1
EXHIBIT 10.2
COLLECTORS UNIVERSE, INC.
FORM OF STOCK OPTION AGREEMENT
Type of Option (check one): [ ] Incentive [ ] Nonqualified
This STOCK OPTION AGREEMENT (the "Agreement") is entered into as of
_________ __, ____, by and between COLLECTORS UNIVERSE, INC., a Delaware
corporation (the "Company"), and _______________________ (the "Optionee")
pursuant to the Company's 1999 Stock Incentive Plan (the "Plan").
1. Grant of Option. The Company hereby grants to Optionee an option
(the "Option") which shall entitle Optionee to purchase all or any portion of a
total of _________________ (____) shares (the "Shares") of the Common Stock, par
value $.01 per share, of the Company at a purchase price of
_______________________ Dollars ($_______) per share (the "Exercise Price") and
on the terms and subject to the conditions that are set forth in this Agreement
and in the Plan. If the box marked "Incentive" above is checked, then, this
Option is intended to qualify as an "incentive stock option" as defined in
Section 422 of the Internal Revenue Code of l986, as amended (the "Code"). If
this Option fails in whole or in part to qualify as an incentive stock option,
or if the box marked "Nonqualified" is checked, then this Option shall, to that
extent, constitute a nonqualified stock option.
2. Vesting of Option. The right to exercise this Option shall vest in
installments, and this Option shall be exercisable from time to time in whole or
in part as to any vested installment, as follows:
This Option shall
On or After: be Exercisable as to:
------------ ---------------------
(i) _____________, 19___: ___________ shares
(ii) _____________, 19___: an additional ___________ shares
(iii) _____________, 19___: an additional ___________ shares
(iv) _____________, 19___: an additional ___________ shares
[Optional Provision: Notwithstanding the foregoing, if the Company
achieves the goals set forth on Exhibit A hereto, the right to exercise this
Option accelerate in accordance with the vesting schedule set forth in that
Exhibit, which by this reference is incorporated herein and made an integral
part of this Agreement.]
No additional shares shall vest after the date of termination of Optionee's
"Continuous Service" (as defined in Section 3 below), but this Option shall
continue to be exercisable in accordance with Section 3 hereof with respect to
that number of shares that have vested as of the date of termination of
Optionee's Continuous Service, unless such termination of Optionee's Continuous
Service is due to the Optionee's "Misconduct" as such term is defined below.
3. Term of Option. Optionee's right to exercise this Option shall
terminate upon the first to occur of the following:
(a) the expiration of ___ (___) years from the date of this
Agreement;
(b) the expiration of three (3) months from the date of
termination of Optionee's Continuous Service if such termination occurs for any
reason other than permanent disability, death, voluntary resignation or a
termination by the Company for Misconduct (as hereinafter defined); provided,
2
however, that, if Optionee dies during such three-month period, then, the
provisions of Section 3(e) below shall apply;
(c) the date of termination of Optionee's Continuous Service if
such termination occurs due to voluntary resignation or is due to Optionee's
Misconduct;
(d) the expiration of one (1) year from the date of termination
of Optionee's Continuous Service if such termination is due to permanent
disability of the Optionee (as defined in Section 22(e)(3) of the Code);
(e) the expiration of one (1) year from the date of termination
of Optionee's Continuous Service if such termination is due to Optionee's death
or if death occurs during either the three-month or one-month period following
termination of Optionee's Continuous Service pursuant to Section 3(b) or 3(c)
above, as the case may be; or
(f) upon the consummation of a "Change in Control" (as defined in
Section 2.4 of the Plan), unless otherwise provided pursuant to Section 9 below.
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company, or by
a corporation or a parent or subsidiary of a corporation issuing or assuming a
stock option in a transaction to which Section 424(a) of the Code applies, which
is uninterrupted except for vacations, illness (except for permanent disability,
as defined in Section 22(e)(3) of the Code), or leaves of absence which are
approved in writing by the Company or any of such other employer corporations,
if applicable, (ii) service as a member of the Board of Directors of the Company
until Optionee resigns, is removed from office, or Optionee's term of office
expires and he or she is not reelected, or (iii) so long as Optionee is engaged
as a consultant or service provider to the Company or other corporation referred
to in clause (i) above. Notwithstanding the foregoing if Optionee ceases to
serve the Company in one capacity, such as an employee, but within fifteen (15)
days thereafter becomes or is an employee or director of the Company or any
parent or subsidiary corporation of the Company, or by a corporation or a parent
or subsidiary of a corporation issuing or assuming a stock option in a
transaction to which Section 424(a) of the Code applies, then, the Optionee's
Continuous Service shall not be deemed to have ceased for purposes of this
Agreement.
As used herein, the term "Misconduct" means any of the following: (i)
the failure of the Optionee to perform, in all material respects, the duties
assigned to him or her by such Optionee's immediate supervisor or the Chairman
or Board of Directors of the Company, which continues unremedied for a period of
15 days following the receipt by Optionee of a notice of such failure; (ii) the
commission by the Optionee of a felony, or of a misdemeanor involving moral
turpitude; (iii) the breach of any duties of Optionee under any non-competition,
confidentiality or trade secret or invention transfer or similar agreement
entered into by the Optionee with the Company or by the Company with any of its
clients or contained in any employment agreement between the Company and
Optionee; (iv) the commission of an action or an omission to act on the part of
the Optionee which subjects the Company to civil or criminal liability, and (v)
any violation of any conflict of interest policy established by the Company that
is not remedied within a period of 15 days following the receipt by Optionee of
a notice of such violation.
4. Exercise of Option. On or after the vesting of any portion of this
Option in accordance with Sections 2 or 9 hereof, and until termination of the
right to exercise this Option in accordance with Section 3 above, the portion of
this Option which has vested prior to such termination and which, pursuant to
Section 3 survives such termination, may be exercised in whole or in part by the
Optionee (or, after his or her death, by the person designated in Section 5
below) upon delivery of the following to the Company at its principal executive
offices:
(a) a written notice of exercise which identifies this Agreement
and states the number of Shares then being purchased (but no fractional Shares
may be purchased);
2
3
(b) a check or cash in the amount of the Exercise Price (or
payment of the Exercise Price in such other form of lawful consideration as the
Administrator may approve from time to time under the provisions of Section 5.3
of the Plan);
(c) a check or cash in the amount reasonably requested by the
Company to satisfy the Company's withholding obligations under federal, state or
other applicable tax laws with respect to the taxable income, if any, recognized
by the Optionee in connection with the exercise of this Option (unless the
Company and Optionee shall have made other arrangements for deductions or
withholding from Optionee's wages, bonus or other compensation payable to
Optionee, or by the withholding of Shares issuable upon exercise of this Option
or the delivery of Shares owned by the Optionee in accordance with Section 10.1
of the Plan, provided such arrangements satisfy the requirements of applicable
tax laws); and
(d) a letter, if requested by the Company, in such form and
substance as the Company may require, setting forth the investment intent of the
Optionee, or person designated in Section 5 below, as the case may be and, if
the Common Stock of the Company is registered under Section 12(b) or 12(g) under
the Securities Act of 1934, as amended, at the time the Option is exercised, an
agreement which obligates the Optionee to enter into a market stand-off
agreement of the type set forth in Section 6 of the form of Stockholders'
Agreement attached hereto as Exhibit B.
(e) a Stockholders' Agreement in substantially the form of
Exhibit B hereto unless, at the time of such exercise, the Common Stock of the
Company is registered under Section 12(b) or 12(g) under the Securities Act of
1934, as amended.
5. Death of Optionee; No Assignment. The rights of the Optionee under
this Agreement may not be assigned or transferred except by will or by the laws
of descent and distribution, and may be exercised during the lifetime of the
Optionee only by such Optionee. Any attempt to sell, pledge, assign,
hypothecate, transfer or dispose of this Option in contravention of this
Agreement or the Plan shall be void and shall have no effect. If the Optionee's
Continuous Service terminates as a result of his or her death, and provided
Optionee's rights hereunder shall have vested pursuant to Section 2 hereof,
Optionee's legal representative, his or her legatee, or the person who acquired
the right to exercise this Option by reason of the death of the Optionee
(individually, a "Successor") shall succeed to the Optionee's rights and
obligations under this Agreement. After the death of the Optionee, only a
Successor may exercise this Option.
6. Representations and Warranties of Optionee.
(a) Optionee represents and warrants that this Option is being
acquired by Optionee for Optionee's personal account, for investment purposes
only, and not with a view to the distribution, resale or other disposition
thereof.
(b) Optionee acknowledges that the Company may issue Shares upon
the exercise of the Option without registering such Shares under the Securities
Act of l933, as amended (the "Securities Act"), on the basis of certain
exemptions from such registration requirement. Accordingly, Optionee agrees that
his or her exercise of the Option may be expressly conditioned upon his or her
delivery to the Company of an investment certificate including such
representations and undertakings as the Company may reasonably require in order
to assure the availability of such exemptions, including a representation that
Optionee is acquiring the Shares for investment and not with a present intention
of selling or otherwise disposing thereof and an agreement by Optionee that the
certificates evidencing the Shares may bear a legend indicating such
non-registration under the Securities Act and the resulting restrictions on
transfer.
3
4
Optionee acknowledges that, because Shares received upon exercise of an Option
may be unregistered, Optionee may be required to hold the Shares indefinitely
unless they are subsequently registered for resale under the Securities Act or
an exemption from such registration is available.
(c) Optionee acknowledges receipt of a copy of the Plan and
understands that all rights and obligations connected with this Option are set
forth in this Agreement and in the Plan.
7. Restrictive Legends.
(a) Optionee hereby acknowledges that federal securities laws and
the securities laws of the state in which he or she resides may require the
placement of certain restrictive legends upon the Shares issued upon exercise of
this Option, and Optionee hereby consents to the placing of any such legends
upon certificates evidencing the Shares as the Company, or its counsel, may deem
necessary or advisable.
(b) In addition, all stock certificates evidencing the Shares
shall be imprinted with a legend substantially as follows:
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO CERTAIN RESTRICTIONS ON TRANSFER, REPURCHASE RIGHTS AND A
RIGHT OF FIRST REFUSAL IN FAVOR OF THE CORPORATION AND/OR ITS
NOMINEE(S), AS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF
FEBRUARY 5,1999. TRANSFER OF THESE SHARES MAY BE MADE ONLY IN
COMPLIANCE WITH THE PROVISIONS OF THAT STOCKHOLDERS AGREEMENT, A
COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION. SUCH TRANSFER RESTRICTIONS, REPURCHASE RIGHTS AND
RIGHT OF FIRST REFUSAL ARE BINDING ON ANY PERMITTED TRANSFEREES
OF THESE SHARES." IN ADDITION, ANY TRANSFER OR PURPORTED TRANSFER
OF SHARES REPRESENTED BY THIS CERTIFICATE, IN VIOLATION OF THE
STOCKHOLDERS AGREEMENT, SHALL BE NULL AND VOID AND INEFFECTIVE TO
TRANSFER OR CONVEY ANY RIGHT, TITLE OR INTEREST IN OR TO THE
SHARES.
8. Adjustments Upon Changes in Capital Structure. In the event that the
outstanding shares of Common Stock of the Company are hereafter increased or
decreased or changed into or exchanged for a different number or kind of shares
or other securities of the Company by reason of a recapitalization, stock split,
combination of shares, reclassification, stock dividend or other change in the
capital structure of the Company, then appropriate adjustment shall be made by
the Administrator to the number of Shares subject to the unexercised portion of
this Option and to the Exercise Price per share, in order to preserve, as nearly
as practical, but not to increase, the benefits of the Optionee under this
Option, in accordance with the provisions of Section 4.2 of the Plan.
9. Change in Control. In the event of a Change in Control (as defined
in Section 2.4 of the Plan) of the Company, (i) the vesting of this Option
pursuant to Section 2 above shall automatically accelerate immediately prior to
the consummation of such Change in Control, and (ii) the Administrator in its
discretion may take one or more of the actions described in Paragraphs 8.1(a) to
8.1(d), inclusive, of the Plan. If the Administrator does not take any of those
actions, this Option shall terminate upon the consummation of the Change in
Control. The Administrator shall cause written notice of the proposed
transaction to be given to the Optionee not less than fifteen (15) days prior to
the anticipated effective date of the proposed transaction, provided, however,
that any delay beyond such time period in the giving of, or the failure to give,
such notice shall not entitle any person or entity, including any Optionee or
Participant,
4
5
to obtain a delay in the effective date or to invalidate or adversely affect the
validity of any such Change in Control.
10. No Employment Contract Created. Neither the granting of this Option
nor the exercise hereof shall be construed as granting to the Optionee any right
with respect to continuance of employment by the Company or any of its
subsidiaries. The right of the Company or any of its subsidiaries to terminate
at will the Optionee's employment at any time (whether by dismissal, discharge
or otherwise), with or without cause, is specifically reserved, except as and to
the extent otherwise provided in any employment agreement that may exist between
the Company or any of its subsidiaries, on the one hand, and the Optionee, on
the other hand.
11. Rights as Shareholder. The Optionee (or transferee of this option
by will or by the laws of descent and distribution) shall have no rights as a
shareholder with respect to any Shares covered by this Option until the date of
the issuance of a stock certificate or certificates to him or her for such
Shares, notwithstanding the exercise of this Option.
12. Interpretation and Entire Agreement.
(a) This Option is granted pursuant to the terms of the Plan, and
shall in all respects be interpreted in accordance therewith. The Administrator
shall interpret and construe this Option and the Plan, and any action, decision,
interpretation or determination made in good faith by the Administrator shall be
final and binding on the Company and the Optionee. As used in this Agreement,
the term "Administrator" shall refer to the committee of the Board of Directors
of the Company appointed to administer the Plan, and if no such committee has
been appointed, the term Administrator shall mean the Board of Directors.
(b) This Agreement, together with the Plan, constitutes the
entire agreement between the parties with respect to the subject-matter of this
Agreement and supersedes any other prior or contemporaneous agreements (either
written or oral) between the parties relating to the grant of the Option
contemplated by this Agreement.
13. Notices. Any notice, demand or request required or permitted to be
given under this Agreement shall be in writing and shall be deemed given when
delivered personally or three (3) days after being deposited in the United
States mail, as certified or registered mail, with postage prepaid, and
addressed, if to the Company, at its principal place of business, Attn: the
Chief Financial Officer, and if to the Optionee, at his or her most recent
address as shown in the Company's employment or stock records.
14. Annual and Other Periodic Reports. During the term of this
Agreement, the Company will furnish to the Optionee copies of all annual and
other periodic financial and informational reports that the Company distributes
generally to its shareholders; provided, however, that nothing herein shall
require the Company to furnish copies of any reports to the Optionee that it
does not furnished generally to its shareholders.
15. Governing Law. The validity, construction, interpretation, and
effect of this Option shall be governed by and determined in accordance with the
laws of the State of Delaware.
16. Severability. Should any provision or portion of this Agreement be
held to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
5
6
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one instrument.
18. California Corporate Securities Law. The sale of the shares that
are the subject of this Agreement has not been qualified with the Commissioner
of Corporations of the State of California and the issuance of such shares or
the payment or receipt of any part of the consideration therefor prior to such
qualification is unlawful, unless the sale of such shares is exempt from such
qualification by Section 25100, 25102 or 25105 of the California Corporate
Securities Law of l968, as amended. The rights of all parties to this Agreement
are expressly conditioned upon such qualification being obtained, unless the
sale is so exempt.
19. Entire Agreement. This Agreement, the Exhibits attached hereto and
the Plan, contain all of the agreements of the parties with respect to the
subject matter of this Agreement and supersede all agreements and understandings
(whether written or oral) between the parties relating to the subject matter of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COLLECTORS UNIVERSE, INC. "OPTIONEE"
By:
------------------------------- -----------------------------------
(Signature)
-----------------------------------
(Type or print name)
6