Exhibit 10.5







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.


 


 









 






(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.


 


 









 





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”