Exhibit 10.4

STOCK OPTION AWARD AGREEMENT

(Non-Qualified Stock Option)

This AGREEMENT is made to be effective as of March 20, 2006, by and between NB&T
Financial Group, Inc. (the “COMPANY”), and John J. Limbert (the “OPTIONEE”).

WITNESSETH:

WHEREAS, the Board of Directors of the COMPANY has determined to retain the
services of the OPTIONEE as the President and Chief Executive Officer of the
COMPANY and its subsidiary, The National Bank and Trust Company (the “BANK”);

WHEREAS, as a material inducement to the OPTIONEE’s entering into employment
with the COMPANY and the BANK and to more closely align the OPTIONEE’s interests
with those of the shareholders of the COMPANY, the COMPANY wishes to award an
option to purchase shares of the COMPANY to the OPTIONEE; and

WHEREAS, the Board of Directors of the COMPANY has determined to award to the
OPTIONEE an option to purchase 30,000 common shares of the COMPANY, no par value
per share, of the COMPANY (the “COMMON SHARES”);

NOW, THEREFORE, in consideration of the above premises and intending to be
legally bound by this AGREEMENT, the parties hereto agree to the following:

1. Grant of Option. The COMPANY hereby grants to the OPTIONEE an option to
purchase 30,000 COMMON SHARES (the “OPTION”). The OPTION is not intended to
qualify as an incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the “CODE”). The COMMON SHARES to be issued upon the
exercise of the OPTION may be either authorized and unissued shares or issued
shares that have been reacquired by the COMPANY. No fractional shares shall be
issued pursuant to this AGREEMENT.

2. Terms and Conditions of the OPTION.

(A) OPTION Price. The purchase price (the “OPTION PRICE”) to be paid by the
OPTIONEE to the COMPANY upon the exercise of the OPTION shall be $20.88 per
share, being 100% of the fair market value of a COMMON SHARE on March 20, 2006,
as determined by the mean between the bid and the asked price of a COMMON SHARE
on the NASDAQ Capital Market at the close of trading on this date.

(B) Exercise of the OPTION. Subject to the other provisions of this AGREEMENT,
the OPTION is exercisable in accordance with the following schedule:

 

DATE

   NUMBER OF SHARES
FIRST EXERCISABLE

March 20, 2007

   6,000

March 20, 2008

   6,000

March 20, 2009

   6,000

March 20, 2010

   6,000

March 20, 2011

   6,000

 

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The OPTION shall remain exercisable until the date of expiration of the OPTION
term. In the event that the employment of the OPTIONEE terminates for any reason
except death, then within 90 days next succeeding such termination, but not
later than 10 years from the date of grant of the option, the OPTIONEE may
exercise such option rights as he then has under this AGREEMENT. To the extent
the OPTION awarded pursuant to this AGREEMENT has not been exercised during such
90 days, the OPTION shall thereupon expire and shall not be exercisable
thereafter. In the event of the OPTIONEE’s death, the executor or administrator
of his estate may exercise the OPTIONEE’s rights under this AGREEMENT at any
time within 180 days next succeeding the OPTIONEE’s death, but not later than 10
years from the effective date of this AGREEMENT. To the extent the OPTION has
not been exercised within the period set forth in the preceding sentence, the
OPTION shall thereupon expire and shall not be exercisable thereafter.

The OPTION may be exercised to purchase less than the total number of COMMON
SHARES subject to the OPTION and exercisable at any time and from time to time.
The OPTION may not be exercised unless the COMMON SHARES issued upon such
exercise are first registered pursuant to any applicable federal and state laws
or regulations or, in the opinion of securities counsel to the COMPANY, are
exempt from such registration. Nothing contained in this AGREEMENT shall be
construed to require the COMPANY to take any action whatsoever to make the
OPTION exercisable or to make transferable any shares issued upon the exercise
of the OPTION.

(C) Change of Control. Subject to and except as otherwise provided in this
AGREEMENT, upon the occurrence of a “CHANGE OF CONTROL,” the OPTION shall become
fully exercisable. A “CHANGE OF CONTROL” shall mean any one of the following
events occurring after the date of this AGREEMENT: (i) the acquisition, directly
or indirectly, of ownership or power to vote more than 50% of the voting stock
of either of the COMPANY or the BANK; (ii) the merger of either of the COMPANY
or the BANK into, or the consolidation of either of the COMPANY or the BANK
with, another corporation, or the merger of another corporation into either of
the COMPANY or the BANK, on a basis whereby less than fifty percent of the total
voting power of the surviving corporation is represented by shares held by
former shareholders of the COMPANY prior to such merger or consolidation;
(iii) the acquisition of the ability to control the election of a majority of
the directors of either of the COMPANY or the BANK; (iv) during any period of
two consecutive years, individuals who at the beginning of such period
constitute the Board of Directors of the COMPANY or the BANK cease for any
reason to constitute at least a majority thereof; provided, however, that any
individual whose election or nomination for election as a member of the Board of
Directors of the COMPANY or the BANK was approved by a vote of at least
two-thirds of the directors then in office shall be considered to have continued
to be a member of the Board of Directors of the COMPANY or the BANK; (v) the
acquisition by any person or entity of the power to direct the BANK’s management
or policies, if the Board of Directors has made a determination that such
acquisition constitutes or will constitute an acquisition of control of either
of the COMPANY or the BANK for the purpose of the Bank Holding Company Act or
the Change in Bank Control Act and the regulations thereunder; or (vi) the BANK
shall have sold substantially all of its assets. For purposes of this paragraph,
the term “person” refers to an individual or corporation, partnership, trust,
association, joint venture, pool, syndicate or other organization or entity.

(D) OPTION Term. Subject to the right of the COMPANY to provide for earlier
termination in the event of any merger, acquisition or consolidation involving
the COMPANY, the OPTION shall in no event be exercisable after the expiration of
10 years from the date of this AGREEMENT.

(E) Method of Exercise. The OPTION may be exercised by delivering written notice
of exercise to the COMPANY in care of its Chief Financial Officer or its
Chairman. The notice must state the number of shares subject to the OPTION in
respect of which it is being exercised and must be accompanied by payment in
full of the OPTION PRICE in cash, unless the Board of Directors of the COMPANY
in its sole discretion permits payment of the OPTION PRICE in COMMON SHARES
already owned by the OPTIONEE, by the surrender of outstanding awards of OPTIONS
or by simultaneously exercising the OPTION and selling COMMON SHARES thereby
acquired and using the proceeds from such sale as payment of the purchase price
of such COMMON SHARES.

 

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(F) Satisfaction of Taxes and Tax Withholding. The COMPANY or a subsidiary shall
be entitled, if the Board of Directors deems it necessary or desirable, to
withhold (or secure payment from the OPTIONEE in lieu of withholding) the amount
necessary to satisfy any withholding or employment-related tax obligation
attributable to the exercise of the OPTION or otherwise incurred with respect to
the OPTION, and the COMPANY may defer delivery of any shares pursuant to the
exercise of the OPTION unless indemnified to its satisfaction. The Board of
Directors may, in its discretion and subject to such rules as the Board of
Directors may adopt, permit the OPTIONEE to satisfy, in whole or in part, any
withholding or employment-related tax obligation which may arise in connection
with the grant, exercise or disposition of the OPTION by electing to have the
COMPANY withhold COMMON SHARES to be issued, or by electing to deliver to the
COMPANY COMMON SHARES already owned by the OPTIONEE having a fair market value
(as determined by the mean between the bid and the asked prices of the COMMON
SHARES on the NASDAQ Capital Market, if the COMMON SHARES are then traded on
such market, or otherwise as determined by the Board of Directors if the COMMON
SHARES are not traded on such market at that time) equal to the amount of such
tax obligation.

3. Non-Assignability of the OPTION. Once granted, the OPTION shall not be
assignable or transferable except by will or by the laws of descent and
distribution, and the terms and conditions of the OPTION shall be binding upon
each and every executor, administrator, heir, beneficiary or other successor to
the OPTIONEE’s interest.

4. Adjustment Upon Changes in Capitalization.

(a) The existence of this AGREEMENT and the OPTION shall not affect or restrict
in any way the right or power of the Board of Directors of the COMPANY or the
shareholders of the COMPANY to make or authorize the following: any adjustment,
recapitalization, reorganization or other change in the COMPANY’s capital
structure or its business; any merger, acquisition or consolidation of the
COMPANY; any issuance of bonds, debentures, preferred or prior preference stocks
ahead of or affecting the COMPANY’s capital stock or rights thereof; the
dissolution or liquidation of the COMPANY or any sale or transfer of all or any
part of its assets or business; or any other corporate act or proceeding,
including any merger or acquisition which would result in the exchange of cash,
stock of any other company or options to purchase the stock of another company
for the OPTION or which would involve the termination of the OPTION at the time
of such corporate transaction.

(b) In the event of any change in capitalization affecting the COMMON SHARES of
the COMPANY, such as a stock dividend, stock split, recapitalization, merger,
consolidation, spin-off, split-up, combination or exchange of shares or other
form of reorganization, or any other change affecting the COMMON SHARES, such
proportionate adjustments, if any, as the Board of Directors of the COMPANY in
its discretion may deem appropriate to reflect such change shall be made with
respect to the aggregate number of COMMON SHARES subject to the OPTION and the
OPTION PRICE.

5. Securities Law Restrictions. No COMMON SHARES shall be issued under this
AGREEMENT unless securities counsel for the COMPANY shall be satisfied that such
issuance will be in compliance with applicable federal and state securities
laws. Nothing in this AGREEMENT shall be construed as requiring the COMPANY to
register the COMMON SHARES subject to the OPTION. Certificates for COMMON SHARES
delivered under this AGREEMENT may be subject to such stop-transfer orders and
other restrictions as the Board of Directors of the COMPANY may deem advisable
under the rules, regulations and other requirements of the Securities and
Exchange Commission, any stock exchange or The NASDAQ Stock Market upon which
the COMMON SHARES are then listed, and any applicable federal or state
securities law. The Board of Directors may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.

6. Interpretation of this AGREEMENT. The Board of Directors of the COMPANY is
authorized to construe and interpret this AGREEMENT and to make all other
determinations necessary or advisable for the administration of this AGREEMENT
to the extent permitted by law. Any determination, decision or action of the
Board of Directors of the COMPANY in connection with the construction,
interpretation, administration, or application of this AGREEMENT shall be final,
conclusive and binding upon all parties to this AGREEMENT.

 

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7. Governing Law. The rights and obligations of the OPTIONEE and the COMPANY
under this AGREEMENT shall be governed by and construed in accordance with the
laws of the State of Ohio (without giving effect to the conflict of laws
principles thereof) in all respects, including, without limitation, matters
relating to the validity, construction, interpretation, administration, effect,
enforcement, and remedies provisions of this AGREEMENT and its rules and
regulations, except to the extent preempted by applicable federal law. All
disputes and matters whatsoever arising under, in connection with or incident to
this AGREEMENT shall be litigated, if at all, in and before a court located in
the State of Ohio, U.S.A., to the exclusion of the courts of any other state or
country.

8. Rights and Remedies Cumulative. All rights and remedies of the COMPANY and of
the OPTIONEE enumerated in this AGREEMENT shall be cumulative and, except as
expressly provided otherwise in this AGREEMENT, none shall exclude any other
rights or remedies allowed by law or in equity, and each of said rights or
remedies may be exercised and enforced concurrently.

9. Captions. The captions contained in this AGREEMENT are included only for
convenience of reference and do not define, limit, explain or modify this
AGREEMENT or its interpretation, construction or meaning and are in no way to be
construed as a part of this AGREEMENT.

10. Severability. If any provision of this AGREEMENT or the application of any
provision hereof to any person or any circumstance shall be determined to be
invalid or unenforceable, then such determination shall not affect any other
provision of this AGREEMENT or the application of said provision to any other
person or circumstance, all of which other provisions shall remain in full force
and effect. It is the intention of each party to this AGREEMENT that if any
provision of this AGREEMENT is susceptible of two or more constructions, one of
which would render the provision enforceable and the other or others of which
would render the provision unenforceable, then the provision shall have the
meaning which renders it enforceable.

11. Entire AGREEMENT. This AGREEMENT constitutes the entire agreement between
the COMPANY and the OPTIONEE in respect of the subject matter of this AGREEMENT,
and this AGREEMENT supersedes all prior and contemporaneous agreements between
the parties hereto in connection with the subject matter of this AGREEMENT. All
representations of any type relied upon by the OPTIONEE and the COMPANY in
making this AGREEMENT are specifically set forth herein, and the OPTIONEE and
the COMPANY acknowledge that each of them has relied on no other representation
in entering into this AGREEMENT. This AGREEMENT may not be modified or amended,
except (a) by an instrument in writing signed by the parties hereto or (b) by
the COMPANY, without any additional consideration to the OPTIONEE, to the extent
deemed necessary by the COMPANY upon the advice of legal counsel to avoid
penalties arising under Section 409A of the Internal Revenue Code of 1986, as
amended, and regulations thereunder, even if those amendments reduce, restrict
or eliminate rights granted under this AGREEMENT. No attempted waiver of any of
the provisions of this AGREEMENT shall be binding upon any party hereto unless
contained in a writing signed by the party to be charged. Nothing contained in
this AGREEMENT shall be interpreted as conferring upon the OPTIONEE any right to
continued service to the COMPANY.

 

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IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed
to be effective as of March 20, 2006.

 

NB&T FINANCIAL GROUP, INC. By:  

/s/ Timothy L. Smith

Its:   Chairman   OPTIONEE:  

/s/ John J. Limbert

 

John J. Limbert

5987 Privatee Road 388

Millersburg, Ohio 44654

 

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