Document:

2005 Stock Incentive Plan

EXHIBIT
10.1

DELTA
FINANCIAL CORPORATION

2005
STOCK INCENTIVE PLAN

 

 

1. Purposes
of the Plan. The
purposes of this Plan are to attract and retain the best available personnel, to
provide additional incentives to Employees, Directors and Consultants and to
promote the success of the Company’s business.

2. Definitions. The
following definitions shall apply as used herein and in the individual Award
Agreements except as defined otherwise in an individual Award Agreement. In the
event a term is separately defined in an individual Award Agreement, such
definition shall supercede the definition contained in this Section
2.

 

(a) “Administrator” means
the Board or any of the Committees appointed to administer the
Plan.

 

(b) “Affiliate” and
“Associate” shall
have the respective meanings ascribed to such terms in Rule 12b-2 promulgated
under the Exchange Act.

 

(c) “Applicable
Laws” means
the legal requirements relating to the Plan and the Awards under applicable
provisions of federal securities laws, state corporate and securities laws, the
Code, the rules of any applicable stock exchange or national market system, and
the rules of any non-U.S. jurisdiction applicable to Awards granted to residents
therein.

 

(d) “Assumed” means
that pursuant to a Corporate Transaction either (i) the Award is expressly
affirmed by the Company or (ii) the contractual obligations represented by the
Award are expressly assumed (and not simply by operation of law) by the
successor entity or its Parent in connection with the Corporate Transaction with
appropriate adjustments to the number and type of securities of the successor
entity or its Parent subject to the Award and the exercise or purchase price
thereof which at least preserves the compensation element of the Award existing
at the time of the Corporate Transaction as determined in accordance with the
instruments evidencing the agreement to assume the Award.

 

(e) “Award” means
the grant of an Option, SAR, Dividend Equivalent Right, Restricted Stock,
Restricted Stock Unit or other right or benefit under the Plan.

 

(f) “Award
Agreement” means
the written agreement evidencing the grant of an Award executed by the Company
and the Grantee, including any amendments thereto.

 

(g) “Board” means
the Board of Directors of the Company.

 

(h) “Cause” means,
with respect to the termination by the Company or a Related Entity of the
Grantee’s Continuous Service, that such termination is for “Cause” as such term
is expressly defined in a then-effective written agreement between the Grantee
and the Company or such Related Entity, or in the absence of such then-effective
written agreement and definition, is based on, in the determination of the
Administrator, the Grantee’s: (i) performance of any act or failure to perform
any act in bad faith and to the detriment of the Company or a Related Entity;
(ii) dishonesty, intentional misconduct or material breach of any agreement with
the Company or a Related Entity; or (iii) commission of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any
person.

 

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(i) “Change
in Control” means a
change in ownership or control of the Company effected through either of the
following transactions:

 

(i) the
direct or indirect acquisition by any person or related group of persons (other
than an acquisition from or by the Company, by a Company-sponsored employee
benefit plan, by the Miller Family or by a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of
beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company’s outstanding securities pursuant to a tender or exchange
offer made directly to the Company’s stockholders which a majority of the
Continuing Directors who are not Affiliates or Associates of the offeror do not
recommend such stockholders accept, or

 

(ii) a change
in the composition of the Board over a period of twelve (12) months or less such
that a majority of the Board members (rounded up to the next whole number)
ceases, by reason of one or more contested elections for Board membership, to be
comprised of individuals who are Continuing Directors.

 

(j) “Code” means
the Internal Revenue Code of 1986, as amended.

 

(k) “Committee” means
any committee composed of members of the Board appointed by the Board to
administer the Plan.

 

(l) “Common
Stock” means
the common stock of the Company.

 

(m) “Company” means
Delta Financial Corporation, a Delaware corporation, or any successor entity
that adopts the Plan in connection with a Corporate Transaction.

 

(n) “Consultant” means
any person (other than an Employee or a Director, solely with respect to
rendering services in such person’s capacity as a Director) who is engaged by
the Company or any Related Entity to render consulting or advisory services to
the Company or such Related Entity. 

 

(o) “Continuing
Directors” means
members of the Board who either (i) have been Board members continuously for a
period of at least twelve (12) months or (ii) have been Board members for less
than twelve (12) months and were elected or nominated for election as Board
members by at least a majority of the Board members described in clause (i) who
were still in office at the time such election or nomination was approved by the
Board.

 

(p) “Continuous
Service” means
that the provision of services to the Company or a Related Entity in any
capacity of Employee, Director or Consultant is not interrupted or terminated.
In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated
upon the actual cessation of providing services to the Company or a Related
Entity notwithstanding any required notice period that must be fulfilled before
a termination as an Employee, Director or Consultant can be effective under
Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the
entity for which the Grantee provides services ceasing to be a Related Entity.
Continuous Service shall not be considered interrupted in the case of (i) any
approved leave of absence, (ii) transfers among the Company, any Related Entity,
or any successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or Consultant
(except as otherwise provided in the Award Agreement). An approved leave of
absence shall include sick leave, military leave, or any other authorized
personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment upon expiration
of such leave is not guaranteed by statute or contract, then the Incentive Stock
Option shall be treated as a Non-Qualified Stock Option on the day three (3)
months and one (1) day following the expiration of such three (3) month
period.

 

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(q) “Corporate
Transaction” means
any of the following transactions, provided, however, that the Administrator
shall determine under parts (iv) and (v) whether multiple transactions are
related, and its determination shall be final, binding and conclusive:

 

(i) a merger
or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the
Company is incorporated;

 

(ii) the sale,
transfer or other disposition of all or substantially all of the assets of the
Company;

 

(iii) the
complete liquidation or dissolution of the Company; 

 

(iv) any
reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in
which the Company is the surviving entity but (A) the shares of Common Stock
outstanding immediately prior to such merger are converted or exchanged by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise, or (B) in which securities possessing more than forty percent
(40%) of the total combined voting power of the Company’s outstanding securities
are transferred to a person or persons different from those who held such
securities immediately prior to such merger or the initial transaction
culminating in such merger, but excluding any such transaction or series of
related transactions that the Administrator determines shall not be a Corporate
Transaction; or

 

(v) acquisition
in a single or series of related transactions by any person or related group of
persons (other than by the Company, by a Company-sponsored employee benefit plan
or by the Miller Family) of beneficial ownership (within the meaning of Rule
13d-3 of the Exchange Act) of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities
but excluding any such transaction or series of related transactions that the
Administrator determines shall not be a Corporate Transaction.

 

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(r) “Covered
Employee” means
an Employee who is a “covered employee” under Section 162(m)(3) of the
Code.

 

(s) “Director” means a
member of the Board or the board of directors of any Related
Entity.

 

(t) “Disability” means
as defined under the long-term disability policy of the Company or the Related
Entity to which the Grantee provides services regardless of whether the Grantee
is covered by such policy. If the Company or the Related Entity to which the
Grantee provides service does not have a long-term disability plan in place,
“Disability” means that a Grantee is unable to carry out the responsibilities
and functions of the position held by the Grantee by reason of any medically
determinable physical or mental impairment for a period of not less than ninety
(90) consecutive days. A Grantee will not be considered to have incurred a
Disability unless he or she furnishes proof of such impairment sufficient to
satisfy the Administrator in its discretion.

 

(u) “Dividend
Equivalent Right” means a
right entitling the Grantee to compensation measured by dividends paid with
respect to Common Stock.

 

(v) “Employee” means
any person, including an Officer or Director, who is in the employ of the
Company or any Related Entity, subject to the control and direction of the
Company or any Related Entity as to both the work to be performed and the manner
and method of performance. The payment of a director’s fee by the Company or a
Related Entity shall not be sufficient to constitute “employment” by the
Company.

 

(w) “Exchange
Act” means
the Securities Exchange Act of 1934, as amended.

 

(x) “Fair
Market Value” means,
as of any date, the value of Common Stock determined as follows:

 

(i) If the
Common Stock is listed on one or more established stock exchanges or national
market systems, its Fair Market Value shall be the closing sales price for such
stock (or the closing bid, if no sales were reported) as quoted on the principal
exchange or system on which the Common Stock is listed (as determined by the
Administrator) on the date of determination (or, if no closing sales price or
closing bid was reported on that date, as applicable, on the last trading date
such closing sales price or closing bid was reported), as reported in The Wall
Street Journal or such other source as the Administrator deems
reliable;

 

(ii) If the
Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value
shall be the closing sales price for such stock as quoted on such system or by
such securities dealer on the date of determination, but if selling prices are
not reported, the Fair Market Value of a share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the date of
determination (or, if no such prices were reported on that date, on the last
date such prices were reported), as reported in The Wall Street Journal or such
other source as the Administrator deems reliable; or

 

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(iii) In the
absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the
Administrator in good faith.

 

(y) “Grantee” means
an Employee, Director or Consultant who receives an Award under the
Plan.

 

(z) “Incentive
Stock Option” means
an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code

 

(aa) “Miller
Family” means
Hugh Miller, Marc E. Miller, Sidney Miller and Lee Miller, any of their
respective spouses or lineal descendants, or any trust (i) the
beneficial interests of which are directly or indirectly held by
such persons or (ii) of which any of such persons serves as a
trustee.

 

(bb) “Non-Qualified
Stock Option” means
an Option not intended to qualify as an Incentive Stock Option.

 

(cc) “Officer” means a
person who is an officer of the Company or a Related Entity within the meaning
of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

 

(dd) “Option” means
an option to purchase Shares pursuant to an Award Agreement granted under the
Plan.

 

(ee) “Parent” means a
“parent corporation”, whether now or hereafter existing, as defined in Section
424(e) of the Code.

 

(ff) “Performance-Based
Compensation” means
compensation qualifying as “performance-based compensation” under Section 162(m)
of the Code.

 

(gg) “Plan” means
this 2005 Stock Incentive Plan.

 

(hh) “Related
Entity” means
any Parent or Subsidiary of the Company and any business, corporation,
partnership, limited liability company or other entity in which the Company or a
Parent or a Subsidiary of the Company holds a substantial ownership interest,
directly or indirectly.

 

(ii) “Replaced” means
that pursuant to a Corporate Transaction the Award is replaced with a comparable
stock award of the Company, the successor entity (if applicable) or Parent of
either of them which preserves the compensation element of such Award existing
at the time of the Corporate Transaction and provides for subsequent payout in
accordance with the same (or a more favorable) vesting schedule applicable to
such Award. The determination of Award comparability shall be made by the
Administrator and its determination shall be final, binding and
conclusive.

 

(jj) “Restricted
Stock” means
Shares issued under the Plan to the Grantee for such consideration, if any, and
subject to such restrictions on transfer, rights of first refusal, repurchase
provisions, forfeiture provisions, and other terms and conditions as established
by the Administrator.

 

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(kk) “Restricted
Stock Units” means
an Award which may be earned in whole or in part upon the passage of time or the
attainment of performance criteria established by the Administrator and which
may be settled for cash, Shares or other securities or a combination of cash,
Shares or other securities as established by the Administrator.

 

(ll) “Rule
16b-3” means
Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

 

(mm) “SAR” means a
stock appreciation right entitling the Grantee to Shares or cash compensation,
as established by the Administrator, measured by appreciation in the value of
Common Stock.

 

(nn) “Share” means a
share of the Common Stock.

 

(oo) “Subsidiary” means a
“subsidiary corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code.

3. Stock
Subject to the Plan.

 

(a) Subject
to the provisions of Section 1‎0, below,
the maximum aggregate number of Shares which may be issued pursuant to all
Awards (including Incentive Stock Options) is 1,000,000 Shares. In addition,
Dividend Equivalent Rights shall be payable solely in cash and therefore the
issuance of Dividend Equivalent Rights shall not be deemed to reduce the maximum
aggregate number of Shares which may be issued under the Plan. The Shares to be
issued pursuant to Awards may be authorized, but unissued, or reacquired Common
Stock.

 

(b) Any
Shares covered by an Award (or portion of an Award) which is forfeited,
cancelled or expires (whether voluntarily or involuntarily) shall be deemed not
to have been issued for purposes of determining the maximum aggregate number of
Shares which may be issued under the Plan. Shares that actually have been issued
under the Plan pursuant to an Award shall not be returned to the Plan and shall
not become available for future issuance under the Plan, except that if unvested
Shares are forfeited, or repurchased by the Company at the lower of their
original purchase price or their Fair Market Value at the time of repurchase,
such Shares shall become available for future grant under the Plan. To the
extent not
prohibited by the listing requirements of The American Stock Exchange (or other
established stock exchanges or national market systems on which the Common Stock
is traded) and Applicable Law, any Shares covered by an Award which are
surrendered (i) in payment of the Award exercise or purchase price or (ii) in
satisfaction of tax withholding obligations incident to the exercise of an Award
shall be deemed not to have been issued for purposes of determining the maximum
number of Shares which may
be issued pursuant to all Awards under the Plan, unless
otherwise determined by the Administrator.

4. Administration
of the Plan.

 

(a) Plan
Administrator.

 

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(i) Administration
with Respect to Directors and Officers. With
respect to grants of Awards to Directors or Employees who are also Officers or
Directors of the Company, the Plan shall be administered by (A) the Board or (B)
a Committee designated by the Board, which Committee shall be constituted in
such a manner as to satisfy the Applicable Laws and to permit such grants and
related transactions under the Plan to be exempt from Section 16(b) of the
Exchange Act in accordance with Rule 16b-3. Once appointed, such Committee shall
continue to serve in its designated capacity until otherwise directed by the
Board.

(ii) Administration
With Respect to Consultants and Other Employees. With
respect to grants of Awards to Employees or Consultants who are neither
Directors nor Officers of the Company, the Plan shall be administered by (A) the
Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once appointed,
such Committee shall continue to serve in its designated capacity until
otherwise directed by the Board. The Board may authorize one or more Officers to
grant such Awards and may limit such authority as the Board determines from time
to time.

(iii) Administration
With Respect to Covered Employees.
Notwithstanding the foregoing, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee
(or subcommittee of a Committee) which is comprised solely of two or more
Directors eligible to serve on a committee making Awards qualifying as
Performance-Based Compensation. In the case of such Awards granted to Covered
Employees, references to the “Administrator” or to a “Committee” shall be deemed
to be references to such Committee or subcommittee.

(iv) Administration
Errors. In the
event an Award is granted in a manner inconsistent with the provisions of this
subsection (a), such Award shall be presumptively valid as of its grant date to
the extent permitted by the Applicable Laws.

(b) Powers
of the Administrator. Subject
to Applicable Laws and the provisions of the Plan (including any other powers
given to the Administrator hereunder), and except as otherwise provided by the
Board, the Administrator shall have the authority, in its
discretion:

 

(i) to select
the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;

 

(ii) to
determine whether and to what extent Awards are granted hereunder;

 

(iii) to
determine the number of Shares or the amount of other consideration to be
covered by each Award granted hereunder;

 

(iv) to
approve forms of Award Agreements for use under the Plan;

 

(v) to
determine the terms and conditions of any Award granted hereunder;

 

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(vi) to amend
the terms of any outstanding Award granted under the Plan, provided that (A) any
amendment that would adversely affect the Grantee’s rights under an outstanding
Award shall not be made without the Grantee’s written consent, (B) the reduction
of the exercise price of any Option awarded under the Plan shall be subject to
stockholder approval and (C) canceling an Option at a time when its
exercise price exceeds the Fair Market Value of the underlying Shares, in
exchange for another Option, Restricted Stock, or other Award shall be subject
to stockholder approval, unless the cancellation and exchange occurs in
connection with a Corporate Transaction;

 

(vii) to
construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the
Plan;

 

(viii) to grant
Awards to Employees, Directors and Consultants employed outside the United
States on such terms and conditions different from those specified in the Plan
as may, in the judgment of the Administrator, be necessary or desirable to
further the purpose of the Plan; and

 

(ix) to take
such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

 

(c) Indemnification. In
addition to such other rights of indemnification as they may have as members of
the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related
Entity to whom authority to act for the Board, the Administrator or the Company
is delegated shall be defended and indemnified by the Company to the extent
permitted by law on an after-tax basis against all reasonable expenses,
including attorneys’ fees, actually and necessarily incurred in connection with
the defense of any claim, investigation, action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any Award granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by the Company) or paid
by them in satisfaction of a judgment in any such claim, investigation, action,
suit or proceeding, except in relation to matters as to which it shall be
adjudged in such claim, investigation, action, suit or proceeding that such
person is liable for gross negligence, bad faith or intentional misconduct;
provided, however, that within thirty (30) days after the institution of such
claim, investigation, action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at the Company’s expense to defend the
same.

 

5. Eligibility. Awards
other than Incentive Stock Options may be granted to Employees, Directors and
Consultants. Incentive Stock Options may be granted only to Employees of the
Company or a Parent or a Subsidiary of the Company. An Employee, Director or
Consultant who has been granted an Award may, if otherwise eligible, be granted
additional Awards. Awards may be granted to such Employees, Directors or
Consultants who are residing in non-U.S. jurisdictions as the Administrator may
determine from time to time.

 

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6. Terms
and Conditions of Awards.

 

(a) Types
of Awards. The
Administrator is authorized under the Plan to award any type of arrangement to
an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i)
Shares, (ii) cash or (iii) an Option, a SAR, or similar right with a fixed or
variable price related to the Fair Market Value of the Shares and with an
exercise or conversion privilege related to the passage of time, the occurrence
of one or more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation, Options, SARs, sales or
bonuses of Restricted Stock, Restricted Stock Units or Dividend Equivalent
Rights, and an Award may consist of one such security or benefit, or two (2) or
more of them in any combination or alternative.

 

(b) Designation
of Award. Each
Award shall be designated in the Award Agreement. In the case of an Option, the
Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, an Option
will qualify as an Incentive Stock Option under the Code only to the extent the
$100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The
$100,000 limitation of Section 422(d) of the Code is calculated based on the
aggregate Fair Market Value of the Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee
during any calendar year (under all plans of the Company or any Parent or
Subsidiary of the Company). For purposes of this calculation, Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares shall be determined as of the grant date of
the relevant Option.

 

(c) Conditions
of Award. Subject
to the terms of the Plan, the Administrator shall determine the provisions,
terms, and conditions of each Award including, but not limited to, the Award
vesting schedule, repurchase provisions, rights of first refusal, forfeiture
provisions, form of payment (cash, Shares, or other consideration) upon
settlement of the Award, payment contingencies, and satisfaction of any
performance criteria. The performance criteria established by the Administrator
may be based on any one of, or combination of, the following: (i) increase in
share price, (ii) earnings per share, (iii) total stockholder return, (iv)
operating margin, (v) gross margin, (vi) return on equity, (vii) return on
assets, (viii) return on investment, (ix) operating income, (x) net operating
income, (xi) pre-tax income, (xii) cash flow, (xiii) revenue, (xiv) expenses,
(xv) earnings before interest, taxes and depreciation, (xvi) economic value
added (xvii) market share, (xviii) cost to originate loans, (xix) loan quality,
(xx) loan origination, (xxi) corporate overhead costs, (xxii) loan delinquency
rates, (xxiii) liquidity management, (xxiv) loan losses, (xxv) net interest
income, (xxvi) net interest income margin, (xxvii) return on capital invested,
(xxviii) stockholders’ equity and (xxix) income (before income tax expense). The
performance criteria may be applicable to the Company, Related Entities and/or
any individual business units of the Company or any Related Entity. Partial
achievement of the specified criteria may result in a payment or vesting
corresponding to the degree of achievement as specified in the Award
Agreement.

 

(d) Acquisitions
and Other Transactions. The
Administrator may issue Awards under the Plan in settlement, assumption or
substitution for, outstanding awards or obligations to grant future awards in
connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether
by merger, stock purchase, asset purchase or other form of
transaction.

 

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(e) Deferral
of Award Payment. The
Administrator may establish one or more programs under the Plan to permit
selected Grantees the opportunity to elect to defer receipt of consideration
upon exercise of an Award, satisfaction of performance criteria, or other event
that absent the election would entitle the Grantee to payment or receipt of
Shares or other consideration under an Award. The Administrator may establish
the election procedures, the timing of such elections, the mechanisms for
payments of, and accrual of interest or other earnings, if any, on amounts,
Shares or other consideration so deferred, and such other terms, conditions,
rules and procedures that the Administrator deems advisable for the
administration of any such deferral program.

 

(f) Separate
Programs. The
Administrator may establish one or more separate programs under the Plan for the
purpose of issuing particular forms of Awards to one or more classes of Grantees
on such terms and conditions as determined by the Administrator from time to
time.

 

(g) Individual
Limitations on Awards.

 

(i) Individual
Limit for Options and SARs. The
maximum number of Shares with respect to which Options and SARs may be granted
to any Grantee in any calendar year shall be 250,000 Shares. In connection with
a Grantee’s commencement of Continuous Service, a Grantee may be granted Options
and SARs for up to an additional 250,000 Shares which shall not count against
the limit set forth in the previous sentence. The foregoing limitations shall be
adjusted proportionately in connection with any change in the Company’s
capitalization pursuant to Section 10, below. To the extent required by Section
162(m) of the Code or the regulations thereunder, in applying the foregoing
limitations with respect to a Grantee, if any Option or SAR is cancelled, the
cancelled Option or SAR shall continue to count against the maximum number of
Shares with respect to which Options and SARs may be granted to the Grantee. For
this purpose, the repricing of an Option (or in the case of a SAR, the base
amount on which the stock appreciation is calculated is reduced to reflect a
reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or
SAR.

 

(ii) Individual
Limit for Restricted Stock and Restricted Stock Units. For
awards of Restricted Stock and Restricted Stock Units that are intended to be
Performance-Based Compensation, the maximum number of Shares with respect to
which such Awards may be granted to any Grantee in any calendar year shall be
250,000 Shares. The foregoing limitation shall be adjusted proportionately in
connection with any change in the Company’s capitalization pursuant to Section
10, below.

 

(iii) Deferral. If the
vesting or receipt of Shares under an Award is deferred to a later date, any
amount (whether denominated in Shares or cash) paid in addition to the original
number of Shares subject to such Award will not be treated as an increase in the
number of Shares subject to the Award if the additional amount is based either
on a reasonable rate of interest or on one or more predetermined actual
investments such that the amount payable by the Company at the later date will
be based on the actual rate of return of a specific investment (including any
decrease as well as any increase in the value of an investment).

 

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(h) Early
Exercise. The
Award Agreement may, but need not, include a provision whereby the Grantee may
elect at any time while an Employee, Director or Consultant to exercise any part
or all of the Award prior to full vesting of the Award. Any unvested Shares
received pursuant to such exercise may be subject to a repurchase right in favor
of the Company or a Related Entity or to any other restriction the Administrator
determines to be appropriate.

 

(i) Term
of Award. The
term of each Award shall be the term stated in the Award Agreement, provided,
however, that the term of an Award shall be no more than ten (10) years from the
date of grant thereof. However, in the case of an Incentive Stock Option granted
to a Grantee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of
the Company or any Parent or Subsidiary of the Company, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or
such shorter term as may be provided in the Award Agreement. Notwithstanding the
foregoing, the specified term of any Award shall not include any period for
which the Grantee has elected to defer the receipt of the Shares or cash
issuable pursuant to the Award.

 

(j) Transferability
of Awards.
Incentive Stock Options may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Grantee, only by the Grantee. Other Awards shall be transferable (i) by
will and by the laws of descent and distribution and (ii) during the
lifetime of the Grantee, to the extent and in the manner authorized by the
Administrator. Notwithstanding the foregoing, the Grantee may designate one or
more beneficiaries of the Grantee’s Award in the event of the Grantee’s death on
a beneficiary designation form provided by the Administrator.

 

(k) Time
of Granting Awards. The
date of grant of an Award shall for all purposes be the date on which the
Administrator makes the determination to grant such Award, or such other later
date as is determined by the Administrator.

 

7. Award
Exercise or Purchase Price, Consideration and Taxes.

 

(a) Exercise
or Purchase Price. The
exercise or purchase price, if any, for an Award shall be as
follows:

 

(i) In the
case of an Incentive Stock Option:

 

(A) granted
to an Employee who, at the time of the grant of such Incentive Stock Option owns
stock representing more than ten percent (10%) of the voting power of all
classes of stock of the Company or any Parent or Subsidiary of the Company, the
per Share exercise price shall be not less than one hundred ten percent (110%)
of the Fair Market Value per Share on the date of grant; or

 

11

(B) granted
to any Employee other than an Employee described in the preceding paragraph, the
per Share exercise price shall be not less than one hundred percent (100%) of
the Fair Market Value per Share on the date of grant.

 

(ii) In the
case of a Non-Qualified Stock Option, the per Share exercise price shall be not
less than one hundred percent (100%) of the Fair Market Value per Share on the
date of grant.

 

(iii) In the
case of SARs, the base appreciation amount shall be not less than one hundred
percent (100%) of the Fair Market Value per Share on the date of
grant.

 

(iv) In the
case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent
(100%) of the Fair Market Value per Share on the date of grant.

 

(v) In the
case of other Awards, such price as is determined by the
Administrator.

 

(vi) Notwithstanding
the foregoing provisions of this Section 7, in the case of an Award issued
pursuant to Section 6, above, the exercise or purchase price for the Award shall
be determined in accordance with the provisions of the relevant instrument
evidencing the agreement to issue such Award.

 

(b) Consideration. Subject
to Applicable Laws, the consideration to be paid for the Shares to be issued
upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator. In addition to any other types of consideration
the Administrator may determine, the Administrator is authorized to accept as
consideration for Shares issued under the Plan the following:

 

(i) cash;

 

(ii) check;

 

(iii) surrender
of Shares or delivery of a properly executed form of attestation of ownership of
Shares as the Administrator may require which have a Fair Market Value on the
date of surrender or attestation equal to the aggregate exercise price of the
Shares as to which said Award shall be exercised, provided, however, that Shares
acquired under the Plan or any other equity compensation plan or agreement of
the Company must have been held by the Grantee for a period of more than six (6)
months (and not used for another Award exercise by attestation during such
period);

 

(iv) with
respect to Options, payment through a broker-dealer sale and remittance
procedure pursuant to which the Grantee (A) shall provide written instructions
to a Company designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to cover
the aggregate exercise price payable for the purchased Shares and (B) shall
provide written directives to the Company to deliver the certificates for the
purchased Shares directly to such brokerage firm in order to complete the sale
transaction; or

 

12

(v) any
combination of the foregoing methods of payment.

 

The
Administrator may at any time or from time to time, by adoption of or by
amendment to the standard forms of Award Agreement described in Section
4(b)(iv), or by other means, grant Awards which do not permit all of the
foregoing forms of consideration to be used in payment for the Shares or which
otherwise restrict one or more forms of consideration.

 

(c) Taxes. No
Shares shall be delivered under the Plan to any Grantee or other person until
such Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of any non-U.S., federal, state, or local
income and employment tax withholding obligations, including, without
limitation, obligations incident to the receipt of Shares. Upon exercise or
vesting of an Award the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations, including, but not limited too, by
surrender of the whole number of Shares
covered by the Award sufficient to satisfy the minimum applicable tax
withholding obligations incident to the exercise or vesting of an
Award.

 

8. Exercise
of Award.

 

(a) Procedure
for Exercise; Rights as a Stockholder.

 

(i) Any Award
granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in
the Award Agreement.

 

(ii) An Award
shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person
entitled to exercise the Award and full payment for the Shares with respect to
which the Award is exercised has been made, including, to the extent selected,
use of the broker-dealer sale and remittance procedure to pay the purchase price
as provided in Section 7(b)(iv).

 

(b) Exercise
of Award Following Termination of Continuous Service.

 

(i) An Award
may not be exercised after the termination date of such Award set forth in the
Award Agreement and may be exercised following the termination of a Grantee’s
Continuous Service only to the extent provided in the Award
Agreement.

 

(ii) Where the
Award Agreement permits a Grantee to exercise an Award following the termination
of the Grantee’s Continuous Service for a specified period, the Award shall
terminate to the extent not exercised on the last day of the specified period or
the last day of the original term of the Award, whichever occurs
first.

 

(iii) Any Award
designated as an Incentive Stock Option to the extent not exercised within the
time permitted by law for the exercise of Incentive Stock Options following the
termination of a Grantee’s Continuous Service shall convert automatically to a
Non-Qualified Stock Option and thereafter shall be exercisable as such to the
extent exercisable by its terms for the period specified in the Award
Agreement.

 

13

9. Conditions
Upon Issuance of Shares.

 

(a) Shares
shall not be issued pursuant to the exercise of an Award unless the exercise of
such Award and the issuance and delivery of such Shares pursuant thereto shall
comply with all Applicable Laws, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

 

(b) As a
condition to the exercise of an Award, the Company may require the person
exercising such Award to represent and warrant at the time of any such exercise
that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any Applicable
Laws.

 

10. Adjustments
Upon Changes in Capitalization. Subject
to any required action by the stockholders of the Company, the number of Shares
covered by each outstanding Award, and the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan, the exercise or purchase price
of each such outstanding Award, the maximum number of Shares with respect to
which Awards may be granted to any Grantee in any calendar year, as well as any
other terms that the Administrator determines require adjustment shall be
proportionately adjusted for (i) any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Shares, or similar transaction affecting
the Shares, (ii) any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company, or (iii) as the
Administrator may determine in its discretion, any other transaction with
respect to Common Stock including a corporate merger, consolidation, acquisition
of property or stock, separation (including a spin-off or other distribution of
stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible
securities of the Company shall not be deemed to have been “effected without
receipt of consideration.” In the
event of any distribution of cash or other assets to stockholders other than a
normal cash dividend, the Administrator may also, in its discretion, make
adjustments described in (i)-(iii) of this Section 10 or substitute, exchange or
grant Awards with respect to the shares of a Related Entity (collectively
“adjustments”). In determining adjustments to be made under this Section 10, the
Administrator may take into account such factors as it deems appropriate,
including (x) the restrictions of Applicable Law, (y) the potential tax,
accounting or other consequences of an adjustment and (z) the possibility that
some Grantees might receive an adjustment and a distribution or other unintended
benefit, and in light of such factors or circumstances may make adjustments that
are not uniform or proportionate among outstanding Awards, modify vesting dates,
defer the delivery of stock certificates or make other equitable adjustments.
Any such adjustments to outstanding Awards will be effected in a manner that
precludes the material enlargement of rights and benefits under such Awards.
Adjustments, if any, and any determinations or interpretations, including any
determination of whether a distribution is other than a normal cash dividend,
shall be made by the Administrator and its determination shall be final, binding
and conclusive. In connection with the foregoing adjustments, the Administrator
may, in its discretion, prohibit the exercise of Awards during certain periods
of time. Except as the Administrator determines, no issuance by the Company of
shares of any class, or securities convertible into shares of any class, shall
affect, and no adjustment by reason hereof shall be made with respect to, the
number or price of Shares subject to an Award.

 

14

11. Corporate
Transactions and Changes in Control.

 

(a)  Termination
of Award to Extent Not Assumed in Corporate Transaction.
Effective upon the consummation of a Corporate Transaction, all outstanding
Awards under the Plan shall terminate. However, all such Awards shall not
terminate to the extent they are Assumed in connection with the Corporate
Transaction.

 

(b)  Acceleration
of Award Upon Corporate Transaction or Change in Control.

 

(i)  Corporate
Transaction. Except
as provided otherwise in an individual Award Agreement, in the event of a
Corporate Transaction and:

 

(A)  for the
portion of each Award that is Assumed or Replaced, then such Award (if Assumed)
or the replacement Award (if Replaced) automatically shall become fully vested,
exercisable and payable and be released from any repurchase or forfeiture rights
(other than repurchase rights exercisable at Fair Market Value) for all of the
Shares at the time represented by such Assumed or Replaced portion of the Award,
immediately upon termination of the Grantee’s Continuous Service if such
Continuous Service is terminated by the successor company or the Company without
Cause within twelve (12) months after the Corporate Transaction;
and

 

(B)  for the
portion of each Award that is neither Assumed nor Replaced, such portion of the
Award shall automatically become fully vested and exercisable and be released
from any repurchase or forfeiture rights (other than repurchase rights
exercisable at Fair Market Value) for all of the Shares at the time represented
by such portion of the Award, immediately prior to the specified effective date
of such Corporate Transaction, provided that the Grantee’s Continuous Service
has not terminated prior to such date. 

 

(ii)  Change
in Control. Except
as provided otherwise in an individual Award Agreement, following a Change in
Control (other than a Change in Control which also is a Corporate Transaction)
and upon the termination of the Continuous Service of a Grantee if such
Continuous Service is terminated by the Company or Related Entity without Cause
within twelve (12) months after a Change in Control, each Award of such Grantee
which is at the time outstanding under the Plan automatically shall become fully
vested and exercisable and be released from any repurchase or forfeiture rights
(other than repurchase rights exercisable at Fair Market Value), immediately
upon the termination of such Continuous Service.

 

(c)  Effect
of Acceleration on Incentive Stock Options. Any
Incentive Stock Option accelerated under this Section 11 in connection with a
Corporate Transaction or Change in Control shall remain exercisable as an
Incentive Stock Option under the Code only to the extent the $100,000 dollar
limitation of Section 422(d) of the Code is not exceeded. To the extent such
dollar limitation is exceeded, the excess Options shall be treated as
Non-Qualified Stock Options.

 

15

12. Effective
Date and Term of Plan. The
Plan shall become effective upon its approval by the stockholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated.

 

13. Amendment,
Suspension or Termination of the Plan.

 

(a) The Board
may at any time amend, suspend or terminate the Plan; provided, however, that no
such amendment shall be made without the approval of the Company’s stockholders
to the extent such approval is required by Applicable Laws, or if such amendment
would lessen the stockholder approval requirements of Section 4(b)(vi) or this
Section 13(a).

 

(b) No Award
may be granted during any suspension of the Plan or after termination of the
Plan.

 

(c) No
suspension or termination of the Plan (including termination of the Plan under
Section 12 above) shall adversely affect any rights under Awards already granted
to a Grantee.

 

14. Reservation
of Shares.

 

(a) The
Company, during the term of the Plan, will at all times reserve and keep
available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

 

(b) The
inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary
to the lawful issuance and sale of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue or sell such Shares
as to which such requisite authority shall not have been obtained.

 

15. No
Effect on Terms of Employment/Consulting Relationship. The
Plan shall not confer upon any Grantee any right with respect to the Grantee’s
Continuous Service, nor shall it interfere in any way with his or her right or
the right of the Company or any Related Entity to terminate the Grantee’s
Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the
employment of a Grantee who is employed at will is in no way affected by its
determination that the Grantee’s Continuous Service has been terminated for
Cause for the purposes of this Plan.

 

16. No
Effect on Retirement and Other Benefit Plans. Except
as specifically provided in a retirement or other benefit plan of the Company or
a Related Entity, Awards shall not be deemed compensation for purposes of
computing benefits or contributions under any retirement plan of the Company or
a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the
availability or amount of benefits is related to level of compensation. The Plan
is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement
Income Security Act of 1974, as amended.

 

16

17. Unfunded
Obligation.
Grantees shall have the status of general unsecured creditors of the Company.
Any amounts payable to Grantees pursuant to the Plan shall be unfunded and
unsecured obligations for all purposes, including, without limitation, Title I
of the Employee Retirement Income Security Act of 1974, as amended. Neither the
Company nor any Related Entity shall be required to segregate any monies from
its general funds, or to create any trusts, or establish any special accounts
with respect to such obligations. The Company shall retain at all times
beneficial ownership of any investments, including trust investments, which the
Company may make to fulfill its payment obligations hereunder. Any investments
or the creation or maintenance of any trust or any Grantee account shall not
create or constitute a trust or fiduciary relationship between the
Administrator, the Company or any Related Entity and a Grantee, or otherwise
create any vested or beneficial interest in any Grantee or the Grantee’s
creditors in any assets of the Company or a Related Entity. The Grantees shall
have no claim against the Company or any Related Entity for any changes in the
value of any assets that may be invested or reinvested by the Company with
respect to the Plan.

 

18. Construction.
Captions and titles contained herein are for convenience only and shall not
affect the meaning or interpretation of any provision of the Plan. Except when
otherwise indicated by the context, the singular shall include the plural and
the plural shall include the singular. Use of the term “or” is not intended to
be exclusive, unless the context clearly requires otherwise.

17Notice of Restricted Stock Bonus Award

EXHIBIT
10.2

DELTA
FINANCIAL CORPORATION 2005
STOCK INCENTIVE PLAN

 

NOTICE
OF RESTRICTED STOCK BONUS AWARD

 

	
      Grantee’s
      Name and Address:
	 
	 	 
	 	 

 

 

You (the
“Grantee”) have been granted shares of Common Stock of the Company (the
“Award”), subject to the terms and conditions of this Notice of Restricted Stock
Bonus Award (the “Notice”), the Delta Financial Corporation 2005 Stock Incentive
Plan (the “Plan”), as amended from time to time, and the Restricted Stock Bonus
Award Agreement (the “Agreement”) attached hereto, as follows. Unless otherwise
defined herein, the terms defined in the Plan shall have the same defined
meanings in this Notice.

 

	
      Award
      Number 
	 
	
      Date
      of Award 
	 
	
      Vesting
      Commencement Date 
	 
	
      Total
      Number of Shares of
      Common Stock Awarded (the “Shares”) 
	 
	
      Aggregate
      Fair Market Value
      of the Shares
	 $

 

Vesting
Schedule:

 

Subject
to the Grantee’s Continuous Service and other limitations set forth in this
Notice, the Plan and the Agreement, the Shares will “vest” in accordance with
the following schedule:

 

50% of
the Shares shall vest three (3) years after the Vesting Commencement Date and an
additional 25% of the Shares shall vest on each yearly anniversary of the
Vesting Commencement Date thereafter such that the Shares will be fully vested
five (5) years after the Vesting Commencement Date.

 

Notwithstanding
the foregoing, in the event a Corporate Transaction or a Change in Control
occurs within three (3) years after the Vesting Commencement Date, the Shares
will “vest” in accordance with the following schedule: 

 

50% of
the Shares shall vest immediately prior to the effective date of the Corporate
Transaction or Change in Control and an additional 25% of the Shares shall vest
on each yearly anniversary of the effective date of the Corporate Transaction or
Change in Control.

 

1

During
any authorized leave of absence, the vesting of the Shares as provided in this
schedule shall be suspended after the leave of absence exceeds a period of
ninety (90) days. Vesting of the Shares shall resume upon the Grantee’s
termination of the leave of absence and return to service to the Company or a
Related Entity. The Vesting Schedule of the Shares shall be extended by the
length of the suspension.

 

In the
event of the Grantee’s change in status from Employee, Director or Consultant to
any other status of Employee, Director or Consultant, the Shares shall continue
to vest in accordance with the Vesting Schedule set forth above.

 

For
purposes of this Notice and the Agreement, the term “vest” shall mean, with
respect to any Shares, that such Shares are no longer subject to forfeiture to
the Company. Shares that have not vested are deemed “Restricted Shares.” If the
Grantee would become vested in a fraction of a Restricted Share, such Restricted
Share shall not vest until the Grantee becomes vested in the entire Share.

 

Vesting
shall cease upon the date of termination of the Grantee’s Continuous Service for
any reason, including death or Disability. In the event the Grantee’s Continuous
Service is terminated for any reason, including death or Disability, any
Restricted Shares held by the Grantee immediately following such termination of
Continuous Service shall be deemed reconveyed to the Company and the Company
shall thereafter be the legal and beneficial owner of the Restricted Shares and
shall have all rights and interest in or related thereto without further action
by the Grantee. The foregoing forfeiture provisions set forth in this Notice as
to Restricted Shares shall apply to the new capital stock or other property
(including cash paid other than as a regular cash dividend) received in exchange
for the Shares in consummation of any transaction described in Section 11
of the Plan and such stock or property shall be deemed Additional Securities (as
defined in the Agreement) for purposes of the Agreement, but only to the extent
the Shares are at the time covered by such forfeiture provisions. 

 

The Award
shall be subject to the provisions of Section 11 of the Plan relating to
the vesting of the Shares in the event of a Corporate Transaction or Change in
Control. 

 

IN
WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree
that the Award is to be governed by the terms and conditions of this Notice, the
Plan and the Agreement.

 

Delta
Financial Corporation,

a
Delaware corporation

 

By:

 

Title:

 

THE
GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SHALL VEST, IF AT ALL, ONLY
DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE
GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS NOTICE, THE
AGREEMENT NOR THE PLAN SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO
CONTINUATION OF THE GRANTEE’S CONTINUOUS SERIVCE, NOR SHALL IT INTERFERE IN ANY
WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S
CONTINUOUS SERIVCE AT ANY TIME, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT
NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS
AT WILL.

 

2

As a
condition to receiving the Shares, the Grantee agrees to refrain from making an
election pursuant to Section 83(b) of the Code with respect to the
Shares.

 

The
Grantee acknowledges receipt of a copy of the Plan and the Agreement and
represents that he or she is familiar with the terms and provisions thereof, and
hereby accepts the Award subject to all of the terms and provisions hereof and
thereof. The Grantee has reviewed this Notice, the Agreement and the Plan in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Notice and fully understands all provisions of this Notice, the
Agreement and the Plan. The Grantee hereby agrees that all questions of
interpretation and administration relating to this Notice, the Plan and the
Agreement shall be resolved by the Administrator in accordance with
Section 11 of the Agreement. The Grantee further agrees to the venue
selection and waiver of a jury trial in accordance with Section 12 of the
Agreement. The Grantee further agrees to notify the Company upon any change in
the residence address indicated in this Notice.

 

Dated:
_______________________________________________     Signed:
__________________________________________________________

3

Award
Number: __________________

 

DELTA
FINANCIAL CORPORATION 2005 STOCK INCENTIVE PLAN

RESTRICTED
STOCK BONUS AWARD AGREEMENT

 

1.     Issuance
of Shares. Delta
Financial Corporation, a Delaware corporation (the “Company”), hereby issues to
the Grantee (the “Grantee”) named in the Notice of Restricted Stock Bonus Award
(the “Notice”), the Total Number of Shares of Common Stock Awarded set forth in
the Notice (the “Shares”), subject to the Notice, this Restricted Stock Bonus
Award Agreement (the “Agreement”) and the terms and provisions of the Company’s
2005 Stock Incentive Plan (the “Plan”), as amended from time to time, which are
incorporated herein by reference. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Agreement. All
Shares issued hereunder will be deemed issued to the Grantee as fully paid and
nonassessable shares, and the Grantee will have the right to vote the Shares at
meetings of the Company’s stockholders. The Company shall pay any applicable
stock transfer taxes imposed upon the issuance of the Shares to the Grantee
hereunder. 

 

2.     Transfer
Restrictions. The
Shares issued to the Grantee hereunder may not be sold, transferred by gift,
pledged, hypothecated, or otherwise transferred or disposed of by the Grantee
prior to the date when the Shares become vested pursuant to the Vesting Schedule
set forth in the Notice. Any attempt to transfer Restricted Shares in violation
of this Section 2 will be null and void and will be disregarded.

 

3.     Escrow
of Stock. For
purposes of facilitating the enforcement of the provisions of this Agreement,
the Grantee agrees, immediately upon receipt of the certificate(s) for the
Restricted Shares, to deliver such certificate(s), together with an Assignment
Separate from Certificate in the form attached hereto as Exhibit A,
executed in blank by the Grantee with respect to each such stock certificate, to
the Secretary or Assistant Secretary of the Company, or their designee, to hold
in escrow for so long as such Restricted Shares have not vested pursuant to the
Vesting Schedule set forth in the Notice, with the authority to take all such
actions and to effectuate all such transfers and/or releases as may be necessary
or appropriate to accomplish the objectives of this Agreement in accordance with
the terms hereof. The Grantee hereby acknowledges that the appointment of the
Secretary or Assistant Secretary of the Company (or their designee) as the
escrow holder hereunder with the stated authorities is a material inducement to
the Company to make this Agreement and that such appointment is coupled with an
interest and is accordingly irrevocable. The Grantee agrees that such escrow
holder shall not be liable to any party hereto (or to any other party) for any
actions or omissions unless such escrow holder is grossly negligent relative
thereto. The escrow holder may rely upon any letter, notice or other document
executed by any signature purported to be genuine and may resign at any time.
Upon the vesting of Restricted Shares, the escrow holder will, without further
order or instruction, transmit to the Grantee the certificate evidencing such
Shares.

 

4

 

4.     Additional
Securities and Distributions.

 

(a) Any
securities or cash received (other than a regular cash dividend) as the result
of ownership of the Restricted Shares (the “Additional Securities”), including,
but not by way of limitation, warrants, options and securities received as a
stock dividend or stock split, or as a result of a recapitalization or
reorganization or other similar change in the Company’s capital structure, shall
be retained in escrow in the same manner and subject to the same conditions and
restrictions as the Restricted Shares with respect to which they were issued,
including, without limitation, the Vesting Schedule set forth in the Notice. The
Grantee shall be entitled to direct the Company to exercise any warrant or
option received as Additional Securities upon supplying the funds necessary to
do so, in which event the securities so purchased shall constitute Additional
Securities, but the Grantee may not direct the Company to sell any such warrant
or option. If Additional Securities consist of a convertible security, the
Grantee may exercise any conversion right, and any securities so acquired shall
constitute Additional Securities. In the event of any change in certificates
evidencing the Shares or the Additional Securities by reason of any
recapitalization, reorganization or other transaction that results in the
creation of Additional Securities, the escrow holder is authorized to deliver to
the issuer the certificates evidencing the Shares or the Additional Securities
in exchange for the certificates of the replacement securities.

 

(b) The
Company shall disburse to the Grantee all regular cash dividends with respect to
the Shares and Additional Securities (whether vested or not), less any
applicable withholding obligations. 

 

5.     Taxes.

 

(a) No
Section 83(b) Election. As a
condition to receiving the Shares, the Grantee agrees to refrain from making an
election pursuant to Section 83(b) of the Code with respect to the
Shares.

 

(b) Tax
Liability. The
Grantee is ultimately liable and responsible for all taxes owed by the Grantee
in connection with the Award, regardless of any action the Company or any
Related Entity takes
with respect to any tax withholding obligations that arise in connection with
the Award. Neither the Company nor any
Related Entity makes
any representation or undertaking regarding the treatment of any tax withholding
in connection with the grant or vesting of the Award or the subsequent sale of
Shares subject to the Award. The Company and its
Related Entities do not
commit and are under no obligation to structure the Award to reduce or eliminate
the Grantee’s tax liability.

 

(c) Payment
of Withholding Taxes. Prior
to any event in connection with the Award (e.g., vesting) that the Company
determines may result in any tax withholding obligation, whether United States
federal, state, local or non-U.S., including any employment tax obligation (the
“Tax Withholding Obligation”), the Grantee must arrange for the satisfaction of
the minimum amount of such Tax Withholding Obligation in a manner acceptable to
the Company. 

 

5

(i) By
Share Withholding. The
Grantee authorizes the Company to, upon the exercise of its sole discretion,
withhold from those Shares issuable to the Grantee the whole number of Shares
sufficient to satisfy the minimum applicable Tax Withholding Obligation. The
Grantee acknowledges that the withheld Shares may not be sufficient to satisfy
the Grantee’s minimum Tax Withholding Obligation. Accordingly, the Grantee
agrees to pay to the Company or any Related
Entity as soon
as practicable, including through additional payroll withholding, any amount of
the Tax Withholding Obligation that is not satisfied by the withholding of
Shares described above.

 

(ii) By
Sale of Shares. Unless
the Grantee determines to satisfy the Tax Withholding Obligation by some other
means in accordance with clause (iii) below, the Grantee’s acceptance of this
Award constitutes the Grantee’s instruction and authorization to the Company and
any brokerage firm determined acceptable to the Company for such purpose to sell
on the Grantee’s behalf a whole number of Shares from those Shares issuable to
the Grantee as the Company determines to be appropriate to generate cash
proceeds sufficient to satisfy the minimum applicable Tax Withholding
Obligation. Such Shares will be sold on the day such Tax Withholding Obligation
arises (e.g., a vesting date) or as soon thereafter as practicable. The Grantee
will be responsible for all broker’s fees and other costs of sale, and the
Grantee agrees to indemnify and hold the Company harmless from any losses,
costs, damages, or expenses relating to any such sale. To the extent the
proceeds of such sale exceed the Grantee’s minimum Tax Withholding Obligation,
the Company agrees to pay such excess in cash to the Grantee. The Grantee
acknowledges that the Company or its designee is under no obligation to arrange
for such sale at any particular price, and that the proceeds of any such sale
may not be sufficient to satisfy the Grantee’s minimum Tax Withholding
Obligation. Accordingly, the Grantee agrees to pay to the Company or any
Related
Entity as soon
as practicable, including through additional payroll withholding, any amount of
the Tax Withholding Obligation that is not satisfied by the sale of Shares
described above. 

 

(iii) By
Check, Wire Transfer or Other Means. At any
time not less than five (5) business days (or such fewer number of business days
as determined by the Administrator) before any Tax Withholding Obligation arises
(e.g., a vesting date), the Grantee may elect to satisfy the Grantee’s Tax
Withholding Obligation by delivering to the Company an amount that the Company
determines is sufficient to satisfy the Tax Withholding Obligation by
(x) wire transfer to such account as the Company may direct,
(y) delivery of a certified check payable to the Company, or (z) such
other means as specified from time to time by the Administrator. 

 

6.     Stop-Transfer
Notices. In
order to ensure compliance with the restrictions on transfer set forth in this
Agreement, the Notice or the Plan, the Company may issue appropriate “stop
transfer” instructions to its transfer agent, if any, and, if the Company
transfers its own securities, it may make appropriate notations to the same
effect in its own records.

 

7.     Refusal
to Transfer. The
Company shall not be required (i) to transfer on its books any Shares that
have been sold or otherwise transferred in violation of any of the provisions of
this Agreement or (ii) to treat as owner of such Shares or to accord the
right to vote or pay dividends to any purchaser or other transferee to whom such
Shares shall have been so transferred.

 

6

8.    Restrictive
Legends. The
Grantee understands and agrees that the Company shall cause the legends set
forth below or legends substantially equivalent thereto, to be placed upon any
certificate(s) evidencing ownership of the Shares together with any other
legends that may be required by the Company or by state or federal securities
laws:

 

THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THAT
CERTAIN RESTRICTED STOCK BONUS AWARD AGREEMENT BETWEEN THE COMPANY AND THE NAMED
STOCKHOLDERS. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY
IN ACCORDANCE WITH SUCH AGREEMENT, A COPY OF WHICH IS ON FILE WITH THE SECRETARY
OF THE COMPANY.

 

9.     Entire
Agreement: Governing Law. The
Notice, the Plan and this Agreement constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to
the Grantee’s interest except by means of a writing signed by the Company and
the Grantee. These agreements are to be construed in accordance with and
governed by the internal laws of the State of New York without giving effect to
any choice of law rule that would cause the application of the laws of any
jurisdiction other than the internal laws of the State of New York to the rights
and duties of the parties. Should any provision of the Notice or this Agreement
be determined to be illegal or unenforceable, the other provisions shall
nevertheless remain effective and shall remain enforceable.

 

10.        
Headings. The
captions used in this Agreement are inserted for convenience and shall not be
deemed a part of this Agreement for construction or interpretation.

 

11.        
Administration
and Interpretation. Any
question or dispute regarding the administration or interpretation of the
Notice, the Plan or this Agreement shall be submitted by the Grantee or by the
Company to the Administrator. The resolution of such question or dispute by the
Administrator shall be final and binding on all persons. 

 

12.        
Venue
and Waiver of Jury Trial. The
parties agree that any suit, action, or proceeding arising out of or relating to
the Notice, the Plan or this Agreement shall be brought in the United States
District Court for the Southern District of New York (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a New York state court
in the County of New York) and that the parties shall submit to the jurisdiction
of such court. The parties irrevocably waive, to the fullest extent permitted by
law, any objection the party may have to the laying of venue for any such suit,
action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY
RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR
PROCEEDING. If any one or more provisions of this Section 12 shall for any
reason be held invalid or unenforceable, it is the specific intent of the
parties that such provisions shall be modified to the minimum extent necessary
to make it or its application valid and enforceable.

 

7

13.     Notices. Any
notice required or permitted hereunder shall be given in writing and shall be
deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the
United States mail by certified mail (if the parties are within the United
States), with postage and fees prepaid, addressed to the other party at its
address as shown in these instruments, or to such other address as such party
may designate in writing from time to time to the other party.

 

 

END
OF AGREEMENT

 

8

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