ex10_25.htm


    Exhibit
10.25

     

    Escalade,
Incorporated

    Stock
Option Award Agreement – Employee

     

    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
Participant (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 Participant:   ____________________ (“Participant”)

     

    Date of Grant:
__________________________ (“Grant Date”)

     

    Number
of Stock Options: _________________

     

    Type
of Stock Options: ___________________

     

    Option Price per Share:
$__________________

     

    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 - Continued
Employment: Except as provided in the attached Terms upon separation of
service due to a Change in Control of the Company, you must be continuously
employed by the Company in order for the Stock Options to vest.

     

    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.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    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 Participant in addition to, and not in lieu of,
any other form of compensation otherwise payable or to be paid to the
Participant. The Company and the Participant agree to the terms of this Award
Agreement, to the attached Terms and to the provisions of the Plan. The
Participant 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 Participant effective as of
this __ day of _________, 20__.

     

    
      	PARTICIPANT	 	 	ESCALADE,
      INCORPORATED	 
	 	 	 	 	 
	
               

            	 
      	
              By:
      

            	 	 


    

     

    
      
        
        

      

      
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    2007
INCENTIVE PLAN

    Terms
and Conditions of Stock Option Award

     

    1.           
Termination of
Employment

     

    (a)           Effect on
Unvested Stock Options. In the event of the
Participant’s termination of employment from the Company and its Subsidiaries,
the Stock Options that were not vested on the date of such termination of
employment shall be immediately forfeited.

     

    (b)           Effect on
Vested Stock Options. In the event of the Participant’s termination of
employment from the Company and its Subsidiaries, other than as a result of
death, Disability or Change in Control of the Company, the Stock Options that
were vested on the date of such termination of employment shall remain
exercisable until the sooner of the expiration date or 90 days following
termination of employment. In the event of the Participant’s death or Disability
while employed by the Company or a Subsidiary, the Stock Options that were
vested on the date of such death or Disability shall remain exercisable until
the sooner of the expiration date or for such period of time as allowed pursuant
to the Internal Revenue Code as then in effect (but in no event longer than 12
months after the date of death or Disability). For purposes of this Agreement
“Disability” shall mean that the Participant is unable to engage in substantial
gainful activity 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 Committee may require
such proof of Disability as the Committee in its sole and absolute discretion
deems appropriate and the Committee’s determination as to whether the
Participant is disabled shall be final and binding on all parties
concerned.

     

    2.           
Change in
Control

     

    (a)           Vesting
of Stock Options.
In the event of a Change in Control of the Company (or any Subsidiary for whom
the Participant is performing services at the time of the Change in Control) 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 Participant is then employed by the
Company or a Subsidiary. If the successor company in a Change in Control does
assume or substitute for the Stock Options credited to the Account 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 Participant’s employment is terminated by the Company without Cause, all of
such Stock Options shall become fully vested.

     

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

    
      
        
        

      

      
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    3.           
Exercise
of Stock Options.

     

    (a)           Notice of
Exercise. Vested Stock Options shall be exercised by the Participant or
by a Permitted Assignee thereof (or by the Participant’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.

     

     
(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 Participant (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 Participants 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 Participant’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 Participant, without the consent of
the Company, while employed by the Company or any Subsidiary or after
termination of such employment or 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
Participant first engaged in such fraud or misconduct, and (B) the Participant
shall within 10 days after written notice from the Company return to the Company
any Shares and dividends paid by the Company to the Participant with respect to
the Stock Options and, if the Participant has previously sold all or a portion
of the Shares paid to the Participant by the Company, the Participant 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 Participant upon exercise of an Incentive Stock Option granted under the
Plan, and if no disposition of those Shares is made by the Participant within
two years after the Grant Date or within one year after the transfer of those
Shares to the Participant, 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 Participant 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 Participant 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 Participant 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 Participant upon the grant of a Non-Qualified Stock Option. Upon exercise,
the Participant 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 Participant’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 Participant at the same
time and in the same amount as the Participant 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 Participant 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 Participant 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.

    
      
        
        

      

      
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    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.

    


    
      	 
      	
              Notices
      to the Company should be addressed to:

            
	 	 
	 
      	
              Escalade
      Incorporated

            
	 
      	
              817
      Maxwell Avenue

            
	 
      	
              Evansville,
      Indiana 47711

            
	 
      	
              Attention:
      Chief Financial Officer

            


    

     

    Notices
to the Participant should be addressed to the Participant at the Participant’s
address as it appears on the Company’s records. The Company or the Participant
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 Participant 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 Participant’s part to continue as an Employee, or of the Company
or a Subsidiary to continue Participant’s service as an
Employee.

     

        
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 Participant 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 Participant’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).

    
      
        
        

      

      
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(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.

     

        
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 Participant
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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