**Exhibit 10(p)****RESTRICTED STOCK AGREEMENT****(Long Term Incentive)****between****FLORIDA EAST COAST INDUSTRIES, INC.****and****Jorgé San Miguel****Dated: May 3, 2006**
 

 
     **THIS AGREEMENT**dated May 3, 2006, by and between Florida East Coast Industries, Inc. (the“Corporation”), and Jorgé San Miguel (the “Employee”).     The parties agree as follows:     1. Grant of Restricted Stock. Under the Corporation’s 2002 Stock Incentive Plan (asamended and restated effective June 2, 2005) (the “Plan”), the Corporation hereby grants to theEmployee, subject to the terms and conditions herein set forth, Seventy Thousand Six Hundred FiftyEight (70,658) shares of the Corporation’s Common Stock (the “Restricted Stock”).     2. Terms and Conditions. The Restricted Stock is subject to the following terms andconditions:          (a) Limited Nontransferability. Prior to the date that restrictions lapse,Restricted Stock shall not be sold, pledged, assigned, hypothecated, transferred or disposed of inany manner other than by will or by the laws of descent or distribution.          (b) (i) Restrictions and Lapse of Restrictions. The Restricted Stock shall besubject to the Employee’s continued employment by the Corporation or a parent or subsidiarycorporation (the “Restrictions”), which Restrictions shall lapse with respect to (i) twenty-fivepercent (25%) of the Restricted Stock on the first anniversary of the date hereof and (ii) theremaining seventy-five percent (75%) of the Restricted Stock on the third anniversary of the datehereof. Notwithstanding the foregoing, upon the occurrence of a termination without Cause or forGood Reason both as defined herein (i) prior to the first anniversary of the date hereof, therestrictions shall lapse with respect to twenty-five percent (25%) of the Restricted Stock and (ii)after the first anniversary of the
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date hereof, the restrictions shall lapse pro rata from the dateof this Agreement to the date of termination provided that if a termination occurs after the firstanniversary of the date hereof, the additional number of shares that will vest pro rata shall becalculated based on the original number of shares granted hereunder without regard to whetherany such shares granted were previously vested and the number of additional shares that veston termination will be reduced by the number of shares previously vested.          By way of example, if 1,000 shares were granted and termination occurs on the secondanniversary, the pro rata amount which would vest upon termination is 416 (666 pro rata vestingminus 250 shares which vested on the first anniversary.)          Upon the occurrence of a termination by reason of death or disability (as defined herein), therestrictions shall lapse with respect to any restrictions as of the date of termination.     3. Forfeiture of Restricted Stock Upon Termination of Employment. The rights of theEmployee and his successors in interest in Restricted Stock on which the Restrictions have notlapsed pursuant to paragraph 2(b) shall terminate in full when the Employee’s employment with theCorporation or a parent or subsidiary corporation (“Corporation”) is terminated by the Corporationfor Cause or by the Employee for any reason other than death, Disability or Good Reason.     4. No Employment Rights. Nothing in this Agreement will confer upon the employee anyright to continue in the employ or service of the Corporation or any of its subsidiaries or affectthe right of the Corporation to terminate the employment of the employee at any time.
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     5. Dividends/Distributions. The Corporation shall pay to the Employee any dividendsor other distributions payable with respect to the Restricted Stock, notwithstanding theRestrictions, beginning on the date hereof but not beyond the date of any forfeiture thereofpursuant to the provisions of paragraph 3.     6. Withholding. The Employee agrees to make arrangements satisfactory to theCorporation to comply with any income tax withholding requirements that may apply upon the lapse ofthe Restrictions on the Restricted Stock. The Employee will be entitled to elect to satisfy histax withholding obligation by the withholding by the Corporation, at the appropriatetime, of shares of the Corporation’s Common Stock from the Restricted Stock in a numbersufficient, based upon the fair market value (as defined below) of such Common Stock on therelevant date or by tendering shares already owned by the Employee for at least six months tosatisfy such tax withholding requirements. For purposes of this Agreement, “fair market value”means, as of any given date, the closing price of the Corporation’s Common Stock on such date asquoted in the NYSE Composite Transactions Report in the *Wall Street Journal*. If there were nosales reported as of a particular date, fair market value will be computed as of the last datepreceding such date on which a sale was reported.     7. Delivery of Certificates. The Company does not intend to issue stock certificatesfor the shares referenced in paragraph 2(b)(i). The shares of common stock will exist in bookentry format with Wachovia Bank, NA (the Company’s transfer agent). Once restrictions lapse, thefollowing alternatives will be available to the Employee through the Director of Human Resources ofthe Corporation:          (a) Request the transfer agent send a certificate for theunrestricted shares
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          (b) Request the transfer agent send the shares electronically to a brokerage accountdesignated by Employee     8. Dispute Resolution. Any dispute or controversy arising under or in connection withthis Agreement shall be settled by binding arbitration, which shall be the sole and exclusivemethod of resolving any questions, claims or other matters arising under this Agreement. Sucharbitration shall be conducted in Miami, Florida under the then-prevailing Commercial ArbitrationRules of the American Arbitration Association (“AAA”) to:       (a) appoint an arbitrator experienced and knowledgeable concerning thematter then in dispute;       (b) require the testimony to be transcribed;       (c) require the award to be accompanied by findings of fact and a statementof reasons for the decision; and       (d) request the matter to be handled by and in accordance with theexpedited procedures provided for in the Commercial Arbitration Rules.The determination of the arbitrators, which shall be based upon de novo interpretation of thisAgreement, shall be final and binding and judgment may be entered on the arbitrator’s award in anycourt having jurisdiction.     9. Recapitalization. The Corporation hereby confirms that in the event theoutstanding shares of Common Stock of the Corporation shall be changed into an increased number ofshares, through a stock dividend or a split-up of shares, or into a decreased number of shares,through a combination of shares, then immediately after the
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record date for such change, the numberof shares then subject to this Agreement shall be proportionately increased, in case of such stockdividend or split-up of shares, or proportionately decreased, in case of such combination ofshares.     10. Miscellaneous. (a) This Agreement shall be governed by and construed in accordancewith the laws of the State of Florida, without reference to principles ofconflict of laws. The captions of this Agreement are not part of theprovisions hereof and shall have no force or effect. This Agreement may not beamended or modified otherwise than by a written agreement executed by theparties hereto or their respective successors and legal representatives.  (b) This Agreement constitutes the entire agreement between theparties with respect to the subject matter hereof. In the event of anyinconsistency between the provisions of this Agreement and the provisions ofthe Plan, the provisions of this Agreement shall govern.  (c) All notices and other communications hereunder shall be inwriting and shall be given by hand delivery to the other party or by registeredor certified mail, return receipt requested, postage prepaid, or by facsimile,or by overnight mail, addressed as follows:
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       If to the Employee to: If to the Corporation to:       Jorge San Miguel Florida East Coast Industries, Inc.  123 E. Enid Dr. One Malaga Street  Key Biscayne, FL 33149 St. Augustine, FL 32084    Attn: Secretary    Facsimile: 904/826-2379or to such other address as either party shall have furnished to the other in writing in accordanceherewith. Notice and communications shall be effective when actually received by the addressee. (d) The invalidity or unenforceability of any provision of thisAgreement shall not affect the validity or enforceability of any otherprovision of this Agreement.  (e) The Employee’s or the Corporation’s failure to insist uponstrict compliance with any provision hereof or any other provision of thisAgreement or the failure to assert any right the Employee or the Corporationmay have hereunder, shall not be deemed to be a waiver of such provision orright or any other provision or right of this Agreement.     11. Definitions.          (a) Cause. For purposes of this Agreement “Cause” means:                    (i) a material breach by the Employee of the obligations under this agreement or any otherwritten agreement with the Company or (b) a failure to attempt in good faith to perform theEmployee’s duties and responsibilities (other than as a result of incapacitydue to physical or mental illness), which is demonstrably willful and deliberate on theEmployee’s part provided that such breach or failure is not
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remedied within ten (10) days afterreceipt of notice from the Company specifying such breach or failure;                    (ii) the Employee’s conviction for committing a felony or the guilty or nolo contendere pleaby the Employee to a felony (other than as a result of vicarious liability where the Employee wasnot involved in and had no material knowledge of the action or inactions leading to the charges orhad such involvement or knowledge but acted upon advise of the Corporation’s counsel as to itslegality);                    (iii) the (a) insubordination or willful engaging by the Employee in misconduct or (b) theEmployee’s gross negligence, in either case, with regard to the Corporation or the Employee’sduties, which have, or is likely to have, a material adverse impact on the Corporation; or                    (iv) a material act of dishonesty or breach of trust on the Employee’s part resulting orintending to result, directly or indirectly, in material personal or family gain or enrichment atthe expense of the Employer.     For purposes of this paragraph, no act, or failure to act, on the Employee’s part shall beconsidered “willful” unless done or omitted to be done, by the Employee not in good faith andwithout reasonable belief that the Employee’s action or omission was in the best interests of theCorporation. In the event that the Employee alleges that the failure to attempt to perform theEmployee’s duties and responsibilities is due to a physical or mental illness, and thus not “Cause”as defined above, the Employee shall be required to furnish the Corporation with a writtenstatement from a licensed physician who is reasonably acceptable to the Corporation which confirmsthe Employee’s inability to attempt to perform due to such physical or mental illness.
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     (b) Disability. For purposes of this Agreement, “Disability” shall mean the absenceof the Employee from the Employee’s duties with Corporation on a full-time basis for one hundredeighty (180) consecutive business days as a result of incapacity due to mental or physical illnesswhich is determined to be total and permanent by a physician selected by Corporation or itsinsurers and acceptable to the Employee or the Employee’s legal representative (such agreement asto acceptability not to be withheld unreasonably).     (c) Good Reason. For purposes of this Agreement, “Good Reason” means:          (i) Corporation materially reduces the Employee’s duties or responsibilities, excluding forthis purpose any isolated and insubstantial action not taken in bad faith and which is remedied byCorporation promptly after receipt of notice thereof given by the Employee; or          (ii) Corporation materially reduces the Employee’s base salary or target bonus opportunitywhich reduction is not remedied within ten (10) days after receipt of notice from Employee withrespect to such reduction; or          (iii) Relocation of the Employee to any office or location other than the Miami, Floridametropolitan area without the consent of the Employee.
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       FLORIDA EAST COAST INDUSTRIES, INC.       By: /s/ Adolfo Henriques       Chairman & Chief Executive Officer   Agreed and Accepted:     /s/ Jorgé San Miguel Jorge San Miguel  
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