Exhibit 10.7

 

STATE NATIONAL COMPANIES, INC.

2014 LONG-TERM INCENTIVE PLAN

 

RESTRICTED STOCK AWARD AGREEMENT

(TIME-BASED)

 

Name of Recipient:

________________________

 

 

Total Restricted Stock Award:

Number of Shares equal to $_______ divided by Fair Market Value of a Share on
the Date of Grant, rounded down to the nearest whole Share 

 

 

Vesting:

This Restricted Stock Award is subject to the time-based and other vesting
conditions set forth in Exhibit A to this Award Agreement, which are
incorporated herein by reference. 

 

 

Qualified Performance-Based Award:

______ Yes

_______No

 

 

 

Date of Grant:

______________

 

 

Effect of Termination of Service because of:

 

 

 

(a) Death or Disability:

50% of the unvested Shares subject to this Restricted Stock Award shall vest as
of the date of Termination of Service, and the remainder of the unvested Shares
shall be forfeited.

 

 

(b) Termination for Cause or Resignation without Good Reason:

All unvested Shares subject to this Restricted Stock Award shall be forfeited as
of the date of Termination of Service and any rights the Recipient had to such
Shares become null and void.

 

 

(c) Other Reasons:

All unvested Shares subject to this Restricted Stock Award shall be forfeited as
of the date of Termination of Service and any rights the Recipient had to such
Shares become null and void.

 

 

Change of Control:

In the event of a Change of Control prior to a vesting date and the successor to
the Company continues or assumes the Awards associated with this Agreement in a
manner approved by the Board of Directors, such Awards shall continue in
accordance with their terms; provided, however, that if the Recipient is
terminated without Cause or voluntarily terminates with Good Reason within 12
months after the Change of Control, then 100% of the Shares associated with this
Agreement that are not already forfeited at the time of termination will vest as
of the date of termination.

 

--------------------------------------------------------------------------------

 

 

If the successor to the Company does not continue or assume the Awards
associated with this Agreement in a manner approved by the Board of Directors,
then 100% of the Shares associated with this Agreement that are not already
forfeited at the time of the Change of Control shall vest as of the Change of
Control.

 

 

Voting:

The Recipient is entitled to direct the Trustee (as hereinafter defined) as to
the voting of Shares subject to this Restricted Stock Award that have been
granted, but have not yet vested.

 

 

Non-Transferability:

The Recipient shall not sell, transfer, assign, pledge or otherwise encumber
Shares subject to this Restricted Stock Award until full vesting of such Shares
has occurred.  The period of time between the Date of Grant and the date Shares
subject to this Award Agreement become vested is referred to herein as the
“Restricted Period”.  All certificates representing Shares subject to this Award
Agreement shall have endorsed thereon the following legend:  “The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) contained in the
State National Companies, Inc. 2014 Long-Term Incentive Plan and an agreement
entered into between the registered owner and State National Companies, Inc.  A
copy of such plan and agreement is on file at the principal office of State
National Companies, Inc.”

 

Unless determined otherwise by the Committee and except in the event of the
Recipient’s death or pursuant to a qualified domestic relations order as defined
by the Code, this Restricted Stock Award is not transferable and may be earned
only in the Recipient’s lifetime.  Upon the death of the Recipient, this
Restricted Stock Award is transferable to the beneficiary or beneficiaries
designated by the Recipient in writing (subject to such requirements as the
Committee may specify in its discretion) to receive, in the event of death, any
Award to which the Recipient would be entitled pursuant to the State National
Companies, Inc. 2014 Long-Term Incentive Plan (the “Plan”) under this Restricted
Stock Award Agreement.  If no beneficiary is designated, this Restricted Stock
Award shall transfer by will or the laws of descent and distribution.  The terms
of the Plan and this Restricted Stock Award Agreement shall be binding upon the
beneficiaries, executors, administrators, heirs, successors and assigns of the
Recipient.

 

 

 

2

--------------------------------------------------------------------------------

 

Distribution:

The certificate or certificates evidencing Shares subject to this Restricted
Stock Award shall be delivered to and deposited with a trustee or with the
Secretary of the Company as escrow agent in this transaction (either referred to
herein as the “Trustee”).  Such certificates are to be held by the Trustee until
termination of the

 

Restricted Period.  Shares of Common Stock, plus any dividends on such Shares,
will be distributed as soon as practicable upon termination of the Restricted
Period.  For avoidance of doubt, except as provided immediately below, if any
Shares are forfeited, any associated dividends shall be forfeited as
well.  Notwithstanding the foregoing, if the Recipient makes an election under
Section 83(b) of the Code to have the Shares subject to this Restricted Stock
Award taxed as of the Date of Grant, dividends on such Shares will be paid to
the Recipient when and as declared.

 

The Committee hereby grants to the individual named above (the “Recipient”) a
Restricted Stock Award for the number of Shares listed above, subject to the
terms and conditions of the Plan and this Restricted Stock Award Agreement.  In
the event of a conflict between the terms and conditions of the Plan and the
terms and conditions of this Restricted Stock Award Agreement, the terms and
conditions of the Plan shall prevail.

Neither the Plan nor this Restricted Stock Award Agreement creates any right on
the part of the Recipient to continue in the service of the Company or any
Affiliates thereof.

The Company shall not be required to transfer on its books any Shares which have
been sold or transferred in violation of any of the provisions set forth in this
Restricted Stock Award Agreement.  The parties agree to execute such further
instruments and take such actions as the Committee determines to be reasonably
necessary to carry out the intent of this Restricted Stock Award Agreement.

The Recipient agrees to make appropriate arrangements with the Company (or any
parent or subsidiary of the Company employing or retaining the Recipient) for
satisfaction of any Federal, state, local and foreign income and employment tax
withholding requirements applicable to the Shares subject to this Award
Agreement.  The Recipient may request that any tax and other withholding
requirements be satisfied by withholding or netting an appropriate number of
Shares of Restricted Stock that would otherwise vest, but the Committee shall
determine the extent to which such withholding or netting shall be permitted.

The Recipient represents that the Recipient has consulted with any tax
consultants deemed advisable in connection with this Restricted Stock Award and
that Recipient is not relying on the Company for any tax advice.  If Recipient
determines to make an election under Section 83(b) of the Code to be taxed on
the Shares subject to this Restricted Stock Award on the Date of Grant, based
upon the fair market value of such Shares on the Date of Grant, it is the
Recipient’s responsibility to (i) file such an appropriate election with the
Internal Revenue Service within the 30-day period after the Date of Grant, (ii)
deliver to the Company a signed copy of the 83(b) election, (iii) file an
additional copy of such election form with the Recipient’s federal income tax
return for the calendar year in which the

3

--------------------------------------------------------------------------------

 

Date of Grant occurs, and (iv) pay applicable withholding taxes to the Company
at the time that the 83(b) election is filed with the Internal Revenue Service.

The Recipient hereby acknowledges that all decisions, determinations and
interpretations of the Board of Directors or the Committee in respect of the
Plan and this Restricted Stock Award Agreement shall be final and conclusive.

The Plan is incorporated herein by reference.  In addition, the terms of any
Severance Agreement that is from time to time in effect between the Recipient
and the Company, including without limitation any Code Section 280G Parachute
Payment provisions, are hereby incorporated herein by reference.

Unless otherwise defined herein, all capitalized terms herein shall have the
same meaning as those contained in the Plan.  The Plan and this Restricted Stock
Award Agreement, and applicable provisions of any related Severance Agreement,
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Recipient with respect to the subject matter
hereof, and may not be modified adversely to the Recipient’s interest except by
means of a writing signed by the Company and the Recipient.  This Restricted
Stock Award Agreement is governed by the internal substantive laws, but not the
choice of law rules, of Delaware.

4

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, State National Companies, Inc. has caused this Restricted
Stock Award Agreement to be executed, and said Recipient has hereunto set his
hand, as of this ____ day of _____________ 20__.

 

 

STATE NATIONAL COMPANIES, INC.

 

 

 

 

By:

 

 

 

 

 

 

 

 

RECIPIENT

 

 

 

 

 

 

 

 

5

--------------------------------------------------------------------------------

 

 

EXHIBIT A

TIME-BASED AND OTHER VESTING CONDITIONS

 

 

--------------------------------------------------------------------------------