Document:

Exhibit 10.5

 

SUPERIOR DRILLING PRODUCTS, INC. 

NonSTATUTORY Stock Option AGREEMENT

 

(Employee,
Director, Consultant)

 

1.                 
Grant of Stock Option. As of the Grant Date (identified in the Award Notice attached hereto (the “Award
Notice”), Superior Drilling Products, Inc., a Utah corporation (the “Company”), hereby grants a Nonstatutory
Stock Option (the “Option”) to the Optionee (identified in the Award Notice), an [Employee/Director/Consultant]
of the Company, to purchase the number of shares of the Company’s common stock, $0.001 par value per share (the “Stock”)
identified in the Award Notice (the “Stock”), subject to the terms and conditions of this agreement (the “Agreement”)
and the Superior Drilling Products, Inc. 2015 Long Term Incentive Plan (the “Plan”) which is hereby incorporated
herein in its entirety by reference and is attached as Exhibit A. The Option is not an “incentive stock option” as
defined in Section 422 of the Internal Revenue Code.

 

2.                 
Definitions. All capitalized terms used herein shall have the meanings set forth in the Plan unless otherwise
specifically provided herein. The Award Notice sets forth meanings for various capitalized terms used in this Agreement.

 

3.                 
Option Term. The Option shall commence on the Grant Date (identified in the Award Notice) and terminate on the
date immediately prior to the tenth (10th) anniversary of the Grant Date. The period
during which the Option is in effect and may be exercised is referred to herein as the “Option Period.”

 

4.                 
Option Price. The Option Price per share of Stock is identified in the Award Notice.

 

5.                 
Vesting. This Option may be exercised for the total number of shares Stock subject to this Option in accordance
with the Vesting Schedule as follows: 100% on the Grant Date. The Stock may be purchased at any time, in whole or in part,
during the Option Period; provided, however, the Option may only be exercisable to acquire whole Stock.

 

6.                 
Method of Exercise. The Option is exercisable by delivery of a written notice to the Secretary of the Company,
at the address for notices to the Company provided below, signed by the Optionee, specifying the number of shares of Stock to be
acquired on, and the effective date of, such exercise. The Optionee may withdraw notice of exercise of this Option, in writing,
at any time prior to the close of business on the business day preceding the proposed exercise date.

 

7.                 
Restrictions on Exercise. The Option may not be exercised if the issuance of such Stock or the method of payment
of the consideration for such Stock would constitute a violation of any applicable federal or state securities or other laws or
regulations, including any laws or regulations or Company policies respecting blackout periods, or any rules or regulations of
any stock exchange on which the Stock may be listed.

 

8.                 
Termination of Employment/Engagement. Voluntary or involuntary termination of the Optionee as an Employee/Consultant
of the Company and its Affiliates shall affect Optionee’s rights under the Option as follows:

 

    	 		 

    	 	 	 

    

  

(a)              
Termination for Cause or Breach of Noncompetition or Confidentiality Agreement. The vested and non-vested portions
of the Option shall expire on 12:01 a.m. (CST) on the date of termination of employment/engagement or the date of the breach, as
applicable and shall not be exercisable to any extent if Optionee’s employment/engagement is terminated for Cause or the
Optionee breaches a noncompetition and/or confidentiality agreement between Optionee and the Company or any of its Affiliates at
any time.

 

(b)              
Death or Disability. If Optionee’s employment/engagement is terminated by death or Disability (as determined
by the Committee at the time of such termination as a member of the Company’s Board of Directors), then the vesting of the
Option shall be accelerated and the entire Option shall automatically become 100% vested as of the date of such termination and
the Option shall expire 365 calendar days after the date of such termination of employment to the extent not exercised by Optionee
or, in the case of death, by the person or persons to whom Optionee’s rights under the Option have passed by will or by the
laws of descent and distribution or, in the case of Disability, by Optionee or Optionee’s legal representative. In no event
may the Option be exercised by anyone after the earlier of (i) the expiration of the Option Period or (ii) 365 days after the date
of Optionee’s death or termination of employment due to Disability.

 

(c)               
Other Involuntary Termination. If Optionee’s employment with the Company and its Affiliates is terminated
by the Company for any reason other than for Cause, death or Disability, then (i) the non-vested portion of the Option shall immediately
expire on the date of termination of employment and (ii) the vested portion of the Option shall expire to the extent not exercised
six (6) months after the date of such termination of employment/engagement. In no event may the Option be exercised by anyone after
the earlier of (i) the expiration of the Option Period or (ii) six (6) months after the date of termination.

 

(d)              
Other Voluntary Termination. If Optionee’s employment with the Company and its Affiliates is terminated
by the Optionee for any reason other than for death or Disability, then (i) the non-vested portion of the Option shall immediately
expire on the date of termination of employment and (ii) the vested portion of the Option shall expire to the extent not exercised
three (3) months after the date of such termination of employment/engagement. In no event may the Option be exercised by anyone
after the earlier of (i) the expiration of the Option Period or (ii) three (3) months after the date of termination.

 

(e)               
Change in Control. Notwithstanding the vesting provisions in this Agreement, in the event of a “Change
in Control” of the Company, vesting of the Option shall be accelerated and the entire Option shall automatically become 100%
vested as of the day of the Change in Control date and the Option shall otherwise be affected as provided in the Plan.

 

9.                 
Independent Legal and Tax Advice. Optionee acknowledges that the Company has advised Optionee to obtain independent
legal and tax advice regarding the grant and exercise of the Option and the disposition of any Stock acquired thereby.

 

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10.             
No Rights in Stock. Subject to the terms of the Plan, Optionee shall have no rights as a stockholder until the
Optionee becomes the record holder of such Stock, or upon a Change in Control, with respect to the Stock.

 

11.             
Investment Representation. Optionee will enter into such written representations, warranties and agreements as
Company may reasonably request in order to comply with any federal or state securities law. Moreover, any stock certificate for
any Stock issued to Optionee hereunder may contain a legend restricting their transferability as determined by the Company in its
discretion. Optionee agrees that Company shall not be obligated to take any affirmative action in order to cause the issuance or
transfer of Stock hereunder to comply with any law, rule or regulation that applies to the Stock subject to the Option.

 

12.             
No Guarantee of Employment, Engagement or Services. The Option shall not confer upon Optionee any right to continued
employment, engagement or Services with the Company or any Affiliate.

 

13.             
Withholding of Taxes. The Option is subject to and the Company shall have the right to take any action as may
be necessary or appropriate to satisfy any federal, state, or local (foreign and domestic) tax and withholding obligations upon
exercise of the Option.

 

14.             
General.

 

(a)              
Notices. All notices under this Agreement shall be mailed or delivered by hand to the parties at their respective
addresses set forth beneath their signatures below or at such other address as may be designated in writing by either of the parties
to one another. Notices shall be effective upon receipt.

 

(b)              
Nontransferability of Option. The Option granted pursuant to this Agreement is not transferable other than by
will or by the laws of descent and distribution or by a qualified domestic relations order (as defined in Section 4l4(p) of the
Internal Revenue Code). The Option will be exercisable during Optionee’s lifetime only by Optionee or by Optionee’s
legal representative in the event of Optionee’s Disability. No right or benefit hereunder shall in any manner be liable for
or subject to any debts, contracts, liabilities, obligations or torts of Optionee.

 

(c)               
Amendment and Termination. No amendment, modification or termination of the Option or this Agreement shall be
made at any time without the written consent of Optionee and Company.

 

(d)              
No Guarantee of Tax Consequences, Legal Consult. The Company and the Committee make no commitment or guarantee
that any federal or state tax treatment will apply or be available to any person eligible for benefits under the Option. The Optionee
has been advised and been provided the opportunity to obtain independent legal and tax advice regarding this Award including, without
limitation, with respect to the grant and exercise of the Option and the disposition of any Stock acquired thereby.

 

(e)               
Severability. In the event that any provision of this Agreement shall be held illegal, invalid, or unenforceable
for any reason, such provision shall be fully severable, but shall not affect the remaining provisions of the Agreement, and the
Agreement shall be construed and enforced as if the illegal, invalid, or unenforceable provision had not been included herein.

 

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(f)               
Supersedes Prior Agreements. This Agreement shall supersede and replace all prior agreements and understandings,
oral or written, between the Company and the Optionee regarding the grant of the Options covered hereby.

 

15.             
Counterparts: This Agreement may be executed in multiple original counterparts, each of which shall be deemed
an original, but all of which together shall constitute but one and the same instrument.

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF,
the Company, as of the Grant Date has caused this Agreement to be executed on its behalf by its duly authorized officer and Optionee
has hereunto executed this Agreement as of the same date.

 

 

	 	SUPERIOR DRILLING PRODUCTS, INC.
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	Address for Notices:
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	Attention:[Name]	 
	 	 	 
	 	 	 
	 	OPTIONEE:	 
	 	 	 
	 	 	 
	 	Signature	 
	 	 	 
	 	 
	 	Printed Name	 
	 	Address:	 
	 	 	 
	 	 	 

 

    	 	5fmnb-ex109_15.htm

Exhibit 10.9

FARMERS NATIONAL BANC CORP.

CASH LONG-TERM INCENTIVE AWARD AGREEMENT 

(201__)

Farmers National Banc Corp. (the “Company”) hereby grants the undersigned Participant an Award pursuant to the Farmers National Banc Corp. Long-Term Incentive Plan (the “Cash LTI Plan”), and this Award Agreement (this “Award Agreement”) is effective the       day of                , 201__.

1.Name of Participant:  _______________

	
2.
	
Performance Period:  The three-year period beginning January 1, 201__ and ending on December 31, 201__ (the “Performance Period”).

	
3.
	
Target Cash Award as Percentage of Base Compensation: [____]% x .3 (the “Target Cash Award”).

	
4.
	
Earning an Award:  At the end of the Performance Period, the Participant shall be eligible to receive a payment equal to between 0% and 250% of the Target Cash Award based on the achievement of the Performance Objectives set forth below during the Performance Period. Performance between two stated levels will be interpolated when determining the percentage of the Target Cash Award earned.  Performance with respect to each Performance Objective is calculated separately.  

	
 
	
(a)
	
The Target Cash Award can be earned based on the Company’s Total Shareholder Return during the Performance Period compared to the Total Shareholder Return of the Peer Group during the Performance Period (“Relative TSR”) that corresponds to the percentage below:

 

		
	
Relative TSR Compared to Peer Group

during Performance Period
	
Percentage of 

Target Cash Award Earned

	
Equal to or less than Peer Group 25th percentile
	
0%

	
Equal to Peer Group 50th percentile
	
50%

	
Equal to Peer Group 59th percentile
	
100%

	
Equal to or higher than Peer Group 85th percentile
	
250%

 

For this purpose: (i) Relative TSR shall be determined by the Committee in its sole discretion; and (ii) the Committee shall select the institutions constituting, and make such periodic adjustments as it determines appropriate to, the “Peer Group” in its sole discretion.

	
5.
	
Payment of Award:  With respect to the Performance Period, the Committee shall certify the level of achievement of the Performance Objectives and determine the amount payable with respect to an Award based on the level of achievement of the Performance Objectives set forth in Section 4. Payment of the Award shall be made to the Participant in cash in a single lump sum between January 1 and March 15 of the year following the end of the Performance Period.

	
6.
	
Limitations on Payment of Award:  The Committee may, in its sole discretion, reduce the amount payable with respect to the Award.  

	
7.
	
Forfeiture of Awards:  If the Company is required to prepare an accounting restatement due to material non-compliance of the Company, as a result of misconduct by a Participant, with any financial reporting requirement under any applicable laws, the Participant shall reimburse the Company for all amounts received under the Cash LTI Plan within 30 days after receipt of notice of the same from the Company.

	
8.
	
Effect of Termination:  If the Participant’s employment terminates for any reason prior to the end of the Performance Period, the Participant shall forfeit any right to payment with respect to an Award for such Performance Period.  Notwithstanding the foregoing:

	
 
	
(a)
	
Death, Disability or Retirement. If the Participant dies, becomes Disabled or Retires during the last 12 months of the Performance Period, the amount payable with respect to the Participant’s Award (if any) shall be multiplied by a fraction, the numerator of which is the number of whole months elapsed during the Performance Period prior to the Participant’s death, Disability or Retirement and the denominator of which is 36.  Payment shall be made at the same time and in the same form, and subject to the same conditions, as set forth in Section 5.

	
 
	
(b)
	
Termination for Cause.  If the Participant is Terminated for Cause (regardless of whether such Termination would also constitute a Retirement) during the Performance Period, the Participant shall forfeit any right to payment with respect to the Award.

	
9.
	
Effect of Change in Control: Notwithstanding the foregoing, if the Participant is Terminated by the Company, other than for “Cause” within two years following a Change in Control, the Participant shall be entitled to receive a payment equal to the amount payable with respect to the Awards as though the Performance Objectives had been satisfied at the “target” level of achievement for the Performance Period.  Payment with respect to the Award will be made in a single lump-sum cash payment within 60 days following the date of Termination. 

	
10.
	
Miscellaneous:  

	
 
	
(a)
	
Non-Transferability.  An Award may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated, except by will or the laws of descent and distribution.  

	
 
	
(b)
	
Beneficiary. Unless otherwise specifically designated by the Participant in writing, a Participant’s beneficiary under the Cash LTI Plan shall be the Participant’s spouse or, if no spouse survives the Participant, the Participant’s estate.

	
 
	
(c)
	
No Right to Continued Service or to Awards.  The granting of an Award shall impose no obligation on the Company or any Affiliate to continue the employment of a Participant or interfere with or limit the right of the Company or any Affiliate to Terminate the employment of the Participant at any time, with or without Cause, which right is expressly reserved.  

	
 
	
(d)
	
Tax Withholding.  The Company or an Affiliate, as applicable, shall have the power and the right to deduct, withhold or collect any amount required by law or regulation to be withheld with respect to any taxable event arising with respect to an Award granted under the Cash LTI Plan. 

	
 
	
(e)
	
Requirements of Law.  The grant of Awards shall be subject to all applicable laws, rules and regulations (including applicable federal and state securities laws) and to all required approvals of any governmental agencies or national securities exchange, market or other quotation system.  

	
 
	
(f)
	
Governing Law.  The Cash LTI Plan and all Award Agreements shall be governed by and construed in accordance with the laws of (other than laws governing conflicts of laws) the State of Ohio.

	
 
	
(g)
	
Award Subject to Cash LTI Plan. The Award is subject to the terms and conditions described in this Award Agreement and the Cash LTI Plan, which is incorporated by reference into and made a part of this Award Agreement.  In the event of a conflict between the terms of the Cash LTI Plan and the terms of this Award Agreement, the terms of the Cash LTI Plan will govern.  The Committee has the sole responsibility of interpreting the Cash LTI Plan and this Award Agreement, and its determination of the meaning of any provision in the Cash LTI Plan or this Award Agreement will be binding on the Participant. Capitalized terms that are not defined in this Award Agreement have the same meanings as in the Cash LTI Plan.

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(h)
	
Section 409A Payment Delay. If a Participant is determined to be a “specified employee” (within the meaning of Section 409A of the Code and as determined under the Company’s policy for determining specified employees), the Participant shall not be entitled to payment or to distribution of any portion of an Award that is subject to Section 409A of the Code (and for which no exception applies) and is payable or distributable on account of the Participant’s “separation from service” (within the meaning of Section 409A of the Code) until the expiration of six months from the date of such separation from service (or, if earlier, the Participant’s death).  Such Award, or portion thereof, shall be paid or distributed on the first business day of the seventh month following such separation from service.

	
 
	
(i)
	
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.

[signature page attached]

 

	
PARTICIPANT
	
 
	
 

	
 
	
 
	
 

	
 
	
Date:
	
 

	
 
	
 
	
 

	
Print Name:
	
 
	
 

 

	
FARMERS NATIONAL BANC CORP.
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
By: 
	
 
	
 
	
Date:
	
 

	
 
	
 
	
 
	
 
	
 

	
Its:
	
 
	
 
	
 
	
 

 

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