Exhibit 10.5

DIRECTOR’S ANNUAL RESTRICTED STOCK  GRANT

________, ______

Mr. ____________________
_______________________
_______________________

Re:  Stock Award

Dear Mr. _________________:

As consideration for your valuable services as a Non-Employee Director of
Patrick Industries, Inc. (the "Company"), and per the Stock Awards section of
the amended 1987 Stock Option Plan, you are hereby granted a Stock Award for
_________ shares of the Company's Common Stock, fully paid and non-assessable
(the "Shares").  Concurrently with this letter, the Company has registered a
certificate for the Shares in your name and will deposit the certificate with
the Company.  You shall have all of the rights of a shareholder with respect to
the Shares, including the right to vote and to receive all dividends or other
distributions paid or made with respect to the Shares.  However, at any and all
times prior to ____________, ________, the Shares (and any securities of the
Company which may be issued with respect to such Shares by virtue of any stock
split, combination, stock dividend or recapitalization) shall be subject to the
following restrictions:

(i)  Unless and until the date of a Change in Control, your death, Disability or
Retirement, the Shares shall not be sold, exchanged, assigned, transferred or
otherwise disposed of.

For these purposes a "Change in Control" shall have the meaning set forth in
Exhibit A attached hereto.

"Disability" shall have the meaning ascribed to such term in Section 105(d) of
the Internal Revenue Code of 1986, or any successor provision.

"Retirement" shall mean retirement from the Board at any time at or after age
65, or retirement at any time with the consent of the Board.

(ii) In the event of your termination from the Board of Directors by the Company
for any reason other than your death, Disability or Retirement, including
resignation or discharge with or without cause, all of the Shares then subject
to above restrictions shall be forfeited, and transferred to the Company without
consideration to you, your executor, administrator, personal representative or
heirs (the "Representative").

In the event of the occurrence of any event listed in paragraph (i) or the lapse
of time, the restrictions shall lapse and have no further force or effect and
certificates representing Shares as to which the restrictions have lapsed, shall
be delivered by the Company to you or your Representative.

 
 

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The grant has been reported to the SEC on a Form 4.  I have enclosed a copy for
your records.

Finally, you should be aware that the grant of a Stock Award will require you to
recognize additional compensation income for federal income tax purposes since
the Award is being granted in connection with your performance of services for
the Company.  However, since the shares which have been issued in connection
with your Stock Award are non-transferable and subject to forfeiture in the
event of your termination as director (other than as a result of your death,
Disability, or Retirement), your recognition of income will be deferred until
the first date upon which the shares are either freely transferable or are no
longer subject to forfeiture.  Specifically, you will not recognize any income
in connection with your Stock Award until the restriction period lapses on
___________, ______, or, if earlier, upon a Change in Control or your
termination of employment as a result of your death, Disability, or Retirement
(the “compensation event”).  The amount of income will equal the fair market
value of the Award shares at the time of the compensation event; appreciation
subsequent to the compensation event will be eligible for capital gain treatment
when the Award shares are ultimately disposed of.  Note that you will not be
treated as the tax owner of the Award shares prior to the compensation
event.  As a result, any dividends which are paid with respect to such shares
prior to the compensation event will be taxable to you as additional
compensation income.

Notwithstanding the above, you may make an election under Section 83(b) to be
taxed in the year the Award shares are issued, _____ instead of _____.  If the
election is made, you will recognize ordinary compensation income in the year of
issuance in an amount equal to the fair market value of the Award shares
($XXXXXXX) on the date of granting, __________, ______; future appreciation will
be eligible for capital gain treatment when the shares are ultimately disposed
of.  The Section 83(b) election must be made within 30 days after granting of
the Award shares, which is ___________, _____.  If you make this election, no
additional tax consequences will arise as the restrictions lapse.  However, if
you make this election and subsequently forfeit the Award shares, you will not
be entitled to recoup any taxes paid in connection with such election.  I have
enclosed a sample letter to the IRS and the Form of Election to use if you chose
to make the election.  This must be done before ______________, _____.  YOU
SHOULD CONSULT WITH YOUR PERSONAL TAX ADVISOR REGARDING WHETHER OR NOT A SECTION
83(b) ELECTION SHOULD BE MADE.

Please contact me with any questions you may have regarding the award and to
arrange for further documentation of your award.

Sincerely,

____________________
Title
____________________

Enclosures

 
 

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EXHIBIT A

A "Change in Control" shall be deemed to have occurred if (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than
the Company or an employee benefit plan sponsored by the Company, becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing twenty-five percent
(25%) or more (or if a person is permitted to own a higher percentage under the
Company’s Rights Agreement, dated March 21, 2006, amended on May 18, 2007, and
subsequently amended on March 10, 2008, as the same may be amended from time to
time, such higher percentage as to such person) of the combined voting power of
the Company’s then outstanding securities ordinarily having the right to vote at
elections of directors (excluding an acquisition of such securities directly
from the Company), (ii) during any period of two consecutive years individuals
who at the beginning of the two-year period were members of the Board cease for
any reason to constitute at least a majority of the Board (individuals with such
two years of service being the “Continuing Directors”), (iii) there shall be
consummated (A) any consolidation, merger, or reorganization of the Company in
which the Company is not the surviving or continuing corporation or pursuant to
which shares of Common Stock would be converted into or exchanged for cash,
securities, or other property, other than a consolidation, merger, or
reorganization of the Company in which the holders of capital stock of all
classes of the Company (including Common Stock) immediately prior to the
transaction have, directly or indirectly, an ownership interest in securities
representing a majority of the combined voting power of the outstanding voting
securities of the surviving entity immediately after the transaction, or (B) any
sale, lease, exchange, or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of the
Company, other than any such transaction with entities in which the holders of
the Company’s then outstanding capital stock of all classes, directly or
indirectly, have an ownership interest in securities representing a majority of
the combined voting power of the outstanding voting securities of such entities
immediately after the transaction, (iv) a change occurs of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A, promulgated under the Exchange Act or any successor disclosure
item, or (v) the stockholders of the Company approve any plan or proposal for
the liquidation or dissolution of the Company; provided, however, that any
occurrence described in (i) through (iv) approved by the affirmative vote of a
majority of the Continuing Directors, shall not constitute a Change in Control
to the extent so provided by the affirmative vote of a majority of those
Continuing Directors.