Exhibit 10.2
▇▇▇▇▇'▇ LIQUID GOLD-INC.
1997 STOCK OPTION PLAN
INCENTIVE STOCK OPTION AGREEMENT
OPTIONEE:
DATE OF GRANT:
AGREEMENT between ▇▇▇▇▇'▇ Liquid Gold-Inc. (the "Company"), and
the above named Optionee ("Optionee"), an employee of the Company or a
Subsidiary thereof.
The Company and Optionee agree as follows:
1. Grant of Option.
Optionee is hereby granted an Incentive Stock Option, within the
meaning of Section 422 of the Code (the "Option"), to purchase Common
Stock of the Company pursuant to the ▇▇▇▇▇'▇ Liquid Gold-Inc. 1997
Stock Option Plan (the "Plan"). The Option and this Agreement are
subject to and shall be construed in accordance with the terms and
conditions of the Plan, as now or hereinafter in effect. Any terms
which are used in this Agreement without being defined and which are
defined in the Plan shall have the meaning specified in the Plan.
2. Date of Grant.
The date of the grant of the Option is the date first set forth
above, the date of the action by the Board of Directors in granting the
same.
3. Number and Price of Shares.
The number of shares as to which the Option is granted is the
number set forth in Schedule 3A to this Agreement. The purchase price
per share is the amount set forth in Schedule 3B to this Agreement.
4. Expiration Date.
Unless sooner terminated as provided in Section 5.4 or Section 9
of the Plan, the Option shall expire and terminate on the date set forth
in Schedule 4 to this Agreement, and in no event shall the Option be
exercisable after that date.
5. Manner of Exercise.
Except as provided in this Agreement, the Option shall be
exercisable, in whole or in part, from time to time, in the manner
provided in Section 8 of the Plan.
6. Time of Exercise.
(a) The Option granted hereby shall become vested in and
exercisable by Optionee in the installments, on the dates and subject
to the conditions set forth in Schedule 6 to this Agreement; provided,
however, that Optionee must have been continuously employed by the
Company or a Subsidiary thereof from the date of grant of the Option
until the date specified on Schedule 6 or until the conditions
specified on Schedule 6 have been satisfied.
(b) Upon a Change in Control, this Option shall become fully and
immediately vested and exercisable. For purposes of this Option,
"Change in Control" means, as may be further limited by Code Section
409A, the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following:
(i) Any third person, including a "group" as defined in Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended from
time to time, becomes the beneficial owner of shares of the Company
having 50% or more of the total number of votes that may be cast for
the election of Directors of the Company.
(ii) The stockholder(s) of the Company approve: (A) any
agreement for a merger or consolidation of the Company with another
entity, provided that there shall be no change of control if the
persons and entities who were the stockholders of the Company immediately
before such merger or consolidation continue to own, directly or
indirectly, more than two-thirds of the outstanding voting securities
of the corporation resulting from such merger or consolidation in
substantially the same proportion as their ownership of the voting
securities of the Company outstanding immediately before such merger
or consolidation; (B) any sale, exchange or other disposition of all
or substantially all of the Company's assets; or (C) a plan of complete
dissolution or liquidation of the Company (or a complete dissolution or
liquidation of the Company shall otherwise occur).
(iii) There is a consummated sale, exchange or other disposition of
greater than 50% in fair market value of the Company's assets, other than
in the ordinary course of business, whether in a single transaction or a
series of related transactions.
In determining whether subsection (i) has been satisfied, the third
person owning shares must be someone other than a person or an affiliate
of a person that, as of March 31, 2005, was the beneficial owner of
shares of the Company having 20% or more of the total number of votes
that may be cast for the election of Directors of the Company.
Notwithstanding the foregoing, there shall not be a Change of Control
for purposes of this Subsection (b) and thus no acceleration of vesting
if (A) the transaction or transactions which would otherwise result
in a Change of Control are not a complete dissolution or liquidation
of the Company or stockholder approval of a complete dissolution or
liquidation, (B) the persons and entities who are stockholders of the
Company immediately before such transaction or transactions continue to
own, directly or indirectly, more than 2/3 of the outstanding voting
securities of the corporation resulting from such transaction or
transactions in substantially the same proportion as their ownership
of the voting securities of the Company outstanding immediately before
such transaction or transactions and (C) the Company and its Subsidiaries
continue operations of an active business immediately after such
transaction or transactions. The Committee's reasonable determination
as to whether an event described in this subsection (b) has occurred
shall be final and conclusive.
7. Nontransferability of Option.
The Option is not transferable by Optionee other than by ▇▇▇▇ or
the laws of descent and distribution, and the Option shall be
exercisable during Optionee's lifetime only by Optionee. Upon any
attempt to transfer, assign, pledge, hypothecate or otherwise dispose
of the Option contrary to the provisions hereof, or upon the levy of
any attachment or similar process upon the Option, the Option shall
immediately become null and void.
8. Withholding for Taxes.
Optionee shall reimburse the Company, in cash or by personal
check to the order of the Company, for any federal, state or local taxes
required by law to be withheld with respect to the exercise of the
Option or any disqualifying disposition of the Common Stock acquired
upon exercise of the Option. The Company or the Subsidiary by whom
Optionee is employed shall have the right to deduct from any salary or
other payments to be made to Optionee any federal, state or local taxes
required by law to be so withheld. The Company's obligation to deliver
a certificate representing the Common Stock acquired upon exercise of
the Option is subject to the payment by Optionee of any applicable
federal, state and local withholding tax.
9. Legends.
Certificates representing Common Stock acquired upon exercise of
this Option may contain such legends and transfer restrictions as the
Company shall deem reasonably necessary or desirable, including, without
limitation, legends restricting transfer of the Common Stock until there
has been compliance with federal and state securities laws and until
Optionee or any other holder of the Common Stock has paid the Company such
amounts as may be necessary in order to satisfy any withholding tax
liability of the Company resulting from a disqualifying disposition
described in Section 422(a) of the Code.
10. Employee Benefits.
Optionee agrees that the grant and vesting of the Option and the
receipt of shares of Common Stock upon exercise of the Option will
constitute special incentive compensation that will not be taken into
account as "salary" or "compensation" or "bonus" in determining the
amount of any payment under any pension, retirement, profit sharing or
other remuneration plan of the Company or any Subsidiary.
11. Amendment.
Subject to the terms and conditions of the Plan, the Board of
Directors may modify the Option, or accept the surrender of the Option
to the extent not theretofore exercised and authorize the granting of
new Options in substitution therefor, except that no such action shall
diminish or impair the rights under the Option without the consent of
the Optionee.
12. Interpretation.
The interpretations and constructions of any provision of and
determinations on any question arising under the Plan or this Agreement
shall be made by the Board of Directors, and all such interpretations,
constructions and determinations shall be final and conclusive as to
all parties.
13. Receipt of Plan.
By entering into this Agreement, Optionee acknowledges: (i) that
he or she has received and read a copy of the Plan; and (ii) that this
Agreement is subject to and shall be construed in accordance with the
terms and conditions of the Plan, as now or hereinafter in effect.
14. Governing Law.
This Agreement shall be construed and shall take effect in
accordance with the laws of the State of Colorado, without regard to
the conflicts of law rules of such State.
15. Miscellaneous.
This Agreement constitutes the entire understanding and agreement
of the parties with respect to the subject matter hereof and supersedes
all prior and contemporaneous agreements or understandings, inducements
or conditions, express or implied, written or oral, between the parties
with respect hereto. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid
or unenforceable, the remainder of this Agreement and the application
of such provision to other circumstances shall be interpreted so as
best to reasonably effect the intent of the parties hereto. All notices
or other communications which are required to be given or may be given
to either party pursuant to the terms of this Agreement shall be in
writing and shall be delivered personally or by registered or certified
mail, postage prepaid, to the address of the parties as set forth
following the signature of such party. Notice shall be deemed given on
the date of delivery in the case of personal delivery or on the delivery
or refusal date as specified on the return receipt in the case of
registered or certified mail. Either party may change its address for
such communications by giving notice thereof to the other party in
conformity with this Section 15.
IN WITNESS WHEREOF, the Company by a duly authorized officer
of the Company and Optionee have executed this Agreement on ___________,
effective as of the date of grant.
▇▇▇▇▇'▇ LIQUID GOLD-INC.
___________________________________
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chairman of the Board, President, and C.E.O.
OPTIONEE
___________________________________
SCHEDULES
TO
INCENTIVE STOCK OPTION AGREEMENT
Schedule
3A Number of Shares of Stock:
3B Purchase Price per Share: $
4 Expiration Date:
6 Vesting Schedule:
Vesting date Monthly on the same date in the month as the Date of ▇▇▇▇▇,
commencing one month after the Date of Grant
Shares that first become exercisable: 1/48 of the total number of shares
subject to this Option
Optionee Name
Street Address
City, State Zip Code
