EXHIBIT 10.11
 
RURBAN FINANCIAL CORP.
2008 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT
(For Employees)

In recognition of your services to Rurban Financial Corp. (the “Company”) and
its Subsidiaries, the Compensation Committee of the Board of Directors of the
Company (the “Committee”) has granted you a Nonqualified Stock Option (“Option”)
to purchase common shares, without par value, of the Company (“Stock”), subject
to the terms and conditions described in the Rurban Financial Corp. 2008 Stock
Incentive Plan (the “Plan”) and this Nonqualified Stock Option Award Agreement
(“Award Agreement”).

To ensure you fully understand the terms and conditions of your Option, you
should read the Plan and this Award Agreement carefully.  Capitalized terms that
are not defined in this Award Agreement have the same meanings as in the Plan.

You should return a signed copy of this Award Agreement to:
Linda Hogrefe
Vice President, Human Resources Manager
Rurban Financial Corp.
401 Clinton Street
Defiance, Ohio 43512
 
1.           Summary of Your Restricted Option
 

 
(a) 
Grant Date: _______________, 2010

 
(b)
Number of Shares of Stock Subject to Your Option:  ___________ shares of Stock.

 
(c)
Exercise Price:  $___________ per share of Stock.

2.           When Your Option Will Vest
 
Your Option will vest and become exercisable with respect to one-fifth of the
Shares subject to the Option on each of the first, second, third, fourth and
fifth anniversaries of the Grant Date (each an “Anniversary Date”), subject to
your continued employment with the Company or an Affiliate on the applicable
Anniversary Date.  Notwithstanding the foregoing, the Option shall become fully
vested and exercisable upon your death, Disability or Retirement.
 
 
 

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3.           When You May Exercise Your Option and When It Will Expire
 
 
(a)
In General:  In general, you may exercise all or any part of the vested portion
of your Option at any time prior to the tenth anniversary of the Grant Date (the
“Expiration Date”), except to the extent the Committee determines otherwise upon
the occurrence of an Applicable Event or as otherwise provided below.

 
(b)
Effect of Termination:  If your employment terminates prior to the Expiration
Date, your Option will remain exercisable for the period specified below:

 
(i)
Retirement.  If you Retire, the vested portion of your Option may be exercised
at any time before the earlier of the Expiration Date or one year following your
Retirement.

 
(ii)
Death or Disability.  If your employment terminates due to your death or
Disability, the vested portion of your Option may be exercised at any time
before the earlier of the Expiration Date or the first anniversary of your
termination date.

 
(iii)
For Any Reason Other Than Retirement, Death or Disability.  If your employment
is terminated for any reason other than your Retirement, death or Disability:
(i) the unvested portion of your Option will be forfeited on your termination
date; and (ii) the vested portion of your Option may be exercised at any time
before the earlier of the Expiration Date or 30 days after your termination
date.

 
(c)
Applicable Event:  If there is an Applicable Event, Section 11.5 of the Plan
will apply to the outstanding and unexercised portion of your Option.

 
4.           Exercising Your Option
 
You must follow the procedures described below to exercise your Option.  If you
do not follow these procedures, your attempted exercise will be disregarded.
 

 
(a) 
Exercise.  Your Option may be exercised with respect to whole shares of Stock
only.

 
(b) 
Procedure. To exercise all or any part of the vested portion of your Option, you
must (i) complete and return a copy of the Nonqualified Stock Option Exercise
Form (attached to this Award Agreement as Exhibit A); and (ii) pay the
applicable exercise price for each share of Stock being purchased as described
in Section 4(c).

 
(c) 
Payment of Exercise Price.  You may pay the exercise price for each share of
Stock being purchased upon the exercise of the Option: (i) in cash equal to the
aggregate exercise price of the number of shares of  Stock being purchased; (ii)
in the form of a personal check or money order made payable to “Rurban Financial
Corp.” in the amount of the aggregate exercise price of the shares of Stock
being purchased; (iii) by tendering whole shares of Stock owned by you for at
least six months before the Option is exercised (or such other period
established by generally accepted accounting principles) with a Fair Market
Value equal to the aggregate exercise price of the shares of Stock being
purchased; or (iv) any combination of the foregoing.

 
(d) 
Issuance of Shares of Stock.  As soon as administratively practicable after the
Company determines that the Option has been validly exercised as to any of the
shares of Stock, the Company will issue or transfer the relevant number of
shares of Stock to you. Any fractional shares of Stock resulting from the
exercise of your Option will be settled in cash.

 
5.           Other Rules Affecting Your Option
 
(a)           Rights Before Your Option Is Exercised:  You may not vote or
receive any dividends associated with the Stock underlying the unexercised
portion of your Option.
 
(b)           Beneficiary Designation:  You may name a beneficiary or
beneficiaries to receive any shares of Stock or exercise any vested portion of
your Option that is unpaid or unexercised at your death by completing and filing
with the Committee a Beneficiary Designation Form.  If you have not completed a
Beneficiary Designation Form or if you wish to change your beneficiary, you may
complete the Beneficiary Designation Form (attached to this Award Agreement as
Exhibit B).  You do not need to designate a beneficiary now, and no designation
is required to be completed as a condition of exercising your Option.  However,
if you die without
 
 
 

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completing a Beneficiary Designation Form or if you do not complete the form
correctly, your beneficiary will be the executor or administrator of your
estate, or if no such executor or administrator has been appointed to the
knowledge of the Company, your beneficiary shall be your spouse or any one or
more of your dependents as the Company may designate.
 
(c)           Tax Withholding:  The Company will have the right and is hereby
authorized to deduct or withhold an amount sufficient to satisfy federal, state
and local taxes required by law to be withheld with respect to your Option.  At
the sole discretion of the Committee, you may be permitted to satisfy the
foregoing withholding liability by: (i) paying to the Company the withholding
amount in cash, through the delivery or attestation of whole shares of Stock you
have owned for at least the previous six months (or such other period acceptable
under generally accepted accounting principles) with a Fair Market Value equal
to the statutory minimum withholding liability; or (ii) by having the Company
withhold shares of Stock that would otherwise be issued to you when your Option
is settled with a Fair Market Value equal to the statutory minimum withholding
liability.

(d)           Transferring Your Option:  In general, your Option may not be
sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
except by will or the laws of descent and distribution.  However, as described
in Section 5(b), you may complete a Beneficiary Designation Form to name the
person who may exercise your Option if you die before the Option expires.  Also,
with the Committee’s consent, you may be allowed to transfer your Option to an
immediate family member, a partnership consisting solely of immediate family
members, or a trust for the benefit of immediate family members (a “Permissible
Transferee”).  Contact the Company at the address given on the first page of
this Award Agreement if you are interested in transferring your Option to a
Permissible Transferee.
 
(e)           Adjustments to Your Options:  If there is a Stock dividend, Stock
split, recapitalization (including payment of an extraordinary dividend),
merger, consolidation, combination, spin-off, distribution of assets to
shareholders, exchange of shares or other similar corporate change affecting the
Stock, the Committee will appropriately adjust the number of shares of Stock
underlying your Option and any other factors, limits or terms affecting your
Option. Notwithstanding the foregoing, any adjustment will comply with Section
409A of the Code to the extent applicable.

(f)           Restrictions on Transfer of Stock:  Shares of Stock tendered upon
exercise of your Option under this Award Agreement may be subject to any stock
transfer orders and other restrictions that the Committee believes to be
advisable under the rules, regulations and other requirements of the Securities
and Exchange Commission, any exchange, market or other quotation system on or
through which the Company’s securities are then traded, or any applicable
federal or state securities laws.  The Committee may cause a legend or legends
to be placed on any certificates issued under this Award Agreement to make
appropriate reference to any restrictions.

 
(g)
Tenure:  Nothing in the Plan or this Award Agreement shall confer upon you the
right to continue as an Employee or Director, as applicable, of the Company or
any Subsidiary.

 
(h)
Governing Law:  This Award Agreement will be construed in accordance with and
governed by the laws (other than laws governing conflicts of laws) of the State
of Ohio.

 
 
 

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(i)
Amendment of Award Agreement:  This Award Agreement may be amended by a written
agreement signed by both parties to this Award Agreement; provided, however,

that the Company may amend this Award Agreement to the extent necessary to
comply with applicable law without your consent or any additional consideration,
even if those amendments eliminate, restrict or reduce your rights under this
Award Agreement.

(j)           Other Terms and Conditions:  Your Option is subject to the terms
and conditions described in this Award Agreement and the Plan, which is
incorporated by reference into and made a part of this Award Agreement.  You
should read the Plan carefully to ensure you fully understand all the terms and
conditions of your Option.  In the event of a conflict between the terms of the
Plan and the terms of this Award Agreement, the terms of the Plan will
govern.  The Committee has the sole responsibility of interpreting the Plan and
this Award Agreement, and its determination of the meaning of any provision in
the Plan or this Award Agreement shall be binding on you.

(k)           Signature in Counterparts:  This Award Agreement may be signed in
counterparts, each of which will be deemed an original, but all of which will
constitute one and the same instrument.

*           *           *           *           *

Your Acknowledgement

By signing below as the “Participant,” you acknowledge and agree that:

 
· 
A copy of the Plan has been made available to you; and

 
· 
You understand and accept the terms and conditions placed on your Option.

PARTICIPANT   RURBAN FINANCIAL CORP.             Print Name:   Print Name:    
Title:       Date:   Date:

 
 
 

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EXHIBIT A
RURBAN FINANCIAL CORP.
2008 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION EXERCISE NOTICE
(For Employees)

By completing this Nonqualified Stock Option Exercise Notice (“Exercise Notice”)
and returning it to the address given below, I elect to buy the shares of Stock
described below.  Capitalized terms not defined in this Exercise Notice have the
same meanings as in the Plan and applicable Award Agreement.
Note:  A separate Exercise Notice must be completed each time an Option is
exercised (e.g., if the Optionee is simultaneously exercising an Option to
purchase 200 shares that was granted on January 1, 2009 and an Option to
purchase 100 shares that was granted on January 1, 2010, you must complete two
Exercise Notices, one for each Option being exercised).

1.
Affected Option Shares:  This Exercise Notice relates to the following Option
and shares of Stock (fill in the blanks):

(a)           Grant Date of
Option:  __________________________________________________________
(b)           Number of Shares of Stock Being Purchase with This Exercise
Notice:  __________________
(c)           Exercise Price:  The exercise price per share of Stock is
$________________________________
(d)           Total Exercise Price:  The total exercise (multiply 1(b) by 1(c))
is: $_______________________

2.           Payment of Exercise Price:  The total exercise price will be paid
by (check one):
 
____
Personal check, bank draft or money order payable to “Rurban Financial Corp.”

 
____
Through the tender of whole shares of Stock that the Optionee has held for at
least six months (or such other period established by generally accepted
accounting principles) and which have a Fair Market Value equal to the total
exercise price.

 
____
A combination of these two methods (the aggregate amount of cash and value of
shares delivered or attested must be equal to the total exercise price).

 
Notes:  If: (a) the cash, bank or money order method of exercise is selected,
full payment must be included with this Exercise Notice; and (b) you elect the
tender form of paying the exercise price, you may contact the Company at the
address given below for further information as to how the choice of payment will
affect the number of shares of Stock you will receive.

3.
Payment of Taxes:  Subject to Section 5(c) of the Award Agreement under which
the Option was issued, the withholding taxes associated with this exercise of
the Option will be paid (check one):

 
____
From my payroll checking account.

 
____
By having the Company withhold shares of Stock that would otherwise be issued
with respect to this exercise.

 
 
 

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4.           Acknowledgement of Effect of Exercise:  By signing below, I
acknowledge and agree that:

 
(a)
I fully understand the effect (including the investment effect) of exercising
the Option and buying the shares of stock and understand that there is no
guarantee that the value of these shares of Stock will appreciate or will not
depreciate;

 
(b)
This Exercise Notice will have no effect if it is not returned to the Company at
the address given below before the Expiration Date or such other date as may be
specified in the Award Agreement or, to the extent applicable, if full payment
of the exercise price is not included; and

 
(c)
The shares of Stock I am buying by completing and returning this Exercise Notice
will be issued to me as soon as administratively practicable.  I will not have
any rights as a shareholder of the Company until the shares of Stock are issued.

 
___________________________________________
(Optionee’s printed name)
___________________________________________
(Optionee’s signature)

Date signed: ________________________________

A signed copy of this Exercise Notice must be sent to the following address no
later than the Expiration Date or such other date as may be specified in the
Award Agreement to:
Linda Hogrefe
Vice President, Human Resources Manager
Rurban Financial Corp.
401 Clinton Street
Defiance, Ohio 43512
*****
Acknowledgement of Receipt

A signed copy of the Exercise Notice was received on:  _______________________.

The Optionee:
_____           Has effectively exercised the portion of the Option described in
the Exercise Notice; or
_____           Has not effectively exercised the portion of the Option
described in the Exercise Notice because
(describe deficiency)
_________________________________________________________________

By:           __________________________________

Date:       __________________________________

Note: Keep a copy of this Exercise Notice as part of the Plan’s permanent
records.
 
 
 

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EXHIBIT B
RURBAN FINANCIAL CORP.
2008 STOCK INCENTIVE PLAN
BENEFICIARY DESIGNATION FORM

Primary Beneficiary Designation.  I designate the following person(s) as my
primary beneficiary or beneficiaries, in the proportion specified, to receive or
to exercise any vested Awards under the Rurban Financial Corp. 2008 Stock
Incentive Plan (the “Plan”) that are unpaid or unexercised at my death:
______%  to
___________________________________________________________________________
           (Name)                                                                (Relationship)
Address:_______________________________________________________________________________
______%  to
___________________________________________________________________________
           (Name)                                                                
(Relationship)
Address:_______________________________________________________________________________
______%  to
___________________________________________________________________________
           (Name)                                                                (Relationship)
Address:_______________________________________________________________________________

Note: You are not required to name more than one primary beneficiary but, if you
do, the sum of these percentages may not be greater than 100 percent.

Contingent Beneficiary Designation.  If one or more of my primary beneficiaries
dies before I die, I direct that any vested Awards under the Plan that are
unpaid or unexercised at my death and that might otherwise have been paid to
that beneficiary be:
_____           Allocated to my other named primary beneficiaries in proportion
to the allocation given above (ignoring the interest allocated to the deceased
primary beneficiary); or
_____    Allocated, in the proportion specified, among the following contingent
beneficiaries:

______%  to
___________________________________________________________________________
           (Name)                                                                (Relationship)
Address:_______________________________________________________________________________
______%  to
___________________________________________________________________________
           (Name)                                                                
(Relationship)
Address:_______________________________________________________________________________
______%  to
___________________________________________________________________________
           (Name)                                                                
(Relationship)
Address:_______________________________________________________________________________

Note: You are not required to name more than one contingent beneficiary but, if
you do, the sum of these percentages may not be greater than 100 percent.
 
______________________________________      ___________________________
(Signature)                                                                           (Date)
______________________________________
(Print Name)

 
Please return an executed copy of this form to the following:  Linda Hogrefe,
Vice President, Human Resources Manager, Rurban Financial Corp., 401 Clinton
Street, Defiance, Ohio 43512.
 

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