Document:

Exhibit 10.5

 

NOTIFICATION OF NON-STATUTORY STOCK OPTION AWARD

UNDER THE FLEXSTEEL INDUSTRIES, INC. OMNIBUS STOCK
PLAN

(Director form)

 

	  Name of Optionee:
	  Effective Date:    
	  Number of Shares Covered:	  Date of Grant:    
	  Exercise Price Per Share:    	  Expiration Date:    

 

Flexsteel Industries, Inc.
(the “Company”) hereby grants you an option (the “Option”) under this Notification of Non-Statutory
Stock Option Award (the “Notification of Award”), under the Flexsteel Industries Inc. Omnibus Stock Plan (the
“Plan”). [See Attachment C, “Omnibus Stock Plan.”] The Options granted under this Notification of
Award are subject to the following terms and conditions:

		1.	Stock Option. The Option is not intended to be an Incentive
Stock Option within the meaning of Section 422 of the Code.

		2.	Purchase Price. The purchase price of the Stock is the Exercise
Price Per Share, which shall not be less than the Fair Market Value of the Stock on the Date of Grant.

		3.	Expiration Date. Except to the extent the right to exercise
any unvested portion of this Option is terminated earlier under Section 6, the Option will expire on the Expiration Date. The Expiration
Date shall not be more than ten years from the Date of Grant. You are solely responsible for exercising this Option, if at all,
prior to its Expiration Date. The Company has no obligation to notify you of this Option’s expiration. 

		4.	Exercise Period. The Option may only be exercised prior to
the Expiration Date. Your right to exercise some or all of the Option may be terminated before the Expiration Date as provided
in Section 6, relating to termination of your participation on the Board of Directors. In all cases, you may only exercise the
Option to the extent the Option has vested as stated in the Notification of Award. 

		5.	Transferability. The Option may be exercised during your lifetime
only by you. You may not transfer the Option, other than by will or the laws of descent and distribution.

		6.	Termination of Services as a Board Member. All of your rights in this
Option, to the extent not previously vested, shall terminate upon your termination of services as a member of the Board of Directors,
except as described in this Section 6. With respect to the vested and exercisable portion of the Option, and subject to subsection
(f):

 

(a) In the event of your termination
of services due to reasons other than death, Disability, Termination for Cause (see Attachment A, “Definitions”) or
termination on or after your Retirement Date, the Option may be exercised (to the extent exercisable at the date of termination)
by you within three months after the date of termination of services.

 

	Director NSO Form	1

    	 

    	 

    

 

(b) In the event of your termination
of services on or after your Retirement Date, the Option may be exercised (to the extent exercisable at the date of termination)
by you within three years after the date of termination of services.  

 

(c) In the event of your termination
of services due to Disability, the Option may be exercised in full by you within one year after the date of termination of services.

 

(d) In the event of your termination
of services due to death, the Option may be exercised in full by your estate or by a person who acquires the right to such Option
by bequest or inheritance or by reason of your death, within one year after the date of termination of services.

 

(e) In the event of your Termination
for Cause, the Option and your right to exercise the Option shall terminate immediately.

 

(f) Notwithstanding anything in this
Notification of Award, in no event may the Option be exercised after the Expiration Date.

Notwithstanding anything else in this
Notification of Award, in no event may the Option be exercised after the Expiration Date.

		7.	Method of Exercise; Use of Company Stock.

 

(a)
The Option may be exercised by delivering written notice of exercise to the Company at the principal executive office of the
Company, to the attention of the Company’s Secretary. The notice must state the number of Shares to be purchased, and must
be signed by the person exercising the Option. If you are not the person exercising the Option, the person also must submit appropriate
proof of his/her right to exercise the Option. The Company may designate a third party to administer the option program in which
case the third party may receive any required notice.

(b)Upon
giving notice of any exercise hereunder, you must provide for payment of the purchase price of the Shares being purchased through
one or a combination of the following methods:

(i)
Purchase. By paying cash (including check paid to the Company, wire transfer, bank draft, or money order);

(ii)
Delivery of Shares. By delivery or tender to the Company of unencumbered Shares
(by actual delivery or attestation) having an aggregate Fair Market Value on the date the Option is exercised equal to the purchase
price of the Shares being purchased pursuant to the Option, or a combination thereof, as determined by the Committee (provided,
however, that no fractional Shares will be issued or accepted); 

 

	Director NSO Form	2

    	 

    	 

    

 

(iii)
Broker-Assisted Cashless Exercise. By directing a stockbroker designated by the Company to effect a broker assisted cashless
exercise to sell Shares issued on exercise of the Option and remitting the proceeds of such sale to the Company; or

(iv)
Net Exercise. By instructing the Company to withhold Shares having an aggregate Fair Market Value on the date of
exercise less than or equal to the purchase price of the Shares acquired upon exercise; provided that this method of exercise
may only be used to deliver net shares to you and no cash compensation may be provided.

In
no event will you be permitted to pay any portion of the purchase price with Shares, though a broker-assisted cashless exercise
or through net exercise, if the Committee, in its sole discretion, determines that payment in such manner could have adverse tax
or financial accounting consequences for the Company.

		8.	Withholding. In any case where withholding is required or advisable under federal, state
or local law in connection with any exercise by you under this Notification of Award, the Company is authorized to withhold appropriate
amounts from amounts payable to you, or may require that you remit to the Company an amount equal to such appropriate amounts.
Upon the exercise of the Option, you may elect, subject to the approval of the Committee and compliance with applicable laws and
regulations, to satisfy any withholding requirements, in whole or in part, by having the Company withhold Stock having a Fair Market
Value, on the date the tax is to be determined, equal to the standard required withholding rates for non-periodic payments. In
no event will the Company be required to permit the exercise of the Option unless the applicable withholding requirements are satisfied.

 

		9.	Changes in Capitalization, Dissolution, Liquidation, Reorganization, Acquisition. The terms
stated in the Notification of Award are subject to modification upon the occurrence of certain events as described in Section 16
of the Plan.

 

		10.	Severability. In the event any provision of this Notification of Award is held illegal or
invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Notification of Award, and the
Notification of Award will be interpreted and enforced as if the illegal or invalid provision had not been included.

 

		11.	No Right to Continued Participation on the Board. The Notification of Award will in no way
provide you with any right to continue to provide services as a member of the Board of Directors.

 

		12.	Tax Advice. You acknowledge that you have not looked to or relied upon the Company
or any of its officers, directors, optionees, shareholders, accountants or legal counsel for tax advice concerning the tax consequences
of the grant to, and your exercise of, the Option and that you have obtained such advice, to the extent you determine that it is
necessary, from other sources located by you.

 

	Director NSO Form	3

    	 

    	 

    

 

		13.	No Shareholder Rights. You will have no rights as a shareholder with respect to any
Stock subject to the Option prior to the date of exercise of the Option and, after such date, will only have rights as a shareholder
with respect to the Stock acquired upon exercise.

 

		14.	Governing Terms. This Notification of Award is made according to the provisions of the Plan.
The terms of the Plan are incorporated by reference in this Notification of Award. Terms used in this Notification of Award have
the meanings used in the Plan unless the context clearly requires otherwise. In the event of a conflict between the provisions
of the Plan and the provisions of this Notification of Award, the provisions of the Plan will govern.

 

		15.	Entire Understanding. This Notification of Award constitutes the entire understanding of
your and the Company with respect to the subject matter of this Notification of Award, and, except as otherwise provided in the
Plan, may not be amended, changed, modified, terminated, or waived other than by written instrument signed by your and the Company.
This Notification of Award supersedes all prior oral or written agreements and understandings between you and the Company concerning
the subject matter of the Notification of Award, including any implied or express representations regarding the your ownership
of any interest in the Company or its property, and any prior oral or written agreements conveying stock option rights to you.

 

		16.	Limitation on Rights; No Right to Future Grants; Extraordinary Item of Compensation.
By accepting the Option, you acknowledges that: (a) the Plan is discretionary in nature and may be suspended or terminated
by the Company at any time; (b) the grant of the Option is a one-time benefit that does not create any contractual or other right
to receive future grants of options, or benefits in lieu of options; (c) all determinations with respect to any such future grants,
including but not limited to, the times when options will be granted, the number of shares of Stock subject to each option, the
Exercise Price Per Share, and the time or times when each option will be exercisable, will be at the sole discretion of the Company;
(d) your participation in the Plan is voluntary; (e) the value of the Option is an extraordinary item of compensation that is outside
the scope of your employment agreement, if any, with the Company; (f) the Option is not part of normal or expected compensation
for purposes of calculating any severance, resignation, redundancy, end of service payment, bonus, long-service award, pension
or retirement benefit or similar payment; (g) the future value of the Stock subject to the Option is unknown and cannot be predicted
with certainty; and (h) if the Stock subject to the Option does not increase in value, the Option will have no value.

 

		17.	Beneficiary Designation. If your provision of services
for the Company as a member of the Board of Directors is terminated as a result of your death, someone other than you may become
entitled to exercise this Option, as provided in Section 6 of this Notification of Award. The Plan permits you to designate a beneficiary
to exercise the vested portion of this Option in the event of your death. Any beneficiary can be named and you may change your
beneficiaries at any time by submitting such designation, in writing, to the Company. (See Attachment B, “Beneficiary Designation
of Director”)

 

 

	Director NSO Form	4

    	 

    	 

    

 

	 	FLEXSTEEL INDUSTRIES, INC.:
	 	 	 
	 	 	 
	 	By:  	Karel K. Czanderna
	 	Its:	President & CEO  
	 	 	 
	 	 	 
	 	Date
	 	 	 
	 	 	 
	 	OPTIONEE:
	 	 	 
	 	 	 
	 	 	 
	 	Name
	 	 	 
	 	 	 
	 	Date

 

 

 

 

 

 

 

 

	Director NSO Form	5

    	 

    	 

    

 

ATTACHMENT A

Definitions

The Capitalized
term used in this Notification of Award have the meanings set forth below.

“Termination for Cause” means
the involuntary termination of services as a member of the Board of Directors as a result of malfeasance arising from the performance
of your duties as a director which has a materially adverse effect on the business of the Company.

 

 

 

 

 

 

 

 

 

 

 

	Director NSO Form	6

    	 

    	 

    

 

ATTACHMENT B

FLEXSTEEL INDUSTRIES, INC.

OMNIBUS STOCK PLAN

DIRECTOR NONQUALIFIED STOCK OPTION

BENEFICIARY DESIGNATION OF DIRECTOR

 

 

 

Under the Flexsteel Industries, Inc. Omnibus Stock Plan, I, ________________________________,
hereby designate the following as beneficiary of any portion of my award which has been earned according to the terms of the Plan
and unpaid at the time of my death.

 

	A.	Primary Beneficiary	 
	 	 	 
	B.	Contingent Beneficiary:	 

 

 

	 	Signature:  	 

 

	 	Name:  	 

 

	 	Date:  	 

 

 

*This election is valid until a later dated
designation is completed and filed with the Company. 

 

 

 

 

	Director NSO Form	7

    	 

    	 

    

 

ATTACHMENT C

 

FLEXSTEEL INDUSTRIES, INC.

OMNIBUS STOCK PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

	Director NSO Form	8Exhibit 10.6

 

NOTIFICATION
OF RESTRICTED STOCK UNIT AWARD 

UNDER THE FLEXSTEEL INDUSTRIES, INC. OMNIBUS STOCK
PLAN

 

	
        Name of Grantee:

         

	
        Restricted Stock Units:

         
	 Grant Date:  

 

1. Notification
of Award. Flexsteel Industries, Inc. (the “Company”), hereby grants to you a Restricted Stock Unit Award
under this Restricted Stock Unit Notification of Award (the “Notification of Award”). The Restricted Stock Units
(“RSUs”) represent the right to receive shares of common stock of the Company (the “Shares”) under
the terms and conditions described in this Notification of Award and in the Flexsteel Industries, Inc. Omnibus Stock Plan (the
“Plan”). (See Attachment C, “Omnibus Stock Plan.”)

 

2. Vesting. In order to
receive any Shares granted to you under this Notification of Award, you must vest in the corresponding RSUs.

 

TIME VESTING: You will vest in the
RSUs according to the schedule set out below based upon your service with the Company. You must not have had a Separation from
Service with the Company before the Vesting Date. If you do, you will forfeit the RSUs and your right to receive the corresponding
Shares.

 

[Sample schedule]

 

	Vesting Date(s)	Number or Percentage of RSUs that Vest
	[Insert date]	[Insert Number or Percentage of RSUs]
	[Insert date]	[Insert Number or Percentage of RSUs]

 

PERFORMANCE VESTING: You will vest
in the RSUs according to the schedule set out below based upon your service with the Company and the satisfaction of the
Performance Criteria. You must not have had a Separation from Service with the Company before the Vesting Date and you must
have satisfied the Performance Criteria by the Vesting Date. If you do have a Separation from Service before, or do not satisfy
the Performance Criteria by, the Vesting Date, you will forfeit the RSUs and your right to receive the corresponding Shares.

 

[Sample schedule]

 

	Performance Criteria	
        Vesting
        Date(s)

         
	Number or Percentage of RSUs that Vest
	[Insert performance criteria]	[Insert date]	[Insert number or percentage of RSUs that vest]
	[Insert performance criteria]	
        [Insert
        date]

         
	“

 

	RSU Form	 

    	 

    	 

    

 

3. Exceptions
to Service Requirement. If you have a Separation from Service with the Company before the Vesting Date under any of the following
circumstances:

a. due
to your death

b. due
to your Disability

c. [Optional:
on or after reaching age 62] or

d. [Optional:
in connection with a Change in Control (See Attachment A, “Definitions”)]

 

you (or
your beneficiary in the case of your death) will vest in a pro rata portion of the number of RSUs awarded under this Notification
of Award based on the number of days beginning on the Grant Date and ending on the date of your Separation from Service. 

4. Payment
of Award. The RSUs in which you vest under this Notification of Award will be converted to Shares. These Shares will be distributed
to you on the 15th day of the third month following the Vesting Date described in Section 2 (regardless of whether you vest or
have vested earlier than the Vesting Date under an exception described in Section 3), unless a delay is otherwise permitted under
the terms of the Plan.

 

5. Withholding
Taxes. The Company is authorized to deduct and withhold from any payment due you under this Notification of Award or any other
compensation payable to you by the Company any taxes due as a result of any payment under this Notification of Award. 

 

6. Beneficiary
Designation. If you Separate from Service with the Company as a result of your death, an amount may be payable upon your death
as provided in Section 3 of this Notification of Award. The Plan permits you to designate a beneficiary to receive payments that
may be due in the event of death. Any beneficiary can be named and you may change your beneficiaries at any time by submitting
such designation, in writing, to the Company. (See Attachment B, “Beneficiary Designation of Employee”)

 

7. Forfeiture and Repayment.
 If you receive or become entitled to receive a payment under this Notification of Award within six months before your Separation
from Service with the Company, the Company, in its sole discretion, may require you to forfeit or return the Award, as the case
may be, in the event you: (a) engage in Competitive Activity at any time during your employment or within a two-year period after
your Separation from Service or (b) engage in Improper Use of Confidential Information at any time. (See Attachment A “Definitions”)
The Company also reserves the right to require you to pay back to the Company any amount received under the Award as described
in Section 18 of the Plan. Any repayment due under this Section 7 or Section 18 of the Plan will be made by you either in the Shares,
or in a dollar amount equal to the Fair Value of the Shares determined on the date of repayment, you received under the Award.
The Committee, in its discretion, will determine which method of payment is acceptable. In no event will you be entitled to an
Award under this Notification of Award if you have a Termination for Cause at any time before the payment date of the Award. “Termination
for Cause” means the involuntary termination of your employment with the Company as a result of dishonesty, fraud, misappropriation
of funds, theft relating to the your position, harassment, an act of violence, acts punishable by law, misconduct as described
in the Flexsteel Industries, Inc. Employee Handbook, as amended from time to time, or such other serious misconduct as will be
determined by the Company to constitute conduct that warrants forfeiture pursuant to the Plan and Section 7 of this Notification
of Award.

	 	2

    	 

    	 

    

 

8. No Employment
Contract. Nothing contained in the Plan or this Notification of Award creates any right to your continued employment or otherwise
affects your status as an employee at will. You hereby acknowledge that the Company and you each have the right to terminate your
employment at any time for any reason or for no reason at all, subject only to the terms of any written employment agreement between
you and the Company.

 

9. Governing
Terms. This Notification of Award is made according to the provisions of the Plan. The terms of the Plan are incorporated
by reference in this Notification of Award. Terms used in this Notification of Award have the meanings used in the Plan unless
the context clearly requires otherwise. In the event of a conflict between the provisions of the Plan and the provisions of this
Notification of Award, the provisions of the Plan will govern.

 

10. Acknowledgment.
Your receipt of this Notification of Award constitutes your agreement to be bound by the terms and conditions of this Notification
of Award and the Plan. 

 

****Signature
Page to Follow****

 

 

 

 

 

 

 

 

 

 

 

3

    	 

    	 

    

 

***Signature Page to Notification of RSU Award***

 

 

 

	 	FLEXSTEEL INDUSTRIES, INC.:
	 	 	 
	 	 	 
	 	 
	 	By:  	 
	 	Its:	 
	 	 	 
	 	 	 
	 	PARTICIPANT:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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ATTACHMENT A

Definitions

The Capitalized terms used in
this Notification of Award have the meanings set forth below.

“Competitive Activity” means any of the following
regardless of whether it is undertaken, directly or indirectly, on your own behalf or on behalf of any person or entity other than
the Company, including without limitation as a proprietor, principal, agent, partner, officer, director, stockholder, employee,
member of any association, contractor, consultant or otherwise:

		(i)	Engaging in any business activity, in any geographic market in which the Company is then engaged in business that is competitive
with the business of the Company; or

		(ii)	Hiring or soliciting for employment any person who is then an employee of the Company; or

		(iii)	Inducing or attempting to induce any person to end his or her employment relationship with the Company; or

		(iv)	Soliciting business concerning any business (as described in Section (i) above) from any person or entity who is, or who was,
a client, customer, prospective client or prospective customer of the Company; or

		(v)	Taking any action to divert business from, or inducing or attempting to induce any customer or prospective customer or any
vendor, supplier or other business relation to cease doing business with the Company.

“Improper Use of Confidential Information”
means:

		(i)	Any use or disclosure of Confidential Information except as required for the performance of your duties as an employee of the
Company;

		(ii)	Any act or omission that directly or indirectly would materially reduce the value of Confidential Information except for such
acts or omissions that are required for the performance of your duties as an employee of the Company.

		(iii)	Notwithstanding anything in Sections (i) or (ii) above, Improper Use of Confidential Information does not include:

		(A)	any disclosure, use or other act or omission that is expressly authorized in writing, in advance by the Company; or

		(B)	any required disclosure of Confidential Information by law or legal process, if: (x) you provide prompt notice to the Company
in writing, and prior to disclosing any Confidential Information, so that the Company may elect to seek an appropriate protective
order to prevent disclosure at the Company’s option and expense; and (y) you cooperate with the Company in any efforts to
seek a protective order.

 

5

    	 

    	 

    

 

For purposes of this definition, “Confidential Information”
means any non-public information regarding the Company or any of its owners, directors, representatives, agents, employees, suppliers,
vendors, shareholders, members, clients, customers, or other third parties or entities with whom the Company does business and
which you have learned or developed in the past as a result of your employment by or association with the Company or which you
learn or develop while providing services to the Company. Confidential Information includes, but is not limited to, trade secrets,
information about customers, prospective customers, marketing strategies, business strategies, sales strategies, products, services,
key personnel, suppliers, pricing, technology, computer software code, methods, processes, designs, research, development systems,
techniques, finances, accounting, purchasing, forecasts, or planning. All information disclosed to you or to which you obtain access
in whatever form, whether originated by you or by others, during the period that you provide services to the Company will be presumed
to be Confidential Information if it is treated by the Company as being Confidential Information or if you have a reasonable basis
to believe it to be Confidential Information. For these purposes, Confidential Information will not include knowledge or information:
(i) that is now or subsequently becomes generally publicly known, other than as a direct or indirect result of Improper Use or
Disclosure of Confidential Information by you; or (ii) that is independently made available to you in good faith by a third party
who has not violated any legal duty or confidential relationship with the Company.

“Termination for Cause”
means the involuntary termination of a Participant’s employment with the Company as a result of dishonesty, fraud, misappropriation
of funds, theft relating to the Participant’s position, harassment, an act of violence, acts punishable by law, misconduct
as described in the Flexsteel Industries, Inc. Employee Handbook, as amended from time to time, or such other serious misconduct
as will be determined by the Company to constitute conduct that warrants forfeiture pursuant to the Plan and this Notification
of Award.

[Optional “Change in Control” means
a “change in control,” as defined in US Treasury Regulations §1.409A-3(i)(5)(vi)(1) and (vii). Generally, this
means that a Change in Control will occur:

		(1)	on the date any one person (or more than one person acting as a group) acquires ownership of the Company’s Stock possessing
50% or more of the total voting power of the Company’s Stock; or

		(2)	on the date any one person (or more than one person acting as a group) acquires assets from the Company that have a total gross
fair market value equal to or more than 75% of the total fair market value of all of the assets of the Company immediately before
such acquisition.]

 

 

 

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ATTACHMENT B

FLEXSTEEL INDUSTRIES, INC.

OMNIBUS STOCK PLAN

RESTRICTED STOCK UNIT

BENEFICIARY DESIGNATION OF EMPLOYEE

 

 

 

Under the
Flexsteel Industries, Inc. Omnibus Stock Plan, I, ________________________________,
hereby designate the following as beneficiary of any portion of my award which has been earned according to the terms of the Plan
and unpaid at the time of my death.

 

	A.	Primary Beneficiary	 
	 	 	 
	B.	Contingent Beneficiary:	 

 

 

	 	Signature:  	 

 

	 	Name:  	 

 

	 	Date:  	 

 

 

*This election is valid until a later dated
designation is completed and filed with the Company. 

 

 

 

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ATTACHMENT C

FLEXSTEEL INDUSTRIES, INC.

OMNIBUS STOCK PLAN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

8

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