Exhibit 10.6
	 

	 
		 
	 

	 
		FORM OF GREENLIGHT CAPITAL RE,
		LTD.
	 

	 
		2004 STOCK INCENTIVE PLAN
	 

	 
		RESTRICTED STOCK AWARD
		AGREEMENT
	 

	 
		This Restricted Stock Award Agreement (the
		“Agreement”), made as of the
		                           
		(the “Grant
		Date”) by and between
		Greenlight Capital Re, Ltd., a company incorporated under the laws of the
		Cayman Islands (the “Company”), and
		              
		(the “Grantee”), evidences the grant by the Company of a stock
		award of restricted Shares (the “Award”)
		to the Grantee on such date and the Grantee’s acceptance of the Award in
		accordance with the provisions of the Amended and Restated 2004 Stock Incentive
		Plan (the “Plan”).
		Any capitalized terms not defined herein shall have the meaning ascribed to
		them as set forth in the Plan.
	 

	 
		The Company and the Grantee agree as
		follows:
	 

	 
		1. Basis and Payment for
		Award. This Award is made under the Plan pursuant to Section 7 thereof
		for services to be rendered to the Company by the Grantee. Upon the Grant Date,
		the Grantee shall pay the Company $
		           by check which is
		equal to the par value of the Shares.
	 

	 
		2. Stock Awarded.
	 

	 
		(a) The Company hereby awards to the
		Grantee, in the aggregate,
		            
		Shares, subject to the restrictions and conditions set forth in the Plan and in
		this Agreement (“Restricted
		Stock”).
	 

	 
		(b) Each certificate issued in respect of
		the Restricted Stock shall be registered in the Grantee’s name and
		deposited by him with the Company and shall bear the following (or a similar)
		legend:
	 

	 
		“THE TRANSFERABILITY OF THIS
		CERTIFICATE AND THE SHARES REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
		CONDITIONS (INCLUDING FORFEITURE) CONTAINED IN THE RESTRICTED STOCK AWARD
		AGREEMENT DATED AS OF
		                    ,
		ENTERED INTO BETWEEN THE REGISTERED OWNER AND GREENLIGHT CAPITAL RE,
		LTD.”
	 

	 
		At the expiration of the restrictions
		applied to the Restricted Stock pursuant to Section 2(d) of this Agreement, the
		Company shall redeliver to the Grantee (or his legal representative,
		beneficiary or heir) share certificates for the Shares deposited with it
		without any legend except as otherwise provided by the Plan, this Agreement,
		the Shareholders’ Agreement dated as of August 11, 2004 by and among the
		Company and each of the signatories thereto (the “Shareholders’
		Agreement”) or as otherwise
		required by applicable law. The Grantee shall have the right to receive
		dividends on and to vote the Restricted Stock while it is held in custody
		except as otherwise provided by the Plan. Notwithstanding the foregoing, the
		Company shall retain custody of all dividends made or declared with respect to
		the Restricted Stock and such retained distributions shall be subject to the
		same restrictions on terms and conditions as are
	 

	 	 
	1



	 
 

	 
		applicable to the Restricted Stock. No
		interest shall be paid on any dividends retained by the Company.
	 

	 
		(c) As a condition of the grant, the Grantee
		shall be required to sign the Shareholders’ Agreement.
	 

	 
		(d) Except as provided in the Plan or this
		Agreement, the restrictions on the Restricted Stock are that the Shares will be
		mandatorily repurchased for par value and cancelled by the Company and all of
		the Grantee’s rights to such Shares shall immediately terminate, in the
		event of any sale, assignment, transfer, hypothecation, pledge or other
		alienation of such Restricted Stock made or attempted, whether voluntary or
		involuntary, and if involuntary whether by process of law in any civil or
		criminal suit, action or proceeding, whether in the nature of an insolvency or
		bankruptcy proceeding or otherwise, without the written consent of the
		Committee, excluding the Grantee if he so serves on the Committee.
	 

	 
		3. Vesting. The restrictions
		described in Section 2 of this Agreement will lapse with respect to 100% of the
		Restricted Stock upon the third anniversary; provided,
		that, the Grantee is still in Continuous Service with the
		Company on such vesting date. Except as otherwise specifically provided herein,
		if the Grantee’s service terminates for any reason at any time prior to
		the vesting date, the unvested Restricted Stock shall automatically be
		repurchased for par value and cancelled by the Company upon such termination of
		Continuous Service.
	 

	 
		4. Compliance with Laws and
		Regulations. The issuance and transfer of Shares shall be subject to
		compliance by the Company and the Grantee with the Memorandum and Articles of
		Association of the Company, all applicable requirements of securities and other
		applicable laws and with all applicable requirements of any stock exchange on
		which the Shares may be listed at the time of such issuance or transfer. The
		Grantee understands that the Company is under no obligation to register or
		qualify the Shares with the U.S. Securities and Exchange Commission
		(“SEC”), any state securities commission or any
		stock exchange to effect such compliance.
	 

	 
		5. Company; Grantee.
	 

	 
		(a) The term “Company” as
		used in this Agreement with reference to Continuous Service shall include the
		Company and its Affiliates, as appropriate.
	 

	 
		(b) Whenever the word
		“Grantee” is used in any provision of this Agreement under
		circumstances where the provision should logically be construed to apply to the
		successors, beneficiaries, the executors, the administrators, or the person or
		persons to whom the Restricted Stock may be transferred by will or by the laws
		of descent or distribution, the word “Grantee”
		shall be deemed to include such person or persons.
	 

	 	 
	2



	 
 

	 
		6. Tax Withholding.
	 

	 
		(a) To the extent required by law, the
		Grantee agrees that, subject to clause 6(b) below, no later than the date as of
		which the restrictions on the Restricted Stock shall lapse with respect to all
		or any of the Restricted Stock covered by this Agreement, the Grantee shall pay
		to the Company (in cash or to the extent permitted by the Committee, Shares
		held by the Grantee whose Fair Market Value is equal to the amount of the
		Grantee’s tax withholding liability) any federal, state or local taxes of
		any kind required by law to be withheld, if any, with respect to the Restricted
		Stock for which the restrictions shall lapse. The Company or its Affiliates
		shall, to the extent permitted by law, have the right to deduct from any
		payment of any kind otherwise due to the Grantee any federal, state or local
		taxes of any kind required by law to be withheld with respect to the Shares of
		Restricted Stock.
	 

	 
		(b) If the Grantee properly elects, within
		thirty (30) days of the Grant Date, to include in gross income for federal
		income tax purposes an amount equal to the Fair Market Value as of the Grant
		Date of the Restricted Stock granted hereunder pursuant to Section 83(b) of the
		Internal Revenue Code of 1986, as amended, to the extent required by law, the
		Grantee shall pay to the Company, or make other arrangements satisfactory to
		the Committee to pay to the Company in the year of such grant, any federal,
		state or local taxes required to be withheld with respect to such Shares. If
		the Grantee fails to make such payments, the Company or its Affiliates shall,
		to the extent permitted by law, have the right to deduct from any payment of
		any kind otherwise due to the Grantee any federal, state or local taxes of any
		kind required by law to be withheld with respect to such Shares.
	 

	 
		7. Amendment of Award. Subject
		to Section 15 of this Agreement, the Board at any time, and from time to time,
		may amend the terms of this Award; provided,
		however, that the Grantee’s rights under this Award shall
		not be impaired by any such amendment unless (i) the Company requests the
		Grantee’s consent and (ii) the Grantee consents in writing.
	 

	 
		8. No Impairment of Rights.
		Subject to Section 15 of this Agreement, suspension or termination of the Plan
		shall not impair any rights and obligations under this Award while the Plan is
		in effect except with the Grantee’s written consent.
	 

	 
		9. Representations and Warranties of
		Grantee. The Grantee represents and warrants to the Company
		that:
	 

	 
		(a) Agrees to Terms of the Plan. The Grantee has received a copy of the Plan and has
		read and understands the terms of the Plan and this Agreement, and agrees to be
		bound by their terms and conditions. The Grantee acknowledges that there may be
		adverse tax consequences upon the vesting of Restricted Stock or disposition of
		the Shares once vested, and that the Grantee should consult a tax advisor prior
		to such time.
	 

	 
		(b) Purchase for Own Account for Investment. The Grantee is receiving the Shares for the
		Grantee’s own account for investment purposes only and not with a view to,
		or for sale in connection with, a distribution of the Shares within the meaning
		of the Securities Act of 1933, as amended (the “Securities Act”). The Grantee has no present intention of selling
		or otherwise
	 

	 	 
	3



	 
 

	 
		disposing of all or any portion of the
		Shares and no one other than the Grantee has any beneficial ownership of any of
		the Shares.
	 

	 
		(c) Access to Information. The Grantee has had access to all information
		regarding the Company and its present and prospective business, assets,
		liabilities and financial condition that the Grantee reasonably considers
		important in making the decision to purchase the Shares, and the Grantee has
		had ample opportunity to ask questions of the Company’s representatives
		concerning such matters and this investment.
	 

	 
		(d) Understanding of Risks. The Grantee is fully aware of: (i) the highly
		speculative nature of the investment in the Shares; (ii) the financial hazards
		involved; (iii) the restrictions on transferability of the Shares
		(e.g., that the Grantee may not be able to sell or dispose
		of the Shares or use them as collateral for loans); and (iv) the tax
		consequences of investment in the Shares. The Grantee is capable of evaluating
		the merits and risks of this investment, has the ability to protect the
		Grantee’s own interests in this transaction and is financially capable of
		bearing a total loss of this investment.
	 

	 
		(e) No General Solicitation. At no time was the Grantee presented with or solicited
		by any publicly issued or circulated newspaper, mail, radio, television or
		other form of general advertising or solicitation in connection with the offer,
		sale and purchase of the Shares.
	 

	 
		(f) Cooperation. The
		Grantee agrees to sign such additional documentation as may reasonably be
		required from time to time by the Company.
	 

	 
		(g) Residence. The
		Grantee represents that the address indicated under his name on the signature
		page of this Agreement is his principal residence.
	 

	 
		(h) Accredited Investor. The Grantee represents that he is an “Accredited
		Investor” within the meaning of Rule 501(a) of Regulation D, as
		promulgated under Section 5 of the Securities Act.
	 

	 
		10. Compliance with Securities
		Laws. The Grantee understands and acknowledges that the Shares have not
		been registered with the SEC under the Securities Act and that, notwithstanding
		any other provision of the Agreement to the contrary, the vesting and holding
		of the Shares is expressly conditioned upon compliance with the Securities Act
		and all applicable securities laws. The Grantee agrees to cooperate with the
		Company to ensure compliance with such laws.
	 

	 
		11. Restricted
		Securities.
	 

	 
		(a) No Transfer Unless Registered or Exempt. The Grantee understands that the Grantee may not
		transfer any Shares unless such Shares are registered under the Securities Act
		or qualified under applicable securities laws or unless, in the opinion of U.S.
		counsel to the Company, exemptions from such registration and qualification
		requirements are also available. The Grantee understands that only the Company
		may file a registration statement with the SEC and that the Company is under no
		obligation to do so with respect to the Shares. The Grantee has also been
		advised that exemptions from registration and qualification may not be
		available or
	 

	 	 
	4



	 
 

	 
		may not permit the Grantee to transfer all
		or any of the Shares in the amounts or at the times proposed by the
		Grantee.
	 

	 
		(b) SEC Rule 144. In
		addition, the Grantee has been advised that SEC Rule 144 promulgated under the
		Securities Act, which permits certain limited sales of unregistered securities,
		is not presently available with respect to the Shares and, in any event,
		requires that the Shares be held for a minimum of one (1) year, and in certain
		cases two (2) years, after they have been purchased and paid for (within the
		meaning of Rule 144). The Grantee understands that Rule 144 may indefinitely
		restrict transfer of the Shares so long as the Grantee remains an
		“affiliate” of the Company or if “current public
		information” about the Company (as defined in Rule 144) is not publicly
		available.
	 

	 
		(c) SEC Rule 701. If
		the Shares are issued pursuant to SEC Rule 701 promulgated under the Securities
		Act, the Shares may become freely tradeable by non-affiliates (under limited
		conditions regarding the method of sale) ninety (90) days after the first sale
		of Shares to the general public pursuant to a registration statement filed with
		and declared effective by the SEC, subject to the lengthier market standoff
		agreement contained in Section 13 of this Agreement or any agreement entered
		into by the Grantee. Affiliates must comply with the provisions (in addition to
		the holding period requirements) of Rule 144.
	 

	 
		12. Restrictions on Transfers.
	 

	 
		(a)
		Disposition of Shares. The Grantee
		hereby agrees that the Grantee shall make no disposition of the Shares (other
		than as permitted by this Agreement) unless and until:
	 

	 
			
				
				   
				

			 	
				
				  1.
				

			 	
				
				  The Grantee shall have notified the
				  Company of the proposed disposition and provided a written summary of the terms
				  and conditions of the proposed disposition;
				

			 

 

	 
			
				
				   
				

			 	
				
				  2.
				

			 	
				
				  The Grantee shall have complied with
				  all requirements of this Agreement, the Shareholders’ Agreement, the
				  Memorandum and Articles of Association of the Company and the Plan applicable
				  to the disposition of the Shares;
				

			 

 

	 
			
				
				   
				

			 	
				
				  3.
				

			 	
				
				  The Grantee shall have provided the
				  Company with written assurances, in form and substance satisfactory to U.S.
				  counsel for the Company, that (i) the proposed disposition does not require
				  registration of the Shares under the Securities Act or (ii) all appropriate
				  actions necessary for compliance with the registration requirements of the
				  Securities Act or of any exemption from registration available under the
				  Securities Act (including Rule 144) have been taken; and
				

			 

 

	 
			
				
				   
				

			 	
				
				  4.
				

			 	
				
				  The Grantee shall have provided the
				  Company with written assurances, in form and substance satisfactory to the
				  Company, that the proposed disposition will not result in the contravention of
				  any transfer restrictions applicable to the Shares pursuant to the provisions
				  of the securities laws referred to herein.
				

			 

 

	 	 
	5



	 
 

	 
		(b) Restriction on Transfer. The Grantee shall not transfer, assign, grant a lien
		or security interest in, pledge, hypothecate, encumber or otherwise dispose of
		any of the Shares, except as permitted by this Agreement, the Plan, the
		Memorandum and Articles of Association of the Company and the
		Shareholders’ Agreement.
	 

	 
		(c) Transferee Obligations. Each person to whom the Shares are transferred by
		means of one of the permitted transfers specified in this Agreement must, as a
		condition precedent to the validity of such transfer, acknowledge in writing to
		the Company that such person is bound by the provisions of this Agreement and
		the Plan and that the transferred Shares are subject to (i) the market
		stand-off provisions of Section 13 hereof and (ii) the Drag-Along Rights set
		forth in Section 3 of the Shareholders’ Agreement, to the same extent such
		Shares would be so subject if retained by the Grantee.
	 

	 
		(d) Compliance with Cayman Islands Regulatory
		Requirements. So long as Greenlight
		Reinsurance Ltd. is a holder of a Category B Insurance License or any other
		insurance license granted under the provisions of the Insurance Law or any
		other insurance license granted under the provisions of the Insurance Law (2004
		Revision) of the Cayman Islands, the Grantee shall not without the prior
		consent of the Cayman Islands Monetary Authority, transfer or dispose of in any
		manner the legal or beneficial interest in such number of Shares that would
		constitute a transfer or disposal of more than 5% of the beneficial interest in
		the issued share capital of Greenlight Reinsurance Ltd.
	 

	 
		13. Market Standoff Agreement.
		In the case of the initial underwritten public offering by the Company of the
		Shares, if the officers and directors of the Company agree not to effect any
		disposition of any equity security of the Company or of any security
		convertible into or exchangeable or exercisable for any equity security of the
		Company (in each case, other than as part of such underwritten public
		offering), the Grantee agrees to the same during the 180-day period (or such
		longer period as may be reasonably requested by the underwriter of such
		offering) beginning on the effective date of such registration statement
		(except as a part of such registration); provided,
		that, the Grantee has received written notice of such
		registration prior to such effective date; provided,
		however, that any waiver of the foregoing restriction by the
		Company or the Company’s underwriters shall apply to all persons subject
		to such restrictions pro rata based on the number of Shares owned.
	 

	 
		14. Restrictive Legends and
		Stop-Transfer Orders.
	 

	 
		(a) Legends. The
		Grantee understands and agrees that the Company will place the legends set
		forth below or similar legends on any stock certificate(s) evidencing the
		Shares, together with any other legends that may be required by state, U.S.
		Federal or foreign securities laws, the Company’s Certificate of
		Incorporation or Bylaws, any other agreement between the Grantee and the
		Company or any agreement between the Grantee and any third party:
	 

	 
		“THE SECURITIES EVIDENCED BY THIS
		CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
		1933, AS AMENDED OR THE SECURITIES LAWS OF CERTAIN STATES, AND MAY
		NOT
	 

	 	 
	6



	 
 

	 
		BE SOLD, TRANSFERRED, ASSIGNED OR
		HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
		OR SUCH LAWS COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE
		144 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE COMPANY AT ITS OPTION
		RECEIVES AN OPINION OF COUNSEL OF THE HOLDER OF THESE SECURITIES REASONABLY
		SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
		HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
		REQUIREMENTS OF SUCH ACT AND SUCH LAWS AND UNLESS, WHERE APPLICABLE, THE PRIOR
		APPROVAL OF THE CAYMAN ISLANDS MONETARY AUTHORITY HAS BEEN
		OBTAINED.
	 

	 
		IN ADDITION, THE SECURITIES EVIDENCED
		BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER RESTRICTIONS IN THE
		COMPANY’S MEMORANDUM AND ARTICLES OF ASSOCIATION, AND PURSUANT TO A
		SHAREHOLDERS’ AGREEMENT DATED AS OF AUGUST 11, 2004 AMONG THE COMPANY AND
		CERTAIN OF THE COMPANY’S SHAREHOLDERS. A COPY OF SUCH ARTICLES OF
		ASSOCIATION AND SHAREHOLDERS’ AGREEMENT WILL BE FURNISHED WITHOUT CHARGE
		BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST. THE SECURITIES ARE
		ALSO SUBJECT TO CERTAIN RESTRICTIONS IN THE RESTRICTED STOCK AWARD AGREEMENT
		DATED AS OF SEPTEMBER 20, 2004 ENTERED INTO BETWEEN THE REGISTERED OWNER AND
		THE COMPANY. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
		FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF
		TIME.”
	 

	 
		(b) Stop-Transfer Instructions. The Grantee agrees that, to ensure compliance with the
		restrictions imposed by this Agreement, the Company may issue appropriate
		“stop-transfer” instructions to its transfer agent, if any, and if
		the Company transfers its own securities, it may make appropriate notations to
		the same effect in its own records.
	 

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

	 	 
	7



	 
 

	 
		15. Adjustment Upon Changes in
		Capitalization. Awards may be adjusted as provided in the Plan,
		including, without limitation, Section 11 of the Plan. The Grantee, by his
		execution and entry into this Agreement, irrevocably and unconditionally
		consents and agrees to any such adjustments as may be made at any time
		hereafter and hereby undertakes to vote in favor of any such adjustments
		required to be approved by the members of the Company.
	 

	 
		16. Incorporation of Plan by
		Reference. The Award is granted pursuant to the terms of the Plan, the
		terms of which are incorporated herein by reference, and the Award shall in all
		respects be interpreted in accordance with the Plan. The Committee shall
		interpret and construe the Plan and this Agreement, and its interpretations and
		determinations shall be conclusive and binding on the parties hereto and any
		other person claiming an interest hereunder, with respect to any issue arising
		hereunder or thereunder. In the event of a conflict or inconsistency between
		the terms and provisions of the Plan and the provisions of this Agreement, the
		Plan shall govern and control.
	 

	 
		17. Governing Law;
		Modification. The validity, construction, interpretation and effect of
		this Agreement shall exclusively be governed by, and determined in accordance
		with, the laws of the Cayman Islands.
	 

	 
		[SIGNATURE PAGE FOLLOWS]
	 

	 	 
	8



	 
 

	 
		IN WITNESS WHEREOF, the parties hereto have
		signed this Agreement as of the date first above written.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				  GREENLIGHT CAPITAL RE,
				  LTD.
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   By: 
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Name:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Title:
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Grantee
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Address
				

			 
	 	 	 	 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 	 
	9