Document:

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                                                                    EXHIBIT 10.1

                        RESTRICTED STOCK AWARD AGREEMENT

         THIS RESTRICTED STOCK AWARD AGREEMENT (this "Agreement") is made and
entered into as of the ____ day of ____, _____ (the "Date of Grant"), between
First Acceptance Corporation, a Delaware corporation (the "Company"), and
___________________, (the "Participant"). Capitalized terms not otherwise
defined herein shall have the meaning ascribed to such terms in the First
Acceptance Corporation 2002 Long Term Incentive Plan, as amended (the "Plan").

         WHEREAS, the Company has adopted the Plan, which permits the issuance
of restricted shares of the Company's common stock, par value $0.01 per share
(the "Common Stock"); and

         WHEREAS, pursuant to the Plan, the Board has granted an award of
restricted stock to the Participant as provided herein;

         NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound hereby, agree as follows:

         1. Grant of Restricted Stock.

            (a) The Company hereby grants to the Participant an award (the
"Award") of 500 shares of Common Stock of the Company (the "Stock" or the
"Restricted Stock") on the terms and conditions set forth in this Agreement and
as otherwise provided in the Plan.

            (b) The Participant's rights with respect to the Award shall remain
forfeitable at all times prior to the date on which the restrictions shall lapse
in accordance with Section 3 hereof.

         2. Terms and Rights as a Stockholder.

            (a) Except as provided herein and subject to such other exceptions
as may be determined by the Committee in its discretion, the "Restriction
Period" for Restricted Shares granted herein shall expire on the date that is
six (6) months after the Date of Grant (as may be adjusted in accordance with
Section 7 hereof.)

            (b) The Participant shall have all rights of a stockholder with
respect to the Restricted Stock, including the right to receive dividends and
the right to vote such Stock, subject to the following restrictions:

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                  (i)      the Participant shall not be entitled to delivery of
                           the stock certificate for any Stock until the
                           expiration of the Restriction Period as to such
                           Stock;

                  (ii)     none of the Restricted Stock may be sold, assigned,
                           transferred, pledged, hypothecated or otherwise
                           encumbered or disposed of during the Restriction
                           Period as to such Stock; and

                  (iii)    except as otherwise determined by the Committee at or
                           after the grant of the Award hereunder, all of the
                           Restricted Stock shall be forfeited, and all rights
                           of the Participant to such Stock shall terminate,
                           without further obligation on the part of the
                           Company, unless the Participant remains in the
                           continuous service as a director of the Company for
                           the entire Restriction Period.

            Any Stock, any other securities of the Company and any other
property (except for cash dividends) distributed with respect to the Restricted
Stock shall be subject to the same restrictions, terms and conditions as such
Restricted Stock.

            (c) Notwithstanding the foregoing, the Restriction Period shall
automatically terminate as to all Restricted Stock awarded hereunder (as to
which such Restriction Period has not previously terminated) upon the occurrence
of the following events:

                  (i)      termination of the Participant's service as a
                           director with the Company which results from the
                           Participant's death, Retirement (as defined in the
                           Plan) or Total and Permanent Disability (as defined
                           in the Plan); or

                  (ii)     the occurrence of a Change in Control.

         3. Termination of Restrictions. At the end of the Restriction Period as
to any portion of the Restricted Stock, or at such earlier time as may be
determined by the Committee, all restrictions set forth in this Agreement or in
the Plan relating to such portion of the Restricted Stock shall lapse as to such
portion of the Restricted Stock, and a stock certificate for the appropriate
number of shares of such Stock, free of the restrictions and restrictive stock
legend, shall be delivered to the Participant or the Participant's beneficiary
or estate, as the case may be, pursuant to the terms of this Agreement.

                                      -2-
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         4. Delivery of Stock.

            (a) As of the date hereof, certificates representing the Restricted
Stock shall be registered in the name of the Participant and held by the Company
or transferred to a custodian appointed by the Company for the account of the
Participant subject to the terms and conditions of the Plan and shall remain in
the custody of the Company or such custodian until their delivery to the
Participant or Participant's beneficiary or estate as set forth in Sections 4(b)
and (c) hereof or their reversion to the Company as set forth in Sections 2(b)
and 4(d) hereof.

            (b) Certificates representing Restricted Stock in respect of which
the Restriction Period has lapsed pursuant to this Agreement shall be delivered
to the Participant as soon as practicable following the date on which the
restrictions on such Restricted Stock lapse.

            (c) Certificates representing Restricted Stock in respect of which
the Restriction Period lapsed upon the Participant's death shall be delivered to
the executors or administrators of the Participant's estate as soon as
practicable following the receipt of proof of the Participant's death
satisfactory to the Company.

            (d) By accepting the grant of Restricted Stock under this Agreement,
Participant shall irrevocably grant to the Company a power of attorney to
transfer any shares forfeited to the Company and agrees to execute any documents
requested by the Company in connection with such forfeiture and transfer.
Participant hereby acknowledges that any breach by it of its obligations under
this Section 4(d) would cause substantial and irreparable damage to the Company,
and that money damages would be an inadequate remedy therefore, and,
accordingly, acknowledges and agrees that the Company shall be entitled to
specific performance to remedy the breach of such obligations (in addition to
the other rights and remedies provided for herein).

            (e) The face of each certificate representing Restricted Stock shall
bear a legend in substantially the following form:

                  TRANSFER OF THIS STOCK IS RESTRICTED IN ACCORDANCE WITH
                  CONDITIONS PRINTED ON THE REVERSE OF THIS CERTIFICATE.

            (f) The reverse of each certificate representing Restricted Stock
shall bear a legend in substantially the following form:

                  THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT
                  TO AND TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN FIRST
                  ACCEPTANCE CORPORATION LONG TERM

                                      -3-
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                  INCENTIVE PLAN (THE "PLAN"), A COPY OF WHICH IS ON FILE AT THE
                  PRINCIPAL OFFICE OF THE COMPANY IN NASHVILLE, TENNESSEE. NO
                  TRANSFER OR PLEDGE OF THE SHARES EVIDENCED HEREBY MAY BE MADE
                  EXCEPT IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF
                  SAID PLAN. BY ACCEPTANCE OF THIS CERTIFICATE, ANY HOLDER,
                  TRANSFEREE OR PLEDGEE HEREOF AGREES TO BE BOUND BY ALL OF THE
                  PROVISIONS OF SAID PLAN.

         5. Effect of Lapse of Restrictions. To the extent that the Restriction
Period applicable to any Restricted Stock shall have lapsed, the Participant may
receive, hold, sell or otherwise dispose of such Stock free and clear of the
restrictions imposed under the Plan and this Agreement.

         6. No Right to Continued Service. This Agreement shall not be
construed as giving Participant the right to be retained as a director of the
Company or any Subsidiary or Affiliate.

         7. Adjustments. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, this Award in recognition of
unusual or nonrecurring events (including, without limitation, the events
described in Section 11 of the Plan) affecting the Company, any Subsidiary or
Affiliate, or the financial statements of the Company or any Subsidiary or
Affiliate, or of changes in applicable laws, regulations, or accounting
principles, whenever the Committee determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan.

         8. Amendment to Award. Subject to the restrictions contained in Section
9 of the Plan, the Committee may waive any conditions or rights under, amend any
terms of, or alter, suspend, discontinue, cancel or terminate, the Award,
prospectively or retroactively; provided that any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that would
adversely affect the rights of the Participant or any holder or beneficiary of
the Award shall not to that extent be effective without the consent of the
Participant, holder or beneficiary affected.

         9. Withholding of Taxes. If the Participant makes an election under
section 83(b) of the Code with respect to the Award, the Award made pursuant to
this Agreement shall be conditioned upon the prompt payment to the Company of
any applicable withholding obligations or withholding taxes by the Participant
("Withholding Taxes"). Failure by the Participant to pay such Withholding Taxes
will render this Agreement and

                                      -4-
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the Award granted hereunder null and void ab initio and the Restricted Stock
granted hereunder will be immediately cancelled. If the Participant does not
make an election under section 83(b) of the Code with respect to the Award, upon
the lapse of the Restriction Period with respect to any portion of Restricted
Stock (or property distributed with respect thereto), the Company shall satisfy
the required Withholding Taxes as set forth by Internal Revenue Service
guidelines for the employer's minimum statutory withholding with respect to
Participant and issue vested shares to the Participant without Restriction.

         10. Plan Governs. The Participant hereby acknowledges receipt of a copy
of the Plan and agrees to be bound by all the terms and provisions thereof. The
terms of this Agreement are governed by the terms of the Plan, and in the case
of any inconsistency between the terms of this Agreement and the terms of the
Plan, the terms of the Plan shall govern.

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

         12. Notices. All notices required to be given under this Grant shall be
deemed to be received if delivered or mailed as provided for herein, to the
parties at the following addresses, or to such other address as either party may
provide in writing from time to time.

         To the Company:      First Acceptance Corporation
                              3813 Green Hills Village Drive
                              Nashville, Tennessee 37215
                              Attn: Secretary
                              Facsimile: (615) 844-2898

         To the Participant:  The address then maintained with respect to the
                              Participant in the Company's records.

         13. Governing Law. The validity, construction and effect of this
Agreement shall be determined in accordance with the laws of the State of
Delaware without giving effect to conflicts of laws principles.

         14. Successors in Interest. This Agreement shall inure to the benefit
of and be binding upon any successor to the Company. This Agreement shall inure
to the benefit of the Participant's legal representatives. All obligations
imposed upon the Participant and

                                      -5-

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all rights granted to the Company under this Agreement shall be binding upon the
Participant's heirs, executors, administrators and successors.

         15. Resolution of Disputes. Any dispute or disagreement which may arise
under, or as a result of, or in any way related to, the interpretation,
construction or application of this Agreement shall be determined by the
Committee. Any determination made hereunder shall be final, binding and
conclusive on the Participant and the Company for all purposes.

                                      -6-
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         IN WITNESS WHEREOF, the parties have caused this Restricted Stock Award
Agreement to be duly executed effective as of the day and year first above
written.

                                         FIRST ACCEPTANCE CORPORATION:

                                         --------------------------------------

                                         By:
                                             ----------------------------------
                                         Its:
                                             ----------------------------------

                                         PARTICIPANT:

                                         --------------------------------------
                                         Name:
                                              ---------------------------------

                                         Address:
                                                 ------------------------------

                                                 ------------------------------

               SIGNATURE PAGE TO RESTRICTED STOCK AWARD AGREEMENT<PAGE>
                                                                    EXHIBIT 10.2

                       NONQUALIFIED STOCK OPTION AGREEMENT
           FIRST ACCEPTANCE CORPORATION 2002 LONG TERM INCENTIVE PLAN

         1. Grant of Option. Pursuant to the First Acceptance Corporation 2002
Long Term Incentive Plan (the "PLAN") for employees, consultants and outside
directors of First Acceptance Corporation, a Delaware corporation (the
"COMPANY"), the Company hereby grants to

                    ____________________ (the "PARTICIPANT"),

an option to purchase shares of Common Stock, par value $.01 per share ("COMMON
STOCK"), of the Company as follows:

         On the date hereof, the Company grants to the Participant an option
         (the "OPTION" or "STOCK OPTION") to purchase _______ full shares
         ("OPTIONED SHARES") of Common Stock at an Option Price equal to
         _____________ Dollars ($____) per share (subject to adjustment as
         provided in the Plan). The Date of Grant of this Stock Option is
         ________.

The "OPTION PERIOD" shall commence on the Date of Grant and shall expire on the
date immediately preceding the tenth (10th) anniversary of the Date of Grant.
The Stock Option is a Nonqualified Stock Option.

         2. Capitalized Terms. The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the Plan as
in effect on the date hereof; any amendments to the Plan shall not affect this
Stock Option unless agreed to in writing by the Participant. If there is a
conflict between any of the terms and provisions of this Stock Option and the
Plan, the terms and provisions of the Plan shall govern.

         3. Vesting; Time of Exercise.

         (a) Except as specifically provided in this Agreement and Section 15.6
of the Plan, the Optioned Shares shall vest, and the Stock Option shall become
exercisable __________________________________________, provided the Participant
is employed by (or, if the Participant is a consultant or an Outside Director,
is providing services to) the Company or a Subsidiary from the Date of Grant to
each vesting date.

         (b) Notwithstanding the foregoing, all of the Optioned Shares not
previously vested shall immediately become fully vested, and this Stock Option
shall become fully exercisable, if not previously exercisable, upon the
effective date of a Change of Control.

         4. Term; Forfeiture. Except as otherwise provided in this Agreement,
the portion of this Option that is not exercisable, or does not become
exercisable, on the date of the Participant's Termination of Service, will,
together with the related unvested Optioned Shares, expire, terminate, and be
forfeited on that date. The exercisable portion of the Stock Option that relates
to Optioned Shares that are or become vested on the date of the Participant's
Termination of Service, will terminate and be forfeited at the first of the
following to occur:

                  (a) 5 p.m. on the date the Option Period terminates;

                  (b) 5 p.m. on the date that is thirty (30) days following the
         Participant's Termination of Service by the Company for Cause; or

                  (c) 5 p.m. on the date that is twelve (12) months following
         the date of the Participant's Termination of Service for any reason
         other than by the Company for Cause, including a Termination of Service
         due to the Participant's death or disability, Termination of the
         Service by the Participant with or without Good Reason, and Termination
         of Service by the Company without Cause.

                  For the purposes of this Agreement, "Cause" shall mean (A) the
         willful and continued failure by the Participant to substantially
         perform his duties with the Company (other than any such failure
         resulting from incapacity due to physical or mental illness), after a
         demand for substantial performance is delivered

<PAGE>

         to the Participant by the Board which specifically identifies the
         manner in which the Board believes that he has not substantially
         performed his duties and the failure by the Participant to cure such
         failure within thirty (30) days after delivery of such demand, or (B)
         the willful engaging by the Participant in gross misconduct materially
         and demonstrably injurious to the Company, or (C) the Participant's
         personal dishonesty, willful misconduct, breach of fiduciary duty of
         loyalty involving profit, willful violation of any law, rule, or
         regulation (other than traffic violations or similar offenses) or final
         cease-and-desist order, or (D) the Participant's material breach of any
         provision of this Agreement and the failure to cure such breach within
         thirty (30) days following notice thereof by the Company. For purposes
         of this paragraph, no act, or failure to act, on the Participant's part
         shall be considered "willful" unless done, or omitted to be done, by
         him not in good faith and without reasonable belief that his action or
         omission was not in the best interest of the Company.

         5. Who May Exercise. Subject to the terms and conditions set forth in
Sections 3 and 4 above, during the lifetime of the Participant, the Stock Option
may be exercised only by the Participant, or by the Participant's guardian or
personal or legal representative, or by any transferee as permitted under
Section 8 herein. If the Participant's Termination of Service is due to his
death prior to the date specified in Section 4(a) hereof, or the Participant
dies prior to the termination dates specified in Sections 4(a) - (c) hereof, and
the Participant has not exercised the Stock Option as to the maximum number of
vested Optioned Shares as set forth in Section 3 hereof as of the date of death,
the following persons may exercise the exercisable portion of the Stock Option
on behalf of the Participant at any time prior to the earliest of the dates
specified in Section 4 hereof: the personal representative of his estate, or the
person who acquired the right to exercise the Stock Option by bequest or
inheritance or by reason of the death of the Participant or a transferee as
permitted in Section 8 herein; provided that the Stock Option shall remain
subject to the other terms of this Agreement, Section 15.6 of the Plan and
applicable laws, rules, and regulations.

         6. No Fractional Shares. The Stock Option may be exercised only with
respect to full shares, and no fractional share of stock shall be issued.

         7. Manner of Exercise. Subject to such administrative regulations as
the Committee may from time to time adopt, the Stock Option may be exercised by
the delivery of written notice to the Committee setting forth the number of
shares of Common Stock with respect to which the Stock Option is to be
exercised, the date of exercise thereof (the "EXERCISE DATE") which shall be the
day upon which such notice is given in accordance herewith. On the Exercise
Date, the Participant shall deliver to the Company consideration with a value
equal to the total Option Price of the shares to be purchased, payable as
follows: (a) cash, check, bank draft, or money order payable to the order of the
Company, (b) Common Stock owned by the Participant on the Exercise Date, valued
at its Fair Market Value on the Exercise Date, and which the Participant has not
acquired from the Company within six (6) months prior to the Exercise Date, (c)
if the Optioned Shares are other than Nonpublicly Traded, by delivery (including
by FAX) to the Company or its designated agent of an executed irrevocable option
exercise form together with irrevocable instructions from the Participant to a
broker or dealer, reasonably acceptable to the Company, to sell certain of the
shares of Common Stock purchased upon exercise of the Stock Option or to pledge
such shares as collateral for a loan and promptly deliver to the Company the
amount of sale or loan proceeds necessary to pay such purchase price, and/or (d)
in any other form of valid consideration that is acceptable to the Committee in
its sole discretion.

         Upon payment of all amounts due from the Participant, the Company shall
cause certificates for the Optioned Shares then being purchased to be delivered
to the Participant (or the person exercising the Participant's Stock Option in
the event of his death) at its principal business office as soon as practicable
(but in no case more than three (3) days) after the Exercise Date in order to
permit timely sales under applicable exchange rules or to permit timely
participation in any liquidity event. The obligation of the Company to deliver
shares of Common Stock shall, however, be subject to the condition that if at
any time the Company shall determine in its discretion that the listing,
registration, or qualification of the Stock Option or the Optioned Shares upon
any securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of, or
in connection with, the Stock Option or the issuance or purchase of shares of
Common Stock thereunder, then the Stock Option may not be exercised in whole or
in part unless such listing, registration, qualification, consent, or approval
shall have been effected or obtained free of any conditions not reasonably
acceptable to the Committee.

<PAGE>

         8. Transfer and Assignment. Except as otherwise provided in this
Section 8, this Stock Option may not be assigned, transferred, pledged,
hypothecated, or otherwise conveyed or encumbered by the Participant, except by
will or by the laws of descent and distribution. Notwithstanding the foregoing,
this Stock Option may be transferred, assigned or otherwise conveyed to (i) any
of the Participant's Immediate Family Members, (ii) a trust or trusts for the
exclusive benefit of such Immediate Family Members, (iii) a partnership in which
the only partners are (1) such Immediate Family Members and/or (2) entities, a
majority of the beneficial ownership of which is owned by Immediate Family
Members, (iv) an entity exempt from federal income tax pursuant to Section
501(c)(3) of the Code, or (v) a split interest trust or pooled income fund
described in Section 2522(c)(2) of the Code; provided, that (x) there shall be
no consideration for any such transfer, (y) subsequent transfers may not be made
hereunder except those by will or the laws of decent and distribution, and (z) a
Termination of Service of Participant shall continue to have the effects in
Sections 3 and 4 as if Participant had not transferred, assigned or otherwise
conveyed this Stock Option.

         9. Rights as Stockholder. The Participant will have no rights as a
stockholder with respect to any shares covered by the Stock Option until the
issuance of a certificate or certificates to the Participant for the Optioned
Shares, subject to the Company's obligation to issue such certificate(s) as soon
as practicable in accordance with Section 7 above. The Optioned Shares shall be
subject to the terms and conditions of this Agreement regarding such Optioned
Shares. Except as otherwise provided in Section 10 hereof, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
issuance of such certificate or certificates.

         10. Adjustment of Number of Optioned Shares and Related Matters. The
number of shares of Common Stock covered by the Stock Option, and the Option
Prices thereof, shall be subject to adjustment in accordance with Articles 11 -
13 of the Plan.

         11. Nonqualified Stock Option. The Stock Option shall not be treated as
an Incentive Stock Option.

         12. Voting. The Participant, as record holder of some or all of the
Optioned Shares following exercise of this Stock Option, has the exclusive right
to vote, or consent with respect to, such Optioned Shares until such time as the
Optioned Shares are transferred in accordance with this Agreement; provided,
however, that this Section shall not create any voting right where the holders
of such Optioned Shares otherwise have no such right.

         13. Community Property. Each spouse individually is bound by, and such
spouse's interest, if any, in any Optioned Shares is subject to, the terms of
this Agreement. Nothing in this Agreement shall create a community property
interest where none otherwise exists.

         14. Dispute Resolution. Any dispute, controversy or claim arising out
of or in relation to or in connection with this Agreement, including without
limitation any dispute as to the construction, validity, interpretation,
enforceability or breach of this Agreement, shall be exclusively and finally
settled by arbitration, and any party may submit such dispute, controversy or
claim, including a claim for indemnification under this Section 14, to
arbitration.

                  (a) Arbitrators. The arbitration shall be heard and determined
         by one arbitrator, who shall be impartial and who shall be selected by
         mutual agreement of the parties; provided, however, that if the dispute
         involves more than $2,000,000, then the arbitration shall be heard and
         determined by three (3) arbitrators. If three (3) arbitrators are
         necessary as provided above, then (i) each side shall appoint an
         arbitrator of its choice within thirty (30) days of the submission of a
         notice of arbitration and (ii) the party-appointed arbitrators shall in
         turn appoint a presiding arbitrator of the tribunal within thirty (30)
         days following the appointment of the last party-appointed arbitrator.
         If (x) the parties cannot agree on the sole arbitrator, (y) one party
         refuses to appoint its party-appointed arbitrator within said thirty
         (30) day period or (z) the party-appointed arbitrators cannot reach
         agreement on a presiding arbitrator of the tribunal, then the
         appointing authority for the implementation of such procedure shall be
         the Senior United States District Judge for the Middle District of
         Tennessee, who shall appoint an independent arbitrator who does not
         have any financial interest in the dispute, controversy or claim. If
         the Senior United States District Judge for the Middle District of
         Tennessee refuses or fails to act as the appointing authority within
         ninety (90) days after

<PAGE>

         being requested to do so, then the appointing authority shall be the
         Chief Executive Officer of the American Arbitration Association, who
         shall appoint an independent arbitrator who does not have any financial
         interest in the dispute, controversy or claim. All decisions and awards
         by the arbitration tribunal shall be made by majority vote.

                  (b) Proceedings. Unless otherwise expressly agreed in writing
         by the parties to the arbitration proceedings:

                           (i) The arbitration proceedings shall be held in
                  Nashville, Tennessee, at a site chosen by mutual agreement of
                  the parties, or if the parties cannot reach agreement on a
                  location within thirty (30) days of the appointment of the
                  last arbitrator, then at a site in Nashville, Tennessee chosen
                  by the arbitrator(s);

                           (ii) The arbitrator(s) shall be and remain at all
                  times wholly independent and impartial;

                           (iii) The arbitration proceedings shall be conducted
                  in accordance with the Commercial Arbitration Rules of the
                  American Arbitration Association, as amended from time to
                  time;

                           (iv) Any procedural issues not determined under the
                  arbitral rules selected pursuant to item (iii) above shall be
                  determined by the law of the place of arbitration, other than
                  those laws which would refer the matter to another
                  jurisdiction;

                           (v) The costs of the arbitration proceedings
                  (including reasonable attorneys' fees and costs) shall be
                  borne in the manner determined by the arbitrator(s);

                           (vi) The decision of the arbitrator(s) shall be
                  reduced to writing; final and binding without the right of
                  appeal; the sole and exclusive remedy regarding any claims,
                  counterclaims, issues or accounting presented to the
                  arbitrator(s); made and promptly paid in United States dollars
                  free of any deduction or offset; and any costs or fees
                  incident to enforcing the award shall, to the maximum extent
                  permitted by law, be charged against the party resisting such
                  enforcement;

                           (vii) The award shall include interest from the date
                  of any breach or violation of this Agreement, as determined by
                  the arbitral award, and from the date of the award until paid
                  in full, at 6% per annum; and

                           (viii) Judgment upon the award may be entered in any
                  court having jurisdiction over the person or the assets of the
                  party owing the judgment or application may be made to such
                  court for a judicial acceptance of the award and an order of
                  enforcement, as the case may be.

                  (c) Acknowledgment Of Parties. Each party acknowledges that he
         or it has voluntarily and knowingly entered into an agreement to
         arbitration under this Section 14 by executing this Agreement.

         15. Participant's Representations. Notwithstanding any of the
provisions hereof, the Participant hereby agrees that he will not exercise the
Stock Option granted hereby, and that the Company will not be obligated to issue
any shares to the Participant hereunder, if the exercise thereof or the issuance
of such shares shall constitute a violation by the Participant or the Company of
any provision of any law or regulation of any governmental authority or any rule
of any stock exchange or inter-dealer quotation system on which such shares are
listed or traded, provided that the foregoing shall not be deemed to be a
limitation of any other obligation of the Company hereunder.

         16. Investment Representation. Unless the Common Stock is issued to him
in a transaction registered under applicable federal and state securities laws,
by his execution hereof, the Participant represents and warrants to the Company
that all Common Stock which may be purchased hereunder will be acquired by the
Participant for investment purposes for his own account and not with any intent
for resale or distribution in violation of federal or

<PAGE>

state securities laws. Unless the Common Stock is issued to him in a transaction
registered under the applicable federal and state securities laws, all
certificates issued with respect to the Common Stock shall bear an appropriate
restrictive investment legend and shall be held indefinitely, unless they are
subsequently registered under the applicable federal and state securities laws
or the Participant obtains an opinion of counsel, in form and substance
satisfactory to the Company and its counsel, that such registration is not
required.

         17. Lock Up. In connection with an underwritten public offering of
Common Stock, upon the request of the Company or the principal underwriter
managing such public offering, no shares of Common Stock received by the
Participant under this Award Agreement may be sold, offered for sale or
otherwise disposed of without the prior written consent of the Company or such
underwriter, as the case may be, for up to one hundred eighty (180) days after
the effectiveness of the registration statement filed in connection with such
offering, if all of the Company's directors and officers agree to be similarly
bound, and releases from any and all lock-up agreements in connection with such
offering are granted on a pro-rata basis.

         18. Participant's Acknowledgments. The Participant acknowledges receipt
of a copy of the Plan, which is annexed hereto, and represents that he or she is
familiar with the terms and provisions thereof.

         19. Law Governing. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Delaware (excluding any
conflict of laws rule or principle of Delaware law that might refer the
governance, construction, or interpretation of this agreement to the laws of
another state).

         20. No Right to Continue Service or Employment. Nothing herein shall be
construed to confer upon the Participant the right to continue in the employ or
to provide services to the Company or any Subsidiary, whether as an employee or
as a consultant or as an Outside Director, or interfere with or restrict in any
way the right of the Company or any Subsidiary to discharge the Participant as
an employee, consultant or Outside Director at any time.

         21. Legal Construction. In the event that any one or more of the terms,
provisions, or agreements that are contained in this Agreement shall be held by
a Court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect for any reason, the invalid, illegal, or unenforceable term,
provision, or agreement shall not affect any other term, provision, or agreement
that is contained in this Agreement and this Agreement shall be construed in all
respects as if the invalid, illegal, or unenforceable term, provision, or
agreement had never been contained herein.

         22. Covenants and Agreements as Independent Agreements. Each of the
covenants and agreements that is set forth in this Agreement shall be construed
as a covenant and agreement independent of any other provision of this
Agreement. The existence of any claim or cause of action of the Participant
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of the covenants and
agreements that are set forth in this Agreement.

         23. Entire Agreement. This Agreement, together with the Plan, supersede
any and all other prior understandings and agreements, either oral or in
writing, between the parties with respect to the subject matter hereof and
constitute the sole and only agreements between the parties with respect to the
said subject matter. All prior negotiations and agreements between the parties
with respect to the subject matter hereof are merged into this Agreement and the
Plan. Each party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have been made by any
party or by anyone acting on behalf of any party, which are not embodied in this
Agreement or the Plan and that any agreement, statement or promise that is not
contained in this Agreement or the Plan shall not be valid or binding or of any
force or effect.

         24. Parties Bound. The terms, provisions, and agreements that are
contained in this Agreement shall apply to, be binding upon, and inure to the
benefit of the parties and their respective heirs, executors, administrators,
legal representatives, and permitted successors and assigns, subject to the
limitation on assignment expressly set forth herein.

         25. Modification. No change or modification of this Agreement shall be
valid or binding upon the parties unless the change or modification is in
writing and signed by the parties.

<PAGE>

         26. Headings. The headings that are used in this Agreement are used for
reference and convenience purposes only and do not constitute substantive
matters to be considered in construing the terms and provisions of this
Agreement.

         27. Gender and Number. Words of any gender used in this Agreement shall
be held and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the context
requires otherwise.

         28. Notice. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered only when actually received by the Company or by
the Participant, as the case may be, at the addresses set forth below, or at
such other addresses as they have theretofore specified by written notice
delivered in accordance herewith:

             a.       Notice to the Company shall be addressed and delivered
         as follows:

                      First Acceptance Corporation
                      3813 Green Hills Village Drive
                      Nashville, Tennessee 37215
                      Attn: Secretary
                      Facsimile: (615) 844-2898

             b.       Notice to the Participant shall be addressed and delivered
         as set forth on the signature page.

         29. Tax Requirements. The Participant, upon exercise of any portion of
the Stock Option, shall be required to pay the Company the amount of all taxes
which the Company is required to withhold as a result of the exercise of the
Stock Option; such obligation to pay such taxes may be satisfied by any of the
following or any combination thereof: (a) the delivery of cash to the Company in
an amount that equals or exceeds (to avoid the issuance of fractional shares
under (c) below) the required tax withholding obligation of the Company; (b) if
the Company, in its sole discretion, so consents in writing, the actual delivery
by the exercising Participant to the Company of shares of Common Stock other
than (i) Restricted Stock or (ii) Common Stock that the Participant owns but has
acquired from the Company within six months prior to the date of exercise, which
shares so delivered have an aggregate Fair Market Value that equals or exceeds
(to avoid the issuance of fractional shares under (c) below) the required tax
withholding payment; or (c) the Company's withholding of a number of shares to
be delivered upon the exercise of the Stock Option, which shares so withheld
have an aggregate Fair Market Value that equals (but does not exceed) the
required tax withholding payment; provided that, shares cannot be withheld in
connection with the exercise of a Stock Option in excess of the minimum number
required for tax withholding, and to permit the Stock Option to be accounted for
as a fixed award. Any such withholding payments with respect to the exercise of
any portion of the Stock Option in cash or by actual delivery of shares of
Common Stock shall be required to be made within thirty (30) days after the
delivery to the Participant of any certificate representing the shares of Common
Stock acquired upon exercise of the Stock Option. The Company may, in its
discretion, withhold such taxes from any other remuneration paid by the Company
or a Subsidiary to the Participant.

         30. Option Cash-out. The Company may only make provisions for a cash
payment to the holder of this Stock Option, as contemplated by Article 11 or
Section 12.3 of the Plan, in the event and subject to the consummation of the
sale of substantially all of the assets or capital stock of the Company for
cash.

         31. Failure to Pay Option Price; Notice to Participant. Section 8.3(c)
of the Plan shall not apply to this Option unless the Participant receives from
the Company written notice of an event giving rise to the forfeiture right
described in Section 8.3(c) of the Plan and the Participant fails to cure such
event within five (5) days after his receipt of such notice.

                                 * * * * * * * *

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Award Agreement to be
executed by its duly authorized officer, and the Participant, to evidence his
consent and approval of all the terms hereof, has duly executed this Agreement,
as of the date specified in Section 1 hereof.

                                        FIRST ACCEPTANCE CORPORATION:

                                        ---------------------------------------

                                        By:
                                             ----------------------------------
                                        Its:
                                             ----------------------------------

                                        PARTICIPANT:

                                        ---------------------------------------
                                        Name:
                                             ----------------------------------

                                        Address:
                                                 ------------------------------

                                                 ------------------------------

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