STATE NATIONAL COMPANIES, INC. 2014 LONG-TERM INCENTIVE PLAN STOCK AWARD AGREEMENT (DIRECTOR)

Name of Recipient:

Total Stock Award:

Shares

Vesting:

This Stock Award is subject to the time-based and performance-based conditions set forth in Exhibits A and B to this Award Agreement, which are incorporated herein by reference. No Shares subject to this Stock Award shall be vested until the Committee certifies that these performance-based conditions set forth in Exhibit B, if any, have been attained. The Committee cannot delegate this certification function.

Qualified Performance-Based Award:

o Yes

x No

Date of Grant:

Effect of termination of employment or service because of:

(a) Death or Disability

All unvested Shares subject to this Stock Award vest immediately upon such termination.

(b) Cause:

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

(c) Other Reasons:

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

Voting:

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

Non-Transferability:

The Recipient of this Stock Award shall not sell, transfer, assign, pledge or otherwise encumber Shares subject to this 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 domestic relations order, this Stock Award is not transferable and may be earned only in the Recipient’s lifetime. Upon the death of the Recipient, this Stock Award is transferable by will or the laws of descent and distribution. The terms of the State National Companies, Inc. 2014 Long-Term Incentive Plan (the “Plan”) and this Stock Award Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Recipient.

In the event the Recipient is subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended, the Committee must give written consent to permit the Shares subject to this Stock Award Agreement to be sold or otherwise disposed of within six (6) months following the Date of Grant of this Stock Award.

Distribution:

The certificate or certificates evidencing Shares subject to this 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 and earnings on such Shares, will be distributed as soon as practicable upon termination of the Restricted Period.

Designation of Beneficiary:

A Beneficiary may be designated 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 Plan under the Stock Award Agreement.

STATE NATIONAL COMPANIES, INC.

By:

RECIPIENT

Date

Cumulative Percentage Vested

First Anniversary of Date of Grant

100

%