Document:

MORGAN GROUP HOLDING
CO.
NONQUALIFIED STOCK OPTION AGREEMENT 

To: Jonathan P. Evans
(“you” or the “Grantee”) 

NOTICE OF GRANT: 

You have been granted the following
option (the “Option”) to purchase the common stock, par value $0.001 per share,
of Morgan Group Holding Co. (the “Company”) subject to the terms and conditions
of the Option Award Agreement (“Award Agreement”) between you and the Company
attached as Exhibit A: 

Grant Date: December 21, 2012 (“Grant
Date”) 
Total Number of Shares Subject to
Option: Eight Hundred Thousand (800,000) (“Shares”)
Option Price per Share
($): Zero and 15/100 Dollars ($0.15) (“Option Price”)
Expiration Date:
December 21, 2015 (“Expiration Date”) 

By accepting this Option, you are
also agreeing to be bound by Exhibit A.

	MORGAN GROUP HOLDING CO.
	 
	 
	By: /s/ Robert E. Dolan
	Name: Robert E. Dolan
	Title: CFO
	Date: December 21, 2012
	 
	 
	JONATHAN P. EVANS
	 
	 
	/S/Jonathan P. Evans
	 
	Date: December
21, 2012

EXHIBIT A 
OPTION AWARD AGREEMENT 

     In
consideration of the mutual promises and covenants contained herein and other
good and valuable consideration, the Grantee and the Company agree as follows:

Section 1. Grant of Nonqualified
Stock Option 

     As of the Grant Date, the Company
grants to the Grantee, subject to the terms and conditions set forth herein, the
right, privilege, and option to purchase the Shares at the Option Price (the
“Option”). 

Section 2. Exercisability of Option

     (a) The Option may be exercised, in
whole or in part, during the period commencing on the Grant Date and ending on
the Expiration Date (the “Option Term”). 

     (b) In the event of the Grantee's
death or Disability while the Grantee is employed with the Company, the Option
will be exercisable according to the terms and conditions set forth in Section
5(a) below. In the event that the Grantee dies (or if a personal representative
is appointed for the Grantee due to his disability) following the termination of
Grantee’s employment with the Company, the Option will be exercisable only to
the extent it (i) was exercisable immediately prior to such termination and (ii)
is exercised within any applicable time period specified in Section 5(b) or 5(d)
below. “Disability” shall mean the good faith determination by the Company’s
Board of Directors (the “Board”) that in its judgment, the Grantee is unable to
satisfactorily perform such Grantee’s normal duties on behalf of the Company due
to such Grantee’s physical or mental incapacity. The Board’s determination
regarding the Grantee’s Disability shall be conclusive. 

Section 3. Method of Exercise

     Provided the Option has not expired,
the Option may be exercised, in whole or in part and from time to time, by
delivery of a written notice to the Company (or its designee) setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment of the Option Price for such Shares. The Grantee may
pay the purchase or exercise price in cash, already-owned shares or a
combination of cash and shares or such other method as approved by the Board.
Already-owned shares must be delivered in transferable form and will be valued
at fair market value, as determined in good faith by the Board, on the date of
exercise. Certificates for shares purchased will be delivered to the Grantee as
soon as practicable after the Grantee exercises his Option(s).

Section 4. Expiration of Option

     Unless terminated earlier in
accordance with the terms of this Award Agreement, the Option granted herein
will expire at 5:00 P.M., U.S. Eastern Time, on the Expiration Date. In the
event the Expiration Date is a Saturday, Sunday or any other day which is a
holiday of the United States Federal Government (a
“Non-Business Day”), then the Option granted herein will expire, unless earlier
terminated in a accordance with the terms of this Award Agreement, at 5:00 P.M.,
U.S. Eastern Time, on the first day that is not a Non-Business Day following
such Expiration Date. 

Section 5. Effect of Termination of
Employment 

     If the
Grantee’s employment with the Company is terminated for any reason, including
termination by the Company with or without cause, voluntary resignation, change
in employment status, death, or Disability, the effect of such termination on
all or any portion of the Option is as follows:

     (a) If the Grantee’s employment with
the Company is terminated on account of death or Disability, then any
unexercised part of the Option, to the extent exercisable immediately before
such termination, will be fully exercisable and may be exercised, in whole or in
part, at any time up to one (1) year after such termination (but only during the
Option term) by the Grantee or, after his death, by his personal representative
or the person to whom the Option is transferred by will or the applicable laws
of descent and distribution.

     (b) If a Grantee’s employment with
the Company is terminated during the period commencing on a Change of Control
(as hereinafter defined) and ending on the first anniversary of the Change of
Control, which termination is initiated by the Company or any of the Company’s
affiliates other than for cause, or initiated by the Grantee for Good Reason (as
hereinafter defined), then any unexercised Option, to the extent exercisable
immediately before such termination, will thereupon be fully exercisable and may
be exercised, in whole or in part for ninety (90) days following such
termination (but only during the Option term) by the Grantee or, in the event
the Grantee dies (or if a personal representative is appointed for the Grantee
due to his disability) within such ninety (90) day period, by his personal
representative or the person to whom the Option is transferred by will or the
applicable laws of descent and distribution; 

     (c) If the Grantee’s employment with the Company is terminated for cause,
then any unexercised Option will terminate
effective immediately upon such termination; and

     (d) If the Grantee’s employment with the Company is terminated for any reason other than for cause, death or Disability, and
other than under the circumstances described above in Section 5(b) above, then
any unexercised Option, to the extent exercisable immediately before such
termination, will remain exercisable in whole or in part for ninety (90) days
after such termination (but only during the Option term) by the Grantee or, in
the event the Grantee dies (or if a personal representative is appointed for the
Grantee due to his disability) within such ninety (90) day period, by his
personal representative or the person to whom the Option is transferred by will
or the applicable laws of descent and distribution.

     “Change of Control” means (i) any
merger, consolidation or similar reorganization requiring the approval of
shareholders holding a majority of voting power of the Company where the
resulting or surviving entity is one in which the majority of voting power is
held by a person or persons who were not owners of shares immediately prior to
such reorganization; or (ii) a sale, lease or other
disposition of all or substantially all of the assets of the Company to any
person or persons (other than a person or persons who owned shares) or any
entity (other than entity in which fifty-one percent (51%) of the voting
securities are beneficially owned by a person or persons who were owners of
shares) immediately prior to such disposition. 

     Termination for “Good Reason” means termination as a result of (i) any
material decrease in base compensation, bonus targets, or benefits that were in
effect immediately prior to the Change of Control, (ii) a requirement by Company
for the Grantee to be based more than 100 miles from the location the Grantee
was based immediately prior to the Change of Control, or (iii) the assignment of
any duties materially inconsistent in any respect with the Grantee’s position,
authority, duties or responsibilities in effect immediately prior to the Change
of Control or any other action by the Company resulting in significant
diminution in position, authority, duties or responsibilities. 

Section 6. Investment Intent.

     The Grantee agrees that the Shares
acquired pursuant to the exercise of all or any part of the Option will be
acquired for his own account for investment only and not with a view to, or for
resale in connection with, any distribution or public offering thereof within
the meaning of the Securities Act of 1933 (the “1933 Act”) or other applicable
securities laws. The Company may, but in no event will be required to, bear any
expenses of complying with the 1933 Act, other applicable securities laws or the
rules and regulations of any national securities exchange or other regulatory
authority in connection with the registration, qualification, or transfer, as
the case may be, of this Award Agreement or any Shares acquired hereunder. The
foregoing restrictions on the transfer of the Shares will be inoperative if (a)
the Company previously has been furnished with an opinion of counsel,
satisfactory to it, to the effect that such transfer will not involve any
violation of the 1933 Act and other applicable securities laws or (b) the Shares
have been duly registered in compliance with the 1933 Act and other applicable
state or federal securities laws. If this Award Agreement, or the Shares subject
to this Award Agreement, are registered under the 1933 Act, then the Grantee
agrees that he will not make a public offering of the said Shares except on a
national securities exchange on which the shares of the Company are then listed.

Section 7. Nontransferability of
Option 

     (a) Except as provided above in
Section 5, no portion of the Option granted hereunder may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will,
or by the laws of descent and distribution. All rights with respect to the
Option granted to the Grantee will be available during his lifetime only to the
Grantee.

Section 8. Restrictive Covenants

     As a condition of this Award
Agreement, the Grantee's rights under the Option, and in addition to any
restrictive agreements the Grantee may have entered into with the Company, the
Grantee accepts and agrees to be bound as follows:

     (a) Nondisclosure of Award Agreement Terms. The Grantee agrees
not to disclose or cause to be disclosed at any time, nor authorize anyone to
disclose any information concerning this Award Agreement except (i) as required
by law, or (ii) to the Grantee's legal and financial advisors who agree to be
bound by this Section 8(a).

     (b) Noncompetition. During the
Grantee's employment and until one (1) year after the Grantee ceases being
employed by or acting as a consultant or independent contractor to the Company
or any of the Company’s affiliates, the Grantee will not perform services as an
employee, director, officer, consultant, independent contractor or advisor, or
invest in, whether in the form of equity or debt, or otherwise have an ownership
interest in any company, entity or person that directly competes with the
Company or any of the Company’s affiliates. Nothing in this Section 8(b) will,
however, restrict the Grantee from making an investment in and owning up to
one-percent (1%) of the common stock of any company whose stock is listed on a
national securities exchange or actively traded in an over-the-counter market;
provided that such investment does not give the Grantee the right or ability to
control or influence the policy decisions of any direct competitor of the
Company or any of the Company’s affiliates.

     (c) Noninterference. During the
Grantee's employment and until one (1) year after the Grantee ceases being
employed by or acting as a consultant or independent contractor to the Company
or any of the Company’s affiliates, the Grantee will not, either directly or
indirectly through another business or person, solicit or otherwise interfere
with any employee, customer, prospective customer, vendor, prospective vendor,
supplier or other similar business relation or (to the Grantee's knowledge)
prospective business relation of the Company or any of the Company’s
affiliates.

     (d) Nonsolicitation. During the
Grantee's employment and until one (1) year after the Grantee ceases being
employed by or acting as a consultant or independent contractor to the Company
or any of the Company’s affiliates, the Grantee will not, either directly or
indirectly through another business or person, hire, recruit, employ, or attempt
to hire, recruit or employ, or facilitate any such acts by others, any person
then currently employed by the Company or any of the Company’s
affiliates.

     (e) Confidentiality. The Grantee
acknowledges that it is the policy of the Company and the Company’s affiliates
to maintain as secret and confidential all valuable and unique information and
techniques acquired, developed or used by the Company and any of the Company’s
affiliates relating to their businesses, operations, employees and customers
(“Confidential Information”). The Grantee recognizes that the Confidential
Information is the sole and exclusive property of the Company and the Company’s
affiliates, and that disclosure of Confidential Information would cause damage
to the Company and the Company’s affiliates. The Grantee will not at any time
disclose or authorize anyone else to disclose any Confidential Information or
proprietary information that (i) is disclosed to or known by the Grantee as a
result or as a consequence of or through the Grantee's performance of services
for the Company or any of the Company’s affiliates, (ii) is not publicly or
generally known outside the Company and (ii) relates in any manner to the
Company's or any of the Company’s affiliates’ business. This obligation will
continue even though the Grantee's employment with the Company or any of the
Company’s affiliates may have terminated. This Section 8(e) will apply in
addition to, and not in derogation of any other
confidentiality agreements that may exist, now or in the future, between the
Grantee and the Company or any of the Company’s affiliates. 

     (f) No
Detrimental Communications. The Grantee agrees not to disclose or cause to be
disclosed at any time any untrue, negative, adverse or derogatory comments or
information about the Company or any of the Company’s affiliates, about any
product or service provided by the Company or any of the Company’s affiliates,
or about prospects for the future of the Company or any of the Company’s
affiliates.

     (g) Remedy. The Grantee acknowledges
the consideration provided herein (absent the Grantee's agreement to this
Section 8) is more than the Company is obligated to pay, and the Grantee further
acknowledges that irreparable harm would result from any breach of this Section
and monetary damages would not provide adequate relief or remedy. Accordingly,
the Grantee specifically agrees that, if the Grantee breaches any of the
Grantee's obligations under this Section 8, the Company and any of the Company’s
affiliates will be entitled to injunctive relief therefor, and in particular,
without limiting the generality of the foregoing, neither the Company nor any of
the Company’s affiliates will be precluded from pursuing any and all remedies
they may have at law or in equity for breach of such obligations. In addition,
this Award Agreement and all of Grantee's right hereunder will terminate
immediately the first date on which the Grantee engages in such activity and the
Board will be entitled on or after the first date on which the Grantee engages
in such activity to require the Grantee to return any Shares obtained by the
Grantee upon exercise of all or any part of the Option to the Company and to
require the Grantee to repay any proceeds received at any time from the sale of
Shares obtained by the Grantee pursuant to the exercise of all or any part of
the Option (plus interest on such amount from the date received at a rate equal
to the prime lending rate as announced from time to time in The Wall Street Journal)
and to recover all reasonable attorneys' fees and expenses incurred in
terminating this Award Agreement and recovering such Shares and proceeds.

Section 9. Piggyback Registration
Rights 

     In the event the Company proposes to
register any of its securities (excluding any registration relating solely to
employee benefit plans or relating solely to the sale of debt or convertible
debt instruments) and the registration form to be filed may be used for the
registration or qualification for distribution of the Shares subject to this
Option, the Company will give prompt written notice to the Grantee of its
intention to effect such a registration and will include in such registration
all Shares subject to this Option with respect to which the Company has received
written requests from the Grantee for inclusion therein within fifteen (15) days
after the date of the Company’s notice (a “Piggyback Registration”). The Company
may, in its discretion, delay, terminate or withdraw any registration under this
Section 9 prior to the effectiveness of such registration whether or not the
Grantee has elected to include the Shares subject to this Option in such
registration, and except for the obligation to pay the expenses of such
registration, the Company will have no liability to the Grantee in connection
with such delay, termination or withdrawal. The Company shall only be obligated
to effect one (1) Piggyback Registration pursuant to this Section 9;
provided,
however, if
the Company terminates any registration under this Section 9 prior to the
effectiveness of such registration, such registration shall not count for
purposes of the foregoing limitation. 

Section 10. Status of the Grantee

     The
Grantee will not be deemed a shareholder of the Company with respect to any of
the Shares subject to this Option, except to the extent such Shares have been
purchased and issued to him. The Company will not be required to issue or
transfer any certificates for Shares purchased upon exercise of this Option
until all applicable requirements of law have been fulfilled.

Section 11. No Effect on Capital
Structure 

     This Option will not affect the
right of the Company to reclassify, recapitalize or otherwise change its capital
or debt structure or to merge, consolidate, convey any or all of its assets,
dissolve, liquidate, windup, or otherwise reorganize. 

Section 12. Adjustments

     Notwithstanding any provision herein
to the contrary, in the event of any change in the number of outstanding Shares
effected without receipt of consideration therefor by the Company, by reason of
a merger, reorganization, consolidation, recapitalization, separation,
liquidation, stock dividend, stock split, share combination or other change in
the corporate structure of the Company affecting the Shares, the aggregate
number and class of Shares subject to this Option and the exercise price of this
Option will be automatically adjusted to accurately and equitably reflect the
effect thereon of such change; provided, however, that any fractional share
resulting from such adjustment will be eliminated. In the event of a dispute
concerning such adjustment, the decision of the Board will be conclusive.

Section 13. Amendments

     This Award Agreement may be amended
only by a writing executed by the Company and the Grantee which specifically
states that it is amending this Award Agreement.

Section 14. Board Authority

     Any questions concerning the
interpretation of this Award Agreement, any adjustments required to be made
under Sections 11 or 12 of this Award Agreement, and any controversy which
arises under this Award Agreement will be settled by the Board in its sole
discretion. 

Section 15. Withholding Taxes

     Whenever Shares are to be delivered
to the Grantee upon exercise of the Option (the exercise date is hereinafter
referred to as the “Tax Date”), the Company will be entitled to require and may
accommodate the Grantee's request if so requested, to satisfy all federal,
state, local and foreign tax withholding requirements, including Social Security
and Medicare taxes related thereto, by one or a combination of the following
methods: (a) payment of an amount in cash equal to the amount to be withheld; or
(b) withholding from compensation otherwise due to the Grantee. 

Section 16. Nonqualified Stock
Option 

     The
Option is not intended to qualify as an “incentive stock option” within the
meaning of Section 422 of the Code, and shall not be so construed. 

Section 17. Notice 

     All notices required under this
Option shall be deemed to have been given or made for all purposes (i) upon
personal delivery, (ii) upon confirmation receipt that the communication was
successfully sent to the applicable number if sent by facsimile; (iii) one day
after being sent, when sent by professional overnight courier service, or (iv)
five days after posting when sent by registered or certified mail. Notices to
the Company shall be sent to the principal office of the Company (or at such
other place as the Company shall notify the Grantee hereof in writing). Notices
to the Grantee shall be sent to the address of the Holder on the books of the
Company (or at such other place as the Grantee shall notify the Company hereof
in writing). 

Section 18. Severability

     If any part of this Award Agreement
is declared by any court or governmental authority to be unlawful or invalid,
such unlawfulness or invalidity will not serve to invalidate any part of this
Award Agreement not declared to be unlawful or invalid. Any part so declared
unlawful or invalid will, if possible, be construed in a manner which gives
effect to the terms of such part to the fullest extent possible while remaining
lawful and valid. Additionally, if any of the covenants in Section 8 are
determined by a court to be unenforceable in whole or in part because of such
covenant's duration or geographical or other scope, such court will have the
power to modify the duration or scope of such provision as the case may be, so
as to cause such covenant, as so modified, to be enforceable. 

Section 19. Binding Effect

     This Award Agreement shall bind,
and, except as specifically provided herein, shall inure to the benefit of the
respective heirs, legal representatives, successors and assigns of the parties
hereto. 

Section 20. Governing Law

     This Award Agreement and the rights
of all persons claiming hereunder will be construed and determined in accordance
with the laws of the State of New York without giving effect to the principles
of the conflict of laws to the contrary.Amendment No 1 - DBR Employment Agreement

AMENDMENT NO. 1

to

EMPLOYMENT AGREEMENT
dated December 31, 2010

by and between

AXIS Specialty U.S. Services, Inc. (the “Company”) and
Dennis B. Reding (the “Executive”)

Dated December 27, 2012

WHEREAS, the Company and the Executive entered into an Employment Agreement dated as of December 31, 2010 (the “Agreement”); and

WHEREAS, the Company and the Executive have determined that it is in the best interests of the Company, Parent and their shareholders to amend the Agreement;

NOW, THEREFORE, the Agreement is hereby amended, effective as of the date hereof, as set forth below.  All capitalized terms not otherwise defined herein shall have the meanings defined in the Agreement.  The parties acknowledge and agree that if the Executive’s employment with the Company terminates for any reason prior to December 31, 2012, this Amendment No. 1 shall be void ab initio.

		
	1.
	Section 1(a) of the Agreement is hereby deleted in its entirety and is replaced  with the following:

“Position and Duties.  Commencing on January 1, 2013, the Company shall employ you in the position of Chief Operating Officer of the Parent or in such other position as is mutually agreeable to you and the Company.  You will report directly and exclusively to the Chief Executive Officer and President of the Parent and its direct and indirect subsidiaries (collectively, the “Parent Group”).  You will be expected to devote your available business time to the performance of your duties and responsibilities to the Parent Group on an exclusive basis, including service to subsidiaries and affiliates of the Parent, on a basis consistent with your position with the Parent, as requested by the Chief Executive Officer and President and the Board of Directors of the Parent (the "Board"), and shall faithfully and diligently endeavor to promote the business and best interests of the Company and its subsidiaries and affiliates.  Anything herein to the contrary notwithstanding, nothing shall preclude you from (i) upon the written approval of the Parent’s Board, serving on the board of directors of another corporation or a trade association; (ii) serving on the board of charitable organizations, (iii) engaging in charitable, community and other business affairs, and (iv) managing your personal investments and affairs; provided such activities do not, in the reasonable judgment of the Company, materially interfere with the proper performance of your responsibilities and duties hereunder.
		
	2.
	Section 2(a) of the Agreement is hereby amended by replacing “$780,000” with “$500,000”. 

		
	3.
	Section 2(b) of the Agreement is hereby amended by replacing “125%” with “100%”. 

		
	4.
	Section 2(c) of the Agreement is hereby deleted in its entirety and replaced with the following:

“For purposes of 2012 performance, you will be eligible to participate in the Parent’s 2007 Long-Term Equity Compensation Plan as it may be amended from time to time (or a successor plan) with a target of 37,500 Restricted Shares, subject to an award agreement in such form as the Compensation Committee of the Board of Directors of the Parent (the “Compensation Committee”) may determine.  Commencing in 2014, you will be eligible to receive a bonus cash award in lieu of further equity awards for 2013, 2014 and 2015 performance.  The Compensation Committee, in its sole and absolute discretion, shall determine the amount of any such bonus cash award, with an award target equal to the value of 18,500 shares of the Company’s common stock, as determined based on the closing price of the last trading day of the applicable performance year.  The award shall be paid in a lump sum not later than January 31 of the year following the year to which the award relates.”  
		
	5.
	Section 3(a) of the Agreement is amended by deleting the first sentence thereof in its entirety and replacing it with the following:

“The employment period shall commence on January 1, 2013, and shall terminate on December 31, 2015 (the “Employment Term”), unless earlier terminated as provided in this Section 3.”  

		
	6.
	Section 3(a)(v) of the Agreement is hereby amended by replacing “six (6) months” with “120 days”. 

		
	7.
	Section 4(h) of the Agreement is deleted in its entirety and replaced with “[reserved]”.  

		
	8.
	Except as set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.

                                            
[signatures on following page]

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the date first written above.

	
				
	 
	 
	 
	 

	 
	AXIS Specialty U.S. Services, Inc.
	 

	 
	 
	 
	 

	 
	By:
	/s/ Brian W. Goshen
	 

	 
	Name:
	Brian W. Goshen
	 

	 
	Title:
	Chief Administrative Officer
	 

	 
	 
	 
	 

	 
	 
	 
	 

	 
	Executive
	 

	 
	 
	/s/ Dennis B. Reding
	 

	 
	 
	Dennis B. Reding

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