Document:

exv10w77

EXHIBIT 10.77

INDEMNIFICATION AND PLEDGE AGREEMENT

     THIS INDEMNIFICATION AND PLEDGE AGREEMENT (this “Agreement”) is made as of January 15,
2009, by and between STEVEN M. MARIANO (the “Indemnitor”) and PATRIOT RISK MANAGEMENT,
INC., a Delaware corporation (the “Company”).

     WHEREAS, the Company proposes to raise approximately $180 million in its initial public
offering (“IPO”) of its common stock, par value $.001 per share (“Common Stock”) to be
managed by a syndicate of underwriters for whom FBR Capital Markets, Inc. will act as sole
bookrunner;

     WHEREAS, the Company has litigation pending involving Progressive Employer Services, LLC,
Westwind Holding Company, LLC and related entities (together “PES”) pursuant to which the
Company is seeking to recover approximately $8.3 million in accrued premiums receivable that the
Company contends is owed by PES;

     WHEREAS, PES has litigation pending against the Company pursuant to which PES is seeking to
recover specified amounts under various agreements between PES and the Company that PES believes
are owed to PES by the Company;

     WHEREAS, if the Company is unable to recover from PES any of the $8.3 million premiums
receivable, plus an additional $2.2 million that the Company has offset against the premiums
receivable through the exercise of a call option, the Company would recognize a pretax loss in the
amount of such unrecovered amounts, plus any amounts due PES pursuant to its litigation against the
Company and associated legal costs;

     WHEREAS, to facilitate the consummation of the Company’s IPO and to mitigate against a
post-IPO diminution in per share book value resulting from a loss relating to the PES litigation,
the Company and the Indemnitor have determined that the terms of the indemnity set forth in this
Agreement are desirable in order for the Company to successfully consummate the IPO and are in the
best interests of the Company and its stockholders; and

     WHEREAS, the effectiveness of this Agreement is subject to approval by a majority of the
Company’s stockholders (other than the Indemnitor) and the consummation of the IPO.

     NOW, THEREFORE, in consideration of the mutual covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
to this Agreement hereby agree as follows:

     1. Definitions. In this Agreement, the following terms have the meanings specified or
referred to in this Section 1 and shall be equally applicable to both the singular and
plural forms. Any agreement referred to below shall mean such agreement as amended, supplemented
and modified from time to time to the extent permitted by the applicable provisions thereof and by
this Agreement.

 

     “Affiliate” means, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries is controlled by such Person. For purposes of this
definition, control of a Person means the ownership of, directly or indirectly, fifty percent (50%)
or more of the voting securities of such Person.

     “Agreement” means this Indemnification and Pledge Agreement, including all amendments,
modifications and supplements and any exhibits or schedules, and shall refer to this Agreement as
the same may be in effect at the time such reference becomes operative.

     “Change of Control” means the occurrence of any of the following events:

     (a) the date any one person, or more than one Person acting as a group, acquires (or has
acquired during the twelve-month period ending on the date of the most recent acquisition by such
Person(s)) ownership of Common Stock possessing 51% or more of the total voting power of the Common
Stock;

     (b) individuals who constitute the Board of Directors (the “Incumbent Board”) cease for any
reason to constitute at least a majority thereof, provided that any Person becoming a director
subsequent to the Effective Date whose election or nomination for election was approved by a vote
of at least three-quarters of the directors comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person is named as a
nominee for director, without objection to such nomination) shall be, for purposes of this clause
(ii) considered as though such Person were a member of the Incumbent Board;

     (c) any consolidation or merger to which the Company is a party, if following such
consolidation or merger, stockholders of the Company immediately prior to such consolidation or
merger shall not beneficially own securities representing at least 51% of the combined voting power
of the outstanding voting securities of the surviving or continuing corporation; or

     (d) any sale, lease, exchange or other transfer (in one transaction or in a series of related
transactions) of all, or substantially all, of the assets of the Company, other than to an entity
(or entities) of which the Company or the stockholders of the Company immediately prior to such
transaction beneficially own securities representing at least 51% of the combined voting power of
the outstanding voting securities.

     “Common Stock” means the Common Stock, par value $0.001 per share, of the Company.

     “Company Group Member” means the Company and its Affiliates and their respective
directors, officers, employees, agents, attorneys and consultants and their successors and assigns.

     “Covered Litigation” means the specific lawsuits listed on Exhibit A attached
hereto, including any and all cross-claims or counter-claims that have or may in the future arise
in such litigation and any additional litigation that arises asserting claims that were raised or
that could have been raised in the litigation listed on Exhibit A.

     “Effective Date” means the date of the closing of the Company’s IPO.

2

 

     “Encumbrance” means any lien (including any Tax lien), charge, security interest,
mortgage, pledge, or similar encumbrance and any option to purchase or sell, conditional sale or
other title retention agreement.

     “Event of Default” means the material breach of any representation made by Indemnitor,
any failure to make a payment or any other material breach of this Agreement.

     “Final Resolution” means execution of a written settlement agreement or determination
by the final and non-appealable determination of the relevant court and collection of any amounts
owed to the Company pursuant to such settlement or determination, provided, that if all amounts
owed to the Company are not collected after a period of Twelve (12) months following such
settlement or determination, a final resolution shall have been deemed to occur.

     “GAAP” means United States generally accepted accounting principles which are
applicable as at the date on which any calculation made hereunder is to be effective or as at the
date of any financial statements referred to herein applied on a basis consistent with past
periods.

     “Legal Expenses” means any and all fees and expenses incurred on or after December 1,
2009, paid or payable to third-parties by the Company and its Affiliates and arising from the
Covered Litigation, including, without limitation, court filing fees, court costs, arbitration fees
or costs, witness fees, and reasonable fees and disbursements of legal counsel, paralegals,
investigators, expert witnesses, accountants and other professionals.

     “Litigation Losses” means the pre-tax amount of any Losses incurred by the Company and
its Affiliates arising from or as a result of the Covered Litigation, taking fully into account the
effect of the creation or increase in any reserve, any write down or write off of all or any
portion of the value of any asset carried on the books of the Company and its Affiliates as of
Effective Date, all determined in accordance with GAAP.

     “Losses” means any and all losses, obligations, liabilities, settlement payments,
awards, judgments, fines, damages, deficiencies (together with interest and penalties thereon, if
any), write offs, write downs, required reserves, required increases in reserves or other charges
of any kind.

     “Person” means any individual, corporation, partnership, limited liability company,
joint venture, association, joint stock company, trust, unincorporated organization or Governmental
Body.

     “Pledged Collateral” means:

     (a) the Pledged Shares and the certificates representing the Pledged Shares, whether now or
hereafter existing;

     (b) all payments, income, dividends (whether in cash, stock or property), liquidating
dividends, distributions, cash, instruments, securities of any issuer (including, without
limitation, any warrants, options or rights to acquire any such securities), and other property or
proceeds from time to time received, receivable or otherwise distributed or to be distributed in
respect of or in exchange for any or all of the Pledged Shares; and

3

 

     (c) all rights, rights to payments, claims, causes of action and interests (but no obligations
or liabilities) of Indemnitor as against any Person arising or granted to Indemnitor with respect
to the Pledged Shares, together with all collateral and other security (including, without
limitation, security agreements, pledge agreements, guaranties, letters of credit and deposits)
which may now or hereafter secure any of the foregoing.

     “Pledged Shares” means the shares of Common Stock listed on Exhibit B attached
hereto.

     “Special Litigation Committee” means the committee of the Board of Directors of the
Company established to oversee the conduct of the Covered Litigation and to approve any proposed
settlement of any lawsuit included in the Covered Litigation. The Special Litigation Committee
shall consist of the members of the Audit Committee of the Board of Directors and Indemnitor,
although Indemnitor shall be a non-voting member of the Special Litigation Committee. As a
non-voting member, Indemnitor shall be entitled to notice of and to participate in meetings of the
Special Litigation Committee, subject to the prerogative of the Special Litigation Committee to
meet in executive session at which only the full voting members are present.

     “Tax” means all federal, state, local, municipal, territorial or foreign or other
taxes, or similar items, assessed or imposed against the Company or its Affiliates, including all
income, capital gains, sales, excise, use, property, capital, goods and services, business
transfer, value added, unemployment compensation, social security, payroll or other withholding,
privilege, franchise, license and school taxes and custom and import duties and includes all
interest, fines and penalties with respect thereto and any liability of the Company for the payment
of any amounts of the types described above as a result of any express or implied obligation to
indemnify, assume or succeed to the liability of any other Persons or arising as a result of being
or ceasing to be a member of an affiliated group or being included or required to be included in
any tax return related thereto or arising under any tax sharing or other agreement with respect
thereto.

     “Tax Benefit” means the amount of reduction in Taxes paid by the Company as a result
of incurring Legal Expenses and Litigation Losses including the value of any deferred tax asset
created.

     “Termination Date” shall mean the date of the occurrence of a Change in Control or
fifteen (15) days after the date upon which there is a Final Resolution of all of the Covered
Litigation.

     2. Effectiveness and Delivery of Pledged Shares. This Agreement shall become
effective on the Effective Date and if the Effective date has not occurred on or prior to March 31,
2010, this Agreement shall terminate and be of no further force and effect. On the Effective Date,
the Indemnitor shall deliver to the Company certificates representing all of the Pledged Shares and
duly executed instruments of transfer and assignment in blank with respect to the Pledged Shares.
The Pledged Shares and any other Pledged Collateral shall serve as security for payment and
satisfaction of the obligations of Indemnitor under Section 3 of this Agreement. The
Indemnitor hereby pledges and collaterally assigns to the Company and grants to the Company a first
priority continuing security interest in all of the Pledged Collateral to secure the

4

 

obligations of Indemnitor under this Agreement. The Indemnitor represents and warrants to the
Company that he is the sole owner of the Pledged Shares and that he owns and will continue to own
(until the termination of this Agreement) the Pledged Shares free and clear of any Encumbrances,
except for the security interest granted to the Company under this Agreement.

     3. Indemnification. Subject to the limitations in Section 4, the Indemnitor
shall indemnify and hold harmless the Company from and against any and all Litigation Losses and
Legal Expenses incurred by the Company or any Company Group Member in connection with or arising
from the Covered Litigation less the amount of any Tax Benefit arising from such Litigation Losses
and Legal Expenses. All material decisions regarding the conduct and settlement of the Covered
Litigation shall be made by the Special Litigation Committee.

     4. Limitation on Indemnification.

     (a) The maximum amount of Litigation Losses for which the Indemnitor shall be liable in the
aggregate under this Agreement is $6,900,000.

     (b) Any indemnification obligation of the Indemnitor under this Agreement may be satisfied by
transfer to the Company of Pledged Collateral at the option of Indemnitor. In the event the
Pledged Collateral is insufficient to satisfy the obligations of Indemnitor under the Agreement,
the excess amount shall be paid by Indemnitor in cash or in such other consideration as the Company
and Indemnitor may agree, subject to the limitations set forth in this Section 4.

     (c) Notwithstanding anything in this Agreement to the contrary, the amount of any
Indemnification Claim shall be reduced by any recoveries which the Company or any of its Affiliates
actually receive under insurance policies with respect to the Litigation Losses and Legal Expenses
included in such Indemnification Claim.

     5. Indemnification Claims. Upon Final Resolution of any of the Covered Litigation,
the Company may deliver to the Indemnitor from time to time, a written notice (an
"Indemnification Notice”) setting forth a claim by the Company against the Indemnitor for
indemnification of Litigation Losses and Legal Expenses arising from such Covered Litigation (an
"Indemnification Claim”). The Indemnification Notice shall set forth the aggregate amount
of such claim (the “Indemnification Amount”) and shall include reasonable detail regarding
the Litigation Losses, Legal Expenses incurred and Tax Benefits. The Indemnification Claim shall
be final and binding on the Indemnitor.

     6. Satisfaction of Indemnity Claim.

     (a) Upon delivery of an Indemnification Notice to the Indemnitor, Indemnitor shall have
fourteen (14) days to either tender the Indemnification Amount to the Company in the form of a
payment in cash or notify the Company that the Indemnitor consents to the transfer of the Pledged
Shares in payment of the Indemnification Claim. If the Indemnitor elects to satisfy the
Indemnification Claim through the transfer of Pledged Shares, the Company may transfer and convey
to the Company Pledged Collateral to satisfy all or a portion of the Indemnification Claim. For
such purpose the Common Stock will be valued at the Share Price. If the Indemnitor fails to
respond to the Indemnification Notice as provided in this Section 6(a), an Event of Default
shall be deemed to have occurred.

5

 

     (b) If an Event of Default occurs, then in addition to any rights set forth herein, the
Company shall have all the rights and remedies of a secured creditor at law or in equity, including
all rights provided for under the Uniform Commercial Code in effect at the time in the State of
Florida and may transfer Pledged Collateral to the Company to satisfy all or a portion of the
Indemnification Claim. For such purpose the Common Stock will be valued at the Share Price.

     7. Transfer of Pledged Collateral upon Termination. The Company shall release to the
Indemnitor on the Termination Date, the remaining Pledged Collateral.

     8. Indemnitor’s Right to Additional Common Stock.

     (a) If the Final Resolution of all of the Covered Litigation results in aggregate net proceeds
to the Company in an amount greater than $10,476,988, after taking into account all Legal Expenses
incurred and cash or other proceeds actually collected by the Company (including any amounts
previously collected from Indemnitor under this Agreement), then the Company shall issue to the
Indemnitor cash or additional shares of Common Stock with a value equal to the amount of the
increase divided by the Share Price, provided however, that as to shares of Common Stock, the
Company shall not be required to issue more than 500,000 shares of Common Stock to Indemnitor
pursuant to this Section 8(a). Any Common Stock to be issued by the Company to the
Indemnitor under this section shall be issued promptly after the Termination Date. Notwithstanding
anything to the contrary herein, the Company shall have the right to pay any amounts due to
Indemnitor under this Section 8(a) in cash.

     (b) If Indemnitor has previously made a payment with respect to the Final Resolution of any of
the Covered Litigation, and subsequently the Company receives payment of any amounts provided for
in the settlement or determination of such Covered Litigation that were not taken into account in
the determination of Indemnitor’s payments hereunder, the Company shall pay such additional amounts
collected over to the Indemnitor; provided that the Company shall not be obligated to make any
payment under this Section unless the Indemnitor shall have satisfied all of his obligations under
this Agreement.

     (c) The Company may deduct and withhold from any amounts payable to Indemnitor any and all
amounts that are required to be deduced and withheld under applicable law, and such deducted
amounts shall be treated for purposes of this Agreement as having been paid to Indemnitor in
respect of amounts payable to the Indemnitor hereunder.

     9. Valuation of Pledged Shares. For purposes of this Agreement, the “Share
Price” shall be determined by the price of the Common Stock at the average trading price
reported by the principal exchange or system on which the Common Stock is listed determined on a
volume-weighted basis for the thirty (30) trading days preceding the date that Pledged Shares are
transferred to the Company in satisfaction of any Indemnification Claim or to date that Common
Stock is issued to the Indemnitor pursuant to Section 8; provided that if the Common Stock
is no longer actively traded on any exchange or system, then the Share Price shall be determined by
an independent investment banking firm selected by the Company, provided that the firm selected
shall be a firm of national reputation that is experienced in valuing insurance companies.

6

 

     10. Indemnitor’s Rights with Respect to Pledged Shares.

     (a) So long as no Event of Default has occurred, the Indemnitor shall have the right, at all
times and from time to time, unless and until such Pledged Collateral is transferred, to vote with
respect to the Pledged Collateral or any part thereof for all purposes not inconsistent with the
provisions of this Agreement. If an Event of Default has occurred, the Company shall have the
right to vote with respect to the Pledged Collateral.

     (b) All proceeds of the Pledged Shares or any other Pledged Collateral, including without
limitation, dividends shall be retained by the Company as provided in this Agreement, provided that
so long as no Event of Default has occurred, all ordinary cash dividends received on the Pledged
Shares (except dividends in partial or complete redemption of the Pledged Shares) shall be paid
over to the Indemnitor by the Company.

     11. Termination. This Agreement shall terminate upon the date of the earlier to occur
of a (i) Change of Control or (ii) final determination of all claims and after all parties have
satisfied their respective obligations herein. Upon such termination this Agreement shall have no
further force and effect, except that the provisions of Sections 8(b) and (c), this
Section 11 and , Section 12, and Sections 14 through 23 shall survive such
termination. Termination of this Agreement shall not affect either party’s obligation to make any
payments that are due and owing pursuant to the terms of this Agreement at the time of termination.

     12. Taxation of Dividends and Other Distributions. The parties hereby acknowledge
that, for federal and state income tax purposes, any dividends or other distributions that may be
made from time to time on the Pledged Collateral shall be income of the Indemnitor and reported, as
and to the extent required by law, by the Company to the Internal Revenue Service, or any other
taxing authority as income earned by the Indemnitor whether or not said income has been distributed
during such year. The parties further acknowledge and agree that any taxes payable from the income
earned on the investment of any other Pledged Collateral shall be paid by the Indemnitor. The
Company may withhold any taxes it deems appropriate and shall remit such taxes to the appropriate
authorities.

     13. Notices. All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to
have been given upon delivery when delivered personally, or upon confirmed transmittal, if by
facsimile to the recipient, one (1) day after being sent to the recipient by reputable overnight
courier service (charges prepaid) or five (5) days after being mailed to the recipient by certified
or registered mail, return receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the parties at the addresses indicated below or to such other
address or to the attention of such other Person as the recipient party has specified by prior
written notice to the sending party.

7

 

	 	 	 
	If to the Company:

Special Litigation Committee
Patriot Risk Management, Inc.

	 	          With a copy to:

(which shall not constitute notice to the
Company)
	 

	 	          Locke Lord Bissell & Liddell LLP
	 

	 	          111 S. Wacker Drive
	 

	 	          Chicago, Illinois 60606
	 

	 	          Attn: J. Brett Pritchard
	 

	 	          FAX No.: 312-443-0336
	 
	 	 
	If to the Indemnitor:

	 	          With a copy to:
	
Steven M. Mariano

	 	(which shall not constitute notice to the
Indemnitor)

     14. Entire Agreement; Amendments. This Agreement contains the entire understanding of
the parties hereto with respect to the subject matter hereof and supersedes any prior
understandings or agreements by or among the parties hereto, whether written or oral, which may
have related to the subject matter hereof in any way. This Agreement may be amended, or any
provision of this Agreement may be waived, so long as such amendment or waiver is set forth in a
writing executed by each of the parties. No course of dealing between or among the parties hereto
shall be deemed effective to modify, amend or discharge any part of this Agreement of any rights or
obligations of any party hereto under or by reason of this Agreement.

     15. Assigns and Assignment. This Agreement and all actions taken hereunder shall
inure to the benefit of and shall be binding upon all of the parties hereto and upon all of their
respective successors and assigns Neither this Agreement nor any right or interest hereunder may
be assigned in whole or in part by any party, without the prior consent of the other party.

     16. No Third Party Beneficiaries. Nothing herein expressed or implied is intended or
shall be construed to confer upon or to give any Person other than the parties and their permitted
assigns any rights or remedies under or by reason of this Agreement.

     17. Interpretation. The headings in this Agreement are inserted for convenience of
reference only and shall not be a part of or control or affect the meaning hereof.

     18. No Waiver. No failure or delay by a party hereto in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, and no single or partial exercise thereof
shall preclude any right of further exercise or the exercise of any other right, power or
privilege.

8

 

     19. Severability. In the event that any part of this Agreement is declared by any
court or other judicial or administrative body to be null, void or unenforceable, said provision
shall survive to the extent it is not so declared, and all of the other provisions of this
Agreement shall remain in full force and effect only if, after excluding the portion deemed to be
unenforceable, the remaining terms shall provide for the consummation of the transactions
contemplated on economic or legal terms that would not in any manner be materially more adverse to
either party hereto than the economic and legal substance of this Agreement as originally executed
or last amended.

     20. No Strict Construction. The language used in this Agreement shall be deemed to be
the language chosen by the parties hereto to express their collective mutual intent, and no rule of
strict construction shall be applied against any of them. The term “including” as used herein
shall be by way of example, and shall not be deemed to constitute a limitation of any term or
provision contained herein. Each defined term used in this Agreement has a comparable meaning when
used in its plural or singular form.

     21. Dispute Resolution; Mediation as Precondition to Suit. The parties agree to
mediate any dispute or claim arising from this Agreement before filing any lawsuit. Mediation
fees, if any, shall be divided equally among the parties involved. Mediation shall be initiated by
written notification of the claimant to other parties involved. The parties involved shall jointly
appoint a mediator within thirty (30) days of such notification, and shall participate in good
faith in a mediation of at least four (4) hours in length. If the dispute is not resolved by
mediation, the parties involved reserve all rights to raise their claims and defenses in
litigation.

     22. Governing Law. All issues and questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by, and construed in accordance
with, the laws of the State of Florida without giving effect to any choice of law or conflict of
law rules or provisions (whether of the State of Florida or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Florida. Each party
irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar
grounds and irrevocably consents to service of process by mail or in any other manner permitted by
applicable law and consents to the jurisdiction of the courts located in the State of Florida,
Broward County.

     23. Counterparts. This Agreement may be executed by the parties hereto individually
or in any combination, in one or more counterparts (including by means of facsimiled signature
pages, which shall be deemed to be the original signature of such party whose signature it
reproduces, and will be binding upon such party), each of which shall be an original and all of
which shall together constitute one and the same agreement.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

9

 

     IN WITNESS WHEREOF, the Indemnitor and the Company have, as applicable, signed
this Agreement or caused this Agreement to be signed by their officers thereunto duly authorized,
all as of the date first written above.

	 	 	 	 	 	 	 
	 	 	PATRIOT RISK MANAGEMENT, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Theodore G. Bryant	 	 
	 

	 	 	 	 

Name: Theodore G. Bryant
	 	 
	 

	 	 	 	Title: SVP/Secretary	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ Steven M. Mariano 

Steven M. Mariano
	 	 

10

 

EXHIBIT A

COVERED LITIGATION

GIC v. Elite Ins. Svcs. Inc., Progressive Employer Svcs., Semco, Inc.,

No. 08051734 CA (Cir. Ct. Broward Cty., FL)

GIC v. Progressive Employer Svcs., Sunz Ins. Co.,

No. 09008208 CA (Cir. Ct. Broward Cty., FL)

Westwind Holding Co. v. Patriot Risk Management Svcs., f/k/a Suncoast Holdings Inc.,

No. 09027001 CA (Cir. Ct. Broward Cty, FL)

11

 

EXHIBIT B

PLEDGED SHARES

500,000 shares of Common Stock represented by certificates                     .

12exv10w78

Exhibit 10.78

Patriot Risk Management, Inc.

Restricted Stock Award Agreement

	 	 	 	 	 	 	 
	 

	 	Date of Grant:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Name of Holder:
	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Number of Shares:
	 	           Shares of Common Stock	 	 
	 
	 	 	 	 	 	 
	 

	 	Fair Market Value:
	 	$                     per Share	 	 
	 
	 	 	 	 	 	 
	 

	 	Vesting Schedule:
	 	 

	 	 

Patriot Risk Management, Inc. (the “Company”) hereby awards to the Holder (the “Holder”) the number
of shares of the presently authorized but unissued Common Stock, $.001 par value per share, of the
Company (the “Restricted Stock”) set forth above pursuant to the Patriot Risk Management, Inc. 2010
Stock Incentive Plan (the “Plan”).

To the extent not controlled by the terms and conditions contained in the Plan, the terms and
conditions of the Restricted Stock granted hereby shall be governed by this Restricted Stock
Agreement (the “Agreement”) as follows:

1. No Right to Continued [Director/Employee] Status.

Nothing contained in this Agreement shall confer upon Holder the right to the continuation of his
or her [Director/Employee] status, or interfere with the right of the Company, a member of the
Company Group, or its stockholders, as applicable, to terminate such relationship.

2. Vesting of Restricted Stock

The Restricted Stock shall vest in accordance with the Vesting Schedule set forth above if the
Holder remains a [Director/Employee] of the Company or a member of the Company Group on each
vesting date. Upon a Holder’s Termination of Service due to Retirement, Disability or death, all
unvested Restricted Stock held by such Holder shall immediately vest. If the Holder has a
Termination of Service and such termination event does not result in accelerated vesting of the
Restricted Stock, the unvested Restricted Stock shall be forfeited without consideration. In the
event of a Change in Control, all unvested Restricted Stock shall become immediately vested.

In the event that the Holder has become obligated to return all or a portion of his or her shares
of Restricted Stock to the Company due to a forfeiture of such shares pursuant to this Agreement,
and the Holder shall fail to deliver the certificates representing such shares in accordance with
the terms of this Agreement, the Company may, at its option,

 

 

in addition to all other remedies it may have, upon written notice to the Holder cancel on its
books the certificates representing the shares to be returned to the Company and thereupon all of
the rights of the Holder in and to said shares shall terminate. The Company shall not be obligated
to give notice to any holder of shares of Restricted Stock if such holder does not appear on the
stock transfer ledger of the Company as the registered holder of such shares.

3. Retention of Certificates

The certificate(s) representing the shares of Restricted Stock granted hereby will be stamped or
otherwise imprinted with the legend required by the Plan with respect to any applicable
restrictions on the sale or transfer of such shares, and the stock transfer records of the Company
will reflect stop transfer instructions with respect to such shares. At the election of the
Company, the Company may retain the certificate(s) representing the shares of Restricted Stock
granted to the Holder pursuant to this Agreement until such time as the vesting restrictions have
lapsed and the restrictions on the transfer of such Restricted Stock have terminated or are removed
by the Board of Directors. Within a reasonable time thereafter, the Company will deliver to the
Holder a new certificate representing such shares, free of the legend referred to herein. The
issuance of such certificate shall not affect any restrictions upon the transferability of such
shares pursuant to applicable law or otherwise.

4. Tax Election

Within 30 days after the date of this Agreement, the Holder may make an election with the Internal
Revenue Service under Section 83(b) of the Internal Revenue Code and the regulations promulgated
thereunder. The parties agree that for such purposes the fair market value of the Restricted Stock
on the Grant Date is that amount per share set forth above.

5. Restrictions on Transfer

Any shares of Restricted Stock granted hereunder, whether vested or unvested, shall not be sold,
assigned, transferred, pledged or otherwise encumbered until such shares are fully vested. The
spouse of the Holder shall execute a signature page to this Agreement as of the date hereof and
agree to be bound in all respects by the terms hereof to the same extent as the Holder. The spouse
further agrees that should he/she predecease the Holder or become divorced from the Holder, any of
the shares of Restricted Stock which such spouse may own or in which he/she may have an interest
shall remain subject to this Agreement.

2

 

6. Dividends and Other Distributions.

The Holder shall be entitled to receive cash dividends or distributions declared and paid with
respect to shares of Restricted Stock. Any such dividends or distributions shall be paid within 30
days after the corresponding dividends or distributions are paid to stockholders.

7. Voting of Restricted Stock

The Holder shall be entitled to vote shares of Restricted Stock subject to the rules and procedures
adopted by the Committee for this purpose.

8. Notices

Any notice required to be given pursuant to this Agreement or the Plan shall be in writing and
shall be deemed to be delivered upon receipt or, in the case of notices by the Company, five (5)
days after deposit in the U.S. mail, postage prepaid, addressed to the Holder at the address last
provided for his or her employee records.

9. Agreement Subject to Plan; Applicable Law

This Agreement is made pursuant to the Plan and shall be interpreted to comply therewith. A copy
of the Plan is attached hereto. Any provision of this Agreement inconsistent with the Plan shall be
considered void and replaced with the applicable provision of the Plan. This Agreement shall be
governed by the laws of the State of Delaware and subject to the exclusive jurisdiction of the
courts therein. Unless otherwise provided herein, capitalized terms used herein that are defined
in the Plan and not defined herein shall have the meanings set forth in the Plan.

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

Patriot Risk Management, Inc.

	 	 	 
	 

By:

	 	 

3

 

	 	 	 	 	 
	Holder:
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	Name:

	 	 

	 	 
	SSN#

	 	 

	 	 
	Address:

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	Phone:

	 	 

	 	 

I, the undersigned, being the spouse of the above-named Holder, hereby acknowledge that I have read
and understand the foregoing Restricted Stock Agreement under the Patriot Risk Management, Inc.
2008 Stock Incentive Plan, and I agree to be bound by the terms thereof.

	 	 	 	 	 
	 	 	 
	Name:

	 	 

	 	 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]