Plan is
950,000 and the maximum number of Shares for which ISOs may be granted is 950,000. Additionally,
subject to Section 10, the maximum number of Shares for which Options or Stock Appreciation Rights
may be granted during a fiscal year to any Participant shall be 475,000. The Shares may consist,
in whole or in part, of unissued Shares or treasury Shares. The issuance of Shares or the payment
of cash upon the exercise of an Award or in consideration of the cancellation or termination of an
Award shall reduce the total number of Shares available under the Plan, as applicable. Shares
which are subject to Awards which terminate or lapse without the payment of consideration may be
granted again under the Plan.



     (b) In the event that a company acquired by the Company or any of its Subsidiaries or with
which the Company or any of its Subsidiaries combines has shares available under a pre-existing
plan approved by shareholders and not adopted in contemplation of such acquisition or combination,
the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the
extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used
in such acquisition or combination to determine the consideration payable to the holders of common
stock of the entities party to such acquisition or combination) may be used for Awards under the
Plan and shall not reduce the Shares authorized for issuance; provided that Awards using such
available shares shall not be made after the date awards or grants could have been made under the
terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to
individuals who were not employees or directors of the Company or any of its Subsidiaries prior to
such acquisition or combination, except as otherwise set forth under Section 3(b).



4. Administration




     (a) The Plan shall be administered by the Committee; provided, however, that the Board may, in
its sole discretion, take any action designated to the Committee under this Plan as it may deem
necessary for the effective administration of this Plan. The Committee may delegate its duties and
powers in whole or in part to any subcommittee thereof consisting solely of at least two
individuals who are intended to qualify as “Non-Employee Directors” within the meaning of Rule
16b-3 under the Act (or any successor rule thereto), “independent directors” within the meaning of
the New York Stock Exchanges listed company rules and “outside directors” within the meaning of
Section 162(m) of the Code (or any successor section thereto), to the extent such qualification
requirements apply in connection with the contemplated Award grant. Additionally, the Committee
may delegate the authority to grant Awards under the Plan to any employee or group of employees of
the Company or an Affiliate; provided that such delegation and grants are
consistent with applicable law and guidelines established by the Board from time to time.



     (b) The Committee shall have the full power and authority to establish the terms and
conditions of any Award consistent with the provisions of the Plan and to waive any such terms









 



5

and conditions at any time (including, without limitation, accelerating or waiving any vesting
conditions). Awards may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the Company or its Affiliates
or a company acquired by the Company or with which the Company combines. The number of Shares
underlying such substitute awards shall be counted against the aggregate number of Shares available
for Awards under the Plan.




     (c) In each case subject to Section 16, the Committee is authorized to interpret the Plan, to
establish, amend and rescind any rules and regulations relating to the Plan, and to make any other
determinations that it deems necessary or desirable for the administration of the Plan, and may
delegate such authority, as it deems appropriate. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan in the manner and to the extent the
Committee deems necessary or desirable. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and absolute discretion
and shall be final, conclusive and binding on all parties concerned (including, but not limited to,
Participants and their beneficiaries or successors).



     (d) The Committee shall require payment of any amount it may determine to be necessary to
withhold for federal, state, local or other taxes as a result of the exercise, grant or vesting of
an Award and the Company or any of its Subsidiaries shall have the right and is authorized to
withhold any applicable withholding taxes in respect to the Award, its exercise or any payment or
transfer under or with respect to the Award and to take such other action as may be necessary in
the opinion of the Committee to satisfy all obligations for the payment of such withholding taxes.
To the extent permitted by the Committee, the Participant may elect to pay a portion or all of such
withholding taxes by (i) delivery of Shares, provided that such Shares have been held by the
Participant for more than six (6) months (or such other period as established by the Committee from
time to time in order to avoid adverse accounting treatment applying generally accepted accounting
principles) or (ii) with respect to minimum withholding amounts only, having Shares with a Fair
Market Value equal to the amount of such withholding taxes withheld by the Company from any Shares
that would have otherwise been received by the Participant (i.e., through a “net settlement” of
such minimum tax withholding due).



5. Limitations




     No Award may be granted under the Plan after the tenth anniversary of the Effective Date, but
Awards theretofore granted may extend beyond that date.



6. Terms and Conditions of Options




     Options granted under the Plan shall be non-qualified stock options unless specifically
identified as an ISO (as defined in Section 6(d)), as determined by the Committee and evidenced by
the related Award agreements, and shall be subject to such other terms and conditions not
inconsistent therewith. In addition to the foregoing, except as otherwise determined by the
Committee and evidenced by the related Award agreements, the Options shall also be subject to the
following terms and conditions:









 



6


     (a) Option Price. The Option Price per Share shall be determined by the Committee,
but shall not be less than 100% of the Fair Market Value of a Share on the date an Option is
granted (other than in the case of Options granted in substitution of previously granted awards, as
described in Section 4(b)).



     (b) Exercisability. Options granted under the Plan shall be exercisable at such time
and upon such terms and conditions as may be determined by the Committee, but in no event shall an
Option be exercisable more than ten years after the date it is granted; provided,
however, in the event that any portion of an exercisable Option is scheduled to expire on
such tenth anniversary date or otherwise scheduled to expire pursuant to the applicable Award
agreement and both (x) the date on which such portion of the Option is scheduled to expire falls
during a Company blackout trading period applicable to the Participant (whether such period is
imposed at the election of the Company or is required by applicable law to be imposed) and (y) the
exercise price per Share of such portion of the Option is less than the Fair Market Value, then on
the date that such portion of the Option is scheduled to expire, such portion of the Option (to the
extent not previously exercised by the Participant) shall be automatically exercised on behalf of
the Participant through a net settlement of both the exercise price and the minimum withholding
taxes due (if any) upon such automatic exercise (as described in Section 6(c)(v), below), and the
net number of Shares resulting from such automatic exercise shall be delivered to the Participant
as soon as practicable thereafter.



     (c) Exercise of Options. Except as otherwise provided in the Plan or in an Award
agreement, an Option may be exercised for all, or from time to time any part, of the Shares for
which it is then exercisable. For purposes of Section 6 of the Plan, the exercise date of an
Option shall be the later of the date a notice of exercise is received by the Company and, if
applicable, the date payment is received by the Company pursuant to clauses (i), (ii), (iii), (iv)
or (v) in the following sentence. The purchase price for the Shares as to which an Option is
exercised shall be paid to the Company in full at the time of exercise at the election of the
Participant: (i) in cash or its equivalent (e.g., by check); (ii) to the extent permitted by the
Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for the Shares
being purchased and satisfying such other requirements as may be imposed by the Committee,
provided, that such Shares have been held by the Participant for such period of time as the
Company’s accountants may require to avoid adverse accounting treatment; (iii) partly in cash and,
to the extent permitted by the Committee, partly in such Shares; (iv) if there should be a public
market for the Shares at such time, to the extent permitted by, and subject to such rules as may be
established by the Committee, through the delivery of irrevocable instructions to a broker to sell
Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount
out of the proceeds of such sale equal to the aggregate Option Price for the Shares being
purchased; or (v) allow for payment through a “net settlement” feature (i.e., having Shares with a
Fair Market Value equal to the aggregate Option Price withheld by the Company from any Shares that
would have otherwise been received by the Participant upon exercise of the Option). No Participant
shall have any rights to dividends or other rights of a stockholder with respect to Shares subject
to an Option until the Participant has given written notice of exercise of the Option, paid in full
for such Shares and, if applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.









 



7


     (d) ISOs. The Committee may grant Options under the Plan that are intended to be
“incentive stock options” (within the meaning of Section 422 of the Code) (“ISOs”). Such ISOs
shall comply with the requirements of Section 422 of the Code (or any successor section thereto).
No ISO may be granted to any Participant who at the time of such grant, owns more than 10% of the
total combined voting power of all classes of stock of the Company or of any Subsidiary, unless (i)
the Option Price for such ISO is at least 110% of the Fair Market Value of a Share on the date the
ISO is granted and (ii) the date on which such ISO terminates is a date not later than the day
preceding the fifth anniversary of the date on which the ISO is granted. Any Participant who
disposes of Shares acquired upon the exercise of an ISO either (x) within two years after the date
of grant of such ISO or (y) within one year after the transfer of such Shares to the Participant,
shall notify the Company of such disposition and of the amount realized upon such disposition. All
Options granted under the Plan are intended to be nonqualified stock options, unless the applicable
Award agreement expressly states that the Option is intended to be an ISO. If an Option is
intended to be an ISO, and if for any reason such Option (or portion thereof) shall not qualify as
an ISO, then, to the extent of such nonqualification, such Option (or portion thereof) shall be
regarded as a nonqualified stock option granted under the Plan; provided that such Option
(or portion thereof) otherwise complies with the Plan’s requirements relating to nonqualified stock
options. In no event shall any member of the Committee, the Company or any of its Affiliates (or
their respective employees, officers or directors) have any liability to any Participant (or any
other Person) due to the failure of an Option to qualify for any reason as an ISO.



     (e) Attestation. Wherever in this Plan or any agreement evidencing an Award a
Participant is permitted to pay the Option Price of an Option or taxes relating to the exercise of
an Option by delivering Shares, the Participant may, subject to procedures satisfactory to the
Committee, satisfy such delivery requirement by presenting proof of beneficial ownership of such
Shares, in which case the Company shall treat the Option as exercised without further payment
and/or shall withhold such number of Shares from the Shares acquired by the exercise of the Option,
as appropriate.



     (f) Repricing of Options. Notwithstanding any provision herein to the contrary, the
repricing of an Option, once granted hereunder, is prohibited without prior approval of the
Company’s stockholders. For this purpose, a “repricing” means any of the following (or any other
action that has the same effect as any of the following): (i) changing the terms of an Option to
lower the Option Price; (ii) any other action that is treated as a “repricing” under generally
accepted accounting principles; and (iii) repurchasing for cash or canceling an Option in exchange
for another Award at a time when the Option Price is greater than the Fair Market Value of the
underlying Shares, unless the cancellation and exchange occurs in connection with a change in
capitalization or similar change permitted under Section 10(a) below. Such cancellation and
exchange would be considered a “repricing” regardless of whether it is treated as a “repricing”
under generally accepted accounting principles and regardless of whether it is voluntary on the
part of the Participant.



7. Terms and Conditions of Stock Appreciation Rights




     (a) Grants. The Committee may also grant (i) a Stock Appreciation Right independent
of an Option or (ii) a Stock Appreciation Right in connection with an Option, or a









 



8

portion thereof. A Stock Appreciation Right granted pursuant to clause (ii) of the preceding
sentence (A) may be granted at the time the related Option is granted or at any time prior to the
exercise or cancellation of the related Option, (B) shall cover the same number of Shares covered
by an Option (or such lesser number of Shares as the Committee may determine) and (C) shall be
subject to the same terms and conditions as such Option except for such additional limitations as
are contemplated by this Section 7 (or such additional limitations as may be included in an Award
agreement).




     (b) Terms. The exercise price per Share of a Stock Appreciation Right shall be an
amount determined by the Committee but in no event shall such amount be less than 100% of the Fair
Market Value of a Share on the date the Stock Appreciation Right is granted (other than in the case
of Stock Appreciation Rights granted in substitution of previously granted awards, as described in
Section 4(b)); provided, however, that in the case of a Stock Appreciation Right
granted in conjunction with an Option, or a portion thereof, the exercise price may not be less
than the Option Price of the related Option; and provided, further, that the exercise price
of a Stock Appreciation Right that is granted in exchange for an Option may be less than the Fair
Market Value on the grant date if such exercise price is equal to the Option Price of the exchanged
Option. Each Stock Appreciation Right granted independent of an Option shall entitle a Participant
upon exercise to an amount equal to (i) the excess of (A) the Fair Market Value on the exercise
date of one Share over (B) the exercise price per Share, times (ii) the number of Shares covered by
the Stock Appreciation Right. Each Stock Appreciation Right granted in conjunction with an Option,
or a portion thereof, shall entitle a Participant to surrender to the Company the unexercised
Option, or any portion thereof, and to receive from the Company in exchange therefor an amount
equal to (i) the excess of (A) the Fair Market Value on the exercise date of one Share over (B) the
Option Price per Share, times (ii) the number of Shares covered by the Option, or portion thereof,
which is surrendered. The date a notice of exercise is received by the Company shall be the
exercise date. Payment to the Participant shall be made in Shares or in cash, or partly in Shares
and partly in cash (any such Shares valued at such Fair Market Value), all as shall be determined
by the Committee. Stock Appreciation Rights may be exercised from time to time upon actual receipt
by the Company of written notice of exercise stating the number of Shares with respect to which the
Stock Appreciation Right is being exercised. No fractional Shares will be issued in payment for
Stock Appreciation Rights, but instead cash will be paid for a fraction or, if the Committee should
so determine, the number of Shares will be rounded downward to the next whole Share.



     (c) Limitations. The Committee may impose, in its discretion, such conditions upon
the exercisability or transferability of Stock Appreciation Rights as it may deem fit, but in no
event shall a Stock Appreciation Right be exercisable more than ten years after the date it is
granted.



     (d) Repricing of Stock Appreciation Rights. Notwithstanding any provision herein to
the contrary, the repricing of a Stock Appreciation Right, once granted hereunder, is prohibited
without prior approval of the Company’s stockholders. For this purpose, a “repricing” means any of
the following (or any other action that has the same effect as any of the following): (i) changing
the terms of a Stock Appreciation Right to lower its exercise price; (ii) any other action that is
treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing for
cash or canceling a Stock Appreciation Right in exchange for another Award at









 



9

a time when its exercise price is greater than the Fair Market Value of the underlying Shares,
unless the cancellation and exchange occurs in connection with a change in capitalization or
similar change permitted under Section 10(a) below. Such cancellation and exchange would be
considered a “repricing” regardless of whether it is treated as a “repricing” under generally
accepted accounting principles and regardless of whether it is voluntary on the part of the
Participant.




8. Other Stock-Based Awards




     The Committee, in its sole discretion, may grant or sell Awards of Shares, Awards of
restricted Shares, Awards of restricted stock units, and Awards that are valued in whole or in part
by reference to, or are otherwise based on the Fair Market Value of Shares (such Awards, “Other
Stock-Based Awards”). Such Other Stock-Based Awards shall be in such form, and dependent on
such conditions, as the Committee shall determine, including, without limitation, the right to
receive, or vest with respect to, one or more Shares (or the equivalent cash value of such Shares)
upon the completion of a specified period of service, the occurrence of an event and/or the
attainment of performance objectives. Other Stock-Based Awards may be granted alone or in addition
to any other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee
shall determine to whom and when Other Stock-Based Awards will be made, the number of Shares to be
awarded under (or otherwise related to) such Other Stock-Based Awards, whether such Other
Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares, and all
other terms and conditions of such Awards (including, without limitation, the vesting provisions
thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and
non-assessable).




	9.	 	Performance-Based Awards.





     (a) The Committee, in its sole discretion, may grant Awards which are denominated in Shares or
cash (such Awards, “Performance-Based Awards”), which Awards may, but for the avoidance of
doubt are not required to, be granted in a manner which is intended to be deductible by the Company
under Section 162(m) of the Code (or any successor section thereto). Such Performance-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to, one or more Shares or
the cash value of the Award upon the completion of a specified period of service, the occurrence of
an event and/or the attainment of performance objectives. Performance-Based Awards may be granted
alone or in addition to any other Awards granted under the Plan. Subject to the provisions of the
Plan, the Committee shall determine to whom and when Performance-Based Awards will be made, the
number of Shares or aggregate amount of cash to be awarded under (or otherwise related to) such
Performance-Based Awards, whether such Performance-Based Awards shall be settled in cash, Shares or
a combination of cash and Shares, and all other terms and conditions of such Awards (including,
without limitation, the vesting provisions thereof and provisions ensuring that all Shares so
awarded and issued, to the extent applicable, shall be fully paid and non-assessable).



     (b) A Participant’s Performance-Based Award shall be determined based on the attainment of
written performance goals approved by the Committee for a performance period established by the
Committee. During any period when Section 162(m) of the Code is applicable









 



10

to the Company and the Plan (after giving effect to Treas. Reg. Section 1.162-27(f)), such
determination shall be made (i) while the outcome for that performance period is substantially
uncertain and (ii) no more than 90 days after the commencement of the performance period to which
the performance goal relates or, if less, the number of days which is equal to 25% of the relevant
performance period. The performance goals, which must be objective, shall be based upon one or
more of the following criteria: (i) consolidated income before or after taxes (including income
before interest, taxes, depreciation and amortization); (ii) EBITDA; (iii) adjusted EBITDA; (iv)
operating income; (v) net income; (vi) adjusted cash net income; (vii) adjusted cash net income per Share; (viii)
net income per Share; (ix)
book value per Share; (x)
return on members’ or stockholders’ equity; (xi) expense management (including, without limitation,
 total general and administrative expense percentages); (xii) return on investment; (xiii)
improvements in capital structure; (xiv) profitability of an identifiable business unit or product;
(xv) maintenance or improvement of profit margins; (xvi) stock price; (xvii) market share; (xviii)
revenue or sales (including, without limitation, net loans charged off and average finance receivables); (xix) costs;
(xx) cash flow; (xxi) working capital; (xxii) multiple of invested
capital;  (xxiii) total debt (including total debt as a multiple of EBITDA), and (xxiv) total return. The foregoing criteria may relate to the Company, one or more of
its Subsidiaries or one or more of its divisions or units, or any combination of the
foregoing, and may be applied on an absolute basis and/or be relative to one or more peer group
companies or indices, or any combination thereof, all as the Committee shall determine. In
addition, to the degree consistent with Section 162(m) of the Code (or any successor section
thereto), the performance goals may be calculated without regard to extraordinary items. The
maximum amount of a Performance-Based Award granted in respect of any given performance period that
may be earned during each fiscal year of the Company covered by the performance period by any
Participant shall be: (x) with respect to Performance-Based Awards that are denominated in Shares,
475,000 Shares and (y) with respect to Performance-Based Awards that are denominated in cash,
$2,500,000. For the avoidance of doubt, to the extent that a Performance-Based Award may be earned
over a period that is longer than one fiscal year of the Company, the foregoing limitations shall
apply to each full or partial fiscal year during or in which such Award may be earned.




     (c) The Committee shall determine whether, with respect to a performance period, the
applicable performance goals have been met with respect to a given Participant and, if they have,
during any period when Section 162(m) of the Code is applicable to the Company and the Plan (after
giving effect to Treas. Reg. Section 1.162-27(f)) and such Performance-Based Award is intended to
be deductible by the Company under Section 162(m) of the Code, shall so certify and ascertain the
amount of the applicable Performance-Based Award. No Performance-Based Awards will be paid for
such performance period until such certification, to the extent applicable, is made by the
Committee. The amount of the Performance-Based Award actually paid to a given Participant may be
less than the amount determined by the applicable performance goal formula, at the discretion of
the Committee. The amount of the Performance-Based Award determined by the Committee for a
performance period shall be paid to the Participant at such time as determined by the Committee in
its sole discretion after the end of such performance period; provided, however, that a Participant
may, if and to the extent permitted by the Committee and consistent with the provisions of Sections
162(m) and 409A of the Code, to the extent applicable, elect to defer payment of a
Performance-Based Award.



10. Adjustments Upon Certain Events




     Notwithstanding any other provisions in the Plan to the contrary, the following provisions
shall apply to all Awards granted under the Plan:









 



11


     (a) Generally. In the event of any Share dividend or split, reorganization,
recapitalization, merger, consolidation, spin-off, combination or transaction or exchange of Shares
or other corporate exchange, any equity restructuring (as defined under Financial Accounting
Standards Board (FASB) Accounting Standards Codification 718), or any distribution to stockholders
other than regular cash dividends or any transaction similar to the foregoing, the Committee in its
sole discretion and without liability to any Person shall make such substitution or adjustment as
it deems reasonably necessary to address, on an equitable basis, the effect of such event (subject
to Section 19), as to (i) the number or kind of Shares or other securities issued or reserved for
issuance pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum number of Shares
for which Options or Stock Appreciation Rights may be granted during a fiscal year to any
Participant, (iii) the maximum amount of a Performance Based Award that may be granted during a
fiscal year to any Participant, (iv) the Option Price or exercise price of any Award and/or (v) any
other affected terms of such Awards.



     (b) Change in Control. In the event of a Change in Control after the Effective Date,
(i) if determined by the Committee in the applicable Award agreement or otherwise, any outstanding
Awards then held by Participants which are unexercisable or otherwise unvested or subject to lapse
restrictions shall automatically be deemed exercisable or otherwise vested or no longer subject to
lapse restrictions, as the case may be, as of immediately prior to such Change of Control and (ii)
the Committee may (subject to Section 19), but shall not be obligated to, (A) accelerate, vest or
cause the restrictions to lapse with respect to all or any portion of an Award, (B) cancel such
Awards for cash payment of fair value (as determined in the sole discretion of the Committee)
which, in the case of Options and Stock Appreciation Rights, may equal the excess, if any, of value
of the consideration to be paid in the Change in Control transaction to holders of the same number
of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration is paid in
any such transaction, the Fair Market Value of the Shares subject to such Options or Stock
Appreciation Rights) over the aggregate exercise price of such Options or Stock Appreciation Rights
(and otherwise, the Committee may cancel Awards for no consideration if the aggregate Fair Market
Value of the shares subject to such Awards is less than or equal to the aggregate Option Price of
such Options or exercise price of such Stock Appreciation Rights), (C) provide for the issuance of
substitute Awards that will substantially preserve the otherwise applicable terms of any affected
Awards previously granted hereunder as determined by the Committee in its sole discretion or (D)
provide that for a period of at least 30 days prior to the Change in Control, such Options or Stock
Appreciation Rights shall be exercisable as to all shares subject thereto and that upon the
occurrence of the Change in Control, such Options or Stock Appreciation Rights shall terminate and
be of no further force and effect.



11. Forfeiture/Clawback




     The Committee may, in its sole discretion, specify in an Award or a policy that will be
incorporated into an Award agreement by reference, that the Participant’s rights, payments, and
benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or
recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award. Such events may include, but shall not be limited
to, termination of Employment for cause, termination of the Participant’s provision of services to
the Company or any of its Subsidiaries, breach of noncompetition, confidentiality, or other
restrictive covenants that may apply to the Participant, or restatement of









 



12

the Company’s financial statements to reflect adverse results from those previously released
financial statements, as a consequence of errors, omissions, fraud, or misconduct.




12. No Right to Employment or Awards




     The granting of an Award under the Plan shall impose no obligation on the Company or any
Affiliate to continue the Employment of a Participant and shall not lessen or affect the Company’s
or Affiliate’s right to terminate the Employment of such Participant. No Participant or other
Person shall have any claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions of
Awards and the Committee’s determinations and interpretations with respect thereto need not be the
same with respect to each Participant (whether or not such Participants are similarly situated).



13. Securities Laws




     The Board may refuse to instruct the Company to issue or transfer any Shares or other
consideration under an Award if, acting in its sole discretion, it determines that the issuance or
transfer of such Shares or such other consideration might violate any applicable law or regulation
and any payment tendered to the Company by a Participant, other holder or beneficiary in connection
with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary. Without limiting the generality of the foregoing, no Award granted hereunder shall be
construed as an offer to sell securities of the Company, and no such offer shall be outstanding,
unless and until the Committee in its sole discretion has determined that any such offer, if made,
would be in compliance with the applicable requirements of applicable securities laws.



14. Successors and Assigns




     The Plan shall be binding on all successors and assigns of the Company and a Participant,
including without limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or representative of the
Participant’s creditors.



15. Nontransferability of Awards




     Unless otherwise determined by the Committee, an Award shall not be transferable or assignable
by the Participant otherwise than by will or by the laws of descent and distribution. An Award
exercisable after the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.



16. Amendments or Termination




     Subject to the limitations imposed under Sections 6(f) and 7(d) of this Plan, the Board may
amend, alter or discontinue the Plan or any outstanding Award, but no amendment, alteration or
discontinuation shall be made, (a) without the approval of the stockholders of the Company to the
extent such approval is (i) required by or (ii) desirable to satisfy the requirements of, in each
case, any applicable law, regulation or other rule, including, the listing









 



13

standards of the securities exchange, which is, at the applicable time, the principal market
for the Shares, or (b) without the consent of a Participant, if such action would materially and
adversely affect any of the rights of the Participant under any Award theretofore granted to such
Participant under the Plan; provided, however, that the Committee may amend the
Plan in such manner as it deems necessary to permit the granting of Awards meeting the requirements
of the Code or other applicable laws (including, without limitation, to avoid adverse tax or
accounting consequences to the Company or to Participants).




     Without limiting the generality of the foregoing, to the extent applicable, notwithstanding
anything herein to the contrary, this Plan and Awards issued hereunder shall be interpreted in
accordance with Section 409A of the Code and Department of Treasury regulations and other
interpretative guidance issued thereunder, including without limitation any such regulations or
other guidance that may be issued after the Effective Date. Notwithstanding any provision of the
Plan to the contrary, in the event that the Committee determines that any amounts payable hereunder
will be taxable to a Participant under Section 409A of the Code and related Department of Treasury
guidance prior to payment to such Participant of such amount, the Company may (a) adopt such
amendments to the Plan and Awards and appropriate policies and procedures, including amendments and
policies with retroactive effect, that the Committee determines necessary or appropriate to
preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder
and/or (b) take such other actions as the Committee determines necessary or appropriate to avoid
the imposition of an additional tax under Section 409A of the Code.



17. Choice of Law




     The Plan shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws, and except as otherwise provided in the pertinent
Award Agreement, any and all disputes between a Participant and the Company or any Affiliate
relating to an Award shall be brought only in a court of competent jurisdiction
sitting in Wilmington, Delaware or the Delaware District Court.



18. Effectiveness of the Plan




     The Plan shall be effective as of the Effective Date, subject to the approval of the
stockholders of the Company.



19. Section 409A of the Code




     Notwithstanding other provisions of the Plan or any Award agreements thereunder, no Award
shall be granted, deferred, accelerated, extended, paid out or modified under this Plan in a manner
that would result in the imposition of an additional tax under Section 409A of the Code upon a
Participant. In the event that it is reasonably determined by the Committee that, as a result of
Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the
time contemplated by the terms of the Plan or the relevant Award agreement, as the case may be,
without causing the Participant holding such Award to be subject to taxation under Section 409A of
the Code, the Company will make such payment on the first day that would not result in the
Participant incurring any tax liability under Section 409A of the Code. References









 



14

under the Plan or an Award to the Participant’s termination of Employment shall be deemed to
refer to the date upon which the Participant has experienced a “separation from service” within the
meaning of Section 409A of the Code. Notwithstanding anything herein to the contrary, (a) if at
the time of the Participant’s separation from service with any Service Recipient the Participant is
a “specified employee” as defined in Section 409A of the Code, and the deferral of the commencement
of any payments or benefits otherwise payable hereunder as a result of such separation from service
is necessary in order to prevent the imposition of any accelerated or additional tax under Section
409A of the Code, then the Company will defer the commencement of the payment of any such payments
or benefits hereunder (without any reduction in such payments or benefits ultimately paid or
provided to the Participant) to the minimum extent necessary to satisfy Section 409A of the Code
until the date that is six months and one day following the Participant’s separation from service
with all Service Recipients (or the earliest date as is permitted under Section 409A of the Code),
if such payment or benefit is payable upon a termination of Employment and (b) if any other
payments of money or other benefits due to the Participant hereunder would cause the application of
an accelerated or additional tax under Section 409A of the Code, such payments or other benefits
shall be deferred, if deferral will make such payment or other benefits compliant under Section
409A of the Code, or otherwise such payment or other benefits shall be restructured, to the minimum
extent necessary, in a manner, reasonably determined by the Board, that does not cause such an
accelerated or additional tax or result in an additional cost to the Company (without any reduction
in such payments or benefits ultimately paid or provided to the Participant).




     The Company shall use commercially reasonable efforts to implement the provisions of this
Section 19 in good faith; provided that neither the Company, the Board, the Committee nor
any of the Company’s employees, directors or representatives shall have any liability to
Participants with respect to this Section 19.



20. Awards Subject to the Plan




     In
the event of a conflict between any term or provision contained in
the Plan and an express term
contained in any Award agreement, the applicable terms and provisions
of the Award agreement will govern and
prevail.



21. Severability




     If any provision of the Plan or any Award is, or becomes or is deemed to be invalid, illegal,
unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be construed or deemed
amended to conform to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the
Plan and any such Award shall remain in full force and effect.









 








NONQUALIFIED
STOCK OPTION AGREEMENT

[Form for Directors]



THIS AGREEMENT (the “Agreement”), is made effective as of the date set forth on the
signature page hereto, (hereinafter called the “Date of Grant”), between Regional
Management Corp., a Delaware corporation (hereinafter called the “Company”), and the
individual set forth on the signature page hereto (hereinafter called the “Participant”),
pursuant to the Regional Management Corp. 2011 Stock Incentive Plan (the “Plan”), which
Plan is incorporated herein by reference and made a part of this Agreement.



1. Grant of the Option.




     The Company hereby grants to the Participant the right and option (the “Option”) to
purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of the
number of Shares set forth on the signature page hereto, subject to adjustment as set forth in the
Plan. The purchase price of the Shares subject to the Option shall be the Option Price set forth on
the signature page hereto (the “Option Price”). The Option is intended to be a
non-qualified stock option, and is not intended to be treated as an option that complies with
Section 422 of the Internal Revenue Code of 1986, as amended.


2. Definitions. Whenever the following terms are used in this Agreement, they shall have the
meanings set forth below. Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan.




     (a) Cause. “Cause” shall mean “Cause” as defined in any employment, severance, or
similar agreement then in effect between the Participant and any of the Company or its Affiliates,
or, if no such agreement containing a definition of “Cause” is then in effect or if such term is
not defined therein, “Cause” shall mean (i) Participant’s engagement in misconduct which is
materially injurious to the Company or its Affiliates, (ii) Participant’s continued failure to
substantially perform his duties to the Company, (iii) Participant’s repeated dishonesty in the
performance of his duties to the Company, (iv) Participant’s commission of an act or acts
constituting any (x) fraud against, or misappropriation or embezzlement from the Company or any of
its Affiliates, (y) crime involving moral turpitude, or (z) offense that could result in a jail
sentence of at least 30 days or (v) Participant’s material breach of any confidentiality or
non-competition covenant entered into between the Participant and the Company. The determination
of the existence of Cause shall be made by the Committee in good faith, which determination shall
be conclusive for purposes of this Agreement.



     (b) Good Reason. “Good Reason” shall mean “Good Reason” or such similar concept as
defined in any employment, severance, or similar agreement then in effect between the Participant
and any of the Company or its Affiliates, or, if no such agreement containing a definition of “Good
Reason” is then in effect or if such term is not defined therein, “Good Reason” shall mean without
the Participant’s consent, a change caused by the Company in the Participant’s duties and
responsibilities which is materially inconsistent with the Participant’s position at the applicable
entity that is a member of the Company Group, or a material reduction in the Participant’s annual
base salary (excluding any reduction in the Participant’s salary that is part of a plan to reduce
salaries of comparably situated employees of any entity that is a member









 



2

of the Company Group generally); provided that, notwithstanding anything to the contrary in
the foregoing, the Participant shall only have “Good Reason” to terminate employment following the
applicable entity’s failure to remedy the act which is alleged to constitute “Good Reason” within
thirty (30) days following such entity’s receipt of written notice from the Participant specifying
such act, so long as such notice is provided within sixty (60) days after such event has first
occurred.



3. Vesting.




     (a) Subject to the Participant’s continued Employment through the applicable vesting date, the
Option shall vest and become exercisable at the time(s) set forth on the signature page hereto.



     (b) Notwithstanding
the foregoing, in the event of  a Change in Control, the Option shall, to the extent not then
vested or previously forfeited or cancelled, become fully vested and exercisable effective as of immediately prior to the occurrence of such Change in
Control.



     (c) Subject to Section 3(b) above, if the Participant’s Employment with the Company is
terminated for any reason, the vested portion of the Option shall remain exercisable for the period
set forth in Section 4(a), and the unvested portion of the Option shall immediately terminate.


4. Exercise of Option.




     (a) Period of Exercise. Subject to the provisions of the Plan and this Agreement, the
Participant may exercise all or any part of the Option at any time prior to the earliest to occur
of:




     (i) immediately upon the Participant’s termination of Employment by the Company or any
of its Affiliates for Cause;




     (ii) 90 days following the date of the Participant’s termination of Employment for any
reason other than due to the Participant’s death or Disability;




     (iii) 180 days following the date of the Participant’s termination of Employment due to
death or Disability; and




     (iv) the tenth anniversary of the Date of Grant.



     (b) Method of Exercise.










 



3







     (i) Subject to Section 4(a), the Option may be exercised by delivering to the Company
at its principal office written notice of intent to so exercise; provided that, the Option
may be exercised with respect to whole Shares only. Such notice shall specify the number of
Shares for which the Option is being exercised and shall be accompanied by payment in full
of the Option Price. The payment of the Option Price may be made at the election of the
Participant (A) in cash or its equivalent (e.g., by check), (B) to the extent permitted by
the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for
the Shares being purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that such Shares have been held by the Participant for no less than six
months (or such other period as established from time to time by the Committee in order to
avoid adverse accounting treatment applying generally accepted accounting principles), (C)
partly in cash and, to the extent permitted by the Committee, partly in such Shares, (D) if
there is a public market for the Shares at such time, through the delivery of irrevocable
instructions to a broker to sell Shares obtained upon the exercise of the Option and to
deliver promptly to the Company an amount out of the proceeds of such Sale equal to the
aggregate option price for the Shares being purchased, or (E) to the extent permitted by the
Committee, through a “net settlement” as described in Section 7(c) of the Plan.




     Participant shall not have any rights to dividends or other rights of a stockholder
with respect to Shares subject to an Option until the Participant has given written notice
of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied
any other conditions imposed by the Committee pursuant to the Plan.




     (ii) Notwithstanding any other provision of the Plan or this Agreement to the contrary,
the Option may not be exercised prior to the completion of any registration or qualification
of the Option or the Shares under applicable state and federal securities or other laws, or
under any ruling or regulation of any governmental body or national securities exchange that
the Committee shall in its sole discretion determine to be necessary or advisable.




     (iii) Upon the Company’s determination that the Option has been validly exercised as to
any of the Shares, the Company shall issue certificates in the Participant’s name for such
Shares. However, the Company shall not be liable to the Participant for damages relating to
any delays in issuing the certificates to him, any loss of the certificates, or any mistakes
or errors in the issuance of the certificates or in the certificates themselves.
Notwithstanding the foregoing, the Company may elect to recognize the Participant’s
ownership through uncertificated book entry.




     (iv) In the
 event of the Participant’s death, to the extent exercisable at the time of Participant’s death, the Option
 shall remain exercisable by
the Participant’s executor or administrator, or the person or persons to whom the
Participant’s rights under this Agreement shall pass by will or by the laws of descent and
distribution as the case may be, to the extent set forth in Section 4(a) above. Any heir or
legatee of the Participant shall take rights herein granted subject to the terms and
conditions hereof.


5. No Right to Continued Employment.













 



4




     The granting of the Option evidenced hereby and this Agreement shall impose no obligation on
the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or
affect the Company’s or its Affiliate’s right to terminate the Employment of such Participant.


6. Legend on Certificates.




     Unless the Company issues the Shares in uncertificated form, the certificates representing the
Shares purchased by exercise of the Option shall be subject to the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares
are listed, and any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such restrictions.


7. Transferability.




     The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Participant otherwise than by will or by the laws of descent and distribution,
and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance
shall be void and unenforceable against the Company or any Affiliate; provided that the designation
of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer
or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant
shall be effective to bind the Company unless the Committee shall have been furnished with written
notice thereof and a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of the terms and
conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the
Participant.


8. Withholding.




     The Participant may be required to pay to the Company or any Affiliate and the Company shall
have the right and is hereby authorized to withhold (including from payroll or any other amounts
payable to the Participant), any applicable withholding taxes in respect of the Option, its
exercise or any payment or transfer under or with respect to the Option and to take such other
action as may be necessary in the opinion of the Committee to satisfy all obligations for the
payment of such withholding taxes; provided, however, that no amounts shall be withheld in excess
of the Company’s statutory minimum withholding liability. Without limiting the generality of the
foregoing, to the extent permitted by the Committee, the Participant may satisfy, in whole or in
part, the foregoing withholding liability by delivery of Shares held by the Participant (which are
fully vested and not subject to any pledge or other security interest) or by having the Company
withhold from the number of Shares otherwise deliverable to the Participant hereunder Shares with a
Fair Market Value not in excess of the statutory minimum withholding liability. The Participant
further agrees to make adequate provision for any sums required to satisfy all applicable federal,
state, local and foreign tax withholding obligations of the Company which may arise in connection
with the Option.


9. Securities Laws.













 



5




     Upon the acquisition of any Shares pursuant to the exercise of the Option, the Participant
will make or enter into such written representations, warranties and agreements as the Committee
may reasonably request in order to comply with applicable securities laws or with this Agreement.


10. Notices.




     Any notice necessary under this Agreement shall be addressed to the Company in care of its
Secretary at the principal executive office of the Company and to the Participant at the address
appearing in the personnel records of the Company for the Participant or to either party at such
other address as either party hereto may hereafter designate in writing to the other. Any such
notice shall be deemed effective upon receipt thereof by the addressee.


11. Choice of Law.




     This Agreement shall be governed by and construed in accordance with the laws of the state of
Delaware without regard to conflicts of laws.


12. Option Subject to Plan.




     By entering into this Agreement the Participant agrees and acknowledges that the Participant
has received and read a copy of the Plan. The Option is subject to the Plan. The terms and
provisions of the Plan, as they may be amended from time to time, are hereby incorporated herein by
reference. In the event of a conflict between any express term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the
Agreement will govern and prevail.


13. Signature in Counterparts.




     This Agreement may be signed in counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same instrument.



[Signatures on next page.]












 



6



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




	 	 	 	 	 

	Date of Grant:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Shares Subject to Option:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Option Price per Share:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Vesting Schedule:
	 	 	 	 
	 

	 	 

	 	 






	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	Participant:
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Regional Management Corp.	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Its:
	 	 

	 	 
	 

	 	 	 	 

	 	 



















 








NONQUALIFIED STOCK OPTION AGREEMENT


[Form for Executives]



THIS AGREEMENT (the “Agreement”), is made effective as of the date set forth on the
signature page hereto, (hereinafter called the “Date of Grant”), between Regional
Management Corp., a Delaware corporation (hereinafter called the “Company”), and the
individual set forth on the signature page hereto (hereinafter called the “Participant”),
pursuant to the Regional Management Corp. 2011 Stock Incentive Plan (the “Plan”), which
Plan is incorporated herein by reference and made a part of this Agreement.



1. Grant of the Option.




     The Company hereby grants to the Participant the right and option (the “Option”) to
purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of the
number of Shares set forth on the signature page hereto, subject to adjustment as set forth in the
Plan. The purchase price of the Shares subject to the Option shall be the Option Price set forth on
the signature page hereto (the “Option Price”). The Option is intended to be a
non-qualified stock option, and is not intended to be treated as an option that complies with
Section 422 of the Internal Revenue Code of 1986, as amended.


2. Definitions. Whenever the following terms are used in this Agreement, they shall have the
meanings set forth below. Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan.




     (a) Cause. “Cause” shall mean “Cause” as defined in any employment, severance, or
similar agreement then in effect between the Participant and any of the Company or its Affiliates,
or, if no such agreement containing a definition of “Cause” is then in effect or if such term is
not defined therein, “Cause” shall mean (i) Participant’s engagement in misconduct which is
materially injurious to the Company or its Affiliates, (ii) Participant’s continued failure to
substantially perform his duties to the Company, (iii) Participant’s repeated dishonesty in the
performance of his duties to the Company, (iv) Participant’s commission of an act or acts
constituting any (x) fraud against, or misappropriation or embezzlement from the Company or any of
its Affiliates, (y) crime involving moral turpitude, or (z) offense that could result in a jail
sentence of at least 30 days or (v) Participant’s material breach of any confidentiality or
non-competition covenant entered into between the Participant and the Company. The determination
of the existence of Cause shall be made by the Committee in good faith, which determination shall
be conclusive for purposes of this Agreement.



     (b) Good Reason. “Good Reason” shall mean “Good Reason” or such similar concept as
defined in any employment, severance, or similar agreement then in effect between the Participant
and any of the Company or its Affiliates, or, if no such agreement containing a definition of “Good
Reason” is then in effect or if such term is not defined therein, “Good Reason” shall mean without
the Participant’s consent, a change caused by the Company in the Participant’s duties and
responsibilities which is materially inconsistent with the Participant’s position at the applicable
entity that is a member of the Company Group, or a material reduction in the Participant’s annual
base salary (excluding any reduction in the Participant’s salary that is part of a plan to reduce
salaries of comparably situated employees of any entity that is a member









 



2

of the Company Group generally); provided that, notwithstanding anything to the contrary in
the foregoing, the Participant shall only have “Good Reason” to terminate employment following the
applicable entity’s failure to remedy the act which is alleged to constitute “Good Reason” within
thirty (30) days following such entity’s receipt of written notice from the Participant specifying
such act, so long as such notice is provided within sixty (60) days after such event has first
occurred.



3. Vesting.




     (a) Subject to the Participant’s continued Employment through the applicable vesting date, the
Option shall vest and become exercisable at the time(s) set forth on the signature page hereto.



     (b) Notwithstanding the
foregoing, in the event of a termination of the Participant’s
Employment by the Company and its Affiliates without Cause or by the Participant with Good Reason,
during the six month period following a Change in Control, the Option shall, to the extent not then
vested or previously forfeited or cancelled, become fully vested and exercisable effective as of
such termination date.



     (c) Subject to Section 3(b) above, if the Participant’s Employment with the Company is
terminated for any reason, the vested portion of the Option shall remain exercisable for the period
set forth in Section 4(a), and the unvested portion of the Option shall immediately terminate.


4. Exercise of Option.




     (a) Period of Exercise. Subject to the provisions of the Plan and this Agreement, the
Participant may exercise all or any part of the Option at any time prior to the earliest to occur
of:




     (i) immediately upon the Participant’s termination of Employment by the Company or any
of its Affiliates for Cause;




     (ii) 90 days following the date of the Participant’s termination of Employment for any
reason other than due to the Participant’s death or Disability;




     (iii) 180 days following the date of the Participant’s termination of Employment due to
death or Disability; and




     (iv) the tenth anniversary of the Date of Grant.



     (b) Method of Exercise.











 



3







     (i) Subject to Section 4(a), the Option may be exercised by delivering to the Company
at its principal office written notice of intent to so exercise; provided that, the Option
may be exercised with respect to whole Shares only. Such notice shall specify the number of
Shares for which the Option is being exercised and shall be accompanied by payment in full
of the Option Price. The payment of the Option Price may be made at the election of the
Participant (A) in cash or its equivalent (e.g., by check), (B) to the extent permitted by
the Committee, in Shares having a Fair Market Value equal to the aggregate Option Price for
the Shares being purchased and satisfying such other requirements as may be imposed by the
Committee; provided, that such Shares have been held by the Participant for no less than six
months (or such other period as established from time to time by the Committee in order to
avoid adverse accounting treatment applying generally accepted accounting principles), (C)
partly in cash and, to the extent permitted by the Committee, partly in such Shares, (D) if
there is a public market for the Shares at such time, through the delivery of irrevocable
instructions to a broker to sell Shares obtained upon the exercise of the Option and to
deliver promptly to the Company an amount out of the proceeds of such Sale equal to the
aggregate option price for the Shares being purchased, or (E) to the extent permitted by the
Committee, through a “net settlement” as described in Section 7(c) of the Plan.




     Participant shall not have any rights to dividends or other rights of a stockholder
with respect to Shares subject to an Option until the Participant has given written notice
of exercise of the Option, paid in full for such Shares and, if applicable, has satisfied
any other conditions imposed by the Committee pursuant to the Plan.




     (ii) Notwithstanding any other provision of the Plan or this Agreement to the contrary,
the Option may not be exercised prior to the completion of any registration or qualification
of the Option or the Shares under applicable state and federal securities or other laws, or
under any ruling or regulation of any governmental body or national securities exchange that
the Committee shall in its sole discretion determine to be necessary or advisable.




     (iii) Upon the Company’s determination that the Option has been validly exercised as to
any of the Shares, the Company shall issue certificates in the Participant’s name for such
Shares. However, the Company shall not be liable to the Participant for damages relating to
any delays in issuing the certificates to him, any loss of the certificates, or any mistakes
or errors in the issuance of the certificates or in the certificates themselves.
Notwithstanding the foregoing, the Company may elect to recognize the Participant’s
ownership through uncertificated book entry.




     (iv) In the
 event of the Participant’s death, to the extent exercisable at the time of Participant’s death, the Option shall remain exercisable by
the Participant’s executor or administrator, or the person or persons to whom the
Participant’s rights under this Agreement shall pass by will or by the laws of descent and
distribution as the case may be, to the extent set forth in Section 4(a) above. Any heir or
legatee of the Participant shall take rights herein granted subject to the terms and
conditions hereof.


5. No Right to Continued Employment.













 



4




     The granting of the Option evidenced hereby and this Agreement shall impose no obligation on
the Company or any Affiliate to continue the Employment of the Participant and shall not lessen or
affect the Company’s or its Affiliate’s right to terminate the Employment of such Participant.


6. Legend on Certificates.




     Unless the Company issues the Shares in uncertificated form, the certificates representing the
Shares purchased by exercise of the Option shall be subject to the rules, regulations, and other
requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares
are listed, and any applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such restrictions.


7. Transferability.




     The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by the Participant otherwise than by will or by the laws of descent and distribution,
and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance
shall be void and unenforceable against the Company or any Affiliate; provided that the designation
of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer
or encumbrance. No such permitted transfer of the Option to heirs or legatees of the Participant
shall be effective to bind the Company unless the Committee shall have been furnished with written
notice thereof and a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of the terms and
conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the
Participant.


8. Withholding.




     The Participant may be required to pay to the Company or any Affiliate and the Company shall
have the right and is hereby authorized to withhold (including from payroll or any other amounts
payable to the Participant), any applicable withholding taxes in respect of the Option, its
exercise or any payment or transfer under or with respect to the Option and to take such other
action as may be necessary in the opinion of the Committee to satisfy all obligations for the
payment of such withholding taxes; provided, however, that no amounts shall be withheld in excess
of the Company’s statutory minimum withholding liability. Without limiting the generality of the
foregoing, to the extent permitted by the Committee, the Participant may satisfy, in whole or in
part, the foregoing withholding liability by delivery of Shares held by the Participant (which are
fully vested and not subject to any pledge or other security interest) or by having the Company
withhold from the number of Shares otherwise deliverable to the Participant hereunder Shares with a
Fair Market Value not in excess of the statutory minimum withholding liability. The Participant
further agrees to make adequate provision for any sums required to satisfy all applicable federal,
state, local and foreign tax withholding obligations of the Company which may arise in connection
with the Option.


9. Securities Laws.













 



5




     Upon the acquisition of any Shares pursuant to the exercise of the Option, the Participant
will make or enter into such written representations, warranties and agreements as the Committee
may reasonably request in order to comply with applicable securities laws or with this Agreement.


10. Notices.




     Any notice necessary under this Agreement shall be addressed to the Company in care of its
Secretary at the principal executive office of the Company and to the Participant at the address
appearing in the personnel records of the Company for the Participant or to either party at such
other address as either party hereto may hereafter designate in writing to the other. Any such
notice shall be deemed effective upon receipt thereof by the addressee.


11. Choice of Law.




     This Agreement shall be governed by and construed in accordance with the laws of the state of
Delaware without regard to conflicts of laws.


12. Option Subject to Plan.




     By entering into this Agreement the Participant agrees and acknowledges that the Participant
has received and read a copy of the Plan. The Option is subject to the Plan. The terms and
provisions of the Plan, as they may be amended from time to time, are hereby incorporated herein by
reference. In the event of a conflict between any express term or provision contained herein and a term or
provision of the Plan, the applicable terms and provisions of the
Agreement will govern and prevail.


13. Signature in Counterparts.




     This Agreement may be signed in counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same instrument.



[Signatures on next page.]












 



6



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




	 	 	 	 	 

	Date of Grant:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Shares Subject to Option:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Option Price per Share:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	Vesting Schedule:
	 	 	 	 
	 

	 	 

	 	 






	 	 	 	 	 	 	 

	 	 	 	 	 
	 

	 	Participant:
	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Regional Management Corp.	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Its: