Document:

Exhibit 10.1

Franklin Bank Corp.
 Houston, TX

Key Employee Intermediate-Term Incentive
 Compensation Plan

A Performance Unit Plan for Selected
 Executives and Other Key Contributors

Effective August 14, 2006

TABLE OF CONTENTS

	
  Section
  	
   
 	
  
Page
  
	
  

  	
   
 	
  

  
	
  
I.
  	
  
Plan Purposes
  	
  
 
  	
  
1
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
II.
  	
  
Compensation Philosophy
  	
  
 
  	
  
1
  
	
   
  	
  
 
  	
  
 
  	
   
 
	
  
III.
  	
  
Definitions of Key Terms
  	
  
 
  	
  
1
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
IV.
  	
  
Participation
  	
  
 
  	
  
2
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
V.
  	
  
Award Opportunities
  	
  
 
  	
  
2
  
	
   
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
a.
  	
  
Types of Award Opportunities
  	
  
 
  	
  
2
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
b.
  	
  
Performance Cycles
  	
  
 
  	
  
2
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
c.
  	
  
Performance Units Subject to the Plan
  	
  
 
  	
  
2
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
d.
  	
  
Price Basis for Performance Units and the Valuation   of Performance Units
  	
  
 
  	
  
3
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
e.
  	
  
Defining Performance Criteria and Setting   Performance Goals
  	
  
 
  	
  
3
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
f.
  	
  
Terms and Conditions of Awards
  	
  
 
  	
  
3
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
VI.
  	
  
Award Determination and Distribution
  	
  
 
  	
  
3
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
a.
  	
  
Determination of Performance Unit Grants
  	
  
 
  	
  
3
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
b.
  	
  
Vesting of Performance Unit Grants
  	
  
 
  	
  
3
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
c.
  	
  
Nonsolicitation Agreement
  	
  
 
  	
  
5
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
d.
  	
  
Active Employment Contingency
  	
  
 
  	
  
5
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
e.
  	
  
Not an Employment Contract
  	
  
 
  	
  
5
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
f.
  	
  
Tax Withholding
  	
  
 
  	
  
5
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
g.
  	
  
Payout
  	
  
 
  	
  
5
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
VII.
  	
  
Certain Additional Payments By The Company
  	
  
 
  	
  
6
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
a.
  	
  
Gross-Up Payments
  	
  
 
  	
  
6
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
b.
  	
  
Calculations
  	
  
 
  	
  
6
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
c.
  	
  
Notification
  	
  
 
  	
  
7
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
d.
  	
  
Refunds
  	
  
 
  	
  
8
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
e.
  	
  
Withholding
  	
  
 
  	
  
8
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
f.
  	
  
Definitions
  	
  
 
  	
  
9
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
VIII.
  	
  
Plan Administration
  	
  
 
  	
  
9
  
	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
a.
  	
  
Administration
  	
  
 
  	
  
9
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
b.
  	
  
Arbitration
  	
  
 
  	
  
10
  

-i-

TABLE OF CONTENTS

	
  
Section
  	
   
 	
  
Page
  
	
  

  	
   
 	
  

  
	
  
 
  	
  
c.
  	
  
Status Reporting to Participants
  	
  
 
  	
  
10
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
   
  	
  
d.
  	
  
No Pledge or Hypothecation
  	
  
 
  	
  
10
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
e.
  	
  
Sunset Provision
  	
  
 
  	
  
10
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
   
 
	
  
 
  	
  
f.
  	
  
Amendment
  	
  
 
  	
  
11
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
Exhibits
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
Exhibit A -
  	
  
Definitions of Key Terms
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
Exhibit B -
  	
  
Sample Performance Unit Plan Grant Agreement
  	
  
 
  	
  
 
  

-ii-

FRANKLIN BANK CORP.
 Key Employee Intermediate-Term Incentive
 Compensation Plan

I.          Plan Purposes

The purposes of this Plan are three-fold:

	
  
 
  	
  
•
  	
  
foster corporate growth and attainment of   performance objectives.
  
	
  
 
  	
  
•
  	
  
recognize participants’ contributions to the   Company’s success.
  
	
  
 
  	
  
•
  	
  
attract and retain the services of significant   contributors for the business.
  

          The   Plan  will
permit  participating  employees to realize future financial  rewards when their
collective  performances  result in attainment of the  Company’s  strategic
objectives  for  growth,   profitability/efficiency   and  increased  enterprise
value.

II.      Compensation Philosophy

          Franklin Bank
Corp.   and   its   Subsidiaries   (hereafter   collectively   referred   to  as
“Franklin” or “the Company”) wish to provide a comprehensive
compensation  program for those employees whose performance and contributions to
the  business  materially  enhance and aid the  attainment  of desired  business
results.   This  intermediate-term  incentive  plan  is  intended  to be an
integral part of the total  compensation  opportunity  offered by the Company to
these key employees.

          This  Plan is
an adjunct,  not an offset, to the other forms of compensation  already provided
by the Company competitive base salaries,  annual bonus award opportunities,  long-term
incentive  award   opportunities   and   comprehensive   health  &   welfare
benefits.

III.     Definitions of Key Terms

          This     Plan
contains  several terms which may be unfamiliar  to  Participants  and/or have a
specific  legal  definition  when used in the  context of this type of  employee
compensation  plan.   Accordingly,  reference is made to the Plan terms and
their definitions  contained in Exhibit A to the Plan.   Capitalized
terms used but not defined  herein shall have the  meanings  ascribed to them in
Exhibit A to the Plan.

-1-

IV.     Participation

          Participation     in
this Plan is open to the Chief Executive Officer (the  “CEO”)  and the
selected key employees of the Company recommended by the CEO and approved by the
Compensation  Committee to have made  significant  contributions to the progress
and  growth  of  the  business  through  the  performance  of  his/her  assigned
responsibilities,  and/or who offer a high potential for long-term  professional
growth within the Franklin  organization  (each, a “Key  Employee”  or
“Participant”).

          Participation
will be limited to a small number of senior  executives,  business unit managers
and a select  group of other key  personnel.   The extent of  participation
among  employees  may  vary  based  on  level,  scope  and  type  of  individual
responsibility in the organization,  the significance of actual contributions to
the  development  and success of the business,  and the  importance of potential
future contributions to the business.

          Once selected
for  participation  in  a  particular   Performance  Cycle,  an  employee’s
participation    in   future    Performance    Cycles    is    not
guaranteed.  Changes in organization role and/or personal performance level
may affect participation in future Performance Cycles.   The recommendation
of the CEO and the approval of the Compensation Committee as to the extent of an
employee’s participation, if any, is final.

          Officers     and
other  employees who may be considered  corporate  insiders under the Securities
Exchange Act of 1934, as amended,  will  participate in this Plan under the same
eligibility guidelines defined for other employees of the Company.

V.      Award Opportunities

          This   Plan   is
intended  to  provide  Key   Employees   with   intermediate-term   compensation
opportunities based on appreciation in the value of the business and the success
of particular  development  projects that the Company  undertakes.   Awards
under this Plan will be expressed in terms of rights to the value of the awarded
“Performance  Units”  at the  conclusion  of a designated  Performance
Cycle.  

	
  
 
  	
  
a.
  	
  

Types of Award Opportunities.  Under this Plan, Participants will be
eligible to receive only one type of award—a  Performance Unit.   This
type of award is further  explained  (defined) in  Exhibit  A.

	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
b.
  	
  

Performance  Cycles.   The Compensation  Committee will grant
Performance  Units  to  Participants,  usually  at the  beginning  of a  defined
Performance  Cycle.   The  term of each  Cycle  will be  determined  by the
Compensation Committee.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
c.
  	
  

Performance Units Subject to the Plan.  The number of Performance Units
awarded to Key Employees for a specific Performance Cycle will be recommended by
the CEO and approved by the Compensation Committee.
 

-2-

	
  
 
  	
  
d.
  	
  

Price  Basis  for   Performance   Units  and  the  Valuation  of  Performance
Units.  The final value of a Performance Unit—at the conclusion of
a  Performance  Cycle—will  be the  average  of the  closing  prices of the
Company’s  common stock on the last day of each fiscal  quarter  during the
last year of the Performance Cycle.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
e.
  	
  

Defining Performance Criteria and Setting Performance Goals.   Prior
to the grant of Performance  Units,  the CEO will  recommend  (for  Participants
other than the CEO) and the  Compensation  Committee  shall approve the criteria
for earning  Performance Units and the specific  Performance Goals which must be
achieved.  The CEO will recommend (for Participants other than the CEO) and
the  Compensation  Committee  shall approve a Threshold,  Target and Outstanding
level of achievement for each Participant,  as well as the number of Performance
Units to be earned by each Participant at each level of  achievement.   The
Compensation Committee will make all determinations  regarding the participation
of the CEO in this Plan,  including the criteria for earning  Performance Units,
the specific Performance Goals which must be achieved, the Threshold, Target and
Outstanding  levels of achievement  and the number of Performance  Units the CEO
will earn at each level of achievement.
 
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
f.
  	
  

Terms and Conditions of Awards.   Terms and conditions of each grant
will be determined  individually and documented in a Performance Unit Plan Grant
Agreement.   This  agreement  will  serve  as  the  agreement  between  the
Participant  and the  Company  regarding  the  nature  and  size  of the  grant,
Performance  Goals  for  earning   Performance   Units,  and  all  other  terms,
qualifications  and  contingencies  affecting  the  grant.    Exhibit  B
contains the form of grant agreement.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  

          The   provisions  of
the grant agreement  (including  without  limitation the Performance Goals) need
not be the same with respect to each Participant.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  

          Further,   in  cases
where  Individual  Agreements  with  individual  Participants  contain  specific
provisions  which  differ from the  general  provisions  contained  in this Plan
Description, the provisions of the Individual Agreement will take precedence and
will be considered  binding.   Where  Individual  Agreements  are silent on
certain topics,  the terms outlined in this Plan  Description will be considered
binding.
 
	
   
  	
  
 
  	
  
 
  
	
  
VI.
  	
  
Award   Determination and Distribution
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
a.
  	
  

Determination of Performance Unit Grants.  Grants may be made during
a  Performance  Cycle as new  Participants  become  eligible,  Participants  are
promoted to new assignments within the organization,  or specific performance of
a Participant warrants such additional consideration.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
b.
  	
  

Vesting of  Performance  Unit  Grants.   Grants made under this Plan
will only vest six months after the conclusion of the Performance Cycle and upon
satisfaction of the Performance  Goals established for such cycle and compliance
with all other provisions of the grant.   However,  portions of a grant may
be forfeited, or vesting may be accelerated, under certain special circumstances
as defined below:
 

-3-

	
  
 
  	
  
 
  	
  
1.
  	
  

Change  in   Control.    Upon  a  Change  in  Control,   outstanding
Performance  Units will fully  vest and the  Company  will make a payout to each
Participant  using the Outstanding level of achievement for each Participant and
the Change in Control Price.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
2.
  	
  

Normal Retirement,  Permanent Disability or Death of the  Employee. 
Following Normal Retirement,  Disability or death of a Participant,  the Company
will make a pro-rated award payout to the  Participant,  the  Participant’s
guardian or the  Participant’s  estate at the conclusion of the Performance
Cycle based on the duration of Participant’s  active employment time during
that Performance  Cycle, as determined by the Plan Administrator and approved by
the Compensation Committee.
 
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
3.
  	
  

Voluntary  Termination of  Employment.   Should a Participant resign
from the Company before the completion of a Performance  Cycle, all interests in
the associated  Performance Units are forfeited and the Participant will receive
no payout from the Performance Units.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
4.
  	
  

Involuntary   Termination  of  Employment.    Should  a  Participant
separate  from the  Company  on an  involuntary  basis  before  completion  of a
Performance  Cycle,  he/she may be  eligible  for a full or partial  payout on a
Performance  Unit  grant,   provided  that  the  separation  was  not  “for
Cause”,  as defined in Exhibit  A.   A  determination  on award
payout prior to the end of a Performance  Cycle as the result of an  involuntary
termination  of employment  other than for Cause will be made on a  case-by-case
basis as recommended by the Plan  Administrator and approved by the Compensation
Committee.
 
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  

          Should             a
Participant’s  employment be  terminated  prior to the end of a Performance
Cycle for Cause, all interests in the associated Performance Units are forfeited
and  the   Participant   will   receive   no   payout   from   the   Performance
Units.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
5.
  	
  

Other.   Notwithstanding  the other  provisions  of this Plan,  upon
recommendation  of  the  Plan  Administrator,  the  Compensation  Committee  may
accelerate   the   vesting   of  any   Performance   Unit   granted   under  the
Plan.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
           The   specific vesting requirements associated with any individual grant will be contained   in the Performance Unit Grant Agreement, which confirms and evidences the   grant of the Performance Units.
  

-4-

	
  
 
  	
  
c.
  	
  

Nonsolicitation Agreement.   As a condition to the vesting of grants
under this Plan,  Participant  agrees,  for a period of twelve (12) months after
any Participant shall cease for any reason, whether voluntarily or involuntarily
or as the result of death,  disability or normal  retirement,  to be employed by
the Company, that Participant will not, either individually or together with any
other individual or organization  directly or indirectly (i) induce any employee
of the Company or any  successor to  terminate  his or her  employment  with the
Company or any  successor,  or to hire any  employee  or former  employee of the
Company or any  successor,  or (ii)  cause,  induce or  encourage,  directly  or
indirectly, any customer, depositor or client of the Company or any successor to
terminate or adversely change any relationship with the Company or any successor
or cause,  induce or encourage any potential  supplier,  customer,  depositor or
client to not enter  into any  business  relationship  with the  Company  or any
successor.
 
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  

          Participant   agrees
and acknowledges that  (i) the provisions of this nonsolicitation agreement
are reasonable  and necessary for the  protection of the Company,  (ii) the
breach  of  this  nonsolicitation   agreement  by  Participant  will  result  in
irreparable  harm  to  the  Company,  (iii) no  adequate  remedy  at law is
available to the Company for the breach by Participant of the provisions of this
nonsolicitation  agreement,  and  (iv) the  Company  shall be  entitled  to
specific enforcement of the provisions of this nonsolicitation  agreement,  and
injunctive  relief for any breach or threatened  breach of this  nonsolicitation
agreement,  without the  necessity of proving  actual  monetary loss and without
bond or other security being required.  In addition to specific performance
and  injunctive  relief,  in the  event  of a  breach  of  this  nonsolicitation
agreement by Participant the Company shall be entitled to (i) forfeit any unpaid
Performance  Units granted to  Participant  under this Plan,  (ii) recovery from
Participant  amounts paid to Participant in respect of Performance  Units during
the twelve (12) months preceding  termination of  Participant’s  employment
and (iii) such other  damages to which the Company  may be  entitled.

	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
d.
  	
  

Active Employment Contingency.   Eligibility to receive grants under
the Plan is dependent upon continuing active employment with the  Company. 
Except as provided in Section VI.b. of the Plan,  eligibility to receive payouts
from  Performance  Unit grants requires that the Participant  have been actively
employed with the Company on the last day of the performance  period.

	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
e.
  	
  

Not  an  Employment  Contract.   Participation  in the Plan does not
constitute  an  employment  contract  between the  Participant  and the Company.
Unless Participant is party to an Individual  Agreement,  Participant remains an
at will employee of the Company, subject to termination at the discretion
of the Company.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
f.
  	
  

Tax  Withholding.   Payouts from Performance Unit grants are subject to
withholding   of   amounts  to  pay   applicable   Federal   and  state   income
taxes.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
g.
  	
  

Payout.   Notwithstanding  anything to the contrary, the payout with
respect to the Performance Unit grants shall be made as soon as administratively
feasible following the time that such Performance Units become vested, but in no
event later than the 15th day of the third month following the year in which the
such Performance Units become vested.
 

-5-

	
  
VII.
  	
  
Certain   Additional Payments By The Company
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
a.
  	
  

Gross-Up  Payments.   Unless a Participant under a change in control or
similar  agreement is entitled to a similar benefit as set forth in this Section
VII. and except as set forth below, in the event it shall be determined that any
Payment  (as  defined  below)  would be subject  to the  Excise Tax (as  defined
below),  then a Participant  shall be entitled to receive an additional  payment
(the  “Gross-Up  Payment”)  in an amount such that, after payment by a
Participant of all taxes (and any interest or penalties  imposed with respect to
such taxes), including,  without limitation,  any income taxes (and any interest
and  penalties  imposed  with  respect  thereto) and Excise Tax imposed upon the
Gross-Up Payment, a Participant  retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments.
 
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  

Notwithstanding the foregoing  provisions of this Section VII.a., if it shall be
determined that a Participant is entitled to the Gross-Up Payment,  but that the
Parachute  Value (as defined  below) of all Payments does not exceed 110% of the
Safe Harbor Amount (as defined below), then no Gross-Up Payment shall be made to
a Participant  and the amounts  payable under this Plan shall be reduced so that
the Parachute  Value of all Payments,  in the aggregate,  equals the Safe Harbor
Amount. The reduction of the amounts payable hereunder, if applicable,  shall be
made by first reducing the payments under Section VI.b.1., unless an alternative
method of reduction is elected by a Participant,  and in any event shall be made
in such a manner as to  maximize  the Value (as defined  below) of all  Payments
actually  made to a  Participant.  For  purposes of reducing the Payments to the
Safe Harbor Amount, only amounts payable under this Plan (and no other Payments)
shall be reduced.  If the reduction of the amount  payable under this Plan would
not result in a reduction  of the  Parachute  Value of all  Payments to the Safe
Harbor Amount,  no amounts payable under the Agreement shall be reduced pursuant
to this Section VII. The  Company’s  obligation to make  Gross-Up  Payments
under this Section VII.  shall not be  conditioned  upon the  Participant’s
termination of employment.
 
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
b.
  	
  

Calculations.   Subject to the  provisions  of Section  VII.c.,  all
determinations required to be made under this Section VII. including whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such  determination,  shall be made by
Deloitte & Touche LLP, or such other nationally  recognized certified public
accounting  firm as may be  designated by a  Participant  (the  “Accounting
Firm”).  The Accounting Firm shall provide detailed supporting calculations
both to the Company and a Participant  within 15 business days of the receipt of
notice from a Participant  that there has been a Payment or such earlier time as
is requested by the Company. 
 

-6-

	
  
 
  	
  
 
  	
  

In the event that the  Accounting  Firm is serving as  accountant or auditor for
the individual,  entity or group affecting the Change in Control,  a Participant
may  appoint  another  nationally   recognized   accounting  firm  to  make  the
determinations  required hereunder (which accounting firm shall then be referred
to as the Accounting  Firm  hereunder).  All fees and expenses of the Accounting
Firm shall be borne solely by the Company.  Any Gross-Up Payment,  as determined
pursuant to this  Section  VII.,  shall be paid by the Company to a  Participant
within 5 days of the receipt of the Accounting  Firm’s  determination.  Any
determination  by the  Accounting  Firm shall be binding  upon the Company and a
Participant.  As a result of the  uncertainty in the application of Section 4999
of the Code at the time of the  initial  determination  by the  Accounting  Firm
hereunder, it is possible that Gross-Up Payments that will not have been made by
the  Company  should have been made (the  “Underpayment”),  consistent
with the  calculations  required to be made hereunder.  In the event the Company
exhausts its remedies pursuant to Section VII.c. and a Participant thereafter is
required  to make a  payment  of any  Excise  Tax,  the  Accounting  Firm  shall
determine  the  amount  of the  Underpayment  that  has  occurred  and any  such
Underpayment  shall be  promptly  paid by the Company to or for the benefit of a
Participant.
 
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
c.
  	
  

Notification.   A Participant shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as  practicable,  but no later than 10 business days after a Participant
is informed in writing of such  claim.   A  Participant  shall  apprise the
Company  of the  nature  of such  claim  and the  date on  which  such  claim is
requested to be paid.   A Participant shall not pay such claim prior to the
expiration of the 30-day period following the date on which a Participant  gives
such notice to the Company (or such shorter  period  ending on the date that any
payment of taxes with respect to such claim is due).  If the Company  notifies a
Participant  in writing prior to the  expiration of such period that the Company
desires to contest such claim, a Participant shall:
 

	
  
 
  	
  
 
  	
  
1.
  	
  
give the Company any information reasonably   requested by the Company relating to such claim,
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
2.
  	
  

take such action in connection  with  contesting such claim as the Company shall
reasonably request in writing from time to time, including,  without limitation,
accepting  legal  representation  with  respect  to such  claim  by an  attorney
reasonably selected by the Company,
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
3.
  	
  
cooperate with the Company in good faith in order   effectively to contest such claim, and
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
4.
  	
  
permit the Company to participate in any proceedings   relating to such claim;
  

-7-

	
  
 
  	
  
 
  	
  

provided,  however,  that the Company  shall bear and pay directly all costs and
expenses  (including  additional  interest and penalties) incurred in connection
with such contest,  and shall indemnify and hold a Participant  harmless,  on an
after-tax  basis,  for any  Excise  Tax or income tax  (including  interest  and
penalties)  imposed as a result of such  representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section VII.c.,
the Company shall control all proceedings taken in connection with such contest,
and,  at its sole  discretion,  may  pursue or forgo any and all  administrative
appeals,  proceedings,  hearings  and  conferences  with the  applicable  taxing
authority in respect of such claim and may, at its sole  discretion,  either pay
the tax claimed to the appropriate  taxing  authority on behalf of a Participant
and  direct  a  Participant  to sue for a refund  or  contest  the  claim in any
permissible  manner,  and a  Participant  agrees to prosecute  such contest to a
determination  before  any  administrative  tribunal,  in  a  court  of  initial
jurisdiction  and  in  one or  more  appellate  courts,  as  the  Company  shall
determine; provided, however, that, if the Company pays such claim and directs a
Participant  to sue  for a  refund,  the  Company  shall  indemnify  and  hold a
Participant  harmless,  on an after-tax basis, from any Excise Tax or income tax
(including  interest or penalties)  imposed with respect to such payment or with
respect to any imputed  income in connection  with such  payment;  and provided,
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of a Participant with respect to which such contested
amount  is   claimed   to  be  due  is   limited   solely   to  such   contested
amount.
 
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  

Furthermore,  the  Company’s  control  of the  contest  shall be limited to
issues with respect to which the Gross-Up  Payment  would be payable  hereunder,
and a  Participant  shall be entitled to settle or contest,  as the case may be,
any other  issue  raised by the  Internal  Revenue  Service or any other  taxing
authority.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
d.
  	
  

Refunds.   If,  after the  receipt  by a  Participant  of a Gross-Up
Payment or payment by the  Company of an amount on a  Participant’s  behalf
pursuant to Section VII.c.,   a Participant becomes entitled to receive any
refund with respect to the Excise Tax to which such Gross-Up  Payment relates or
with respect to such claim, a Participant  shall (subject to the  Company’s
complying with the requirements of Section III.c.,  if applicable)  promptly pay
to the Company the amount of such refund  (together  with any  interest  paid or
credited  thereon  after taxes  applicable  thereto).  If, after  payment by the
Company of an amount on a Participant’s  behalf pursuant to Section VII.c.,
a determination  is made that a Participant  shall not be entitled to any refund
with  respect to such claim and the  Company  does not notify a  Participant  in
writing of its intent to contest such denial of refund  prior to the  expiration
of 30 days  after such  determination,  then the  amount of such  payment  shall
offset,  to the extent thereof,  the amount of Gross-Up  Payment  required to be
paid.
 
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
e.
  	
  

Withholding.   Notwithstanding  any other  provision of this Section
VII.,  the Company  may, in its sole  discretion,  withhold  and pay over to the
Internal  Revenue  Service or any other  applicable  taxing  authority,  for the
benefit of a  Participant,  all or any portion of any  Gross-Up  Payment,  and a
Participant hereby consents to such withholding.
 

-8-

	
  
 
  	
  
f.
  	
  
Definitions.  The following terms shall have the   following meanings for purposes of this Section VII.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
1.
  	
  

“Excise Tax”  shall mean the excise tax imposed by Section 4999 of the
Code,  together  with any  interest or  penalties  imposed  with respect to such
excise tax.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
2.
  	
  
“Parachute  Value”  of a Payment shall mean the present value as of the
date of the Change in Control for  purposes  of Section  280G of the Code of the
portion of such Payment that constitutes a “parachute  payment”  under
Section  280G(b)(2),  as  determined  by the  Accounting  Firm for  purposes  of
determining  whether  and to what  extent  the  Excise  Tax  will  apply to such
Payment.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
3.
  	
  
A “Payment” shall mean any payment or distribution   in the nature of compensation (within the meaning of Section 280G(b)(2) of   the Code) to or for the benefit a Participant, whether paid or payable   pursuant to this Agreement or otherwise.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
4.
  	
  

The  “Safe  Harbor  Amount”  means  2.99  times  the  Executive’s
“base  amount,”  within  the  meaning  of  Section  280G(b)(3)  of the
Code.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
5.
  	
  

“Value”  of a  Payment  shall  mean the  economic  present  value of a
Payment as of the date of the Change in Control for  purposes of Section 280G of
the Code, as determined by the Accounting  Firm using the discount rate required
by Section 280G(d)(4) of the Code.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  VIII.
  	
  
Plan   Administration
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
a.
  	
  

Administration.    The  Plan   shall  be   administered   by  the  Plan
Administrator, subject to the direction of the Compensation Committee.  The
Compensation Committee has plenary authority with respect to the Plan.  The
Compensation  Committee  has the  authority,  upon  recommendation  of the  Plan
Administrator   or   otherwise,   to  adopt,   amend,   alter  and  repeal  such
administrative  rules,  guidelines and practices  governing the Plan as it shall
from time to time deem  advisable,  to interpret the terms and provisions of the
Plan and any Performance Unit issued under the Plan (and any agreement  relating
thereto) and to otherwise  supervise  administration  of the Plan.   It may
delegate   administrative   and   operational   responsibilities   to  the  Plan
Administrator or other persons or entities to ensure effective management of the
Plan.
 
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  

          Determinations  with
respect  to any  Performance  Unit shall be made at the time of the grant of the
Performance  Unit or, unless in contravention of any express term of the Plan or
any  requirement  of law,  at any time  thereafter.  All  decisions  made by the
Compensation  Committee or any appropriately  delegated  officer  (including the
Plan  Administrator)  pursuant to the  provisions of the Plan shall be final and
binding  on all  persons,  including  the  Participants,  the  Company  and  its
affiliates, subsidiaries and shareholders.
 

-9-

	  
	 b.
	 
Arbitration.   The Company  shall have the right to apply to a court
to enjoin any breach or threatened  breach by any current or former  Participant
of the nonsolicitation provisions of this Plan and any agreement subject to this
Plan, and to recover  damages in respect  thereof.   Excepting the right of
the Company to seek and obtain such  relief,  all claims and matters in question
arising out of or related to this Plan,  any  agreement  subject to this Plan or
the relationship  between the Company and any current or former Participant (the
“parties”)  created  by this  Plan  and any  such  agreement,  whether
sounding  in  contract,  tort  or  otherwise,  shall  be  resolved  by  binding,
self-administered  arbitration  pursuant to the Commercial  Arbitration Rules of
the American Arbitration Association (“AAA”), and all such proceedings
shall be subject to the  Federal  Arbitration  Act.   There  shall be three
arbitrators.   Each of the  Company  and  Participant  shall  designate  an
arbitrator,  who need not be neutral,  within 30 days of the  notification  of a
party’s  intent to proceed with  arbitration.   The two arbitrators so
designated  shall  elect a third  arbitrator.   If  either  party  fails to
designate  an  arbitrator  within the time  specified  or the two  parties’
arbitrators  fail  to  designate  a third  arbitrator  within  30 days of  their
appointment,  the remaining  arbitrator(s)  shall be appointed by the AAA. 
The  arbitrators  shall  decide  whether  a  particular  dispute  is or  is  not
arbitrable.   Each  party  shall  pay  for  the  expenses  incurred  by its
designated  arbitrator and the costs of the third,  neutral  arbitrator shall be
divided  between  the  parties.   Only  actual  damages  may be awarded and
arbitrators shall have no authority to award punitive or exemplary damages,  the
parties  hereby  waiving their right,  if any, to recover  punitive or exemplary
damages,  either in arbitration or in  litigation.   The arbitration  shall
take place in Houston, Texas.

	 
	  
	  

	  
	  
	 
          In  the  event  of a
dispute  between  the  Company  and a current  or former  Participant  about the
operation  of  the  Plan,  the  Plan  Administrator   shall  recommend  and  the
Compensation  Committee shall approve any resolution of the dispute on behalf of
the Company on such basis as it may approve,  and to conduct any  litigation  or
arbitration proceeding on behalf of the Company.

	  
	  
	  

	  
	 c.
	 
Status  Reporting to  Participants.   Each  Participant will receive an
annual  statement  summarizing  total  Performance  Units  granted and status of
performance measurements.

	  
	  
	  

	  
	 d.
	 
No Pledge or  Hypothecation.   No  Performance  Unit may be  mortgaged,
pledged,  hypothecated,  sold,  assigned,  transferred  or subject to a security
interest of any kind,  and any attempt by a Participant  shall be void and shall
entitle the Compensation Committee to cancel the grant.

	 
	 
	 

	 
	e.
	
Sunset Provision.  This Plan will terminate on the sixth anniversary of
the Effective Date.  Prior to expiration, the Compensation Committee of the
Board of Directors  will evaluate the needs of the business and the  performance
of this Plan to  determine  if the Plan  should be amended  and  renewed  for an
additional period of time.

-10-

	
  
 
  	
  
f.
  	
  
Amendment.  The Compensation Committee may amend,   alter, or discontinue this Plan, but no amendment, alteration or   discontinuation shall be made which would impair the rights of a Key Employee   under a Performance Unit award without the Key Employee’s consent, except   such an amendment made to comply with applicable law (including Section 409A   of the Code), stock exchange rules or accounting rules.  In addition, no such amendment shall be   made without the approval of the Company’s shareholders to the extent such   approval is required by applicable law or stock exchange rules.
  
	
   
  
	
   
  	
  
 
  	
  

          The     Compensation
Committee  may amend  the terms of any  Performance  Unit Plan  Grant  Agreement
theretofore granted, prospectively or retroactively, but no such amendment shall
impair the rights of any Key Employee under a Performance Unit award without the
Key  Employee’s  consent  except with respect to an amendment made to cause
this Plan or  Performance  Unit award to comply with  applicable  law (including
Section 409A of the Code), stock exchange rules or accounting  rules.

-11-

Exhibit A

Franklin Bank Corp.
 Key Employee Intermediate-Term Incentive Compensation Plan

Definitions of Key Terms

The   following   terms  used  in  the   Franklin   Bank  Corp.   Key   Employee
Intermediate-Term  Incentive  Compensation  Plan  have the  meanings  set  forth
below:

	
  
Cause
  	
  

Means, unless otherwise provided by the Compensation  Committee in a Performance
Unit Plan Grant Agreement,  (i)  “Cause”  as defined in any Individual
Agreement  to which  the  Participant  is a  party,  or (ii) if there is no such
Individual  Agreement  or if it does not define  Cause:  (A)  conviction  of the
Participant for committing a felony under federal law or the law of the state in
which such action  occurred,  (B)  dishonesty  in the course of  fulfilling  the
Participant’s  employment duties, (C) willful and deliberate failure on the
part of the Participant to perform his or her employment  duties in any material
respect,  or (D) prior to a Change in  Control,  such  other  events as shall be
determined by the  Committee.   Unless otherwise  provided in an Individual
Agreement with the Participant,  the Plan Administrator  shall determine whether
“Cause”  exists.  Such a determination by the Plan Administrator,
when confirmed by the Compensation Committee, shall be final.
 
	
   
  	
  
 
  
	
  
Change   in Control
  	
  
Means the happening of any of the following events:
  
	
  
 
  	
  
 
  
	
  
 
  	
  

          (i)          An
acquisition  by any  individual,  entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) (a  “Person”)  of beneficial
ownership  (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (1) the then outstanding  shares of common stock of the
Company (the  “Outstanding  Company Common Stock”) or (2) the combined
voting power of the then outstanding  voting  securities of the Company entitled
to vote  generally in the election of directors (the  “Outstanding  Company
Voting Securities”); excluding, however, the following: (1) Any acquisition
directly from the Company,  other than an  acquisition by virtue of the exercise
of a  conversion  privilege  unless the security  being so converted  was itself
acquired directly from the Company,  (2) Any acquisition by the Company, (3) Any
acquisition  by any  employee  benefit  plan (or  related  trust)  sponsored  or
maintained by the Company or any entity  controlled  by the Company,  or (4) Any
acquisition  pursuant to a transaction  which complies with clauses (1), (2) and
(3) of subsection (iii) of this definition; or
 

A-1

	
  
 
  	
  

          (ii)          A
change in the composition of the Board such that the individuals  who, as of the
Effective Date,  constitute the Board (such Board shall be hereinafter  referred
to as the  “Incumbent  Board”)  cease for any reason to  constitute at
least  a  majority  of the  Board;  provided,  however,  for  purposes  of  this
definition,  that any individual who becomes a member of the Board subsequent to
the  Effective  Date,  whose  election,   or  nomination  for  election  by  the
Company’s  shareholders,  was  approved by a vote of at least a majority of
those  individuals who are members of the Board and who were also members of the
Incumbent  Board  (or  deemed  to be such  pursuant  to this  proviso)  shall be
considered as though such individual were a member of the Incumbent Board;  but,
provided,  further,  that any such individual whose initial assumption of office
occurs as a result of an actual or threatened  election  contest with respect to
the election or removal of directors or other actual or threatened  solicitation
of proxies or  consents  by or on behalf of a Person  other than the Board shall
not be so considered as a member of the Incumbent Board; or
 
	
  
 
  	
  
 
  
	
  
 
  	
  

          (iii)        Consummation
of a reorganization, merger or consolidation or sale or other disposition of all
or   substantially   all  of  the   assets  of  the   Company   (“Corporate
Transaction”); excluding, however, such a Corporate Transaction pursuant to
which (1) all or  substantially  all of the individuals and entities who are the
beneficial  owners,  respectively,  of the Outstanding  Company Common Stock and
Outstanding  Company  Voting  Securities  immediately  prior  to such  Corporate
Transaction will  beneficially  own,  directly or indirectly,  more than 50% of,
respectively,  the outstanding  shares of common stock,  and the combined voting
power of the then outstanding  voting  securities  entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including,  without limitation,  a corporation which
as a result of such transaction owns the Company or all or substantially  all of
the  Company’s  assets either directly or through one or more subsidiaries)
in substantially  the same proportions as their ownership,  immediately prior to
such  Corporate  Transaction,  of  the  Outstanding  Company  Common  Stock  and
Outstanding Company Voting Securities,  as the case may be, (2) no Person (other
than the Company, any employee benefit plan (or related trust) of the Company or
such corporation  resulting from such Corporate  Transaction)  will beneficially
own,  directly or  indirectly,  30% or more of,  respectively,  the  outstanding
shares  of  common  stock  of the  corporation  resulting  from  such  Corporate
Transaction or the combined voting power of the outstanding voting securities of
such corporation  entitled to vote generally in the election of directors except
to the extent that such  ownership  existed prior to the Corporate  Transaction,
and (3)  individuals  who were members of the Incumbent Board will constitute at
least a majority of the  members of the board of  directors  of the  corporation
resulting from such Corporate Transaction; or
 

A-2

	
  
 
  	
  

          (iv)     The   approval  by  the  shareholders  of  the
Company of a complete  liquidation  or  dissolution  of the  Company.

	
  
 
  	
  
 
  
	
  
Change   in Control Price
  	
  

Means the higher of (i) the highest  reported  sales  price,  regular  way, of a
share of common stock of the Company in any  transaction  reported on the Nasdaq
(or such other national  securities market or exchange as may at the time be the
principal  market for the Common  Stock)  during the 60-day  period prior to and
including  the date of a Change in  Control  or (ii) if the Change in Control is
the result of a tender or exchange offer or a Corporate Transaction, the highest
price per share of common  stock of the Company  paid in such tender or exchange
offer or Corporate Transaction.   To the extent that the consideration paid
in any such transaction described above consists all or in part of securities or
other  noncash  consideration,  the value of such  securities  or other  noncash
consideration  shall  be  determined  in the  sole  discretion  of the  board of
directors.
 
	
  
 
  	
  
 
  
	
  
Company
  	
  

Means Franklin Bank Corp., a Delaware  corporation and its  successors,  and its
subsidiaries, including Franklin Bank, S.S.B.
 
	
   
  	
  
 
  
	
  
Compensation   Committee
  	
  

Means the  Compensation  Committee of the board of directors of the Company,  or
such  committee  as the Board may from time to time  designate,  which  shall be
composed of not less than three Outside Directors, and shall be appointed by and
serve at the pleasure of the board.
 
	
  
 
  	
  
 
  
	
  
Disability
  	
  

Means, unless otherwise provided by the Committee, (i) “Disability” as
defined in any Individual Agreement to which the Participant is a party, or (ii)
if   there   is  no  such   Individual   Agreement   or  it  does   not   define
“Disability,”  permanent and total  disability as determined under the
Company’s     Long    Term    Disability    Plan    applicable    to    the
Participant.
 

A-3

	
  
Effective   Date
  	
  
Means the date this Plan is adopted by the   Compensation Committee.
  
	
  
 
  	
  
 
  
	
  Employee
  	
  

Means a person  employed by the Company in a regular  ongoing work  relationship
which meets applicable tests in labor regulation for employee status.

	
  
 
  	
  
 
  
	
  
Individual   Agreement
  	
  

Means  an  employment,   consulting  or  similar  written  agreement  between  a
Participant and the Company or one of its subsidiaries or affiliates.

	
  
 
  	
  
 
  
	
  
Nonsolicitation   Agreement
  	
  

Means the agreement  between the Company and the  Participant  contained in Plan
and in the Performance Unit Plan Grant Agreement in which the Participant agrees
not to  solicit  FBC  clients  and/or  employees  twelve  months  following  the
termination of employment with the Company.
 
	
  
 
  	
  
 
  
	
  
Normal   Retirement
  	
  

Means  retirement from active  employment with the Company at or after age 65 or
such other age as may be established by the  Compensation  Committee.

	
  
 
  	
  
 
  
	
  Outside   Director
  	
  
Means a director of the Company who meets any   applicable independent requirements of the Nasdaq and who qualifies as an   “outside director” within the meaning of Section 162(m) of the Internal   Revenue Code of 1986, as amended, and as a “non-employee director” within the   meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934,   as amended from time to time.
  
	
  
 
  	
  
 
  
	
  
Performance   Cycle
  	
  
Means the length of time selected by the CEO and   approved by the Compensation Committee over which a Key Employee’s   performance will be measured against the performance and other any other   standards established by the CEO and approved by the Compensation Committee   for purposes of determining whether the Key Employee satisfied the performance   standards and has become entitled to receive payment of the Performance   Units; provided, that the Compensation Committee will make all such   determinations regarding Performance Units granted to the CEO.
  
	
  
 
  	
  
 
  
	
  
Performance   Goals
  	
  
Means the performance goals established by the CEO   and approved by the Compensation Committee in connection with the grant of   Performance Units; provided, that the Compensation Committee will make all   such determinations regarding Performance Units granted to the CEO.  Such goals shall be based on the   attainment of specified levels of one or more of the following measures with   respect to the Company or a subsidiary, division or department of the Company   for or within which the Participant performs services: specified levels of   the Company’s stock price, market share, sales, asset quality, non-performing   assets, earnings per share, return on equity, costs, earnings,   marketing-spending efficiency, return on operating assets, return on assets,   deposits, core non-interest income and/or levels of cost savings.  Performance Goals also may be based upon   the attaining of specified levels of Company performance under one or more of
the measures described above relative to the performance of other corporations.  Performance Goals may be established using   Threshold, Target and Outstanding levels of achievement, with a different   number of Performance Units being earned at each level.
  

A-4

	
  
Performance   Unit
  	
  
Means a unit of monetary value which Participants   will receive when their individual and collective efforts meet or exceed the   performance standards established by the Company for the Performance Cycle.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
While the value of a Performance Unit correlates to   a degree with the value of the Company’s common stock, it does not have an intrinsic   value.  A Performance Unit is not   related in any legal manner to the common stock of the Company and it conveys   no rights of ownership in the Company to the Key Employee.
  
	
  
 
  	
  
 
  
	
  
Plan
  	
  
Means the Franklin Bank Corp. Key Employee   Intermediate-Term Incentive Compensation Plan, as amended, from time to time.
  
	
  
 
  	
  
 
  
	
  
Plan   Administrator
  	
  
Means the Administrative Committee of the Company in   existence from time to time or another committee of officers or outsiders   designated by the Compensation Committee to administer the Plan, subject to   the direction of the Compensation Committee.
  
	
   
  	
  
 
  
	
  
Vesting
  	
  
Means the satisfaction of Performance Goals and all   other conditions contained in the Plan and the applicable Performance Unit   Plan Grant Agreement entitling a Key Employee to receive the value of earned   Performance Units.  Vesting occurs six   months after the end of the Performance Cycle, subject to forfeiture or   acceleration as provided in the Plan.
  

Participants should consult with the Plan Administrator for any additional information or clarification required about terms and conditions and operating guidelines of the Plan.  

A-5

Exhibit B

FRANKLIN BANK CORP.

Key Employee Intermediate-Term Incentive Compensation Plan

Performance Unit Plan Grant Agreement

This Agreement is made the _____ day of _______________, 2006 (the “Agreement”), by and between Franklin Bank Corp. (the “Company”) and _________________________ (the “Participant”), an employee of the Company on this date.

A.      Declaration of Grant to Participant

In recognition of the Participant’s role in the Company and the extent of opportunities for the employee to contribute to the growth and success of the business, pursuant to the Franklin Bank Corp. Key Employee Intermediate-Term Incentive Compensation Plan (the “Plan”) the Compensation Committee, with the approval of the Company’s Board of Directors, grants to the Participant an intermediate-term incentive compensation award as follows:

          [_______] Performance Units provided that results achieved during the Performance Cycle, January 1, 2006 through December 31, 2008 meet the Threshold level of Performance Goals established for the period; [______] Performance Units if results meet the Target level of Performance Goals established for the period; and [_____] Performance Units if results meet the Outstanding level of Performance Goals established for the period.

This grant is made on the terms and conditions specified in this Agreement and in the Plan.  Capitalized terms used but not defined in this Agreement have the meanings ascribed to them in the Plan.

	
  
B.
  	
  
Terms   and Conditions of the Grant
  
	
  
 
  	
  
 
  
	
  
1.
  	
  
Term   of the Grant.  This   grant will remain in effect until June 30, 2009 or until such time as the   value of the grant is distributed to the Participant, the grant is terminated   in accordance with the terms of the Plan, the grant is modified or terminated   because of a change in the Plan itself, or the Participant’s employment with   the Company terminates, which ever comes first.
  
	
  
 
  	
  
 
  
	
  
2.
  	
  
Performance   Goals.  The   Performance Goals to be satisfied by Participant in order to receive a payout   under the Agreement are specified in Annex I to this Agreement.  Satisfaction of the Performance Goals is   in addition to any other requirements of the Plan and this Agreement.
  
	
   
  	
  
 
  
	
  
3.
  	
  
Vesting.  Rights to this grant vest on June 30,   2009, the last day of the Performance Cycle, if the Performance Goals have   been met, subject to acceleration and forfeiture as provided in the Plan.  There is no partial vesting of grant   interests prior to that date, except as provided in the Plan or unless   otherwise recommended by the Plan Administrator and approved by the   Compensation Committee.  The   Compensation Committee may amend the terms of any grant, subject to the   provisions of the Plan.
  

B-1

	 4.
	 Determination of Grant Value.  The value of the grant will be determined as soon as practical following the close of the Performance Cycle when the Company can determine actual results achieved against the established Performance Goals.

	  
	  

	
  
 
  	The number of Performance Units earned will be multiplied by the unit value (average of quarter-end stock closing prices during the last year of the Performance Cycle) to determine the value of the grant.
 

	
  5.
  	
  
Distribution   of Grant Value.    Distribution of the grant value will be made to the Participant in the   form of a lump sum payment of cash as soon as practical following vesting of   Performance Units.  Distribution of   grant value may be accelerated or forfeited under the circumstances described   in the Plan.  Notwithstanding anything   to the contrary, the distribution of the grant value with respect to this   grant of Performance Units shall be made no later than the 15th   day of the third month following the year in which such grant becomes vested.
  
	
  
 
  	
  
 
  
	
  
6.
  	
  
Participant’s   Rights.  A   Participant’s rights and privileges hereunder are limited to receipt of the   value of the Performance Units following the close of the Performance   Cycle.  Performance Units do not   represent an ownership interest in common stock of the Company or provide any   rights or privileges associated with stock ownership, i.e., voting, receipt   of dividends or participation in profit distributions.
  
	
  
 
  	
  
 
  
	
  
7.
  	
  
No   Investment Requirement.    The Participant is not required to make an investment in the Company   in order to receive and participate in this grant of Performance Units.
  
	
  
 
  	
  
 
  
	
  8.
  	
  
Forfeiture   of Interests.  If a   Participant (i) is terminated for reasons of Cause, as defined in Exhibit A   of the Plan, or (ii) voluntarily terminates his or her employment with the   Company, the Participant will forfeit all interests herein, as well as any   undistributed awards from prior Performance Unit grants.
  

	  
	If the Participant violates the provisions of his/her nonsolicitation covenant with the Company contained in the Plan and in Section 9 of this Agreement, any undistributed awards from the Plan are forfeited and the Company shall be entitled to the remedies contained in the Plan and Section 9 of the Agreement.
	  
	 
	
  
9.
  	
  

Nonsolicitation Agreement.  As a condition to the vesting of this grant
under the Plan,  Participant  hereby agrees,  for a period of twelve (12) months
after  any  Participant  shall  cease for any  reason,  whether  voluntarily  or
involuntarily or as the result of death, disability or normal retirement,  to be
employed by the Company,  that  Participant  will not,  either  individually  or
together with any other  individual or  organization  directly or indirectly (i)
induce any  employee of the Company or any  successor  to  terminate  his or her
employment with the Company or any successor,  or to hire any employee or former
employee of the Company or any  successor,  or (ii) cause,  induce or encourage,
directly or indirectly, any customer,  depositor or client of the Company or any
successor to terminate or adversely change any relationship  with the Company or
any successor or cause,  induce or encourage any potential  supplier,  customer,
depositor or client to not enter into any business relationship with the Company
or any successor.
 

B-2

	  
	 Participant agrees and acknowledges that  (i) the provisions of this nonsolicitation agreement are reasonable and necessary for the protection of the Company, (ii) the breach of this nonsolicitation agreement by Participant will result in irreparable harm to the Company, (iii) no adequate remedy at law is available to the Company for the breach by Participant of the provisions of this nonsolicitation agreement, and (iv) the Company shall be entitled to specific enforcement of the provisions of this nonsolicitation agreement, and injunctive relief for any breach or threatened breach of this nonsolicitation agreement, without the necessity of proving actual monetary loss and without bond or other security being required.  In addition to specific performance and injunctive relief, in the event of a breach of this nonsolicitation agreement by Participant the Company shall be entitled to (i) forfeit any unpaid Pe
rformance Units granted to Participant under this Plan, (ii) recovery from Participant amounts paid to Participant in respect of Performance Units during the twelve (12) months preceding termination of Participant’s employment and (iii) such other damages to which the Company may be entitled.

	  
	  

	
  
10.
  	
  

Active Employment  Contingency.   The Participant’s opportunity to
receive grants and to vest interests in grants is contingent  upon  continuation
of active  employment with the Company,  including  cases of Normal  Retirement,
Disability or death as contained in the Plan.
 
	
  
 
  	
  
 
  
	
  11.
  	
  

Nontransferability  of  Grant.    The  Participant’s   rights  and
financial  interests  in this grant may not be  pledged,  hypothecated,  sold or
transferred  other than by will or laws of descent and  distribution.   The
grant  may only be  exercised  during  the  Participant’s  lifetime  by the
Participant  or by  his  or  her  legal  representatives  in  the  event  of the
Participant’s Disability or death.
 
	
  
 
  	
  
 
  
	
  
12.
  	
  
No   Employment Rights.    Receipt of grants under this Plan does not constitute an employment   agreement between the Participant and the Company.  Unless restricted by the terms of an Individual Agreement,   Participant’s employment relationship may be terminated at any time by either   party at will.
  

B-3

	
  
C.
  	
  
Notices
  
	
  
 
  	
  
 
  
	
  
Any notice hereunder to the Company shall be   addressed to its offices in Houston, TX to the attention of the Plan   Administrator, and any notice to the Participant shall be addressed to him or   her at the address of record in the Company’s personnel files.
  
	
   
  	
  
 
  
	
  
D.
  	
  
Participant   Bound by Plan
  

The Participant acknowledges receipt of a copy of the Plan and this Agreement and agrees to be bound by all of the terms, provisions and methods therein contained.  

In witness whereof, the Company has caused this agreement to be executed on its behalf by the Plan Administrator(s) and the Participant on the date indicated.

	
  
For the Company
  	
  
 
  	
  
By the Participant
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  

  	
  
 
  	
  

  

B-4

Annex I to Exhibit B

FRANKLIN BANK CORP.

Performance Goals

Performance Cycle:  The Performance Cycle applicable to the Performance
Units  evidenced by this Agreement  begins January 1, 2005 and ends December 31,
2008.  

Performance Units:  Participant will earn [____] Performance Units upon
satisfaction  of  the  Threshold   Performance  Level  set  forth  below;  [___]
Performance  Units upon  satisfaction of the Target  Performance Level set forth
below;  and  [___]  Performance  Units  upon  satisfaction  of  the  Outstanding
Performance  Level set forth  below.   No Performance  Units will be earned
unless the Threshold Performance Level is satisfied.  If Participant’s
Performance Level exceeds the Threshold  Performance level, but is less than the
Target Performance, or exceeds the Target Performance Level but is less than the
Outstanding  Performance Level, the difference will be interpolated as described
below to determine the Performance Units earned.   Performance Units earned
will   entitle   Participant   to  a  cash  payment   calculated   as  described
below.

Vesting:   Subject to  acceleration  and  forfeiture as provided in the
Plan and satisfaction of the Performance  Goals and the other provisions of this
Agreement and the Plan, the  Performance  Units evidenced by this Agreement vest
on June  30,  2009.   Payment  of the  cash  sum due  upon  vesting  of the
Performance  Units  will be made as soon as  practicable  after  vesting  and in
compliance with the terms of the Plan. 

Performance Goals:   The Performance Goals applicable to this Agreement
are the (1) annual  percentage  increase in net income  available  to the common
stock  (“NICS”)  during  each of the years  2006,  2007 and  2008,  as
compared to each of the  immediately  preceding  years,  and (2) the  percentage
increase in annual fully diluted earnings per share  (“FDEPS”)  during
each of the years 2006,  2007 and 2008,  and (3) for line managers and operating
unit  managers,  the  annual  percentage  increase  in net income  before  taxes
(“NIBT”)  during each of the years 2006, 2007 and 2008, as compared to
each  of the  immediately  preceding  years.   The  Threshold,  Target  and
Outstanding Levels of annual percentage increase in NICS are [___]%,  [___]% and
[___]%,  respectively.   The Threshold,  Target and  Outstanding  Levels of
annual   percentage   increase   in  FDEPS  are   [___]%,   [___]%  and  [___]%,
respectively.    For  line  managers  and  operating  unit  managers,   the
Threshold,  Target and Outstanding Levels of annual percentage  increase in NBIT
are [____]%, [____]% and [____]%, respectively.  

In  determining  whether the  Performance  Goals have been satisfied the Company
shall perform the  following  calculations:  (1) calculate the NICS Factor,  (2)
calculate the FDEPS Factor,  (3) for line managers and operating  unit managers,
calculate the NBIT Factor,  (4) calculate the Employee  Performance  Level,  (5)
adjust  the  applicable   Performance  Units  to  interpolate  between  Employee
Performance Levels and (6) determine the amount due to Participant.

-1-Exhibit 10.2

FRANKLIN BANK CORP.
 RESTRICTED STOCK AGREEMENT

          This      Restricted
Stock  Agreement  (“Agreement”),  entered  into  on  the  ____  day of
___________,  2006 (the “Effective Date”),  which is the date on which
the Grant  described  below was  approved  by the  Compensation  Committee  (the
“Committee”)  of the Board of  Directors  of Franklin  Bank Corp.,  is
between Franklin Bank Corp., a Delaware  corporation (the  “Company”),
and ____________________ (the “Participant”).

          WHEREAS,   to  carry
out the purposes of the Franklin Bank Corp.  2006 Long-Term  Incentive Plan (the
“Plan”),  shares of  restricted  Common  Stock (as defined  below) are
hereby  granted  to  Participant  in  accordance  with  this  Restricted   Stock
Agreement; and

          WHEREAS, the Company and Participant agree as follows:

          1.          Award
of Common Stock.   The Company hereby grants (the “Grant”) to
Participant ________ shares (the  “Shares”) of common stock, $0.01 par
value, of the Company (“Common Stock”),  which shall be subject to the
restrictions  on   transferability   set  forth  in  Section  2(d)  herein  (the
“Restrictions”)    and   to   the    other    provisions    of    this
Agreement.

          2.          Restricted
Period.

                       (a)          For
a period of  ____________  (___) years and _________  (_____) days commencing on
the  Effective  Date (the  “Restricted  Period”),  the Shares shall be
subject  to  the   Restrictions   and  any  other   restrictions  as  set  forth
herein.   The  Restrictions  shall  expire  as to  all  of  the  Shares  on
_________________.   The Shares which are subject to the Restrictions shall
hereinafter be referred to as  “Restricted  Shares.”   The Shares
which are no longer subject to the  Restrictions  as set forth in paragraphs (f)
or  (g)  below  shall   hereinafter   be   referred  to  as   “Transferable
Shares.”

                       (b)          The
Company shall effect the issuance of the Shares out of  authorized  but unissued
shares of Common Stock or out of treasury  shares of Common Stock and shall also
effect the issuance of a certificate or certificates for the Shares.   Each
certificate  issued for Restricted  Shares to Participant shall be registered in
Participant’s  name and shall be either deposited with the Secretary of the
Company or its  designee in an escrow  account or held by the  Secretary  of the
Company,  at the  election of the Company,  together  with stock powers or other
instruments  of  transfer   appropriately   endorsed  in  blank  by  Participant
(Participant  hereby agreeing to execute such stock powers or other  instruments
of transfer as requested by the Company).  Such certificate or certificates
shall remain in such escrow  account or with the  Secretary of the Company until
the earlier to occur of (i) the termination of the Restricted Period or (ii) the
expiration  of  the   Restrictions  as  set  forth  in  paragraphs  (f)  or  (g)
below.  Certificates representing the Restricted Shares shall bear a legend
in substantially the following form:

-1-

	
  
 
  	
  
          THE   TRANSFERABILITY OF THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED   HEREBY ARE SUBJECT TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE) OF THE   FRANKLIN BANK CORP. 2006 LONG-TERM INCENTIVE PLAN AND AN AWARD   AGREEMENT.  COPIES OF SUCH PLAN AND   AGREEMENT ARE ON FILE AT THE OFFICES OF FRANKLIN BANK CORP., 9800 RICHMOND AVENUE,   SUITE 680, HOUSTON, TEXAS 77042.
  

The Company may place appropriate stop transfer instructions with respect to the Restricted Shares with the transfer agent for the Common Stock.  Upon Restricted Shares becoming Transferable Shares, the Company shall effect, in exchange for the legended certificates, the issuance and delivery of a certificate or certificates for such Shares to Participant free of the legend set forth above.

                       (c)          Participant
shall,  during  the  Restricted  Period,  have  all of  the  other  rights  of a
stockholder with respect to the Shares including,  but not limited to, the right
to receive dividends,  if any, as may be declared on such Restricted Shares from
time to time,  and the right to vote (in  person or by  proxy)  such  Restricted
Shares at any meeting of stockholders of the Company.

                       (d)          The
Restricted  Shares  and the right to vote the  Restricted  Shares and to receive
dividends thereon may not be sold, assigned,  transferred,  exchanged,  pledged,
hypothecated,  or otherwise encumbered and no such sale,  assignment,  transfer,
exchange,  pledge,  hypothecation,  or  encumbrance,  whether made or created by
voluntary act of Participant or any agent of Participant or by operation of law,
shall be  recognized  by, or be binding  upon, or shall in any manner affect the
rights of, the Company or any agent or any custodian  holding  certificates  for
the Restricted Shares during the Restricted Period, unless the Restrictions have
then expired  pursuant to the provisions of paragraphs  (f) or (g)  below. 
This provision shall not prohibit Participant from granting revocable proxies in
customary form to vote the Shares.

                       (e)          If
Participant  ceases to be  employed  by, or ceases to serve on the Board of, the
Company  or its  Affiliates  (as  defined  in  Section  6  herein)  prior to the
expiration  of the  Restricted  Period  for any  reason  other  than the  death,
Disability,  or Normal  Retirement of  Participant,  or upon the occurrence of a
Change in Control  (which  events are governed by Sections 2(f) or 2(g) hereof),
then,  in that event,  any  Restricted  Shares  outstanding  shall  thereupon be
forfeited by Participant to the Company, without payment of any consideration or
further   consideration  by  the  Company,   and  neither  Participant  not  any
successors,  heirs,  assigns  or  legal  representatives  of  Participant  shall
thereafter  have any  further  rights or interest  in the  Restricted  Shares or
certificates therefor,  and  Participant’s  name shall thereupon be deleted
from the list of the Company’s  stockholders with respect to the Restricted
Shares.  

                       (f)          If Participant ceases to be employed by, or ceases to serve on the Board of, the Company or its Affiliates prior to the expiration of the Restricted Period by reason of death, Disability or Normal Retirement, any Restrictions on the Restricted Shares shall be deemed to have expired as to the Restricted Shares as of the date of any such occurrence, and the Restricted Shares shall thereby be Transferable Shares.  For purposes of this Agreement, “Normal Retirement” shall mean retirement from active employment with the Company at or after the age of 65 or such other age as may be established by the Committee.  

-2-

                       (g)          Upon
the occurrence of a Change in Control, any Restrictions on the Restricted Shares
set forth in this Agreement shall be deemed to have expired,  and the Restricted
Shares shall thereby be Transferable  Shares.   In addition,  to the extent
that the accelerated  vesting of a  Participant’s  Restricted Shares upon a
Change in Control  (“C in C  Vesting”)  results in a Tax,  Participant
shall be paid by the Company an amount (“Gross-Up  Payment”) such that
after payment by  Participant  of all Taxes  imposed upon the Gross-Up  Payment,
Participant  shall retain an amount of the Gross-Up  Payment equal to the Tax on
the C in C  Vesting.   Participant  shall be responsible for payment to the
Internal  Revenue  Service of any  Tax.   Any  determination  whether a Tax
imposed  by  Section  4999 of the  Internal  Revenue  Code of 1986,  as  amended
(“Excise  Tax”)  is incurred and the amount of any  required  Gross-Up
Payment  (“Determination”)  shall  be  made by a tax  accounting  firm
mutually    acceptable    to   the    Company   and    Participant    (“Tax
Accountants”).   After a Determination is made by the Tax Accountants,
the Tax  Accountants  shall furnish  Participant and the Company with an opinion
that  either no Excise Tax will be imposed or that an Excise Tax will be imposed
with respect to the C in C Vesting.   If the opinion states that any Excise
Tax  will be  incurred  with  respect  to the C in C  Vesting,  the  appropriate
Gross-Up Payment will be made by the Company to Participant within five business
days of the receipt by the Company of the  opinion of the Tax  Accountants,  but
such Gross-Up Payment shall be made no earlier than the occurrence of the Change
in Control.  Notwithstanding anything to the contrary, the Gross-Up Payment
shall  be made as soon as  administratively  practicable  after  the  Change  in
Control,   but  such   Gross-Up   Payment  shall  be  made  no  later  than  the
15th  day of the third month  following  the last day of the calendar
year in which the Change in Control  occurs.   For purposes of this Section
2(g), the terms “Tax” and “Taxes”  mean any and all taxes of
any kind  whatsoever  (including,  but not limited to, any and all Excise Taxes,
income taxes, and employment  taxes),  together with any interest  thereon,  any
penalties,  additions to tax, or  additional  amounts with respect to such taxes
and any interest in respect of such  penalties,  additions to tax, or additional
amounts.

                       (h)          If
Participant  ceases to be  employed  by, or ceases to serve on the Board of, the
Company prior to the  expiration of the  Restricted  Period,  and there exists a
dispute  between  Participant  and the  Company  as to the  satisfaction  of the
conditions to the release of the Shares from the  Restrictions  hereunder or the
terms and  conditions  of the Grant,  the  Shares  shall  remain  subject to the
Restrictions until the resolution of such dispute, regardless of any intervening
expiration  of the  Restricted  Period,  except that any  dividends  that may be
payable to the holder of record of Common  Stock as of a date  during the period
from  termination  of  Participant’s  employment to the  resolution of such
dispute shall:

	
  
 
  	
  

                (i)          to
the extent to which such dividends would have been payable to Participant on the
Shares,  be held by the Company as part of its general funds,  and shall be paid
to or for  the  account  of  Participant  only  upon,  and in the  event  of,  a
resolution of such dispute in a manner favorable to Participant,  and

	
  
 
  	
  
 
  
	
  
 
  	
  

                (ii)        be
canceled  upon,  and in the event of, a  resolution  of such dispute in a manner
unfavorable to Participant.
 

-3-

          3.          Taxes. 
To the extent that the receipt of the Restricted  Shares,  Transferable  Shares,
payment  of the  Gross-Up  Payment or the lapse of any  Restrictions  results in
income to  Participant  for federal or state  income tax  purposes,  Participant
shall  deliver to the Company at the time of such receipt or lapse,  as the case
may be,  such  amount of money  or,  if the  Participant  so  elects,  shares of
unrestricted  Common  Stock as the Company  may  require to meet its  obligation
under  applicable tax laws or regulations,  and, if Participant  fails to do so,
the Company is authorized to withhold from any cash or Common Stock remuneration
then or  thereafter  payable to  Participant  any tax required to be withheld by
reasons  of such  resulting  compensation  income.   Participant  agrees to
notify the Company promptly of any tax election made by Participant with respect
to the  Shares.   The  Company  confirms to  Participant  that the right of
Participant to deliver unrestricted shares in payment of taxes due in respect of
the  receipt  or  vesting  of  Restricted   Shares  has  been  approved  by  the
Compensation  Committee  prior to the date of this Agreement as  contemplated by
SEC Rule 16b-3.

          4.          Changes
in Capital Structure.   If the outstanding shares of Common Stock shall
at any time be changed or  ex-changed  or  augmented by  declaration  of a stock
dividend,   stock  split,   combination   of  shares,   merger,   consolidation,
recapitalization  or similar  event,  the Shares,  being  outstanding  shares of
Common  Stock,  shall be  treated  in the same  manner as all other  issued  and
outstanding shares.  Any cash, property or securities into which the Shares
are so changed or exchanged or so augmenting  the Shares or so issued in respect
of the Shares  shall be subject to the  Restrictions  in the same  manner as the
Shares.

          5.          Compliance
with Securities Laws.

                       (a)          If
a registration  statement  under the Securities Act of 1933, as amended,  is not
effective with respect to the Shares, Participant (i) represents and warrants to
the Company that  Participant  is acquiring the Shares for his own account,  for
investment,  and without a view to any sale or distribution thereof in violation
of any federal or state  securities laws, and (ii) understands that the Grant of
the Shares to Participant  has not been  registered  under the Securities Act of
1933, as amended, or the securities laws of any state, and, accordingly, that in
addition to the other restrictions  placed on the Shares by this Agreement,  the
Shares may not be offered,  sold,  assigned,  transferred,  exchanged,  pledged,
hypothecated  or  otherwise   encumbered  in  absence  of  either  an  effective
registration  statement  under  the  Securities  Act of 1933,  as  amended,  and
applicable  state  securities laws or an opinion of counsel  satisfactory to the
Company that such registration is not required.

                       (b)          If
a registration  statement  under the Securities Act of 1933, as amended,  is not
effective with respect to the Shares,  Participant  agrees that the certificates
representing   the  Shares   (whether  the  Shares  are  Restricted   Shares  or
Transferable  Shares) may bear any legend required by law or which the Committee
deems appropriate to reflect any restrictions on transfer.

                       (c)          Upon
the execution of this Agreement and receipt of any  certificates  for the Shares
pursuant  to  this   Agreement,   Participant   (or   Participant’s   legal
representative upon Participant’s  death or disability) will make and enter
into such additional written  representations,  warranties and agreements as the
Company may  reasonably  request in order to comply with  applicable  securities
laws or with this Agreement or the Plan.

-4-

          6.          Employment
Relationship.   If  Participant  is an employee,  Participant  shall be
considered to be in the employment of the Company as long as Participant remains
as an employee  of the  Company or its  Affiliates.   Any  questions  as to
whether and when there has been a termination of such employment,  and the cause
of such termination,  shall be determined by the Company, with the advice of the
employing  corporation (if an Affiliate of the Company),  and the Company’s
determination   shall  be   final.    For   purposes  of  this   Agreement,
“Affiliates”  shall  mean any  “parent  corporation”  of the
Company and any  “subsidiary  corporation”  of the Company  within the
meaning of Sections 424(e) and (f),  respectively,  of the Internal Revenue Code
of 1986, as  amended.   If  Participant is an employee,  nothing  contained
herein shall be construed as conferring  upon  Participant the right to continue
in the employ of the Company,  nor shall anything  contained herein be construed
or interpreted to limit the “employment at will”  relationship between
Participant and the Company.

          7.          Binding Effect. The terms and conditions hereof shall be binding upon, and inure to the benefit of, all successors of Participant, including, without limitation, Participant’s estate and the executors, administrators, or trustees thereof, heirs and legatees, and any receiver, trustee in bankruptcy, or representative of creditors of Participant.  This Agreement shall be binding upon and inure to the benefit of any successors to the Company.

          8.          Notice.   All notices, requests, demands and other communications given under or by reason of this Agreement shall be in writing and shall be deemed given when delivered in person or when mailed, by certified mail (return receipt requested), postage prepaid, addressed as follows (or to such other address as a party may specify by notice pursuant to this provision):

                       (a)          To Participant:

	
  
 
  	
  
Franklin Bank Corp.
  	
  
 
  
	
  
 
  	
  
9800 Richmond Avenue, Suite 680
  	
  
 
  
	
  
 
  	
  
Houston, Texas 77042
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
To Participant:
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  

  	
  
 
  

          9.          Resolution of Disputes.  As a condition to the granting of the Shares, Participant, his or her legal representatives, heirs, successors and other transferees agree that any dispute or disagreement which may arise hereunder shall be determined by the Committee in its sole discretion and judgment, and that any such determination any interpretation by the Committee of the terms of this Agreement shall be final and shall be binding and conclusive, for all purposes, upon the Company, Participant, his or her legal representatives, heirs, successors and other transferees.   

-5-

          10.          Entire Agreement and Amendments. This Agreement contains the entire agreement of the parties relating to the matters contained herein and supersedes all prior agreements and understandings, oral or written, between the parties with respect to the subject matter hereof.  This Agreement may be changed only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension or discharge is sought.

          11.          Separability.  If any provision of the Agreement is rendered or declared illegal or unenforceable by reason of any existing or subsequently enacted legislation or by the decision of any arbitrator or by decree of a court of last resort, the parties shall promptly meet and negotiate substitute provisions for those rendered or declared illegal or unenforceable to preserve the original intent of this Agreement to the extent legally possible, but all other provisions of this Agreement shall remain in full force and effect.

          12.          Agreement Subject to Plan.  This Agreement is subject to the Plan.  The terms and provisions of the Plan (including any subsequent amendments thereto) are hereby incorporated herein by reference thereto.  In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.  All definitions of words and terms contained in the Plan shall be applicable to this Agreement.

          13.          Governing Law.  The execution, validity, interpretation, and performance of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware without reference to principles of conflict of laws, except to the extent preempted by federal law.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by one of its officers thereunto duly authorized, and Participant has executed this Agreement, all as of the day and year first above written.

	
  
 
  	
  
FRANKLIN BANK CORP.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
By:
  	
  
 
  
	
  
 
  	
  
 
  	
  

  
	
  
 
  	
  
 
  	
  
Authorized Officer
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
PARTICIPANT
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  

  
	
  
 
  	
  
Name:
  	
  
 
  

-6-

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