Document:

Revolving Line of Credit Note

 Exhibit 10.37 
  

			
	WELLS FARGO	  	REVOLVING LINE OF CREDIT NOTE
		
	$12,000,000.00	  	 San Diego, California
 March 15, 2006

 FOR VALUE RECEIVED, the undersigned Natural Alternatives International, Inc. (“Borrower”)
promises to pay to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”) at its office at San Diego RCBO, 401 B Street, Suite #2201, San Diego, CA 92101, or at such other place as the holder hereof may designate, in lawful
money of the United States of America and in immediately available funds, the principal sum of $12,000,000.00, or so much thereof as may be advanced and be outstanding, with interest thereon, to be computed on each advance from the date of
its disbursement as set forth herein. 
  

	1.	DEFINITIONS: 

 As used herein, the following terms
shall have the meanings set forth after each, and any other term defined in this Note shall have the meaning set forth at the place defined: 
 1.1
“Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in California are authorized or required by law to close. 
 1.2 “Fixed Rate Term” means a period commencing on a Business Day and continuing for 1, 2, 3, 6 or 12 months, as designated by Borrower, during which all or a portion of the outstanding principal
balance of this Note bears interest determined in relation to LIBOR; provided however, that no Fixed Rate Term may be selected for a principal amount less than $100,000.00; and provided further, that no Fixed Rate Term shall extend beyond the
scheduled maturity date hereof. If any Fixed Rate Term would end on a day which is not a Business Day, then such Fixed Rate Term shall be extended to the next succeeding Business Day. 
 1.3 “LIBOR” means the rate per annum (rounded upward, if necessary, to the nearest whole 1/8 of 1%) determined by dividing Base LIBOR by a percentage equal to 100% less any LIBOR Reserve Percentage.

 (a) “Base LIBOR” means the rate per annum for United States dollar deposits quoted by Bank as the Inter-Bank Market Offered Rate,
with the understanding that such rate is quoted by Bank for the purpose of calculating effective rates of interest for loans making reference thereto, on the first day of a Fixed Rate Term for delivery of funds on said date for a period of time
approximately equal to the number of days in such Fixed Rate Term and in an amount approximately equal to the principal amount to which such Fixed Rate Term applies. Borrower understands and agrees that Bank may base its quotation of the Inter-Bank
Market Offered Rate upon such offers or other market indicators of the Inter-Bank Market as Bank in its discretion deems appropriate including, but not limited to, the rate offered for U.S. dollar deposits on the London Inter-Bank Market.

 (b) “LIBOR Reserve Percentage” means the reserve percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor) for “Eurocurrency Liabilities” (as defined in Regulation D of the Federal Reserve Board, as amended), adjusted by Bank for expected changes in such reserve percentage during the applicable Fixed Rate Term. 
 1.4 “Prime Rate” means at any time the rate of interest most recently announced within Bank at its principal office as its Prime Rate, with the understanding
that the Prime Rate is one of Bank’s base rates and serves as the basis upon which effective rates of interest are calculated for those loans making reference thereto, and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Bank may designate. 
  

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	2.	INTEREST: 

 2.1 Interest. The outstanding principal balance
of this Note shall bear interest (computed on the basis of a 360-day year, actual days elapsed) either (a) at a fluctuating rate per annum equal to the Prime Rate in effect from time to time, or (b) at a fixed rate per annum
determined by Bank to be 1.75000% above LIBOR in effect on the first day of the applicable Fixed Rate Term. When interest is determined in relation to the Prime Rate, each change in the rate of interest hereunder shall become effective on the
date each Prime Rate change is announced within Bank. With respect to each LIBOR selection option selected hereunder, Bank is hereby authorized to note the date, principal amount, interest rate and Fixed Rate Term applicable thereto and any payments
made thereon on Bank’s books and records (either manually or by electronic entry) and/or on any schedule attached to this Note, which notations shall be prima facie evidence of the accuracy of the information noted. 
 2.2 Selection of Interest Rate Options. At any time any portion of this Note bears interest determined in relation to LIBOR, it may be continued by Borrower at
the end of the Fixed Rate Term applicable thereto so that all or a portion thereof bears interest determined in relation to the Prime Rate or to LIBOR for a new Fixed Rate Term designated by Borrower. At any time any portion of this Note bears
interest determined in relation to the Prime Rate, Borrower may convert all or a portion thereof so that it bears interest determined in relation to LIBOR for a Fixed Rate Term designated by Borrower. At such time as Borrower requests an advance
hereunder or wishes to select a LIBOR option for all or a portion of the outstanding principal balance hereof, and at the end of each Fixed Rate Term, Borrower shall give Bank notice specifying: (a) the interest rate option selected by
Borrower; (b) the principal amount subject thereto; and (c) for each LIBOR selection, the length of the applicable Fixed Rate Term. Any such notice may be given by telephone (or such other electronic method as Bank may permit) so long as,
with respect to each LIBOR selection, (i) if requested by Bank, Borrower provides to Bank written confirmation thereof not later than 3 Business Days after such notice is given, and (ii) such notice is given to Bank prior to 10:00 a.m. on
the first day of the Fixed Rate Term, or at a later time during any Business Day if Bank, at it’s sole option but without obligation to do so, accepts Borrower’s notice and quotes a fixed rate to Borrower. If Borrower does not immediately
accept a fixed rate when quoted by Bank, the quoted rate shall expire and any subsequent LIBOR request from Borrower shall be subject to a redetermination by Bank of the applicable fixed rate. If no specific designation of interest is made at the
time any advance is requested hereunder or at the end of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate interest selection for such advance or the principal amount to which such Fixed Rate Term applied. 
 2.3 Taxes and Regulatory Costs. Borrower shall pay to Bank immediately upon demand, in addition to any other amounts due or to become due hereunder, any and all
(a) withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign governmental authority and related in any manner to LIBOR, and (b) future, supplemental,
emergency or other changes in the LIBOR Reserve Percentage, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign governmental authority or resulting from
compliance by Bank with any request or directive (whether or not having the force of law) from any central bank or other governmental authority and related in any manner to LIBOR to the extent they are not included in the calculation of LIBOR. In
determining which of the foregoing are attributable to any LIBOR option available to Borrower hereunder, any reasonable allocation made by Bank among its operations shall be conclusive and binding upon Borrower. 
 2.4 Payment of Interest. Interest accrued on this Note shall be payable on the 1st day of each month, commencing April 1, 2006.

 2.5 Default Interest. From and after the maturity date of this Note, or such earlier date as all principal owing hereunder becomes due and payable
by acceleration or otherwise, the outstanding principal balance of this Note shall bear interest until paid in full at an increased rate per annum (computed on the basis of a 360-day year, actual days elapsed) equal to 4% above the rate of interest
from time to time applicable to this Note. 
 3. BORROWING AND REPAYMENT: 
 3.1 Borrowing and Repayment. Borrower may from time to time during the term of this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of 

  

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this Note and of the Credit Agreement between Borrower and Bank defined below, provided however, that the total outstanding borrowings under this Note shall
not at any time exceed the principal amount stated above. The unpaid principal balance of this obligation at any time shall be the total amounts advanced hereunder by the holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder. The outstanding principal balance of this Note shall be due and payable in full on November 1, 2007. 
 3.2 Advances. Advances hereunder, to the total amount of the principal sum available hereunder, may be made by the holder at the oral or written request of
(a) Randell Weaver or John Reaves, any one acting alone, who are authorized to request advances and direct the disposition of any advances until written notice of the revocation of such authority is received by the holder at the office
designated above, or (b) any person, with respect to advances deposited to the credit of any deposit account of any Borrower, which advances, when so deposited, shall be conclusively presumed to have been made to or for the benefit of each
Borrower regardless of the fact that persons other than those authorized to request advances may have authority to draw against such account. The holder shall have no obligation to determine whether any person requesting an advance is or has been
authorized by any Borrower. 
 3.3 Application of Payments. Each payment made on this Note shall be credited first, to any interest then due and
second, to the outstanding principal balance hereof. All payments credited to principal shall be applied first, to the outstanding principal balance of this Note which bears interest determined in relation to the Prime Rate, if any, and second, to
the outstanding principal balance of this Note which bears interest determined in relation to LIBOR, with such payments applied to the oldest Fixed Rate Term first. 
  

	4.	PREPAYMENT: 

 4.1 Prime Rate. Borrower may prepay principal
on any portion of this Note which bears interest determined in relation to the Prime Rate at any time, in any amount and without penalty. 
 4.2
LIBOR. Borrower may prepay principal on any portion of this Note which bears interest determined in relation to LIBOR at any time and in the minimum amount of $100,000.00; provided however, that if the outstanding principal balance of
such portion of this Note is less than said amount, the minimum prepayment amount shall be the entire outstanding principal balance thereof. In consideration of Bank providing this prepayment option to Borrower, or if any such portion of this Note
shall become due and payable at any time prior to the last day of the Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower shall pay to Bank immediately upon demand a fee which is the sum of the discounted monthly differences
for each month from the month of prepayment through the month in which such Fixed Rate Term matures, calculated as follows for each such month: 
 (a) Determine the amount of interest which would have accrued each month on the amount prepaid at the interest rate applicable to such amount had it remained outstanding until the last day of the Fixed Rate Term applicable thereto.

 (b) Subtract from the amount determined in (a) above the amount of interest which would have accrued for the same month on the
amount prepaid for the remaining term of such Fixed Rate Term at LIBOR in effect on the date of prepayment for new loans made for such term and in a principal amount equal to the amount prepaid. 
 (c) If the result obtained in (b) for any month is greater than zero, discount that difference by LIBOR used in (b) above. 
 Each Borrower acknowledges that prepayment of such amount may result in Bank incurring additional costs, expenses and/or liabilities, and that it is difficult to
ascertain the full extent of such costs, expenses and/or liabilities. Each Borrower, therefore, agrees to pay the above-described prepayment fee and agrees that said amount represents a reasonable estimate of the prepayment costs, expenses and/or
liabilities of Bank. If 

  

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Borrower fails to pay any prepayment fee when due, the amount of such prepayment fee shall thereafter bear interest until paid at a rate per annum 2.000%
above the Prime Rate in effect from time to time (computed on the basis of a 360-day year, actual days elapsed). Each change in the rate of interest on any such past due prepayment fee shall become effective on the date each Prime Rate change is
announced within Bank. 
  

	5.	EVENTS OF DEFAULT: 

 This Note is made pursuant to
and is subject to the terms and conditions of that certain Credit Agreement between Borrower and Bank dated as of May 1, 2004, as amended from time to time (the “Credit Agreement”). Any default in the payment or performance of
any obligation under this Note, or any defined event of default under the Credit Agreement, shall constitute an “Event of Default” under this Note. 
  

	6.	MISCELLANEOUS: 

 6.1 Remedies. Upon the occurrence of any
Event of Default, the holder of this Note, at the holder’s option, may declare all sums of principal and interest outstanding hereunder to be immediately due and payable without presentment, demand, notice of nonperformance, notice of protest,
protest or notice of dishonor, all of which are expressly waived by each Borrower, and the obligation, if any, of the holder to extend any further credit hereunder shall immediately cease and terminate. Each Borrower shall pay to the holder
immediately upon demand the full amount of all payments, advances, charges, costs and expenses, including reasonable attorneys’ fees (to include outside counsel fees and all allocated costs of the holder’s in-house counsel), expended or
incurred by the holder in connection with the enforcement of the holder’s rights and/or the collection of any amounts which become due to the holder under this Note, and the prosecution or defense of any action in any way related to this Note,
including without limitation, any action for declaratory relief, whether incurred at the trial or appellate level, in an arbitration proceeding or otherwise, and including any of the foregoing incurred in connection with any bankruptcy proceeding
(including without limitation, any adversary proceeding, contested matter or motion brought by Bank or any other person) relating to any Borrower or any other person or entity. 
 6.2 Obligations Joint and Several. Should more than one person or entity sign this Note as a Borrower, the obligations of each such Borrower shall be joint and several. 
 6.3 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of California.

 IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first written above. 
  

			
	Natural Alternatives International, Inc.
		
	By:	 	/s/    John Reaves        
	Title:	 	CFO
		
	By:	 	/s/    Randy Weaver        
	Title:	 	President

  

 Page 4Form of StanCorp Financial Group, Inc. Long-Term Incentive Award Agreement

 Exhibit 10.1 
 STANCORP FINANCIAL GROUP, INC. 
 LONG-TERM INCENTIVE AWARD AGREEMENT 
 (20     Performance Period) 
 This Long-Term Incentive Award Agreement (this “Agreement”) is made effective as of
                     between StanCorp Financial Group, Inc., an Oregon corporation (the “Company”) and
                                        
         (the “Employee”). 
 On
                    , 20    , the Organization and Compensation Committee (the “Committee”) of the
Company’s Board of Directors (the “Board”) authorized a performance-based award to the Employee pursuant to Section 8 of the Company’s 2002 Stock Incentive Plan (the “Plan”). Compensation paid pursuant to the award
is intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986 (the “Code”). Employee desires to accept the award subject to such shareholder approval and the terms and conditions of
this Agreement. 
 In consideration of the agreements set forth below, the Company and the Employee agree as follows: 
 1. Awards. 
 1.1
Restricted Shares. Subject to the terms and conditions of this Agreement, the Company hereby awards to the Employee              shares of common stock (“Common
Stock”) of the Company (the “Restricted Shares”). The Restricted Shares shall be issued to the Employee as of the date of this Agreement subject to vesting and possible forfeiture to the Company based on (i) the Company’s
financial performance during the 20     calendar year (the “Performance Period”) as described in Section 3, and (ii) the Employee’s continued employment until the vesting date as described in
Section 4. 
 1.2 Cash Performance Units. Subject to the terms and conditions of this Agreement, the Company
hereby awards to the Employee              performance units (the “Performance Units”), with each Performance Unit representing a right to receive cash from the Company
equal to the value of one share of Common Stock at the time of payment, as described in Section 5. The number of Performance Units for which the Employee shall receive payment shall also be based on (a) the Company’s financial
performance during the Performance Period as described in Section 3, and (b) the Employee’s continued employment until the vesting date as described in Section 4. 
 2. Escrow. For purposes of facilitating the enforcement of Sections 4.1, 5, 8 and 13.1 of this Agreement, the Restricted Shares shall be delivered
to a person or persons designated by the Company to serve as escrow holder (individually or jointly, as applicable, the “Escrow Holder”). The Escrow Holder may be an employee of the Company. Upon delivery into escrow of the Restricted
Shares, the Employee shall deliver to the Escrow Holder duly executed stock powers with respect to the Restricted Shares. The Escrow Holder shall hold the Restricted Shares and the stock powers in escrow and shall release the Restricted Shares to
the Company or the Employee, as applicable, only in accordance with Section 10 of this Agreement. 

 
The Employee hereby acknowledges that the Company’s designee is appointed as the Escrow Holder with the foregoing authorities as a material inducement
to make this Agreement and that said appointment is coupled with an interest and is irrevocable. The Employee agrees that said Escrow Holder shall not be liable to any party to this Agreement (or to any other party) for any actions or omissions
unless the Escrow Holder is grossly negligent with respect thereto. 
 3. Performance Conditions. 
 3.1 Subject to Section 4.1 and Section 5, the number of Restricted Shares and Performance Units that will vest shall be
determined by multiplying the number of Restricted Shares or Performance Units, as the case may be, awarded as provided in Section 1 by the Payout Factor determined under the following formula: 
 Payout Factor = (50% * Adjusted EPS PF) + (35% * Revenues PF) + (15% * AM Earnings PF) 
 where the “Adjusted EPS PF,” the “Revenues PF” and the “AM Earnings PF” are determined under the following table based on the
Company’s Adjusted EPS, Revenues and AM Earnings, respectively (each as defined below), for the Performance Period. 
  

											
	 Adjusted EPS
	  	Adjusted EPS PF	  	 Revenues
 (in millions)
	  	Revenues PF	  	 AM Earnings
 (in millions)
	  	AM earnings PF
		  		  		  		  		  	
		  		  		  		  		  	
		  		  		  		  		  	
		  		  		  		  		  	
		  		  		  		  		  	

 If the Adjusted EPS for the Performance Period is between any two data points set forth in the first column of the
above table, the Adjusted EPS PF shall be determined by interpolation between the corresponding data points in the second column of the table. If the Revenues for the Performance Period are between any two data points set forth in the third column
of the above table, the Revenues PF shall be determined by interpolation between the corresponding data points in the fourth column of the table. If the AM earnings for the Performance Period are between any two data points set forth in the fifth
column of the above table, the AM earnings PF shall be determined by interpolation between the corresponding data points in the sixth column of the table. 
 3.2 The Company’s “Adjusted EPS” for the Performance Period shall be the Company’s net income per diluted common share excluding after-tax net capital gains for the Performance Period. Adjusted EPS
shall be calculated by subtracting After-Tax Net Capital Gains (Losses) (as defined below) from the Company’s net income for the year, and then 

  

 2 

 
dividing the resulting amount by the Company’s diluted weighted-average common shares outstanding for the year. “After-Tax Net Capital Gains
(Losses)” shall mean the amount calculated by multiplying the Company’s net capital gains (losses) for the year by a fraction, the numerator of which shall be the Company’s net income for the year and the denominator of which shall be
the Company’s income before income taxes for the year. For this purpose, the Company’s net income, diluted weighted-average common shares outstanding, net capital gains (losses) and income before income taxes for the year shall be those
amounts as set forth in the audited consolidated financial statements of the Company and its subsidiaries for the year. If, after the date of this Agreement, the outstanding Common Stock is increased or decreased by reason of any stock split,
combination of shares or dividend payable in shares, the Adjusted EPS targets in the above table shall each be adjusted by multiplying such targets by a fraction, the numerator of which shall be the number of outstanding shares of Common Stock
immediately before the increase or decrease and the denominator of which shall be the number of outstanding shares of Common Stock immediately after the increase or decrease. 
 3.3 The Company’s “Revenues” for the Performance Period shall be the Company’s earned revenues for the Performance
Period as set forth in the audited consolidated financial statements of the Company and its subsidiaries for the year. 
 3.4
The Company’s “AM Earnings” for the Performance Period shall be the Company’s Asset Management Earnings for the Performance Period. Asset Management Earnings shall be equal to the aggregate income before income taxes for the year
of all of the Company’s business units other than the Individual and Group Life Insurance and Individual and Group Disability Insurance business units. Income before income taxes of the included business units shall be computed based on the
Company’s books and records, in accordance with generally accepted accounting principles, and in a manner consistent with the manner in which the Company calculated such aggregate amount as being
$             million for its 20     fiscal year. 
 3.5 If the Company implements a change in accounting principle between the date of this Agreement and the end of the Performance Period, either as a result of the issuance of new accounting standards or otherwise, and
the effect of the accounting change was not reflected in the Company’s business plan at the time of approval of this award, then Adjusted EPS, Revenues and AM Earnings shall be adjusted to eliminate the impact of the change in accounting
principle. 
 4. Employment Condition. 
 4.1 In order to become vested in any Restricted Shares or Performance Units, the Employee must not have a Termination of Employment (as defined below) prior to the February 15 immediately following the end of the
Performance Period (the “Vesting Date”), other than by reason of Total Disability, Death or Retirement as such terms are defined in Sections 6.1-4(b), 6.1-4(c) and 6.1-4(f), respectively, of the Plan. If the Employee has a Termination of
Employment prior to the Vesting Date, other than by reason of Total Disability, Death or Retirement, the Employee shall forfeit all of the Restricted Shares and Performance Units. 
  

 3 

 4.2 A “Termination of Employment” shall be deemed to occur on the date on which
the Employee ceases to be employed on a continuous full time basis by the Company or a subsidiary of the Company for any reason or no reason, with or without cause. The Employee shall not be treated as having a Termination of Employment during the
time the Employee is receiving long term disability benefits provided by the Company or a subsidiary of the Company, unless the Employee has received formal written notice of termination. 
 5. Certification, Vesting and Payment. As soon as practicable following the completion of the audit of the Company’s consolidated financial
statements for the Performance Period, the Company shall calculate the Payout Factor and the corresponding numbers of Restricted Shares and Performance Units that will vest based on the Payout Factor, and shall submit these calculations to the
Committee. Notwithstanding anything to the contrary in this Agreement, the Committee may, in its sole discretion, reduce by up to 50% the calculated numbers of Restricted Shares and Performance Units that will vest based on circumstances relating to
the performance of the Company or the Employee. No later than the Vesting Date the Committee shall certify in writing (which may consist of approved minutes of a Committee meeting) the levels of Adjusted EPS, Revenues and AM earnings attained by the
Company for the Performance Period, and the numbers of Restricted Shares and Performance Units that will vest based on those performance levels. Subject to Section 4.1, on the Vesting Date, the number of Restricted Shares so certified shall
become vested and nonforfeitable and, subject to applicable tax withholding, the cash amount payable with respect to the number of Performance Units so certified shall be paid by the Company to the Employee, and no amounts shall be vested or paid
prior to the Vesting Date. Subject to Section 9, the amount payable with respect to each vested Performance Unit shall be equal to the closing market price for Common Stock on the last trading day preceding the Vesting Date. No fractional
Restricted Shares shall be vested and the number of Restricted Shares that vest shall be rounded to the nearest whole share. No rounding shall be required for fractional Performance Units. Any Restricted Shares and Performance Units that do not vest
shall be forfeited on the Vesting Date. 
 6. Tax Withholding. The Employee acknowledges that, on the Vesting Date, the Value (as
defined below) on that date of the vested Restricted Shares, as well as the amount payable with respect to vested Performance Units, will be treated as ordinary compensation income for federal and state income and FICA tax purposes, and that the
Company will be required to withhold taxes on these income amounts. To satisfy the required withholding amount, the Company shall first withhold all or part of the cash payable with respect to vested Performance Units, and if that is insufficient,
the Employee shall pay to the Company any remaining balance immediately upon notice from the Company. If the Employee does not pay the required amount, the Company shall have the right to withhold such amount from other amounts payable to the
Employee, as compensation or otherwise. For purposes of this Section 6, the “Value” of a Restricted Share shall be equal to the closing market price for Common Stock on the last trading day preceding the Vesting Date. 
 7. Change of Control. 
 7.1 Notwithstanding any other provision of this Agreement, if a Change of Control (as defined below) occurs before the Vesting Date, all of the Restricted Shares and 

  

 4 

 
Performance Units (other than those that have been forfeited under Section 4.1) shall vest upon the date of such Change of Control, and the Company
shall, as soon as practicable thereafter and subject to applicable tax withholding as provided for in Section 6, pay to the Employee the amount payable with respect to the vested Performance Units based on the closing market price for Common
Stock (or such other cash, securities or property as may be represented by Performance Units as provided in Section 9 below) on the last trading day preceding the date of such Change of Control. 
 7.2 For purposes of this Agreement, a Change of Control shall have occurred if: 
 (a) Any “Person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company’s then outstanding securities; 
 (b) The shareholders of the Company approve a
merger or other consolidation of the Company with any other company, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) 51% or more of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person acquires more than 30% of the combined voting power of the Company’s then outstanding
securities; 
 (c) The shareholders of the Company approve an agreement for the sale or disposition by the Company of all or
substantially all of its assets; 
 (d) A tender or exchange offer is made for Common Stock (or securities convertible into
Common Stock) and such offer results in a portion of those securities being purchased and the offeror after the consummation of the offer is the beneficial owner (as determined pursuant to Section 13(d) of the Exchange Act), directly or
indirectly, of securities representing at least 30% of the voting power of outstanding securities of the Company; 
 (e)
During any period of twelve months or less, individuals who at the beginning of such period constituted a majority of the Board cease for any reason to constitute a majority of the Board unless the nomination or election of such new directors was
approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period; or 
  

 5 

 (f) Any other event or combination of events occurs which the Board, acting in its sole
discretion, determines to be a “Change of Control” for purposes of this Agreement. 
 8. Restriction on Transfer. The
Employee shall not sell, assign, pledge, or in any manner transfer Performance Units or unvested Restricted Shares, or any right or interest in Performance Units or unvested Restricted Shares, whether voluntarily or by operation of law, or by gift,
bequest or otherwise. Any sale or transfer, or purported sale or transfer, of Performance Units or unvested Restricted Shares, or any right or interest in Performance Units or unvested Restricted Shares, in violation of this Section 8 shall be
null and void. 
 9. Mergers, Consolidations or Changes in Capital Structure. If, after the date of this Agreement, the outstanding
Common Stock is increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, plan of exchange,
recapitalization, reclassification, stock split, combination of shares or dividend payable in shares, or in the event of any consolidation, merger or plan of exchange involving the Company pursuant to which the Common Stock is converted into cash,
securities or other consideration, then (a) the cash, securities or other consideration issued, distributed or received with respect to the Restricted Shares in any such transaction shall be subject to the restrictions and conditions applicable
to Restricted Shares set forth herein, including the escrow requirements of Sections 2 and 10, and (b) each Performance Unit shall be adjusted to represent a right to receive cash from the Company equal to the value at the time of payment of
the cash, securities or other property that a holder of one share of Common Stock before the transaction would hold after giving effect to the transaction. 
 10. Escrow. The Restricted Shares and associated stock powers delivered to the Escrow Holder pursuant to Section 2 of this Agreement shall be held in escrow until (i) receipt by the Escrow Holder of a
certificate of the Company certifying that some or all of the Restricted Shares have vested, or (ii) receipt by the Escrow Holder of a certificate of the Company certifying that some or all of the Restricted Shares have been forfeited to the
Company pursuant to Section 4.1, Section 5 or Section 13.1. Upon receipt by the Escrow Holder of one of the foregoing certificates, the Escrow Holder shall deliver to the Employee or the Company, as appropriate, certificates
representing all of the Restricted Shares to which the Employee or the Company, as applicable, is entitled. 
 11. No Right to
Employment. Nothing in this Agreement or the Plan shall (i) confer upon the Employee any right to be continued in the employment of the Employee’s employer or interfere in any way with the right of such employer to terminate the
Employee’s employment at any time, for any reason or no reason, with or without cause, or to decrease the Employee’s compensation or benefits, or (ii) confer upon the Employee any right to the continuation, extension, renewal, or
modification of any compensation, contract or arrangement with or by the Company or any subsidiary of the Company. 
 12. Rights as
Shareholder. Subject to Section 2 and the other provisions of this Agreement, the Employee shall be entitled to all of the rights of a shareholder with respect to the 

  

 6 

 
Restricted Shares, including the right to vote such shares and to receive dividends payable with respect to such shares from the date of grant. Until the
Restricted Shares become vested, they will be treated for tax purposes as owned by the Company and dividends paid to the Employee with respect to the Restricted Shares will be treated for federal and state income and FICA tax purposes as ordinary
compensation income subject to applicable withholding. The Employee acknowledges that the certificates representing the Restricted Shares may bear such legends as may be required by law with respect to the rights and restrictions applicable to the
shares. 
 13. Approval. The obligations of the Company under this Agreement and the Plan are subject to the approval of state,
federal or foreign authorities or agencies with jurisdiction in the matter. The Company will use its reasonable best efforts to take steps required by state, federal or foreign law or applicable regulations, including rules and regulations of the
Securities and Exchange Commission and any stock exchange on which the Company’s shares may then be listed, in connection with the grant evidenced by this Agreement. The foregoing notwithstanding, the Company shall not be obligated to deliver
the Restricted Shares if such delivery would violate or result in a violation of applicable state or federal securities laws. 
 14.
Miscellaneous. 
 14.1 Governing Law. This Agreement shall be governed by and construed under the laws of the
State of Oregon, without regard to the choice of law principles applied in the courts of such state. 
 14.2
Severability. If any provision or provisions of this Agreement are found to be unenforceable, the remaining provisions shall nevertheless be enforceable and shall be construed as if the unenforceable provisions were deleted. 
 14.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter
hereof and supersedes all prior and contemporaneous oral or written agreements between the Company and the Employee relating to the subject matter hereof. 
 14.4 Amendment. This Agreement may be amended or modified only by written consent of the Company and the Employee. 
  

 7 

 14.5 Assignment. The Employee may not assign this Agreement or any rights
hereunder to any other party or parties without the prior written consent of the Company. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns. 
 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. 
  

			
	 STANCORP FINANCIAL GROUP, INC.

		
	By:	 	  
	
	 EMPLOYEE

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