Exhibit 10.2


 


ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.

RESTRICTED STOCK AGREEMENT


 


This RESTRICTED STOCK AGREEMENT (this “Restricted Stock Agreement”) is made and entered into as of October 27, 2005
(the “Date of Grant”), by and between Advance
America, Cash Advance Centers, Inc., a Delaware corporation (the “Company”) and Kenneth E. Compton (the “Recipient”).


 


WHEREAS, the Board of Directors of the Company (the “Board”) has approved the Award to the Recipient as set forth
below; and


 


WHEREAS, the Award is
intended to induce the Recipient to join the Company as its Chief Executive
Officer and President, to motivate him to achieve long-term Company goals, and
to further align his interests with those of the Company’s stockholders.


 


NOW, THEREFORE, in consideration of the covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties agree as follows:


 


1.  Definitions.


 


“Award”
shall mean the shares of Restricted Stock granted pursuant to the terms of this
Restricted Stock Agreement.


 


“Bylaws”
shall mean the Amended and Restated Bylaws of the Company, as they may be
further amended, modified, or restated from time to time.


 


“Certificate
of Incorporation” shall mean the Amended and Restated Certificate of
Incorporation of the Company as it may be further amended, modified, or
restated from time to time.


 


“Change in
Control” shall mean a “change in ownership or
effective control of a corporation, or a change in the ownership of a
substantial portion of the assets of a corporation” as defined for
purposes of section 409A of the Internal Revenue Code of 1986, as amended,
with respect to the Company.


 


“Committee” shall mean the Compensation Committee of
the Board.


 


“Common Stock”
shall mean the common stock of the Company, par value $.01 per share.


 


2.  Grant of Restricted Stock. 
The Company hereby grants to the Recipient 250,000 restricted shares of Common
Stock (the “Restricted Stock”), subject to all
of the terms and conditions of this Restricted Stock Agreement.  The
Recipient’s grant and record of share ownership shall be kept on the books of
the Company, until the restrictions on transfer have lapsed pursuant to Section 3
below.  Shares that have become vested pursuant to Section 3
below may be evidenced by stock certificates, at the request of the Recipient,
which certificates shall be


 


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registered in the name of
the Recipient and delivered to Recipient within five (5) days of such
request, subject to Section 8 below.


 


3.  Lapse of Restrictions.  All shares
of Restricted Stock shall be unvested unless and until they become Vested
Shares (defined below) in accordance with this Section 3.  If
the Recipient is employed by the Company or any Subsidiary as of the applicable
anniversary date set forth below, the Restricted Stock shall become “Vested Shares” according to the percentage set forth
opposite such date:


 


	
  Date

  	
   

  	
  Cumulative
  Percentage Vested

  	
   

  
	
  First Anniversary of the Date of Grant

  	
   

  	
  12

  	
  1⁄2%

  	
   

  
	
  Second Anniversary of the Date of Grant

  	
   

  	
  25

  	
  %

  	
   

  
	
  Third Anniversary of the Date of Grant

  	
   

  	
  37

  	
  1⁄2%

  	
   

  
	
  Fourth Anniversary of the Date of Grant

  	
   

  	
  50

  	
  %

  	
   

  
	
  Fifth Anniversary of the Date of Grant

  	
   

  	
  62

  	
  1⁄2%

  	
   

  
	
  Sixth Anniversary of the Date of Grant

  	
   

  	
  75

  	
  %

  	
   

  
	
  Seventh Anniversary of the Date of Grant

  	
   

  	
  87

  	
  1⁄2%

  	
   

  
	
  Eighth Anniversary of the Date of Grant

  	
   

  	
  100

  	
  %

  	
   

  



 


In the event that the
Recipient is employed by the Company or one of its subsidiaries upon a Change
of Control, all Restricted Stock shall automatically become Vested Shares upon the
consummation of such Change in Control.  Additionally,
in the event that the employment of the Recipient with the Company or its
subsidiaries (or the Recipient’s service to the Company or its subsidiaries)
shall terminate on account of the death of the Recipient, all Restricted Stock
shall automatically become Vested Shares.


 


4.  Restrictions
on Transfer.  Shares of Restricted Stock may not be transferred,
assigned, or otherwise disposed of by the Recipient prior to becoming Vested
Shares, including by way of sale, assignment, transfer, pledge, or otherwise.  Except as otherwise provided in this Section 4,
no transfer of the Recipient’s rights with respect to such Restricted Stock,
whether voluntary or involuntary, by operation of law or otherwise, shall be
permitted.  Immediately upon any attempt to transfer such rights, such
shares, and all of the rights related thereto, shall be forfeited by the Recipient.  Upon the death of the Recipient, the Recipient’s
rights with respect to such Vested Shares may be exercised only by the executor
or administrator of the Recipient’s estate or by a person who shall have
acquired the right to such exercise by will or by the laws of descent and
distribution.  No transfer of shares of Vested Stock by will or the laws
of descent and distribution shall be effective to bind the Company unless the Committee
shall have been furnished with (i) written notice thereof and with a copy
of the will and/or such evidence as the Committee may deem necessary to
establish the validity of the transfer and (ii) an agreement by the
transferee to comply with all the terms and conditions of this Restricted Stock
Agreement that are or would have been applicable to the Recipient and to be
bound by the acknowledgments made by the Recipient in connection with the grant
of the Award.  The Recipient may file
with the Committee a written designation of a beneficiary on such form as may
be prescribed by the Committee and may, from time to time, amend or revoke such
designation.  If no designated beneficiary survives the Recipient, the
executor or administrator of the Recipient’s estate shall be deemed to be the Recipient’s
beneficiary.


 


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5.  Rights as a Stockholder. 
The Company shall hold in escrow all dividends, if any, that are paid with
respect to the shares of Restricted Stock until all restrictions on such shares
have lapsed.  Recipient agrees that the right to vote any shares for which
the restrictions on transfer set forth in Section 4 hereof have not
yet lapsed pursuant to the vesting schedule set forth in Section 3
hereof (the “Unvested Shares”) will be held by
the Company and, accordingly, shall execute an irrevocable proxy in favor of
the Company for all shares of Restricted Stock in the form supplied by the
Company.


 


6.  Adjustment
for Change in Capitalization.  In the event that any dividend or other
distribution is declared (whether in the form of cash, Common Stock, or other
property), or there occurs any recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange, or other similar corporate transaction or event,
the Committee shall adjust, in its sole and absolute discretion, the shares of
Restricted Stock, and any dividends, cash, property, or stock issuable in
respect of the Restricted Stock, proportionate to any such adjustments made
with respect to the Company’s outstanding Common Stock.


 


7.  Notices.  Any notice
required or permitted under this Restricted Stock Agreement shall be deemed given
when delivered personally, or when deposited in a United States Post Office,
postage prepaid, addressed, as appropriate, to the Recipient either at the
Recipient’s address as last known by the Company or such other address as the
Recipient may designate in writing to the Company.


 


8.  Securities Laws Requirements.


 


(a)                                  Notwithstanding anything herein to the
contrary, the Company shall not be obligated to cause to be issued or delivered
any certificates evidencing shares of Common Stock pursuant to this Restricted
Stock Agreement unless and until the Company is advised by its counsel that the
issuance and delivery of such certificates is in compliance with all applicable
laws, regulations of governmental authority, and the requirements of any
securities exchange on which shares of Common Stock are traded.  The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such agreements and representations, and
that such certificates bear such legends, as the Committee, in its sole
discretion, deems necessary or advisable.


 


(b)                                 The
Company shall not be obligated to transfer any shares of Common Stock from the
Recipient to another party, if such transfer, in the opinion of counsel for the
Company, would violate the Securities Act of 1933, as amended from time to time
(or any other federal or state statutes having similar requirements as may be
in effect at that time), or the
requirements of any securities exchange on which shares of Common Stock are
traded.  Further, the Company may require as a condition of
transfer of any shares to the Recipient that the Recipient furnish a written
representation that he or she is holding the shares for investment and not with
a view to resale or distribution to the public.  The Committee may, in its sole discretion, defer the
effectiveness of any issuance or transfer of shares of Common Stock hereunder
in order to allow the issuance of such shares to be made pursuant to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws.  The Committee


 


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shall inform the Recipient in writing of its decision to defer the
effectiveness of an issuance or transfer.


 


9.  Protections Against Violations of
Restricted Stock Agreement.  No purported sale, assignment, mortgage,
hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting
or other), or other disposition of, or creation of a security interest in or
lien on, any of the shares of Restricted Stock by any holder thereof in
violation of the provisions of this Restricted Stock Agreement or the
Certificate of Incorporation or the Bylaws, shall be valid, and the Company
will not transfer any of said shares of Restricted Stock on its books nor will
any of said shares of Restricted Stock be entitled to vote, nor will any
dividends be paid thereon, unless and until there has been full compliance with
said provisions to the satisfaction of the Company.  The foregoing
restrictions are in addition to and not in lieu of any other remedies, legal or
equitable, available to enforce said provisions.


 


10.  Taxes.  The Recipient
understands that he or she (and not the Company) shall be responsible for any
tax obligation that may arise as a result of the transactions contemplated by
this Restricted Stock Agreement and shall pay to the Company the amount
determined by the Company to be such tax obligation at the time such tax
obligation arises.  If the Recipient fails to make such payment, the
number of shares necessary to satisfy the tax obligations shall be
forfeited.  The Recipient shall promptly notify the Company of any
election made pursuant to Section 83(b) of the Internal Revenue Code
of 1986, as amended from time to time (the “Code”).


 


THE RECIPIENT ACKNOWLEDGES THAT IT IS THE RECIPIENT’S
SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b) OF
THE CODE, IN THE EVENT THAT THE RECIPIENT DESIRES TO MAKE THAT ELECTION.


 


11.  Legend.  The Company’s
Secretary shall, or shall instruct the Company’s transfer agent to, provide
stop transfer instructions in the Company’s stock records to prevent any
transfer of the Restricted Stock for any purpose until the shares become Vested
Shares.  Any certificate that the Secretary or the transfer agent deems
necessary to issue to represent shares of Restricted Stock shall, until all
restrictions lapse and new certificates are issued, bear the following legend:


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN VESTING REQUIREMENTS AND MAY BE SUBJECT TO
REACQUISITION BY THE COMPANY UNDER THE TERMS OF THAT CERTAIN RESTRICTED STOCK
AGREEMENT BY AND BETWEEN ADVANCE AMERICA, CASH ADVANCE CENTERS, INC. (THE “COMPANY”)
AND THE HOLDER OF THE SECURITIES.  PRIOR TO VESTING OF OWNERSHIP IN THE
SECURITIES, THEY MAY NOT BE, DIRECTLY OR INDIRECTLY, OFFERED, TRANSFERRED,
SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF UNDER ANY
CIRCUMSTANCES.  COPIES OF THE ABOVE REFERENCED AGREEMENT ARE ON FILE AT
THE OFFICES OF THE COMPANY, 135 NORTH CHURCH STREET, SPARTANBURG, SOUTH
CAROLINA, 29306.


 


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12.  Failure to
Enforce Not a Waiver.  The failure of the Company to enforce at any
time any provision of this Restricted Stock Agreement shall in no way be
construed to be a waiver of such provision or of any other provision hereof.


 


13.  Effect of
Termination of Employment (or Provision of Services).  Notwithstanding
anything else herein to the contrary, upon the termination of Recipient’s employment
(or upon cessation of Recipient’s services to the Company or any of its
subsidiaries) for any reason, or no reason, any and all shares to which
restrictions on transferability apply and that have not become Vested Shares shall
be immediately forfeited by the Recipient and transferred to, and reacquired
by, the Company.  In the event that the Company requires a return of
shares, it shall also have the right to require the return of all dividends
paid on such shares, whether by termination of any escrow arrangement under
which such dividends are held or otherwise.


 


14.  Governing Law.  This
Restricted Stock Agreement shall be governed by and construed according to the
laws of the State of Delaware without regard to its principles of conflict of
laws.


 


15.  Amendments.  Except as
otherwise provided in Section 18 and Section 19, this
Restricted Stock Agreement may be amended or modified at any time only by an
instrument in writing signed by each of the parties hereto.


 


16.  Survival of Terms.  This
Restricted Stock Agreement shall apply to and bind the Recipient and the
Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators, and legal successors.


 


17.  Agreement Not a Contract for
Services.  Neither the grant of Restricted Stock, this Restricted
Stock Agreement, nor any other action taken pursuant to this Restricted Stock
Agreement shall constitute or be evidence of any agreement or understanding,
express or implied, that the Recipient has a right to continue to provide
services as an officer, director, employee, or consultant of the Company for
any period of time or at any specific rate of compensation.


 


18.  Severability.  If a
provision of this Restricted Stock Agreement is held invalid by a court of
competent jurisdiction, the remaining provisions will nonetheless be
enforceable according to their terms.  Further, if any provision is held
to be over broad as written, that provision shall be amended to narrow its
application to the extent necessary to make the provision enforceable according
to applicable law and enforced as amended.


 


19.  Authority
Reserved to the Committee.  The Committee may, in its sole and
absolute discretion, without amendment to this Restricted Stock Agreement,
accelerate the vesting date, or waive any condition imposed hereunder, with
respect to any share of Restricted Stock.


 


20.  Counterparts.  This
Restricted Stock Agreement
may be executed in one or more counterparts, each of which will be deemed to be
an original copy of this Restricted
Stock Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.


 


[Remainder of Page Intentionally Left Blank.]


 


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IN WITNESS WHEREOF, the parties hereto have executed
and delivered this Restricted Stock Agreement on the day and year first above
written.


 


	
   

  	
  ADVANCE AMERICA, CASH ADVANCE CENTERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  	
  /s/ John I. Hill

  	
   

  
	
   

  	
  Name:

  	
  John I. Hill

  
	
   

  	
  Title:

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RECIPIENT:

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Kenneth
  E. Compton

  	
   

  
	
   

  	
  Kenneth E. Compton

  



 


 


Restricted Stock Agreement


 





















 


IRREVOCABLE PROXY


 


I, the undersigned, hereby irrevocably authorize and
empower Advance America, Cash Advance Centers, Inc. (the “Company”) as my irrevocable proxy (the “Proxy”)
to represent me with respect of any and all Unvested Shares (as such term is
defined in the Restricted Stock Agreement dated as of October 27, 2005, by
and between the Company and the undersigned (the “Restricted
Stock Agreement”)) at any and all general meetings, or pursuant to
any action by written consent, of the stockholders of the Company.


 


The Proxy is irrevocably authorized and empowered to
receive, in my stead, any and all notices of and invitations to the Company’s
general meetings, and to participate in all such general meetings; and the
Proxy is authorized and empowered to vote all such Unvested Shares in such
manner as the Proxy shall, in the Proxy’s sole discretion, deem to be in the
best interests of the Company.


 


This proxy shall remain in full force and effect until
the shares of Restricted Stock (as such term is defined in the Restricted Stock
Agreement) granted to me pursuant to the Restricted Stock Agreement have vested
in accordance with the terms of the Restricted Stock Agreement, unless sooner
terminated by the Company.


 


	
  NAME:  Kenneth
  E. Compton

  
	
   

  	
   

  
	
  DATE:  October 27, 2005

  
	
   

  
	
  SIGNATURE:

  	
  /s/ Kenneth E. Compton