Document:

Exhibit
      10.03

    

    SANDERS
      MORRIS HARRIS GROUP 

    

    NONSTATUTORY
      STOCK OPTION

    

    Optionee:
      __________________

    

    1. Grant
      of Stock Option.
      As of
      the Grant
      Date (identified
      on Section
      18 below),
      SANDERS MORRIS HARRIS GROUP, a Texas corporation (the “Company”),
      hereby grants a Nonstatutory Stock Option (the “Option”)
      to the
Optionee
      (identified above), a director of the Company, to purchase the number of shares
      of the Company’s common stock, $.01 par value per share (the “Common
      Stock”)
      identified in Section
      18
      below
      (the “Shares”),
      subject to the terms and conditions of this agreement (the “Agreement”)
      and
      the SANDERS MORRIS HARRIS GROUP 1998 Incentive Plan (the “Plan
      formerly
      known as the Pinnacle Global Group Plan”) which is hereby incorporated herein in
      its entirety by reference. The Shares, when issued to Optionee upon the exercise
      of the Option, shall be fully paid and nonassessable. The Option is not an
      “incentive stock option” as defined in Section 422 of the Internal Revenue
      Code.

    

    2.
       Definitions. All
      capitalized terms used herein shall have the meanings set forth in the Plan
      unless otherwise provided herein. Section
      18
      below
      sets forth meanings for various capitalized terms used in this
      Agreement.

    

    3. Option
      Term. 
      The
      Option shall commence on the Grant Date (identified in Section
      18
      below)
      and terminate on the date immediately prior to the _______ anniversary of the
      Grant Date. The period during which the Option is in effect and may be exercised
      is referred to herein as the “Option
      Period”.
      

    

    4.
       Option
      Price. 
      The
      Option Price per Share is identified in Section
      18
      below.

    

    5.
       Vesting.
      The
      total number of Shares subject to this Option shall vest in accordance with
      the
Vesting
      Schedule
      (identified in Section
      18
      below).
      The Shares may be purchased at any time after they become vested, in whole
      or in
      part, during the Option Period; provided, however, the Option may only be
      exercisable to acquire whole Shares. The right of exercise provided herein
      shall
      be cumulative so that if the Option is not exercised to the maximum extent
      permissible after vesting, the vested portion of the Option shall be
      exercisable, in whole or in part, at any time during the Option Period.

    

    6. Method
      of Exercise.
      The
      Option is exercisable by delivery of a written notice to the Secretary of the
      Company, signed by the Optionee, specifying the number of Shares to be acquired
      on, and the effective date of, such exercise. The Optionee may withdraw notice
      of exercise of this Option, in writing, at any time prior to the close of
      business on the business day preceding the proposed exercise date. 

    

    7. Method
      of Payment. 
      The
      Option Price upon exercise of the Option shall be payable to the Company in
      full
      either: (i) in cash or its equivalent, or (ii) subject to prior approval by
      the
      Committee in its discretion, by tendering previously acquired Shares having
      an
      aggregate Fair Market Value (as defined in the Plan) at the time of exercise
      equal to the total Option Price (provided that the Shares must have been held
      by
      the Optionee for at least six (6) months prior to their tender to satisfy the
      Option Price), or (iii) subject to prior approval by the Committee in its
      discretion, by withholding Shares which otherwise would be acquired on exercise
      having an aggregate Fair Market Value at the time of exercise equal to the
      total
      Option Price, or (iv) subject to prior approval by the Committee in its
      discretion, by a combination of (i), (ii), and (iii) above. Any payment in
      shares of Common Stock shall be effected by the delivery of such shares to
      the
      Secretary of the Company, duly endorsed in blank or accompanied by stock powers
      duly executed in blank, together with any other documents as the Secretary
      may
      require. If the payment of the Option Price is remitted partly in Shares, the
      balance of the payment of the Option Price shall be paid in cash, certified
      check, bank cashiers’ check, or by wire transfer. 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      Committee, in its discretion, may allow (i) a “cashless exercise” as permitted
      under Federal Reserve Board’s Regulation T, 12 CFR Part 220 (or its successor),
      and subject to applicable securities law restrictions and tax withholdings,
      or
      (ii) any other means of exercise which the Committee, in its discretion,
      determines to be consistent with the Plan’s purpose and applicable
      law.

    

    As
      soon
      as practicable after receipt of a written notification of exercise and full
      payment, the Company shall deliver to or on behalf of the Optionee, in the
      name
      of the Optionee or other appropriate recipient, Share certificates for the
      number of Shares purchased under the Option. Such delivery shall be effected
      for
      all purposes when a stock transfer agent of the Company shall have deposited
      such certificates in the United States mail, addressed to Optionee or other
      appropriate recipient. 

    

    8.
       Restrictions
      on Exercise.
      The
      Option may not be exercised if the issuance of such Shares or the method of
      payment of the consideration for such Shares would constitute a violation of
      any
      applicable federal or state securities or other laws or regulations, including
      any rule under Part 207 or Title 12 of the Code of Federal Regulations
      (“Regulation G”) as promulgated by the Federal Reserve Board, or any rules or
      regulations of any stock exchange on which the Common Stock may be listed.
      

    

    9. Termination
      of Employment.
      Voluntary or involuntary termination of Employment shall affect Optionee’s
      rights under the Option as follows:

    

    (a)
       Termination
      for Cause.
      The
      vested and non-vested portions of the Option shall expire on 12:01 a.m. (CDT)
      on
      the date of termination of Employment and shall not be exercisable to any extent
      if Optionee’s Employment is terminated for Cause (as defined in the Plan at the
      time of such termination of Employment).

    

    (b)
       Retirement.
      If
      Optionee’s Employment is terminated for Retirement on or after Optionee attains
      the age of 65, then (i) the non-vested portion of the Option shall immediately
      expire on the termination date and (ii) the vested portion of the Option shall
      expire to the extent not exercised within 183 calendar days after that date
      of
      such termination of Employment. In no event may the Option be exercised by
      anyone after the earlier of (i) the expiration of the Option Period or (ii)
      183
      calendar days after the date of termination of Employment due to
      Retirement.

    

    (c) Death
      or Disability.
      If
      Optionee’s Employment is terminated by death or Disability (as defined in the
      Plan at the time of such termination of Employment), then (i) the non-vested
      portion of the Option shall immediately expire on the date of termination of
      Employment and (ii) the vested portion of the Option shall expire 365 calendar
      days after the date of such termination of Employment to the extent not
      exercised by Optionee or, in the case of death, by the person or persons to
      whom
      Optionee’s rights under the Option have passed by will or by the laws of descent
      and distribution or, in the case of Disability, by Optionee or Optionee’s legal
      representative. In no event may the Option be exercised by anyone after the
      earlier of (i) the expiration of the Option Period or (ii) 365 days after the
      date of Optionee’s death or termination of Employment due to
      Disability.

    

    (d) Other
      Involuntary Termination or Voluntary Termination.
      If
      Optionee’s Employment is terminated for any reason other than for Cause,
      Retirement, Death or Disability, then (i) the non-vested portion of the Option
      shall immediately expire on the termination date and (ii) the vested portion
      of
      the Option shall expire to the extent not exercised within 90 calendar days
      after the date of such termination of Employment. In no event may the Option
      be
      exercised by anyone after the earlier of (i) the expiration of the Option Period
      or (ii) 90 calendar days after the date of termination of Employment.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.
       Independent
      Legal and Tax Advice.
      Optionee
      acknowledges that the Company has advised Optionee to obtain independent legal
      and tax advice regarding the grant and exercise of the Option and the
      disposition of any Shares acquired thereby.

    

    11. Reorganization
      of Company.
      The
      existence of the Option shall not affect in any way the right or power of the
      Company or its stockholders to make or authorize any or all adjustments,
      recapitalizations, reorganizations or other changes in Company’s capital
      structure or its business, or any merger or consolidation of the Company, or
      any
      issue of bonds, debentures, preferred or prior preference stock ahead of or
      affecting the Shares or the rights thereof, or the dissolution of liquidation
      of
      the Company, or any sale or transfer of all or any part of its assets or
      business, or any other corporation act or proceeding, whether of a similar
      character or otherwise.

    

    In
      the
      event of a “Change in Control” of the Company (as defined in the Plan at the
      time of such event), vesting of the Option shall be accelerated and the Option
      shall automatically become 100% vested as of the Change in Control date.

    

    12. Adjustments
      of Shares. In
      the
      event of stock dividends, spin-offs or assets or other extraordinary dividends,
      stock splits, combinations of shares, recapitalizations, mergers,
      consolidations, reorganizations, liquidations, issuances of rights or warrants
      and similar transactions or events involving Company, appropriate adjustments
      shall be made to the terms and provisions of the Option as provided in the
      Plan.

    

    13. No
      Rights in Shares.
      Optionee
      shall have no rights as a stockholder in respect of the Shares until the
      Optionee becomes the record holder of such Shares. 

    

    14. Investment
      Representation.  Optionee
      will enter into such written representations, warranties and agreements as
      Company may reasonably request in order to comply with any federal or state
      securities law. Moreover, any stock certificate for any Shares issued to
      Optionee hereunder may contain a legend restricting their transferability as
      determined by the Company in its discretion. Optionee agrees that Company shall
      not be obligated to take any affirmative action in order to cause the issuance
      or transfer of Shares hereunder to comply with any law, rule or regulation
      that
      applies to the Shares subject to the Option.

    

    15. No
      Guarantee of Employment. The
      Option shall not confer upon Optionee any right to continued employment with
      the
      Company or any subsidiary thereof. 

    

    16. Withholding
      of Taxes.
      The
      Company shall have the right to (a) make deductions from the number of Shares
      otherwise deliverable upon exercise of the Option in an amount sufficient to
      satisfy withholding of any federal, state or local taxes required by law, or
      (b)
      take such other action as may be necessary or appropriate to satisfy any such
      tax withholding obligations. 

    

    17. General. 

    

    (a)
       Notices.
      All
      notices under this Agreement shall be mailed or delivered by hand to the parties
      at their respective addresses set forth beneath their signatures below or at
      such other address as may be designated in writing by either of the parties
      to
      one another. Notices shall be effective upon receipt. 

    

    (b)
       Shares
      Reserved.
      The
      Company shall at all times during the Option Period reserve and keep available
      under the Plan such number of Shares as shall be sufficient to satisfy the
      requirements of this Option.

    

    (c) Nontransferability
      of Option.
      The
      Option granted pursuant to this Agreement is not transferable other than by
      will
      or by the laws of descent and distribution. The Option will be exercisable
      during Optionee’s lifetime only by Optionee or by Optionee’s legal
      representative in the event of Optionee’s Disability. No right or benefit
      hereunder shall in any manner be liable for or subject to any debts, contracts,
      liabilities, obligations or torts of Optionee.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d) Amendment
      and Termination.
      No
      amendment, modification or termination of the Option or this Agreement shall
      be
      made at any time without the written consent of Optionee and Company.

    

    (e)
       No
      Guarantee of Tax Consequences.
      The
      Company and the Committee make no commitment or guarantee that any federal
      or
      state tax treatment will apply or be available to any person eligible for
      benefits under the Option. The Optionee has been advised and been provided
      the
      opportunity to obtain independent legal and tax advice regarding the grant
      and
      exercise of the Option and the disposition of any Shares acquired
      thereby.

    

    (f)
       Severability.
      In the
      event that any provision of this Agreement shall be held illegal, invalid,
      or
      unenforceable for any reason, such provision shall be fully severable, but
      shall
      not affect the remaining provisions of the Agreement, and the Agreement shall
      be
      construed and enforced as if the illegal, invalid, or unenforceable provision
      had not been included herein. 

    

    (g)
       Supersedes
      Prior Agreements.
      This
      Agreement shall supersede and replace all prior agreements and understandings,
      oral or written, between the Company and the Optionee regarding the grant of
      the
      Options covered hereby. 

    

    (h)
       Governing
      Law.
      The
      Option shall be construed in accordance with the laws of the State of Texas
      without regard to its conflict of law provisions, to the extent federal law
      does
      not supersede and preempt Texas law.

    

    18. Definitions
      and Other Terms. The
      following capitalized terms shall have those meanings set forth opposite
      them:

    

    (a) Optionee:   
_____________ 

    

    (b) Grant
      Date:            
 _____________

    

    (c) Shares:            __________
      Shares of the Company’s Common Stock

    

    (d) Option
      Price:         
      __________
      per Share.

    

    (e) Option
      Period:       
      ____________
      through __________ 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f) Vesting
      Schedule:  

     

    
      	
            	Date	
              Options
                Vesting

            

      	 	 	 

      	 	_______	_______

      	 	 	 

      	 	_______	_______

    

    

    [Signature
      page follows.]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF,
      the
      Company as of _______, 200_, has caused this Agreement to be executed on its
      behalf by its duly authorized officer and Optionee has hereunto executed this
      Agreement as of the same date. 

    

    

    
      	 	
              SANDERS
                MORRIS HARRIS GROUP 

              

              

              

              By:
                ___________________________________

              Ben
                T. Morris,  

              Chief
                Executive Officer

              

              

              Address
                for Notices:

              

              SANDERS
                MORRIS HARRIS GROUP 

              600
                Travis, Suite 3100

              Houston,
                Texas 77002

              Attention:
                Corporate Secretary

              

              

              OPTIONEE

              

              

              _______________________________________

               

              Printed
                name: ___________________________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.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (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.]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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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