exv10w4






Exhibit 10.4




REGIONAL MANAGEMENT CORP.

2007 MANAGEMENT INCENTIVE PLAN




     Regional Management Corp. a South Carolina corporation (the “Corporation”), hereby establishes
the Regional Management Corp. 2007 Management Incentive Plan (the “Plan”), effective as of March
21, 2007, subject to stockholder approval.



     1. Purpose. The purpose of the Plan is to enable the Corporation to obtain and retain the
services of selected persons considered essential to the long-range success of the Corporation by
providing and offering them an opportunity to become owners of the Common Stock of the Corporation
through stock options, including options intended to qualify as “incentive stock options” under
Section 422 of the Code.



     2. Definitions. In addition to terms elsewhere defined in the Plan, the following terms will
have the following respective meanings when used with initial capital letters:



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




          (b) “Certificate”: the Certificate of Incorporation of the Corporation, as filed with the
Secretary of State of the State of South Carolina, and as further amended from time to time.




          (c) “Code”: the Internal Revenue Code of 1986, as in effect from time to time.




          (d) “Committee”: the Compensation Committee of the Board and, to the extent the
administration of the Plan has been assumed by the Board pursuant to Paragraph 10, the Board.




          (e) “Common Stock”: the Common Stock, par value $1.00 per share, of the Corporation.




          (f) “Date of Grant”: the date specified by the Committee on which a grant of Stock Options
will become effective.




          (g) “Duly Endorsed”: duly endorsed in blank by the Person or Persons in whose name a
certificate representing a security is registered or accompanied by a duly executed instrument of
assignment separate from the certificate.




          (h) “Holdings”: Regional Holdings LLC, a Delaware limited liability company.




          (i) “Incentive Stock Option”: a Stock Option that is intended to qualify as an “incentive
stock option” under Section 422 of the Code.




          (j) “Management Objectives”: the measurable performance objectives, if any, established by
the Committee for a Performance Period that are to be achieved with respect to a Stock Option
granted to a Participant under the Plan. Management Objectives may be





 









 







described in terms of Corporation-wide objectives or in terms of objectives that are related
to performance of the division, Subsidiary, department or function within the Corporation or a
Subsidiary in which the Participant receiving the Stock Option is employed or on which the
Participant’s efforts have the most influence. The Management Objectives established by the
Committee for any Performance Period under the Plan may consist of one or more of the following:





          (i) gross profits and/or growth in gross profits in relation to target objectives;




          (ii) pre-tax profit and revenue and/or growth in pre-tax profit and revenue in relation
to target objectives;




          (iii) earnings per share and/or growth in earnings per share in relation to target
objectives, excluding the effect of extraordinary or nonrecurring items;




          (iv) operating cash flow and/or growth in operating cash flow in relation to target
objectives;




          (v) earnings before interest, depreciation, taxes and amortization expenses;




          (vi) net income and/or growth in net income in relation to target objectives, excluding
the effect of extraordinary or nonrecurring items;




          (vii) revenue and/or growth in revenue in relation to target objectives;




          (viii) total stockholder return (measured as the total of the appreciation of and
dividends declared on the Common Stock) in relation to target objectives;




          (ix) return on invested capital in relation to target objectives;




          (x) return on stockholder equity in relation to target objectives; or




          (xi) return on assets in relation to target objectives.



     If the Committee determines that, as a result of a change in the business, operations,
corporate structure or capital structure of the Corporation, or the manner in which the Corporation
conducts its business, or any other events or circumstances, the Management Objectives are no
longer suitable, the Committee may in its discretion modify such Management Objectives or the
related minimum acceptable level of achievement, in whole or in part, with respect to a Performance
Period as the Committee deems appropriate and equitable, except where such action would result in
the loss of the otherwise available exemption of the Stock Option under Section 162(m) of the Code.
In such case, the Committee will not make any modification of the Management Objectives or minimum
acceptable level of achievement, in each such case to the extent it would cause such a result.



 









 





          (k) “Market Value Per Share”: at any date (i) if the Common Stock is listed on any nationally
recognized stock exchange, the closing sales price of the Common Stock (or the closing bid, if no
sales were reported) as quoted on such exchange (or, if more than one exchange, the exchange with
the greatest volume of trading in the Common Stock) on the last market trading day prior to the day
of determination, as reported in The Wall Street Journal or such other source as the Board deems
reliable or (ii) if the Common Stock is not traded on any such stock exchange, the fair market
value of a share of Common Stock as determined in good faith by the Board.




          (l) “Option Price”: the purchase price per share payable on exercise of a Stock Option.




          (m) “Participant”: a person who is selected by the Committee to receive a grant of Stock
Options and who is at that time an executive officer, a non-employee member of the Board or the
board of directors of any Subsidiary, a consultant or other independent advisor who provides
services to the Corporation (or any Subsidiary) or a key employee of the Corporation or any
Subsidiary.




          (n) “Performance Period”: a period of time within which the Management Objectives relating to
a Stock Option are to be measured. The Performance Period will be established by the Committee at
the time the Stock Option is granted.




          (o) “Person”: an individual, a corporation, a partnership, a limited liability company, an
association, a trust, a joint stock company, a joint venture, an unincorporated organization, a
business entity or any governmental authority.




          (p) “Public Offering”: the sale of shares of any class of equity securities of the
Corporation to the public pursuant to an effective registration statement (other than a
registration statement on Form S-4 or S-8 or any similar or successor form) filed under the
Securities Act and underwritten by an investment banking firm of national reputation reasonably
acceptable to the Corporation and Holdings.




          (q) “Rule 16b-3”: Rule 16b-3 under Section 16 of the Securities Exchange Act of 1934, as
amended (or any successor rule to the same effect), as in effect from time to time.




          (r) “Stock Option”: the right to purchase one or more shares of Common Stock upon exercise of
an option granted pursuant to Paragraph 4.




          (s) “Subsidiary”: means (i) any corporation of which at least 50% of the total combined
voting power of all outstanding shares of stock is owned directly or indirectly in the aggregate by
the Corporation and its Subsidiaries, (ii) any partnership of which at least 50% of the profits
interest or capital interest is owned directly or indirectly in the aggregate by the Corporation
and its Subsidiaries, and (iii) any other entity of which at least 50% of the total equity interest
is owned directly or indirectly in the aggregate by the Corporation and its Subsidiaries.






 









 








     3. Shares Available Under Plan. The shares of Common Stock that may be issued or transferred
and covered by outstanding Stock Options granted under the Plan will not exceed in the aggregate
1,037,412 shares. Such shares may be shares of original issuance or treasury shares or a
combination of the foregoing. The number of shares of Common Stock available under this Paragraph
3 will be subject to adjustment as provided in Paragraph 7 and will be further adjusted to include
shares that (i) relate to Stock Options that expire or are canceled without having been fully
exercised or (ii) are transferred, surrendered or relinquished to or withheld by the Corporation in
satisfaction of any Option Price or withholding amount. Upon payment by the Corporation in cash of
the benefit provided by any Stock Option granted under the Plan, any shares that were covered by
that Stock Option will again be available for issuance or transfer under the Plan.



     4. Stock Options for Participants. The Committee may from time to time authorize grants of
Stock Options to any Participant upon such terms and conditions as it may determine in accordance
with this Paragraph 4. Each grant of Stock Options may utilize any or all of the authorizations,
and will be subject to all of the requirements, contained in the following provisions:



          (a) Each grant will be evidenced by a written award agreement, which will be executed on
behalf of the Corporation by an authorized officer of the Corporation and which will contain such
terms and conditions as determined by the Committee, consistent with the Plan.




          (b) Each grant will specify the number of shares of Common Stock to which it pertains.




          (c) Each grant will specify the Option Price, which will not be less than 100% of the Market
Value Per Share on the Date of Grant.




          (d) Each grant will specify whether the Option Price will be payable (i) in cash or by check
acceptable to the Corporation, (ii) by the actual or constructive transfer to the Corporation of
shares of Common Stock owned by the Participant for at least six months (or, with the consent of
the Committee, for less than six months) having an aggregate Market Value Per Share at the date of
exercise equal to the aggregate Option Price, (iii) with the consent of the Committee, by
authorizing the Corporation to withhold a number of shares of Common Stock otherwise issuable to
the Participant having an aggregate Market Value Per Share on the date of exercise equal to the
aggregate Option Price, or (iv) by a combination of such methods of payment; provided,
however, that the payment methods described in clauses (ii), (iii) and (iv) will not be
available at any time that the Corporation is prohibited from purchasing or acquiring such shares
of Common Stock.




          (e) To the extent permitted by law, any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a bank or broker of some or all of the shares to which such
exercise relates.




          (f) Successive grants may be made to the same Participant whether or not any Stock Options
previously granted to such Participant remain unexercised.






 









 








          (g) Each grant will specify the required period or periods of continuous service by the
Participant with the Corporation or any Subsidiary that are necessary before the Stock Options or
installments thereof will become exercisable, and may include such other conditions as the
Committee deems appropriate.




          (h) Any grant may specify the Management Objectives, if any, that must be achieved as a
condition to the exercise of the Stock Options.




          (i) Any grant may provide for the earlier exercise of the Stock Options in the event of a
change in control of the Corporation or other similar transaction or event.




          (j) Stock Options granted under this Paragraph 4 may be Incentive Stock Options, options that
are not intended to be Incentive Stock Options, or combinations of the foregoing. Incentive Stock
Options may be granted only to individuals who are employees of the Corporation or a Subsidiary
that is a “subsidiary corporation” within the meaning of Section 424 of the Code. The aggregate
number of shares of Common Stock issued or transferred by the Corporation upon the exercise of
Incentive Stock Options will not exceed 1,037,412 shares, subject to adjustment as provided in
Paragraph 3.




          (k) No Stock Option will be exercisable more than 10 years from the Date of Grant.




          (l) If a Participant terminates employment by reason of permanent disability (as determined by
the Committee) or death, the vested portion of the Participant’s Stock Options may be exercised for
a period of six months after the date of termination of employment and to the extent not previously
exercised will expire six months after the date the Participant terminates employment. The
nonvested portion of the Participant’s Stock Options will be forfeited upon the Participant’s
termination of employment.




          (m) If the employment of a Participant is terminated by the Corporation for cause (as defined
in an effective employment agreement between the Participant and the Corporation or Subsidiary or,
if no such employment agreement exists, as determined by the Committee in its sole discretion), the
Participant’s Stock Options will expire immediately and all unexercised Stock Options will be
forfeited on the date of the Participant’s termination of employment.




          (n) If a Participant terminates employment other than as set forth in Paragraphs 4(l) and
4(m), the vested portion of the Participant’s Stock Options may be exercised for a period of 90
days after the date of termination of employment and to the extent not previously exercised will
expire 90 days after the date of the termination of employment. The nonvested portion of the
Participant’s Stock Options will be forfeited upon the Participant’s termination of employment.




          (o) For purposes of any provision in the Plan or a stock option agreement relating to the
effect on a Stock Option of a Participant’s ceasing to perform services for the Corporation or any
Subsidiary, a termination of employment or other separation from service will occur when the
Participant permanently ceases to perform services for the Corporation and all Subsidiaries or when
the entity for which the Participant is performing services ceases to be a





 









 







Subsidiary, unless the Participant immediately becomes employed by the Corporation or another
Subsidiary.




     5. Transferability. Except as otherwise provided in the agreement evidencing a Participant’s
grant, (a) no Stock Option will be transferable by the Participant other than by will or the laws
of descent and distribution, and (b) no Stock Option will be exercisable during the Participant’s
lifetime by any person other than the Participant or the Participant’s guardian or legal
representative.



     6. Corporation’s Repurchase Right.



          (a) Subject to the terms of this Paragraph 6, upon the occurrence of any Repurchase Event (as
defined herein) the Corporation will have the right to repurchase all or any portion of the shares
of Common Stock issued to such Participant upon the exercise of a Stock Option (the “Option
Shares”). The repurchase right may be exercised by the Corporation at any time following the date
of a Repurchase Event by giving the holder of the Option Shares written notice of its intention to
exercise such right. The purchase price per share will be the Market Value Per Share on the date
of such notice; provided, however, that if the Participant’s employment with the
Corporation is terminated for cause, the purchase price per share will be the lesser of the Market
Value Per Share on the date of such notice or the purchase price per share paid by the Participant.




          (b) Within 30 days following the date of delivery by the Corporation of a written notice of
its election to exercise its repurchase right pursuant to this Paragraph 6, the Corporation will
pay to the Participant or other holder of the Option Shares the full amount of the purchase price
in cash, and the Participant or holder will deliver to the Corporation the stock certificate or
certificates representing the Option Shares being purchased, Duly Endorsed and free and clear of
any and all liens, charges and encumbrances.




          (c) For purposes of the Plan, “Repurchase Event” means (i) the termination of the
Participant’s employment with the Corporation and its Subsidiaries for any reason whatsoever,
regardless of the circumstances thereof, and including without limitation death, disability,
retirement, discharge or resignation for any reason, whether voluntary or involuntary; (ii) the
filing of a voluntary petition under any bankruptcy or insolvency law, or a petition for the
appointment of a receiver or the making of an assignment for the benefit of creditors, with respect
to the Participant or other holder of the Option Shares; (iii) the Participant or other holder of
Option Shares being subjected involuntarily to a petition or assignment or to an attachment or
other legal or equitable interest with respect to his or her assets, which involuntary petition or
assignment or attachment is not discharged within 60 days after its date; or (iv) the Participant
or other holder being subject to a transfer of Option Shares by operation of law.




          (d) If any change in the Common Stock of the Corporation occurs as a result of any transaction
or event described in Paragraph 7, the restrictions contained in this Paragraph 6 will apply with
equal force to additional and/or substitute securities, if any, received by the Participant in
exchange for, or by virtue of his or her ownership of, Option Shares.






 









 








          (e) If the Participant or holder fails or refuses to deliver on a timely basis Duly Endorsed
certificates representing Option Shares purchased by the Corporation pursuant to this Paragraph 6,
the Corporation will have the right to deposit the purchase price for such Option Shares in a
special account with any bank or trust company, giving notice of such deposit to the Participant or
holder, whereupon (i) such Option Shares will be deemed to have been purchased by the Corporation
and (ii) the Corporation shall make an appropriate notation on its books and records reflecting
such repurchase and may place stop-transfer or similar instructions with respect to such Option
Shares with any transfer agent for the Common Stock. All such monies will be held by the bank or
trust company for the benefit of the Participant or holder. All monies deposited with the bank or
trust company but remaining unclaimed for two years after the date of deposit will be repaid by the
bank or trust company to the Corporation on demand and become general funds of the Corporation, and
the Participant or holder will thereafter look only to the Corporation for payment.




          (f) The repurchase right of the Corporation set forth above will remain in effect until the
closing of a Public Offering, and will be binding upon any transferee of Option Shares. The
Corporation may place a legend on any certificate for Option Shares delivered to the Participant
reflecting the repurchase rights provided in the Plan.




     7. Adjustments. The Committee will make or provide for such adjustments in the maximum number
of shares specified in Paragraph 3 and Paragraph 4, in the numbers of shares of Common Stock
covered by outstanding Stock Options granted hereunder, in the Option Price applicable to any such
Stock Options, and/or in the kind of shares covered thereby (including shares of another issuer),
as the Committee in its sole discretion may determine is equitably required to maintain the intent
of the Plan or to prevent dilution or enlargement of the rights of Participants that otherwise
would result from (i) any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Corporation, or (ii) any merger, consolidation,
spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other
distribution of assets, issuance of rights or warrants to purchase securities, or (iii) any other
corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the
event of any such transaction or event, the Committee, in its sole discretion, may provide in
substitution for any or all outstanding Stock Options under the Plan such alternative consideration
as it, in good faith, may determine to be equitable in the circumstances and may require in
connection with such substitution the surrender of all Stock Options so replaced.



     8. Fractional Shares. The Corporation will not be required to issue any fractional share of
Common Stock pursuant to the Plan. The Committee may provide for the elimination of fractions or
for the settlement of fractions in cash.



     9. Withholding Taxes. To the extent that the Corporation is required to withhold federal,
state, local or foreign taxes in connection with any payment made or benefit realized by a
Participant or other person under the Plan (including as a result of the exercise of any Stock
Option), and the amounts available to the Corporation for such withholding are insufficient, it
will be a condition to the receipt of such payment or the realization of such benefit that the
Participant or such other person make arrangements satisfactory to the Corporation for payment of
the balance of such taxes required to be withheld. In addition, if permitted by the Committee,



 









 




the Participant or such other person may elect to have any withholding obligation of the
Corporation satisfied with shares of Common Stock (valued at the Market Value Per Share at such
time) that would otherwise be transferred to the Participant or such other person in payment of the
aggregate Option Price. In no event, however, will shares of Common Stock be withheld in excess of
the minimum number of shares required to satisfy the Corporation’s withholding obligation.




     10. Administration of the Plan.



          (a) Prior to the Corporation’s initial registration of Common Stock under Section 12 of the
Securities Exchange Act of 1934, as amended, unless the Board determines otherwise, the Committee
will consist of the entire Board. Following such registration, unless the Board determines
otherwise, the Committee will consist of two or more directors appointed by the Board, all of whom
will qualify as “non-employee directors” as defined in Rule 16b-3 and as “outside directors” as
defined in regulations adopted under Section 162(m) of the Code, as such terms may be amended from
time to time, and its size and members will otherwise satisfy applicable requirements of any
exchange or market system upon which shares of Common Stock are listed or admitted to trading.
Appointment of Committee members will be effective upon acceptance of appointment. Committee
members may resign at any time by delivering written notice to the Board. Vacancies in the
Committee will be filled by the Board.




          (b) The Committee has the full authority and discretion to administer the Plan and to take any
action that is necessary or advisable in connection with the administration of the Plan, including
without limitation the authority and discretion to interpret and construe any provision of the Plan
or of any agreement, notification or document evidencing the grant of a Stock Option, and to
determine whether a Participant’s termination of employment resulted from voluntary resignation for
good reason, discharge for cause or any other reason. The interpretation and construction by the
Committee of any such provision and any determination by the Committee pursuant to any provision of
the Plan or of any such agreement, notification or document will be final and conclusive. No
member of the Committee will be liable for any such action or determination made in good faith.




          (c) Prior to the Corporation’s initial registration of Common Stock under Section 12 of the
Securities and Exchange Act of 1934, as amended, the Committee will act by action of the Board.
Thereafter, the Committee will act by a majority of the votes of its members in office and the
Committee may act either by vote at a meeting or by a memorandum or other written instrument signed
by directors constituting a voting majority of the Committee.




     11. Other Provisions.



          (a) No grant of Stock Options will be exercisable unless the Plan has been approved by the
stockholders of the Corporation within 12 months of the effective date of the Plan. Any Stock
Option exercised or granted before stockholder approval is obtained will be rescinded if
stockholder approval is not obtained within 12 months of the effective date of the Plan.






 









 








          (b) The Plan may be amended from time to time by the Committee or the Board but may not be
amended without further approval by the stockholders of the Corporation if such amendment would
result in the Plan no longer satisfying any applicable requirements of the New York Stock Exchange
(or any other exchange or market system upon which shares of Common Stock are listed or quoted or
admitted to trading), Rule 16b-3 or Section 162(m) of the Code.




          (c) Neither the Committee nor the Board will authorize the amendment of any outstanding Stock
Option to reduce the Option Price without the further approval of each class of stockholders of the
Corporation. Furthermore, no Stock Option will be cancelled and replaced with Stock Options having
a lower Option Price without further approval of each class of the stockholders of the Corporation.
This Paragraph 11(c) is intended to prohibit the repricing of “underwater” Stock Options and will
not be construed to prohibit the adjustments provided for in Paragraph 7.




          (d) The Plan will terminate automatically 10 years after its adoption by the Board and may be
terminated at any earlier time by an action of the Board. The termination of the Plan will not
adversely affect the terms of any outstanding Stock Option.




          (e) The Plan does not confer upon any Participant any right with respect to continuance of
employment or other service with the Corporation or any Subsidiary, nor will it interfere in any
way with any right the Corporation or any Subsidiary would otherwise have to terminate such
Participant’s employment or other service at any time.




          (f) If the Committee determines, with the advice of legal counsel, that any provision of the
Plan would prevent the payment of any Stock Option intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code from so qualifying, such Plan
provision will be invalid and cease to have any effect without affecting the validity or
effectiveness of any other provision of the Plan.




          (g) To the extent applicable, it is intended that the Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code. The Plan and any grants made hereunder
will be administered in a manner consistent with this intent, and any provision that would cause
this Plan or any grant made hereunder to fail to satisfy Section 409A of the Code will have no
force and effect until amended to comply with Section 409A of the Code (which amendment may be
retroactive to the extent permitted by Section 409A of the Code and may be made by the Corporation
without the consent of Participants). Any reference in the Plan to Section 409A of the Code will
also include any proposed, temporary or final regulations, or any other guidance, promulgated with
respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.




          (h) The provisions of the Plan are not intended, and should not be construed, to be legal,
business or tax advice. The Corporation, the Subsidiaries, Participants and any other party having
any interest herein are hereby informed that the U.S. federal tax advice contained in this document
(if any) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding
penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party
any transaction or matter addressed herein.






 









 








     12. Governing Law. The Plan, all Stock Options and all actions taken under the Plan and with
respect to Stock Options will be governed in all respects in accordance with the laws of the State
of Delaware, but without giving effect to the principles of conflict of laws of the State of
Delaware.



[SIGNATURE PAGE FOLLOWS]




 









 





     As adopted by the Board of Directors as of the date first set forth above.



	 	 	 	 	 
	 	REGIONAL MANAGEMENT CORP.

 	 
	 	By:  	/s/ Eric A. Anderson
 	 
	 	 	Eric A. Anderson 	 
	 	 	Chief Financial Officer 	 
	 



[Signature Page to the Management Incentive Plan]