Exhibit 10.04

SANDERS MORRIS HARRIS GROUP INC.
RESTRICTED STOCK AGREEMENT

THIS RESTRICTED STOCK AGREEMENT (this “Agreement”) is made and entered into by
and between Sanders Morris Harris Group Inc. (the “Company”) and ---, employee
of the Company or a Subsidiary thereof (“Grantee”) effective as of the grant
date(s) shown in the attached Appendix to this Agreement (the “Appendix”),
pursuant to the Company’s Capital Incentive Program (the “Program”). The Program
was adopted by the Compensation Committee pursuant to authority granted to it
under the Company’s 1998 Incentive Plan, as amended (the “Plan”), each of the
Program and Plan is incorporated herein by reference in its entirety.
Capitalized terms not otherwise defined in this Agreement shall have the meaning
given to such terms in the Program and the Plan.

WHEREAS, the Company desires to grant to Grantee a number of restricted shares
of the Company's common stock, par value $.01 per share (the “Common Stock”),
subject to the terms and conditions of this Agreement and the Program, with a
view to increasing Grantee's interest in the Company's welfare and growth; and

WHEREAS, Grantee desires to receive shares of the Common Stock subject to the
terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the premises, mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:

1. Grant of Common Stock. Subject to the restrictions, forfeiture provisions and
other terms and conditions set forth herein (a) the Company hereby grants to
Grantee the number of shares of Common Stock (“Restricted Shares”) as set out in
the Appendix hereto, and (b) Grantee shall have and may exercise rights and
privileges of ownership of such Restricted Shares, including, without
limitation, the voting rights of such shares and the right to receive dividends
declared in respect thereof, subject to the terms and conditions of the Program.

2. Transfer Restrictions. Grantee shall not sell, assign, transfer, exchange,
pledge, encumber, gift, devise, hypothecate or otherwise dispose of
(collectively, “Transfer”) any Restricted Shares. These transfer restrictions
shall lapse in accordance with the Vesting Schedule set out in the Appendix,
provided that Grantee remains an Employee through the Vesting Date except as may
otherwise be provided in the Program.

3. Forfeiture.

(a) Termination of Employment. If Grantee's Employment is terminated, then
Grantee’s vested interest, if any, in the Restricted Shares shall be determined
pursuant to the terms and conditions of the Program.

(b) Forfeited Shares. Any Shares forfeited hereunder shall automatically revert
to the Company and become canceled. Any certificate(s) representing Restricted
Shares which include forfeited shares shall only represent that number of
Restricted Shares which have not been forfeited hereunder. Upon the Company's
request, Grantee agrees for himself and any other holder(s) to tender to the
Company any certificate(s) representing Restricted Shares which include
forfeited shares for a new certificate representing the unforfeited number of
Restricted Shares.

4. Issuance of Certificate.

(a) The Restricted Shares may not be Transferred until they become vested.
Further, the vested and unrestricted shares may not be sold or otherwise
disposed of in any manner which would constitute a violation of any applicable
federal or state securities laws in the opinion of counsel satisfactory to the
Company. The Company shall cause to be issued a stock certificate, registered in
the name of the Grantee, evidencing the Restricted Shares upon receipt of a
stock power duly endorsed in blank with respect to such shares. Each such stock
certificate shall bear the legend as set forth in the Program. Such legend shall
not be removed from the certificate evidencing Restricted Shares until such time
as the restrictions thereon have lapsed.

 
 

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(b) The certificate issued pursuant to this Section 4, together with the stock
powers relating to the Restricted Shares evidenced by such certificate, shall be
held by the Company. The Company may issue to the Grantee a receipt evidencing
the certificates held by it which are registered in the name of the Grantee.

5. Miscellaneous.

(a) Certain Transfers Void. Any purported transfer of Restricted Shares in
breach of any provision of this Agreement, the Program or the Plan shall be void
and ineffectual, and shall not operate to transfer any interest or title in the
purported transferee.

(b) No Fractional Shares. All provisions of this Agreement concern whole shares
of Common Stock. If the application of any provision hereunder would yield a
fractional share, the value of such fractional share shall be paid to the
Grantee in cash.

(c) Not an Employment Agreement. This Agreement is not an employment agreement,
and no provision of this Agreement shall be construed or interpreted to create
any right to continued employment with the Company or any Subsidiary.

(d) Notices. Any notice, instruction, authorization, request or demand required
hereunder shall be in writing, and shall be delivered either by personal in-hand
delivery, by telecopy or similar facsimile means, by certified or registered
mail, return receipt requested, or by courier or delivery service, addressed to
the Company at the address indicated beneath its signature on the execution page
of this Agreement, and to Grantee at his address indicated on the Company's
stock records, or at such other address and number as a party shall have
previously designated by written notice given to the other party in the manner
herein set forth. Notices shall be deemed given when received, if sent by
facsimile means (confirmation of such receipt by confirmed facsimile
transmission being deemed receipt of communications sent by facsimile means),
and when delivered and receipted for (or upon the date of attempted delivery
where delivery is refused), if hand-delivered, sent by express courier or
delivery service, or sent by certified or registered mail, return receipt
requested.

(e) Amendment and Waiver. This Agreement may be amended, modified or superseded
only by written instrument executed by the Company and Grantee. Any waiver of
the terms or conditions hereof shall be made only by a written instrument
executed and delivered by the party waiving compliance. Any amendment or waiver
agreed to by the Company shall be effective only if executed and delivered by a
duly authorized executive officer of the Company other than Grantee. The failure
of any party at any time or times to require performance of any provisions
hereof shall in no manner effect the right to enforce the same. No waiver by any
party of any term or condition in this Agreement, or breach thereof, in one or
more instances shall be deemed a continuing waiver of any such condition or
breach, a waiver of any other condition, or the breach of any other term or
condition.

(f) Independent Legal and Tax Advice. The Grantee is strongly advised to obtain
independent legal and tax advice regarding this grant of Restricted Shares and
the disposition of such shares, including, without limitation, the election
available under Section 83(b) of the Internal Revenue Code.

(f) Governing Law and Severability. This Agreement shall be governed by the
internal laws, and not the laws of conflict, of the State of Texas.
The invalidity of any provision of this Agreement shall not affect any other
provision of this Agreement which shall remain in full force and effect.

 
 

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(g) Successors and Assigns. Subject to the limitations which this Agreement
imposes upon transferability of Restricted Shares, this Agreement shall bind, be
enforceable by and inure to the benefit of the Company and its successors and
assigns, and Grantee, and, upon his death, on his estate and beneficiaries
thereof (whether by will or the laws of descent and distribution).

[Signature page follows.]
 
 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the
date first above written.
 

 
COMPANY:

SANDERS MORRIS HARRIS GROUP INC.

By:                                                                                      

Name:                                                                                 
       
Title:                                                                                   

Address: Sanders Morris Harris Group Inc.

Telecopy No.: (___) ____-______

Attention:                                                                          

GRANTEE:

         
                                                                                   
Signature
 

                                                                                             
Printed Name

 
 
 

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APPENDIX TO
RESTRICTED STOCK AGREEMENT

Grantee’s Name:        Name

Vesting Schedule:

Annual Anniversary
 
Vested % of the Shares Subject
of the Grant Date
 
to the Restricted Stock Award
     
First
 
50%
     
Second
 
75%
     
Third
 
100%
               
Number of
Grant Date:
 
Restricted Shares Granted
         
 ____________________________
   
 ____________________________

Note: All vesting is subject to the terms and conditions of the Program.
 
 
 
 

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