Exhibit 10.4
 
 
AMTRUST  FINANCIAL SERVICES, INC.
  2010 OMNIBUS INCENTIVE PLAN

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RESTRICTED STOCK AGREEMENT
 

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AmTrust Financial Services, Inc.  a Delaware corporation, (the “Company”),
hereby grants restricted stock (“Restricted Stock”) relating to shares of its
common stock, $.01 par value, (the “Stock”), to the individual named below as
the Grantee, subject to the vesting conditions set forth in this Agreement. This
grant is subject to the terms and conditions set forth in (i) this Agreement,
and (ii) the 2010 Omnibus Incentive Plan (the “Plan”). Unless otherwise defined
herein, capitalized terms used in this Agreement are defined in the Plan, and
have the meaning set forth in the Plan.

Award of Restricted Stock
 
 
You have been granted ________ shares of Restricted Stock, subject to the terms
and conditions of this Agreement and the Plan.
 
Grant Date
 
 
The effective date of this grant of Restricted Stock is _______ ____, 20__
(“Grant Date”).
Vesting
 
Your award of Restricted Stock  shall vest in four equal installments of 25% on
each of the first, second, third and fourth anniversaries of the Grant Date,
provided you remain in Service (as defined below) on the vesting date.
 
“Service” means that you are currently an employee of the Company, are a member
of the Company’s Board of Directors, or are otherwise providing services to the
Company.
 
Restricted Stock
Ownership and
Transferability
 
Subject to the restrictions set forth in the Plan and this Agreement, the Award
holder shall possess all incidents of ownership of the Restricted Stock granted
hereunder, including the right to receive dividends with respect to such
Restricted Stock and the right to vote such Restricted Stock.
 
Restricted Stock may not be transferred, assigned, pledged or hypothecated,
whether by operation of law or otherwise (except by the laws of descent and
distribution) nor may shares of Restricted Stock be made subject to execution,
attachment or similar process.
 
Forfeiture of Unvested
Restricted Stock
 
Except as specifically provided in this Agreement or as may be provided in other
agreements between you and the Company, no additional shares of Restricted Stock
will vest after your Service has terminated for any reason and you will forfeit
to the Company all of the Restricted Stock not yet vested or with respect to
which all applicable restrictions and conditions have not lapsed.
 
Death
 
If your Service terminates because of your death, the Restricted Stock granted
under this Agreement will automatically vest as to the number of Restricted
Stock that would have vested had you remained in Service for the 12 month period
immediately following your death.
 

 

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Disability
 
If your Service terminates because of your Disability (as defined below), the
Restricted Stock granted under this Agreement will automatically vest as to the
number of Restricted Stock that would have vested had you remained in Service
for the 12 month period immediately following your termination for Disability.
 
For purposes of this Agreement, “Disability” shall mean the Award holder is
unable to perform the duties of their Service (or other services) (i) for a
period of 90 consecutive days, or (ii) any 120 days during any consecutive 12
month period.
 
Termination For Cause
 
If your Service is terminated for Cause (as defined below), then you shall
immediately forfeit all rights to your vested (but undelivered) and unvested
Restricted Stock and this award shall immediately terminate.
 
For purposes of this Agreement, “Cause” shall mean (a) willful misconduct or
gross negligence; (b) conviction of a felony or conviction of a crime involving
moral turpitude; (c) any act constituting fraud or the misappropriation or
embezzlement of money or other property of any member of the Company; and (d)
any willful act or course of conduct constituting an abuse of office or
authority which has a material adverse impact on the Company’s reputation or
financial condition.
 
Termination without Cause within 12 Months of Change in Control
 
 
If your Service with the Company (or any affiliate) is terminated by the Company
without Cause within 12 months following the effective date of a “Change of
Control,” the Board of Directors may accelerate the vesting of any award of
Restricted Stock held by you.
 
For purposes of this Agreement: “Change in Control” shall mean:
(i) any “person” (as such term is used in Section 13(d) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), including any
syndicate or group deemed to be a “person” under Section 13(d)(3) of the
Exchange Act) other than Barry Zyskind, George Karfunkel, Michael Karfunkel, any
subsidiary or any employee benefit plan of the Company or a subsidiary or former
subsidiary, is or becomes a beneficial owner, directly or indirectly, of stock
of the Company representing 50% of more of the total voting power of the
Company’s then outstanding stock;
 
(ii) a tender offer (for which a filing has been made with the Securities and
Exchange Commission (the “SEC”) that purports to comply with the requirements of
Section 14(d) of the Exchange Act, and the corresponding SEC rules) is made for
the stock of the Company. In case of a tender offer described in this paragraph
(ii), the “Change of Control” will be deemed to have occurred upon the first to
occur of (A) any time during the offer when the person (using the definition in
(i) above) making the offer owns or has accepted for payment stock of the
Company with 50% or more of the total voting power of the Company's outstanding
stock or (B) three business days before the offer is to terminate unless the
offer is withdrawn first, if the person making the offer could own, by the terms
of the offer plus any shares owned by this person, stock with 50% or more of the
total voting power of the Company's outstanding stock when the offer terminates;
or
 
(iii)  individuals who were the Board’s nominees for election as directors of
the Company immediately prior to a meeting of the stockholders of the Company
involving a contest for the election of directors shall not constitute a
majority of the Board following the election.
 

 
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Certificate; Book Entry Form; Legend
 
The Company shall issue the shares of Restricted Stock either (i) in certificate
form or (ii) in book entry form, registered in the name of the Award holder,
with legends, or notations, as applicable, referring to the terms, conditions,
and restrictions applicable to the Award.  Any certificate issued for Restricted
Stock prior to vesting will be inscribed with the following legend:
 
“The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) relating
to Restricted Stock contained in the AmTrust Financial Services, Inc.
2010 Omnibus Incentive Plan and an Agreement entered into between the registered
owner and AmTrust Financial Services, Inc. Copies of such Plan and Agreement are
on file at the principal office of AmTrust Financial Services, Inc.”
 
Escrow
 
 
Any Restricted Stock issued pursuant to this Award shall be held by the Company
in escrow for the benefit of the Award recipient. Upon vesting, a certificate
for the vested shares shall be issued to the Award holder free of the
restrictive legend.
 
Vesting: Delivery of Shares
 
Upon vesting, restrictions related to the vested shares of Restricted stock
shall lapse and the Company shall, as applicable, either remove the notations on
such vested shares issued in book-entry form or deliver to the Award holder or
their personal representative a stock certificate representing the number of
shares of Stock, free of any restrictive legend, equal to the number of vested
shares.  If certificates representing such Restricted Stock had previously been
delivered to you, you shall return such certificates to the Company, complete
with any necessary signatures or instruments of transfer prior to the issuance
by the Company of shares of Stock without the restrictive legend.
 

 
Income Taxes
 
(a)  You shall pay to the Company promptly upon request, and in any event at the
time you recognize taxable income in respect of the Restricted Stock (whether in
connection with the grant or vesting of the Restricted Stock, the making of an
election under Section 83(b) of the Code in connection with the Award as
described below or otherwise), an amount equal to the taxes the Company
determines it is required to withhold under applicable tax laws with respect to
the Restricted Stock.  Such payment may be made by any of, or a combination of,
the following methods: (i) cash or check; (ii) out of your current compensation;
(iii) in the sole discretion of the Company, by surrender of other shares of
Common Stock of the Company that (a) in the case of shares initially acquired
from the Company (upon exercise of a stock option or otherwise), have been owned
by you for such period, if any, as may be required to avoid a charge to the
Company’s earnings and (b) have a Fair Market Value on the date of surrender
equal to the amount required to be withheld; or (iv) in the sole discretion of
the Company, by electing to have the Company withhold or otherwise reacquire
from you shares of Restricted Stock that vest pursuant to the terms hereof
having a Fair Market Value equal to the minimum statutory amount required to be
withheld in connection with the vesting of such shares.  For these purposes, the
Fair Market Value of the shares to be withheld or repurchased, as applicable,
shall be determined on the date that the amount of the tax to be withheld is to
be determined (the “Tax Date”).

 
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All elections by you to have the shares withheld or repurchased to satisfy tax
obligations shall be made in writing in a form acceptable to the Company and
shall be subject to the following restrictions:
 
(i) the election must be made on or prior to the applicable Tax Date;
 
(ii) once made, the election shall be irrevocable as to the particular shares as
to which the election is made and you acknowledge that this irrevocable written
instruction is intended to constitute an instruction pursuant to Rule 10b5-1 of
the Exchange Act;
 
(iii) all elections shall be subject to the consent or disapproval of the
Company; and
 
(iv) If you are subject to Section 16 of the Exchange Act, the election must
comply with the applicable provisions of Rule 16(b)-3 promulgated under the
Exchange Act and shall be subject to such additional conditions or restrictions
as may be required thereunder to qualify for the maximum exemption from Section
16 of the Exchange Act with respect to Plan transactions.
 
   
(b)  Section 83(b) Election.  You hereby acknowledge that you may file an
election pursuant to Section 83(b) of the Code to be taxed currently on the fair
market value of the shares of Restricted Stock (less any purchase price paid for
the shares), provided that such election must be filed with the Internal Revenue
Service no later than thirty (30) days after the date of the Award.  You will
seek the advice of your own tax advisors as to the advisability of making such a
Section 83(b) election, the potential consequences of making such an election,
and the other tax consequences of the Award under federal, state, and any other
laws that may be applicable.  The Company and its affiliates and agents have not
and are not providing any tax advice to you.
 
Recapture Rights
 
 
In the event that you violate any of your obligations pursuant to the
Confidentiality, Non-Competition, or Non-Solicitation provisions of this
Agreement, you agree to return to the Company, within five days of receipt of
written demand from the Company, any gains you realize from the sale of all or
any portion of the Restricted Stock during the 12 months immediately preceding
such violation, and any remaining unsold portion of your Restricted Stock shall
be immediately and totally forfeited.
 

 
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Confidentiality
 
During your Service, you will have access to confidential or proprietary data or
information of the Company (and its affiliates) and its operations.  You agree
not to at any time divulge or communicate the Confidential Information (defined
below) to any person, nor shall you direct any employee to divulge or
communicate to any person (other than to a person bound by confidentiality
obligations similar to those contained herein and other than as necessary in
performing your duties hereunder), or use to the detriment of the Company (or
any of its affiliates) or for the benefit of any other person, any Confidential
Information.  This restriction shall survive your Service hereunder, whether by
the normal expiration thereof or otherwise.
 
The term “Confidential Information” shall mean all information, whether or not
reduced to written or recorded form, that is related to the Company and that is
not generally known or accessible to members of the public and/or competitors of
the Company nor intended for general dissemination, whether furnished by the
Company or compiled by the employee, including, without limitation, relating to
the Company’s (or any affiliate’s) financial performance, customers, existing or
proposed future projects, prospects, or business strategies, personnel
information, financial information, customer lists, supplier lists, trade
secrets, information regarding operations, systems, services, know-how, computer
and any other processed or collated data, computer programs, pricing, marketing
and advertising data.
 
You understand the Company intends to maintain the confidentiality of the
Confidential Information notwithstanding that employees of the Company may have
free access to the information for the purpose of performing their duties with
the Company, and notwithstanding that employees not expressly bound by
agreements similar to this agreement may have access to such information for job
purposes. You  acknowledge that Confidential Information need not be marked as
such to preserve the confidential nature of the information.
 
Non-Competition
 
You acknowledge that (a) in the course of your Service with the Company and its
affiliates, you have, and will continue to, become familiar with the Company’s
and its affiliates’ trade secrets, methods of doing business, business plans and
other valuable confidential and proprietary information concerning the Company,
its affiliates, their customers and business partners and that your services
have been and will be of special, unique and extraordinary value to the Company
and its affiliates.  In consideration thereof and of this Award, during your
Service with the Company or an affiliate and for a period of one (1) year
thereafter, you shall not, without the Company’s prior written approval, become
engaged, directly or indirectly, as a director, officer, employee or 5% or more
stockholder or equity interest owner in, partner in, or consultant to, any
business that is directly competitive with the business of the Company (or any
affiliate) in any area or region where the Company (or any affiliate) conducts
business (“Competition”).  Notwithstanding the foregoing, you shall not be
deemed to be in Competition with the Company if you provide evidence
satisfactory to the Company, in its sole and absolute discretion, that you: (i)
work in a separate division, department or unit that does not compete with the
business of the Company (or any affiliate); and (ii) will not have contact with
the division, department or unit that does compete with the business of the
Company (or any affiliate).  If you received your Restricted Stock grant as a
non-employee member of the Company’s Board of Directors, this provision will not
apply to you unless your Service is terminated for Cause (as defined above) or
for cause pursuant to the Company’s Certificate of Incorporation.
 

 
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Non-Solicitation
 
During Service and for a period of two (2) years thereafter, you shall not,
without the prior written consent of the Company, directly or indirectly, on
your own behalf or on behalf of any other person, firm, corporation or business
entity: (a) induce or attempt to induce any agent, affinity group or
policyholder of the Company (or any affiliate), or any prior agent, affinity
group or policyholder that was an agent, affinity group or policyholder within
twelve (12) months of such contact, to withdraw, decrease or cancel its business
with the Company (or any affiliate) or otherwise terminate any written or oral
agreement or understanding or other relationship with the Company (or any
affiliate); (b) solicit or attempt to solicit, service or attempt to service, or
for the purpose of obtaining the business of any customer of the Company (or any
affiliate), or any prior agent, affinity group or policyholder that was an
agent, affinity group or policyholder within twelve (12) months of such contact,
to the extent the business solicited is similar to, or competitive with, the
business of the Company (or any affiliate), engage in discussions or other
communications with (regardless of who initiates such discussions or
communications) any person, firm or entity that was an actual or prospective
customer of the Company during any part of the twelve (12) month period
immediately preceding termination of Service if you participated, directly or
indirectly, in the solicitation or servicing of that customer or prospective
customer, or supervised or managed those who did, during your Service with the
Company at any time during such twelve (12) month period immediately preceding
your termination of Service; (c) solicit or attempt to solicit, hire or attempt
to hire, or call, any person who is an employee, individual consultant or
independent contractor of the Company (or any affiliate), or any prior employee,
individual consultant or independent contractor that was an employee, consultant
or independent contractor within twelve (12) months of such contact, with the
purpose or intent of attracting such person from the employ of the Company (or
any affiliate); or (d) induce or attempt to induce any person who is an
employee, individual consultant or independent contractor of the Company (or any
affiliate) to terminate or limit his or her Service or other relationship with
the Company (or any affiliate), or any prior employee, individual consultant or
independent contractor that was an employee, individual consultant or
independent contractor within twelve (12) months of such contact.

 
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No Right to Employment
 
Neither your Restricted Stock nor this Agreement give you the right to be
retained by the Company in any capacity and your Service may be terminated at
any time and for any reason.
 
Shareholder Rights
 
You have no rights as a shareholder unless and until the Stock relating to the
Restricted Stock has been issued to you (or an appropriate book entry has been
made). Except as described in the Plan or herein, no adjustments are made for
dividends or other rights if the applicable record date occurs before your Stock
is issued (or an appropriate book entry has been made). If the Company pays a
dividend on its Stock, you will, however, be entitled to receive a cash payment
equal to the per-share dividend paid on the Stock times the number of Restricted
Stock that you hold as of the record date for the dividend.
 
Applicable Law
 
This Agreement shall be governed by the laws of the State of Delaware, with
consent to jurisdiction by you in the State of New York.
 
Data Privacy
 
To administer the Plan, the Company may process personal data about you. Such
data includes the information provided in this Agreement, other appropriate
personal and financial data about you such as home address and business
addresses and other contact information, payroll information and any other
information deemed appropriate by the Company to facilitate the administration
of the Plan.
 
By accepting this award, you consent to the Company’s processing of such
personal data and the transfer of such data outside the country in which you
work or are employed, including, with respect to non-U.S. residents, to the
United States, to transferees who shall include the Company and other persons
designated by the Company to administer the Plan.
 
Consent to Electronic Delivery
 
Certain statutory materials relating to the Plan may be delivered to you in
electronic form. By accepting this grant, you consent to electronic delivery and
acknowledge receipt of these materials, including the Plan and the Plan
prospectus.
 

 
 
    This Agreement is not a not a stock certificate or a negotiable instrument.
 
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By accepting your grant, you agree to the terms and conditions in this Agreement
and in the Plan, and agree that the Plan will control in the event any provision
of this Agreement should appear to be inconsistent with the terms and conditions
of the Plan.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date and
year below.

AMTRUST FINANCIAL SERVICES, INC
 

       
 
     
By:
     
Its:
Date:
 
                         
EMPLOYEE
                                     
 
Date:
 
 
Name:
     

 
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