Exhibit 10.5





 


 


 


 


 


 


ALAMO GROUP INC.


Stock Option


 


            KNOW
ALL MEN BY THESE PRESENTS:  That ALAMO GROUP INC. (the “Company”) having
adopted a First Amended and Restated 1999 Non-Qualified Stock Option Plan (the
“Plan”), hereby grants to ___________________ (the “Optionee”) the right and
option to purchase ________________ shares of the Common Stock of the Company
on the following terms and conditions:


 



1.         Exercise of Option. 
This option shall become exercisable as follows.  After the expiration of one
year following the date on which this option is granted, this option may be
exercised as to up to twenty percent (20%) of the total number of shares
covered hereby.  An additional twenty percent (20%) of the shares subject to
this option shall become exercisable on each anniversary date of the grant
hereof until all of the shares subject hereto have become exercisable. 
Further, subject to the terms of paragraph 6, all of the shares covered hereby
shall vest upon a Qualifying Event (as herein defined).  “Qualifying Event”
means such date as Optionee is (i) age 62 or older, and (ii) has been employed
by the Company or any of its affiliates for at least five (5) years.  (For
purposes of this paragraph 1, Optionee shall be credited with time and service
with any predecessor of such affiliate, if the predecessor or substantially all
of its business was acquired by the Company or its affiliate.)  


 


                        The
option shall be exercised by the Optionee as to all or part of the shares
covered hereby, by the giving of written notice of such exercise to the Company
at its principal business office, specifying the number of shares to be
purchased, and specifying a business day, (the “exercise date”) not more than
five (5) days from the date such notice is given, for the payment of the purchase
price against delivery of the shares being purchased.  The giving of such
written notice to the Company shall constitute an irrevocable election to
purchase the number of shares specified in the notice and to exercise the right
on the date specified in the notice.


 



2.         Option
Price.  The purchase price of the shares which may be purchased pursuant to
the option granted herein shall be $______ per share.


 



3.         Rights
of Optionee.  Neither the Optionee nor his executors or administrators
shall have any of the rights of a stockholder of the Company with respect to
the shares subject to this option until a certificate or certificates for such
shares shall have been issued upon the exercise of this option.


 



4.         Nontransferability
of Option.  The option granted herein shall not be transferable by the
Optionee other than to his executors or administrators by will or the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Internal Revenue Code of 1986, as amended, or Title I of the
Employer Retirement Income Security Act, or the rules thereunder.  During the
Optionee's lifetime, this option shall be exercisable only by Optionee.


 


 

 

 










 






 


 


 


 



5.         Adjustments
to Option Upon Change in Control, Changes in Capitalization, Etc.  In the
event of any stock split, stock dividend, reclassification, or capitalization
which changes the character or amount of the Company's outstanding Common Stock
while any portion of this option is outstanding but unexercised, the Committee
appointed under the Plan shall make such adjustments in the character and
number of shares subject to such unexercised portion of this option, and in
the option price, as shall be equitable and appropriate in order to make the
option, as nearly as may be practicable, equivalent to this option immediately
prior to such change; provided that no adjustment shall give the Optionee any
additional benefits under this option.  In no event shall any key employee
receiving stock options under this Plan receive options for more than 400,000
shares of the Company’s Common Stock during the period of the Plan set forth in
paragraph 7 below.  


 


                        If
the Company participates in any transaction resulting in a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation, the Committee appointed under the Plan or the Board of Directors
of the Company or any surviving or acquiring corporation: (i) shall take such
action as is equitable and appropriate to substitute a new option for this option,
or to assume this option, in order to make the new option, as nearly as may be
practicable, equivalent to this option, or (ii) shall require that the option
be exercised.  Notwithstanding the foregoing, upon the occurrence of a change
of control of the Company as provided in paragraph 13(a) of the Plan, the terms
of paragraph 13 of the Plan shall apply to this Option.  


 



6.         Termination of Option. 
The unexercised portion of the option granted herein shall automatically and
without notice terminate and become null and void at the time of the earliest
of the following to occur:


 


(a)        the
expiration of ten (10) years from the date on which this option is granted; 


 


(b)        the
expiration of six (6) months after the issuance of letters testamentary or letters
of administration to the executor or administrator of the Optionee if the
Optionee's death occurs either during his employment with the Company or during
the 30-day period following the date of termination of such employment with the
Company, but not later than one year after the Optionee's death;


 


(c)        the
expiration of thirty (30) days from the date of the termination of the Optionee's employment with the Company; provided, however, that in the event of
the termination of the Optionee's employment with the Company for cause, this
option shall automatically terminate.  The term “cause” shall be defined as
including, but shall not be limited to, the following: (a)  the Optionee's
commission of an act of fraud, misappropriation, embezzlement or the like; or
(b) in the event the Optionee is indicted or convicted of a felony;


 


(d)        the
occurrence of the event or the expiration of the period set forth in Annex 1
hereto.  


 



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In
the event of the Optionee's death during his employment with the Company or
during the 30-day period following the date of termination of such employment
with the Company pursuant to paragraph 6(b), this option shall thereafter be
exercisable, as provided in paragraph 6(b), only by his executors or administrators.


 


                        The
Company shall cause certificates for any shares to be delivered to the Optionee
or his executors or administrators at its principal business office within ten
(10) business days after the exercise date.


 



7.         Securities
Laws Representations and Restrictions.  The Optionee, by his acceptance
hereof, represents and warrants to the Company that his purchase of shares of
Common Stock upon the exercise hereof shall be for investment and not with a
view to distribution, provided that this representation and warranty shall be
inoperative if, in the opinion of counsel to the Company, a proposed sale or
distribution of such shares is pursuant to an applicable effective registration
statement under the Securities Act of 1933 or without such representation and
warranty is exempt from registration under such Act.


 


                        The
Optionee agrees that the obligation of the Company to issue shares upon the
exercise of an option shall also be subject as conditions precedent to
compliance with applicable provisions of the Securities Act of 1933, the
Securities Exchange Act of 1934, state securities laws, rules and regulations
under any of the foregoing and applicable requirements of any securities
exchange upon which the Company's securities shall be listed.


 


                        The
Company may endorse an appropriate legend referring to the foregoing
restriction upon the certificate or certificates representing any shares issued
or transferred to the Optionee upon the exercise of this option.


 



8.         Employment with the
Company.  As used herein, the term “employment with the Company” shall
include employment with the Company or with any of its direct and indirect
subsidiaries or serving as a director of the Company or with any of its direct
or indirect subsidiaries.


 


            IN
WITNESS WHEREOF, the Company has caused these presents to be signed by its
officer duly authorized thereto this _____ day of ________________, _____.


 


                                                                        

	 	


ALAMO GROUP INC.


		
	 	

 


		
	 	

By:
__________________________________


		
	 	

 


		
	 	

_____________________,
President


		
	ATTEST:	

 


		
	 	

 


		
	_________________________	

 


		
	            Secretary	

 


		
	 	


ACCEPTED
AND AGREED TO:


		
	 	

 


		
	 	

________________________________


		
	 	

                  OPTIONEE


		



                                                                                               

 


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Annex 1: 



 


            Additional
Conditions.

 

 

 

 

 

 

 

 

 



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