Exhibit 10.5
STOCK APPRECIATION RIGHT AGREEMENT
THIS STOCK APPRECIATION RIGHT AGREEMENT (this “Agreement”) is made as of the
_____day of                     , 20_____, between AMERICAN NATIONAL INSURANCE
COMPANY, a Texas insurance corporation (the “Company”), and
                                         (the “Officer”).
1. Award. Pursuant to the AMERICAN NATIONAL INSURANCE COMPANY 1999 STOCK AND
INCENTIVE PLAN (the “Plan”), as of the date of this Agreement, stock
appreciation rights (“SARS”) are granted as hereinafter provided in the
Officer’s name. The Officer acknowledges receipt of a copy of the Plan, and
agrees that this award of SARS shall be subject to all of the terms and
provisions of this Agreement and of the Plan, including future amendments
thereto, if any, pursuant to the terms thereof.
2. SAR Payments.
(a) SAR Spread. Each SAR represents the contractual and conditional right of the
Officer to receive payment from the Company as of the date of exercise thereof
of an amount (the “Spread”) equal in value to the excess, if any, of the then
fair market value of one share of the Company’s common stock, par value $1.00
per share (“Stock”), over $_____. Fair market value shall be calculated as the
closing price of one share of the Stock on the date of exercise or on the most
recent date on which the Stock was publicly traded.
(b) Exercise of SARS. The Officer may exercise the SARS based on the number of
full years of employment from the date of grant hereof to the date of such
exercise, in accordance with the following schedule:

              PERCENTAGE OF SARS   Number of Full Years   That May Be Exercised
 
 
       
Less than 1 year
    0 %
1 year
    20 %
2 years
  An additional 20 % 
3 years
  An additional 20 % 
4 years
  An additional 20 % 
5 years
  An additional 20 % 

Once a percentage of the Officer’s SARS becomes exercisable pursuant to the
foregoing schedule, the Officer shall have five years to exercise such
percentage of the Officer’s SARS (the “Exercise Period”) and upon the expiration
of such five-year Exercise Period, such percentage of SARS, to the extent then
unexercised, shall terminate and permanently cease to be exercisable. Provided,
however, SARS may be exercised only while the Officer is an officer of the
Company and will terminate and cease to be exercisable should the Officer no
longer be an officer of the Company, except that:
(i) If the Officer dies while an officer of the Company, the five-year Exercise
Period shall be reduced and the Officer’s estate, or the person who acquires the
SARS by will or the laws of descent and distribution or otherwise by reason of
the death of the Officer (the “Officer Representative”), shall have one year
following the date of the Officer’s death to exercise a percentage of the
Officer’s SARS equal to the sum of (i) the percentage of the SARS the Officer
was entitled to exercise hereunder as of the date of the Officer’s death plus
(ii) the pro rata portion based upon the period included between the Officer’s
date of death and the preceding August 1, of any additional 20% of the SARS
which would have become exercisable had the Officer survived until the following
August 1. SARS not exercised by the Officer Representative within such one-year
period shall terminate and no longer be exercisable.

 

 

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(ii) If the Officer ceases to be an officer of the Company by reason of
retirement at or after attaining the age of 65, the five-year Exercise Period
shall be reduced and the Officer (or the Officer Representative in the event of
the Officer’s death) shall have one year following the date of such retirement
to exercise a percentage of the Officer’s SARS equal to the sum of (i) the
percentage of SARS the Officer was entitled to exercise hereunder as of the date
of the Officer’s retirement plus (ii) the pro rata portion, if any, based upon
the period included between the Officer’s date of retirement and the preceding
August 1, of any additional 20% of the SARS which would have become exercisable
had the Officer remained an employee until the following August 1.
(c) Exercise and Payment. SARS can be exercised by written notice to the
Secretary of the Company specifying the number of SARS to be exercised. Such
exercise date shall be the date such written notice of exercise is actually
received by the Company’s Secretary. Upon exercise of SARS, the Company shall
pay the then Spread amount with respect to such exercised SARS in cash in full.
Upon such exercise and payment, the SARS which were exercised shall terminate.
(d) Corporate Acts. The existence of the SARS shall not affect in any way the
right or power of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue
of debt or equity securities, the dissolution or liquidation of the Company or
any sale, lease, exchange or other disposition of all or any part of its assets
or business or any other corporate act or proceeding. Upon the occurrence of any
such corporate act, the SARS may be adjusted as contemplated by Article XII of
the Plan.
3. Withholding of Tax. To the extent that exercise of the SARS results in
compensation income to the Officer for federal or state income tax purposes, the
Officer shall deliver to the Company at the time of such receipt or lapse, as
the case may be, such amount of money as the Company may require to meet its
obligation under applicable tax laws or regulations, and, if the Officer fails
to do so, the Company is authorized to withhold from any remuneration then or
thereafter payable to the Officer any tax required to be withheld by reason of
such resulting compensation income.
4. Employment Relationship. For purposes of this Agreement, the Officer shall be
considered to be in the employment of the Company as long as the Officer remains
an officer of either the Company, a parent or subsidiary corporation of the
Company or any successor corporation. Any question as to whether and when there
has been a termination of such employment, and the cause of such termination,
shall be determined by the Company, and its determination shall be final.
5. Notices. Any notices or other communications provided for in this Agreement
shall be sufficient if in writing. In the case of the Officer, such notices or
communications shall be effectively delivered if hand delivered to the Officer
at his principal place of employment or if sent by registered or certified mail
to the Officer at the last address he has filed with the Company. In the case of
the Company, such notices or communications shall be effectively delivered if
hand delivered to the Secretary of the Company or if sent by registered or
certified mail to the Secretary of the Company at its principal executive
offices.
6. Binding Effect. This Agreement shall be binding upon and inure to the benefit
of any successors to the Company and all persons lawfully claiming under the
Officer.
7. Plan Summary and Prospectus. The Officer acknowledges receipt of a Plan
Summary and Prospectus. The Officer agrees that the Company shall have the
right, from time to time, to revise and amend the Plan Summary and Prospectus in
the Company’s sole and absolute discretion.
8. Construction and Administration. The Compensation Committee of the Board of
Directors of the Company has the power to construe the Plan and this Agreement
and to prescribe such rules and regulations relating thereto as it may deem
advisable. The Compensation Committee also has the authority, in the exercise of
its sole and exclusive discretion, to correct any defect or supply any omission
or reconcile any inconsistency in this Agreement or in the Plan in the manner
and to the extent it shall deem appropriate. The determinations and actions of
the Compensation Committee shall be conclusive.

 

 

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9. Controlling Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by
an officer thereunto duly authorized, and the Officer has executed this
Agreement, all as of the date first above written.

                  AMERICAN NATIONAL INSURANCE COMPANY    
 
           
 
  By:                  
 
      G. Richard Ferdinandtsen    
 
      President, Chief Operating Officer    
 
          “Company”
 
                     
 
           
 
          “Officer”