Exhibit
10.26




Escalade,
Incorporated


Stock
Option Award Agreement – Directors




ESCALADE,
INCORPORATED 2007 INCENTIVE PLAN


Stock Option Award
Agreement




THIS STOCK OPTION AWARD AGREEMENT(this “Award Agreement”) evidences the Stock Option Award (the “Award”)
granted by ESCALADE, INCORPORATED, an Indiana corporation (the “Company”) to the
Director (as defined below) as to the number of Stock Options set forth below.
This Award is made pursuant to the Escalade, Incorporated 2007 Incentive Plan
(the “Plan”).




Name of Director:_______________________ (“Director”)




Date of Grant:
____________________________ (“Grant Date”)




Number of Stock Options:__________________




Type of Stock Options:
_____________________




Option Price per Share1:
___________________




Expiration of Stock Options:________________




Vesting Schedule:Subject to
the terms of the Plan and this Award, the Stock Options will become first
exercisable as follows:




Number
      of Stock Options
            
            Vesting
      Date_____________________
            
            ________________________________________
            
            ________________________________________
            
            ________________________________________
            
            ___________________




Vesting Conditions: Except as
provided in the Plan or in the attached Terms, the Stock Options granted to you
shall vest in accordance with the Vesting Schedule set forth above provided that
you are serving as a Director of the Company on the applicable vesting
date.




Stock Options:Each Stock
Option is deemed to be the equivalent of one Share of the Company’s common
stock. Pending vesting of the Stock Options and the exercise thereof and the
issuance of the underlying Shares, you will not have any of the rights of a
stockholder with respect to the Shares subject to the Stock Options.
Accordingly, you will not have the right to vote such Shares or receive
dividends until exercise of the Stock Options and payment for the Shares is made
under this Award Agreement.





1
Option price must be at least equal to 100% of the Fair Market Value of the
Shares on the Grant Date (as defined in the Plan).





Terms and Conditions of this
Award: This Award is subject to, and governed by, the provisions of the
Plan and the Terms and Conditions of Stock Option Award (the “Terms”) attached
to this Award Agreement, all of which are incorporated herein by reference. In
the event of a conflict between the provisions of the Plan and this Award or the
Terms, the Plan shall control.




Defined Terms: Unless the
context requires otherwise, terms used in this Award Agreement and/or in the
Terms shall have the same meaning as in the Plan.




Acceptance and Agreement: This
Award has been granted to the Director in addition to, and not in lieu of, any
other form of compensation otherwise payable or to be paid to the Director. The
Company and the Director agree to the terms of this Award Agreement, to the
attached Terms and to the provisions of the Plan. The Director acknowledges
receipt of a copy of the Terms and of the Plan.




IN WITNESS WHEREOF, this Award
Agreement has been executed by the Company and the Director effective as of this
__ day of _________, 20__.




DIRECTOR
            
            ESCALADE,
      INCORPORATEDBy:Name:




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ESCALADE,
INCORPORATED 2007 INCENTIVE PLAN


Terms and Conditions of
Stock Option Award




1.           
Termination of Service
as a Director




(a)           Effect on
Unvested Stock Options. In the event of the
Director’s termination of service as a director of the Company, other than as a
result of Retirement, death or Disability, the Stock Options that were not
vested on the date of such termination of employment shall be immediately
forfeited. In the event of the Director’s Retirement, death or Disability, any
Stock Options not yet vested shall continue to vest over the twelve months
following such Retirement, death or Disability. For purposes of this Agreement,
“Retirement” shall mean completion of service on the Company’s Board of
Directors, and “Disability” shall mean that the Director is unable to serve as a
director by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months. The Board may require such proof
of Disability as the Board in its sole and absolute discretion deems appropriate
and the Board’s determination as to whether the Director is disabled shall be
final and binding on all parties concerned.




(b)          Effect on
Vested Stock Options. In the event of the Director’s termination of
service as a director of the Company, including as a result of Retirement, death
or Disability, the Stock Options that were vested on the date of such
termination of service shall remain exercisable until the sooner of the
expiration date or twelve months thereafter. Any Stock Options that vest
pursuant to Section 1(a) above following Retirement, death or Disability, may be
exercised following vesting until the sooner of the expiration date or twelve
months following the date of the Director’s Retirement, death or
Disability.




2.           
Change in
Control




(a)           Vesting
of Stock Options.
In the event of a Change in Control of the Company in which the successor
company does not assume or substitute for the Stock Options on substantially the
same terms and conditions (which may include payment in shares of the common
stock of the successor company), all of such Stock Options shall become fully
vested, provided the Director is then serving as a director of the Company. If
the successor company in a Change in Control does assume or substitute for the
Stock Options on substantially the same terms and conditions (which may include
payment in shares of the common stock of the successor company) and within 24
months thereafter the Director’s service as a director of the Company or the
successor company is terminated without Cause by the Company or the successor
company, all of such Stock Options shall become fully vested.




(b)          Cause.
For purposes of this Section “Cause” shall mean (i) the conviction of the
Director of, or plea of nolo contendere by the
Director to, a felony or misdemeanor involving moral turpitude; (ii) the
indictment of the Director for a felony or misdemeanor involving moral turpitude
under the federal securities laws; (iii) the willful misconduct or gross
negligence by the Director resulting in material harm to the Company; (iv) the
willful breach by the Director of the Director’s duties or responsibilities as a
director; or (v) fraud, embezzlement, theft or dishonesty by the Director
against the Company or any Subsidiary, or willful violation by the Director of a
policy or procedure of the Company, resulting in any case in material harm to
the Company.




3.           
Exercise
of Stock Options.




(a)           Notice of
Exercise. Vested Stock Options shall be exercised by the Director or by a
Permitted Assignee thereof (or by the Director’s executors, administrators,
guardian or legal representative) as to all or part of the Shares covered
thereby, by giving notice of exercise to the Company or its designated agent,
specifying the number of Shares to be purchased. The notice of exercise shall be
in such form, made in such manner, and in compliance with such other
requirements consistent with the provisions of the Plan as the Committee may
prescribe from time to time.


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(b)           Payment
for Shares. Full payment of the Option Price shall be made at the time of
exercise and shall be made (i) in cash or cash equivalents (including certified
check or bank check or wire transfer of immediately available funds), (ii) by
tendering previously acquired Shares (either actually or by attestation, valued
at their then Fair Market Value), (iii) with the consent of the Committee, by
delivery of other consideration (including, where permitted by law and the
Committee, other Awards) having a Fair Market Value on the exercise date equal
to the total purchase price, (iv) with the consent of the Committee, by
withholding Shares otherwise issuable in connection with the exercise of the
Option, (v) through any other method specified in an Award Agreement, or (vi)
any combination of any of the foregoing. The notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business office
or such other office as the Committee may from time to time direct, and shall be
in such form, containing such further provisions consistent with the provisions
of the Plan, as the Committee may from time to time prescribe. In no event may
any Option granted hereunder be exercised for a fraction of a Share. No
adjustment shall be made for cash dividends or other rights for which the record
date is prior to the date of such issuance.




4.           
Withholding.
The Company shall have the right to make all payments or distributions pursuant
to the Plan to a Director (or a Permitted Assignee thereof) (any such person, a
“Payee”) net of any applicable federal, state and local taxes required to be
paid or withheld as a result of (a) the grant of any Award, (b) the exercise of
an Option or Stock Appreciation Right, (c) the delivery of Shares or cash, (d)
the lapse of any restrictions in connection with any Award or (e) any other
event occurring pursuant to the Plan. The Company or any Subsidiary shall have
the right to withhold from wages or other amounts otherwise payable to such
Payee such withholding taxes as may be required by law, or to otherwise require
the Payee to pay such withholding taxes. If the Payee shall fail to make such
tax payments as are required, the Company or its Subsidiaries shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Payee or to take such other action as
may be necessary to satisfy such withholding obligations. The Committee shall be
authorized to establish procedures for election by Directors to satisfy such
obligation for the payment of such taxes by tendering previously acquired Shares
(either actually or by attestation, valued at their then Fair Market Value), or
by directing the Company to retain Shares (up to the Director’s minimum required
tax withholding rate or such other rate that will not trigger a negative
accounting impact) otherwise deliverable in connection with the
Award.




5.           
Cancellation
of Award. In the
event that the members of the Company’s Board of Directors who are considered
“independent” for purposes of the listing standards of the NASDAQ Stock Market
determine in their sole discretion that the Director, without the consent of the
Company, while serving as a director of the Company or after termination of such
service, establishes a relationship with a competitor of the Company or any
Subsidiary or engages in activity that is in conflict with or adverse to the
interest of the Company or any Subsidiary, then (A) the Stock Options shall be
forfeited effective as of the date on which the Director first engaged in such
fraud or misconduct, and (B) the Director shall within 10 days after written
notice from the Company return to the Company any Shares and dividends paid by
the Company to the Director with respect to the Stock Options and, if the
Director has previously sold all or a portion of the Shares paid to the Director
by the Company, the Director shall pay the proceeds of such sale to the
Company.


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6.           
Federal
Income Tax Considerations. Subject to changes in federal tax laws, rules
and regulations, the expected U.S. federal income tax considerations relating to
an Award of Stock Options are as follows:




(a)           Incentive
Stock Options. If the Stock Options have been designated on page 1 of the
Award Agreement as Incentive Stock Options, then no taxable income is realized
by the Director upon exercise of an Incentive Stock Option granted under the
Plan, and if no disposition of those Shares is made by the Director within two
years after the Grant Date or within one year after the transfer of those Shares
to the Director, then (a) upon the sale of the Shares, any amount realized in
excess of the Option Price will be taxed as a long-term capital gain and any
loss sustained will be taxed as a long-term capital loss, and (b) no deduction
will be allowed to the Company for federal income tax purposes. Upon exercise of
an Incentive Stock Option, the Director may be subject to alternative minimum
tax on certain items of tax preference. If the Shares acquired upon the exercise
of an Incentive Stock Option are disposed of prior to the expiration of the
two-years-from-grant/one-year-from-transfer holding period, generally (a) the
Director will realize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the Fair Market Value of the Shares at exercise
(or, if less, the amount realized upon disposition of the Shares) over the
exercise price, and (b) the Company will be entitled to deduct such amount. Any
additional gain or loss realized will be taxed as short-term or long-term
capital gain or loss, as the case may be, and may not be deducted by the
Company. If an Incentive Stock Option is exercised at a time when it no longer
qualifies as an Incentive Stock Option, the option will be treated as a
Non-Qualified Stock Option. In addition, if the aggregate fair market value of
Shares (determined at the Grant Date) subject to Stock Options designated as
Incentive Stock Options held by the Director that first become exercisable
during any calendar year exceeds $100,000, then the portion of such Incentive
Stock Options equal to such excess shall be treated as Non-Qualified Stock
Options.




(b)           Non-Qualified
Stock Options. If the Stock Options have been designated on page 1 of the
Award Agreement as Non-Qualified Stock Options, then no income is recognized by
the Director upon the grant of a Non-Qualified Stock Option. Upon exercise, the
Director will realize ordinary income in an amount equal to the excess of the
Fair Market Value of a Share on the date of exercise over the Option Price
multiplied by the number of Shares received pursuant to the exercise of such
Stock Options. A subsequent sale or exchange of such Shares will result in gain
or loss measured by the difference between (a) the exercise price, increased by
any compensation reported upon the Director’s exercise of the Stock Options and
(b) the amount realized on such sale or exchange. Any gain or loss will be
capital in nature if the Shares were held as a capital asset and will be
long-term if such Shares were held for more than one year. The Company is
entitled to a deduction for compensation paid to the Director at the same time
and in the same amount as the Director realizes compensation upon exercise of
the Stock Options.




7.           
Nontransferability. Except as otherwise
permitted under the Plan, no Stock Options shall be assignable or transferable
by the Director or by the Company (other than to successors of the Company) and
no amounts payable under this Agreement, or any rights therein, shall be subject
in any manner to any anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, levy, lien, attachment, garnishment, debt or other charge
or disposition of any kind.




8.           
No
Rights of a Stockholder. The Director shall not have
any of the rights of a stockholder with respect to the Shares subject to the
Stock Options until such Shares have been issued.




9.           
Notices. All notices required or
permitted under this Agreement shall be in writing and shall be delivered
personally or by mailing by registered or certified mail, postage prepaid, to
the other party. Notice by mail shall be deemed delivered at the time and on the
date the same is postmarked.


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Notices
      to the Company should be addressed to:Escalade
      Incorporated817
      Maxwell AvenueEvansville,
      Indiana 47711Attention:
      Chief Financial Officer


Notices to the Director
should be addressed to the Director at the Director’s address as it appears on
the Company’s records. The Company or the Director may by writing to the other
party, designate a different address for notices. Notices may be transmitted and
received via fax, e-mail or such other electronic transmission mechanism as may
be available to the parties pursuant to which receipt can be confirmed. Such
notices shall be deemed delivered when received.





10.            Headings. The headings in these Terms
and Conditions are for reference purposes only and shall not affect the meaning
or interpretation of these Terms and Conditions or the applicable Award
Agreement.




11.            Successors
and Assigns.
These Terms and Conditions and the applicable Award Agreement shall inure to the
benefit of and be binding upon the heirs, legatees, distributees, executors and
administrators of the Director and the successors and assigns of the
Company.




12.            Governing
Law. This
Agreement shall be governed by, and interpreted in accordance with, the laws of
the State of Indiana, other than its conflict of laws principles.




13.             Agreement
Not a Contract.Neither the Award Agreement (and the grant of Stock Options) nor these Terms and
Conditions constitutes an employment or service contract, and nothing herein or
in the Award Agreement shall be deemed to create in any way whatsoever any
obligation on Director’s part to continue as a director, or of the Company or a
Subsidiary to continue Director’s service as a director.




14.            Entire
Agreement; Modification. The Award Agreement, these Terms and Conditions
and the provisions of the Plan constitute the entire agreement between the
parties with respect to the subject matter hereof, and may not be modified
except as provided in the Plan or in a written document executed by both
parties.




15.            Compliance
with Section 409A of the Code.




(a)            Automatic
Delay of Payment. Notwithstanding anything to the contrary contained in
these Terms and Conditions, the applicable Award Agreement and/or the Plan, if
the Company determines that as of the date of payment the Director is a
“specified employee” (as such term is defined under Section 409A of the Code),
any Shares (or shares of the common stock of the successor company in the event
of a Change in Control) payable by reason of the Director’s termination of
employment with the Company and its Subsidiaries for any reason other than death
or Disability will not be paid until the date that is 6 months following the
date of termination of employment (or such earlier time permitted under Section
409A of the Code without the imposition of any accelerated or additional taxes
under Section 409A of the Code).




(b)           General.
The Award represented by the applicable Award Agreement to which these Terms and
Conditions are attached is intended to comply and shall be administered in a
manner that is intended to comply with section 409A of the Code and shall be
construed and interpreted in accordance with such intent. Payment of the Award
shall be made in a manner that will comply with section 409A of the Code,
including regulations or other guidance issued with respect thereto, as
determined by the Committee. Any provision of the Award that would cause the
payment or settlement thereof to fail to satisfy section 409A of the Code shall
be amended to comply with section 409A of the Code on a timely basis, which may
be made on a retroactive basis, in accordance with regulations and other
guidance issued under section 409A of the Code.


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16.           Severability. If any provision of these
Terms and Conditions, the applicable Award Agreement and/or the Plan shall be
held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction, such provision shall (i) be deemed limited to
the extent that such court of competent jurisdiction deems it lawful, valid
and/or enforceable and as so limited shall remain in full force and effect, and
(ii) not affect any other provision of the Award or part thereof, each of which
shall remain in full force and effect.




17.            Conflict
with Laws. If the issuance or transfer of the Shares covered by the Stock
Options may in the opinion of the Company conflict or be inconsistent with any
applicable federal or state securities laws or regulation, the Company reserves
the right to refuse to issue or transfer such Shares until such conflicts or
inconsistencies are resolved to the satisfaction of the Company. In the event
that the Company’s shares of common stock are no longer registered under the
Securities Exchange Act of 1934, as amended, and the Company determines that it
would be impractical to register the Shares issuable upon exercise of the Stock
Options and/or to satisfy the terms of potentially applicable exemptions from
registration under federal or state securities laws, the Committee may in its
sole discretion issue a Substitute Award (including but not limited to cash)
having value reasonably believed by the Committee to be approximately equal in
value to such Stock Options, and such issuance of a Substitute Award shall
result in the replacement and cancellation of the Stock Options. The Director
hereby agrees to accept such Substitute Award in exchange for the Stock
Options.




18.            Defined
Terms.Unless the
context requires otherwise, terms used in these Terms and Conditions and/or in
the Award Agreement shall have the same meaning as in the Plan.


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