Exhibit 10.18

NN, INC.

2016 OMNIBUS INCENTIVE PLAN

INCENTIVE STOCK OPTION GRANT NOTICE

NN, Inc., a Delaware corporation, (the “Company”), pursuant to its 2016 Omnibus
Incentive Plan, as amended from time to time (the “Plan”), hereby grants to the
holder listed below (“Grantee”), an option (the “Option”) to purchase the number
of shares of common stock of the Company (“Shares”) set forth below. The Option
is subject to the terms and conditions set forth in this Stock Option Grant
Notice (the “Grant Notice”) and the Incentive Stock Option Agreement attached
hereto as Exhibit A (the “Agreement”) and the Plan, which are incorporated
herein by reference. Unless otherwise defined, the terms defined in the Plan
shall have the same defined meanings in the Grant Notice and the Agreement.

 

Grantee:   

 

   Grant Date:   

 

   Exercise Price per Share:    $                                      
                              Total Number of Shares Subject to the Option:   
                                                          shares    Expiration
Date:   

 

   Vesting Schedule:   

Initial Exercisability Date

  

Percentage of Option
Which Becomes First

Exercisable

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

Type of Option:    Incentive Stock Option   

By his or her signature and the Company’s signature below, Grantee agrees to be
bound by the terms and conditions of the Plan, the Agreement and the Grant
Notice. Grantee has reviewed the Agreement, the Plan and the Grant Notice in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing the Grant Notice and fully understands all provisions of the Grant
Notice, the Agreement and the Plan. Grantee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Plan, the Grant Notice or the Agreement.

 

NN, INC.       GRANTEE By:   

 

      By:   

 

Print          Print    Name:   

 

      Name:   

 

Title:   

 

      Address:   

 

           

 

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EXHIBIT A

INCENTIVE STOCK OPTION AGREEMENT

Pursuant to the Grant Notice to which this Agreement is attached, the Company
has granted to Grantee an Option under the Plan to purchase the number of Shares
set forth in the Grant Notice.

ARTICLE I

GENERAL

1.1 Defined Terms. Capitalized terms not specifically defined herein shall have
the meanings specified in the Plan or the Grant Notice.

1.2 Incorporation of Terms of Plan. The Option is subject to the terms and
conditions set forth in this Agreement, the Grant Notice and the Plan, which are
incorporated herein by reference. In the event of any inconsistency between the
Plan and this Agreement, the terms of the Plan shall control.

1.3 Incentive Stock Option. This Option is intended to qualify as an incentive
stock option (“ISO”) within the meaning of Section 422 of the Code. If any
portion of this Option should fail to qualify as an ISO, such portion shall be
treated as a non-qualified stock option and the remainder of this Option that
continues to qualify as an ISO shall be unaffected by such treatment.

ARTICLE II

GRANT OF OPTION

2.1 Grant of Option. In consideration of Grantee’s past and/or continued
employment with or service to the Company or a Subsidiary and for other good and
valuable consideration, effective as of the grant date set forth in the Grant
Notice (the “Grant Date”), the Company has granted to Grantee the Option to
purchase any part or all of an aggregate of the number of Shares set forth in
the Grant Notice, upon the terms and conditions set forth in the Grant Notice,
the Plan and this Agreement, subject to adjustments as provided in Section 4.2
of the Plan.

2.2 Exercise Price. The exercise price per Share subject to the Option (the
“Exercise Price”) shall be as set forth in the Grant Notice.

ARTICLE III

PERIOD OF EXERCISABILITY

3.1 Commencement of Exercisability. Subject to Sections 3.2, and 3.3 hereof, the
Option shall become vested and exercisable in such amounts and at such times as
are set forth in the Grant Notice. In the event Grantee Separates from Service,
other than in connection with Grantee’s death, Disability or Retirement as
defined in Section 3.3(d) hereof, prior to the “Initial Exercisability Date” set
forth in the Grant Notice with respect to all or any portion of this Option, all
or such portion of this Option that shall not have become exercisable
immediately shall be forfeited and not exercisable by the Grantee. In the event
Grantee Separates from Service on account of death, Disability or Retirement,
this Option shall become 100% vested for the period of time set forth in
Section 3.2 hereof.

 

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3.2 Duration of Exercisability. Once a portion of this Option shall have become
exercisable in accordance with Section 3.1 hereof, such portion shall remain
exercisable until it becomes unexercisable under Section 3.3 hereof.

3.3 Expiration of Option. The Option may not be exercised to any extent by
anyone after the first to occur of the following events:

(a) The expiration date set forth in the Grant Notice;

(b) Except as the Committee may otherwise approve, in the event of Grantee’s
Separation from Service other than for Cause or by reason of Grantee’s death,
Disability or Retirement, the expiration of three (3) months from the date of
Grantee’s Separation from Service;

(c) Except as the Committee may otherwise approve, the expiration of two
(2) years from the date of Grantee’s Separation from Service by reason of
Grantee’s death or Disability; or

(d) Except as the Committee may otherwise approve, the expiration of two
(2) years from the date of Grantee’s Separation from Service by reason of
Grantee’s Retirement; for purposes of this Agreement, “Retirement” means
termination of service after the Grantee has completed 10 years of service with
the Company and has reached the age of 55.

(e) Except as the Committee may otherwise approve, upon Grantee’s Separation
from Service for Cause.

3.4 Change in Control. Upon the occurrence of a Change in Control, the Committee
shall determine the treatment of the Option consistent with the provisions of
Section 13 of the Plan.

3.5 Tax Withholding. Notwithstanding any other provision of this Agreement:

(a) The Company and its Subsidiaries have the authority to deduct or withhold,
or require Grantee to remit to the Company or the applicable Subsidiary, an
amount sufficient to satisfy applicable federal, state, local and foreign taxes
(including the employee portion of any FICA obligation) required by law to be
withheld, if any, with respect to any taxable event arising pursuant to this
Agreement. The Company and its Subsidiaries may withhold or Grantee may make
such payment in one or more of the forms specified below:

(i) by cash or check made payable to the Company or the Subsidiary with respect
to which the withholding obligation arises;

(ii) by the deduction of such amount from other cash compensation payable to
Grantee;

(iii) with the consent of the Committee, by requesting that the Company withhold
a net number of Shares issuable upon the exercise of the Option having a then
current Fair Market Value not exceeding the amount necessary to satisfy the
withholding obligation of the Company and its Subsidiaries based on the
applicable statutory withholding rates for federal, state, local and foreign
income tax and payroll tax purposes;

(iv) with the consent of the Committee, by tendering to the Company Shares
having a then current Fair Market Value not exceeding the amount necessary to
satisfy the withholding obligation of the Company and its Subsidiaries due upon
the exercise of the Option based on the applicable statutory withholding rates
for federal, state, local and foreign income tax and payroll tax purposes;

 

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(v) with the consent of the Committee, through the delivery of a notice that
Grantee has placed a market sell order with a broker designated by the Company
with respect to Shares then issuable upon exercise of the Option, and that the
broker has been directed to pay a sufficient portion of the net proceeds of the
sale to the Company or the Subsidiary with respect to which the withholding
obligation arises in satisfaction of such withholding taxes; provided that
payment of such proceeds is then made to the Company or the applicable
Subsidiary at such time as may be required by the Committee, but in any event
not later than the settlement of such sale; or

(vi) in any combination of the foregoing.

(b) With respect to any withholding taxes arising in connection with the Option,
in the event Grantee fails to provide timely payment of all sums required
pursuant to Section 3.5(a) hereof, the Company shall have the right and option,
but not the obligation, to treat such failure as an election by Grantee to
satisfy all or any portion of Grantee’s required payment obligation pursuant to
Section 3.5(a)(ii) or Section 3.5(a)(iii) above, or any combination of the
foregoing as the Company may determine to be appropriate. The Company shall not
be obligated to deliver any certificate representing Shares issuable with
respect to the exercise of the Option to Grantee or his or her legal
representative unless and until Grantee or his or her legal representative shall
have paid or otherwise satisfied in full the amount of all federal, state, local
and foreign taxes applicable with respect to the taxable income of Grantee
resulting from the exercise of the Option or any other taxable event related to
the Option.

(c) In the event any tax withholding obligation arising in connection with the
Option will be satisfied under Section 3.5(a)(iii) above, then the Company may
elect to instruct any brokerage firm determined acceptable to the Company for
such purpose to sell on Grantee’s behalf a whole number of Shares from those
Shares that are issuable upon exercise of the Option as the Company determines
to be appropriate to generate cash proceeds sufficient to satisfy the tax
withholding obligation and to remit the proceeds of such sale to the Company or
the Subsidiary with respect to which the withholding obligation
arises. Grantee’s acceptance of this Award constitutes Grantee’s instruction and
authorization to the Company and such brokerage firm to complete the
transactions described in this Section 3.5(c), including the transactions
described in the previous sentence, as applicable. The Company may refuse to
issue any Shares to Grantee until the foregoing tax withholding obligations are
satisfied.

(d) Grantee is ultimately liable and responsible for all taxes owed in
connection with the Option, regardless of any action the Company or any
Subsidiary takes with respect to any tax withholding obligations that arise in
connection with the Option. Neither the Company nor any Subsidiary makes any
representation or undertaking regarding the treatment of any tax withholding in
connection with the awarding, vesting or exercise of the Option or the
subsequent sale of Shares. The Company and the Subsidiaries do not commit and
are under no obligation to structure the Option to reduce or eliminate Grantee’s
tax liability.

ARTICLE IV

EXERCISE OF OPTION

4.1 Person Eligible to Exercise. During the lifetime of Grantee, only the
Grantee may exercise the Option or any portion thereof. After the death of
Grantee, the Option may, prior to the time when the Option becomes unexercisable
under Section 3.3 hereof, be exercised by Grantee’s personal representative or
by any person empowered to do so under the deceased Grantee’s will or under the
then applicable laws of descent and distribution.

 

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4.2 Partial Exercise. Subject to Section 5.2 hereof, the Option may be exercised
in whole or in part at any time prior to the time when the Option or applicable
portion thereof becomes unexercisable under Section 3.3 hereof.

4.3 Manner of Exercise. The Option may be exercised solely by delivery to the
Secretary of the Company (or any third party administrator or other person or
entity designated by the Company), during regular business hours, of all of the
following prior to the time when the Option or such portion thereof becomes
unexercisable under Section 3.3 hereof:

(a) An exercise notice in a form specified by the Committee, stating that the
Option or portion thereof is thereby exercised, such notice complying with all
applicable rules established by the Committee;

(b) The receipt by the Company of full payment for the Shares with respect to
which the Option or portion thereof is exercised, in such form of consideration
permitted under Section 4.4 hereof that is acceptable to the Committee;

(c) The payment of any applicable withholding tax in accordance with
Section 3.4;

(d) Any other written representations or documents as may be required in the
Committee’s sole discretion to effect compliance with applicable law; and

(e) In the event the Option or portion thereof shall be exercised pursuant to
Section 4.1 hereof by any person or persons other than Grantee, appropriate
proof of the right of such person or persons to exercise the Option.
Notwithstanding any of the foregoing, the Committee shall have the right to
specify all conditions of the manner of exercise, which conditions may vary by
Grantee and which may be subject to change from time to time.

4.4 Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of Grantee:

(a) Cash or check;

(b) With the consent of the Committee, surrender of Shares (including, without
limitation, Shares otherwise issuable upon exercise of the Option) held for such
period of time as may be required by the Committee in order to avoid adverse
accounting consequences and having a Fair Market Value on the date of delivery
equal to the aggregate exercise price of the Option or exercised portion
thereof;

(c) With the consent of the Committee and subject to Section 5.18 hereof,
through the delivery of a notice that Grantee has placed a market sell order
with a broker designated by the Company with respect to Shares then issuable
upon exercise of the Option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the Company in
satisfaction of the Option exercise price; provided that payment of such
proceeds is then made to the Company at such time as may be required by the
Committee, but in any event not later than the settlement of such sale; or

(d) Any other form of legal consideration acceptable to the Committee.

 

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4.5 Conditions to Issuance of Stock. The Company shall not be required to issue
or deliver any Shares purchased upon the exercise of the Option or portion
thereof prior to fulfillment of all of the following conditions: (a) the
admission of such Shares to listing on all stock exchanges on which such Shares
are then listed, (b) the completion of any registration or other qualification
of such Shares under any state or federal law or under rulings or regulations of
the SEC or other governmental regulatory body, that the Committee shall, in its
absolute discretion, deem necessary or advisable, (c) the obtaining of any
approval or other clearance from any state or federal governmental agency that
the Committee shall, in its absolute discretion, determine to be necessary or
advisable, (d) the receipt by the Company of full payment for such Shares, which
may be in one or more of the forms of consideration permitted under Section 4.4
hereof, and (e) the receipt of full payment of any applicable withholding tax in
accordance with Section 3.4 hereof by the Company or its Subsidiary with respect
to which the applicable withholding obligation arises.

4.6 Rights as Stockholder. Neither Grantee nor any person claiming under or
through Grantee will have any of the rights or privileges of a stockholder of
the Company in respect of any Shares purchasable upon the exercise of any part
of the Option unless and until certificates representing such Shares (which may
be in book-entry form) will have been issued and recorded on the records of the
Company or its transfer agents or registrars and delivered to Grantee (including
through electronic delivery to a brokerage account). No adjustment will be made
for a dividend or other right for which the record date is prior to the date of
such issuance, recordation and delivery, except as provided in Section 4.2 of
the Plan. Except as otherwise provided herein, after such issuance, recordation
and delivery, Grantee will have all the rights of a stockholder of the Company
with respect to such Shares, including, without limitation, the right to receive
dividends and distributions on such Shares.

ARTICLE V

OTHER PROVISIONS

5.1 Administration. The Committee shall have the power to interpret the Plan,
the Grant Notice and this Agreement and to adopt such rules for the
administration, interpretation and application of the Plan, the Grant Notice and
this Agreement as are consistent therewith and to interpret, amend or revoke any
such rules. All actions taken and all interpretations and determinations made by
the Committee will be final and binding upon Grantee, the Company and all other
interested persons. To the extent allowable pursuant to applicable law, no
member of the Committee or the Board will be personally liable for any action,
determination or interpretation made with respect to the Plan, the Grant Notice
or this Agreement.

5.2 Whole Shares. The Option may only be exercised for whole Shares.

5.3 Option Not Transferable. Subject to Section 4.1 hereof, the Option may not
be sold, pledged, assigned or transferred in any manner other than by will or
the laws of descent and distribution, unless and until the Shares underlying the
Option have been issued, and all restrictions applicable to such Shares have
lapsed. Neither the Option nor any interest or right therein or part thereof
shall be liable for the debts, contracts or engagements of Grantee or his or her
successors in interest or shall be subject to disposition by transfer,
alienation, anticipation, pledge, encumbrance, assignment or any other means
whether such disposition be voluntary or involuntary or by operation of law by
judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy), and any attempted disposition thereof shall
be null and void and of no effect, except to the extent that such disposition is
permitted by the preceding sentence.

 

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5.4 Adjustments. Upon the occurrence of certain events relating to Shares
contemplated by Section 4.2 of the Plan (including, without limitation, an
extraordinary cash dividend on such Stock), the Committee shall make such
adjustments as the Committee deems appropriate in the number of Shares subject
to the Option, the exercise price of the Option and the kind of securities that
may be issued upon exercise of the Option. Grantee acknowledges that the Option
is subject to adjustment, modification and termination in certain events as
provided in this Agreement and Section 4.2 of the Plan. If any such adjustment
shall result in a fractional Share, such fractional Share shall be disregarded.

5.5 Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company at the Company’s principal office, and any notice to be given to Grantee
shall be addressed to Grantee at Grantee’s last address reflected on the
Company’s records. By a notice given pursuant to this Section 5.5, either party
may hereafter designate a different address for notices to be given to that
party. Any notice that is required to be given to Grantee shall, if Grantee is
then deceased, be given to the person entitled to exercise the Option pursuant
to Section 4.1 hereof by written notice under this Section 5.5. Any notice shall
be deemed duly given when sent via email or when sent by certified mail (return
receipt requested) and deposited (with postage prepaid) in a post office or
branch post office regularly maintained by the United States Postal Service.

5.6 Titles. Titles are provided herein for convenience only and are not to serve
as a basis for interpretation or construction of this Agreement.

5.7 Governing Law. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the
terms of this Agreement regardless of the law that might be applied under
principles of conflicts of laws.

5.8 Conformity to Securities Laws. Grantee acknowledges that the Plan, the Grant
Notice and this Agreement are intended to conform to the extent necessary with
all applicable laws, including, without limitation, the provisions of the
Securities Act and the Exchange Act and any and all regulations and
rules promulgated thereunder by the SEC and state securities laws and
regulations. Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Option is granted and may be exercised, only in such a
manner as to conform to applicable law. To the extent permitted by applicable
law, the Plan and this Agreement shall be deemed amended to the extent necessary
to conform to applicable law.

5.9 Amendment, Suspension and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or the
Board, provided that, except as may otherwise be provided by the Plan, no
amendment, modification, suspension or termination of this Agreement shall
adversely affect the Option in any material way without the prior written
consent of Grantee.

5.10 Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement shall inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer set forth in Section 5.3 hereof and the Plan, this
Agreement shall be binding upon and inure to the benefit of the heirs, legatees,
legal representatives, successors and assigns of the parties hereto.

5.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if Grantee is subject to Section 16 of
the Exchange Act, the Plan, the Option, the Grant Notice and this Agreement
shall be subject to any additional limitations set forth in any applicable
exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of
such exemptive rule. To the extent permitted by applicable law, this Agreement
shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule.

 

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5.12 Not a Contract of Employment. Nothing in this Agreement or in the Plan
shall confer upon Grantee any right to continue to serve as an employee or other
service provider of the Company or any Subsidiary or shall interfere with or
restrict in any way the rights of the Company and its Subsidiaries, which rights
are hereby expressly reserved, to discharge or terminate the services of Grantee
at any time for any reason whatsoever, with or without cause, except to the
extent expressly provided otherwise in a written agreement between the Company
or a Subsidiary and Grantee.

5.13 Entire Agreement. The Plan, the Grant Notice and this Agreement (including
any exhibit hereto) constitute the entire agreement of the parties and supersede
in their entirety all prior undertakings and agreements of the Company and
Grantee with respect to the subject matter hereof.

5.14 Section 409A. This Award is not intended to constitute “nonqualified
deferred compensation” within the meaning of Section 409A of the Code (together
with any Department of Treasury regulations and other interpretive guidance
issued thereunder, including without limitation any such regulations or other
guidance that may be issued after the date hereof, “Section 409A”). However,
notwithstanding any other provision of the Plan, the Grant Notice or this
Agreement, if at any time the Committee determines that this Award (or any
portion thereof) may be subject to Section 409A, the Committee shall have the
right in its sole discretion (without any obligation to do so or to indemnify
Grantee or any other person for failure to do so) to adopt such amendments to
the Plan, the Grant Notice or this Agreement, or adopt other policies and
procedures (including amendments, policies and procedures with retroactive
effect), or take any other actions, as the Committee determines are necessary or
appropriate for this Award either to be exempt from the application of
Section 409A or to comply with the requirements of Section 409A. Nothing in the
Plan or this Agreement shall be construed to make the Company liable to Grantee
for any tax, interest, or penalties that Grantee might owe as a result of the
grant, holding, vesting, exercise, or payment of this Option or any Shares
related thereto.

5.15 Agreement Severable. In the event that any provision of the Grant Notice or
this Agreement is held invalid or unenforceable, such provision will be
severable from, and such invalidity or unenforceability will not be construed to
have any effect on, the remaining provisions of the Grant Notice or this
Agreement.

5.16 Limitation on Grantee’s Rights. Participation in the Plan confers no rights
or interests other than as herein provided. This Agreement creates only a
contractual obligation on the part of the Company as to amounts payable and
shall not be construed as creating a trust. Neither the Plan nor any underlying
program, in and of itself, has any assets. Grantee shall have only the rights of
a general unsecured creditor of the Company with respect to amounts credited and
benefits payable, if any, with respect to the Option, and rights no greater than
the right to receive the Shares as a general unsecured creditor with respect to
options, as and when exercised pursuant to the terms hereof.

5.17 Counterparts. The Grant Notice may be executed in one or more counterparts,
including by way of any electronic signature, subject to applicable law, each of
which shall be deemed an original and all of which together shall constitute one
instrument.

5.18 Broker-Assisted Sales. In the event of any broker-assisted sale of Shares
in connection with the payment of withholding taxes as provided in
Section 3.4(a)(v) or Section 3.4(c) hereof or the payment of the exercise price
as provided in Section 4.4(c) hereof: (a) any Shares to be sold through a
broker-assisted sale will be sold on the day the tax withholding obligation or
exercise of the Option, as

 

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applicable, occurs or arises, or as soon thereafter as practicable; (b) such
Shares may be sold as part of a block trade with other Grantees in the Plan in
which all Grantees receive an average price; (c) Grantee will be responsible for
all broker’s fees and other costs of sale, and Grantee agrees to indemnify and
hold the Company harmless from any losses, costs, damages, or expenses relating
to any such sale; (d) to the extent the proceeds of such sale exceed the
applicable tax withholding obligation or exercise price, the Company agrees to
pay such excess in cash to Grantee as soon as reasonably practicable;
(e) Grantee acknowledges that the Company or its designee is under no obligation
to arrange for such sale at any particular price, and that the proceeds of any
such sale may not be sufficient to satisfy the applicable tax withholding
obligation or exercise price; and (f) in the event the proceeds of such sale are
insufficient to satisfy the applicable tax withholding obligation, Grantee
agrees to pay immediately upon demand to the Company or its Subsidiary with
respect to which the withholding obligation arises, an amount sufficient to
satisfy any remaining portion of the Company’s or the applicable Subsidiary’s
withholding obligation.

5.19 Clawback. Any Shares issued pursuant to this Award shall be subject to
mandatory repayment by the Grantee to the Company to the extent that such
Grantee is, or in the future becomes, subject to (a) any “clawback” or
recoupment policy adopted by the Company or any Subsidiary thereof to comply
with the requirements of any applicable laws, rules or regulations, including
pursuant to final rules adopted by the SEC pursuant to the Dodd-Frank Wall
Street Reform and Consumer Protection Act, or otherwise, or (b) any applicable
laws which impose mandatory recoupment, under circumstances set forth in such
applicable laws, including the Sarbanes-Oxley Act of 2002.

 

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