Exhibit 10.2

 

MINES MANAGEMENT, INC.
2012 EQUITY INCENTIVE PLAN

 

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

 

This Nonqualified Stock Option Award Agreement (the “Agreement”), is made as of
the        day of                 , 201 , by and between Mines Management, Inc.,
an Idaho corporation (the “Company”), and                          (the
“Participant”).

 

WHEREAS, the Company desires to encourage and enable the Participant to acquire
a proprietary interest in the Company through ownership of shares of the
Company’s Common Stock, par value $0.001 per share (the “Shares”), pursuant to
the terms and conditions of the Company’s 2012 Equity Incentive Plan (the
“Plan”) and this Agreement.  Such ownership will provide the Participant with an
additional incentive to promote the success of the Company.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:

 

1.                                      Definitions.  For purposes of this
Agreement, all capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Plan.

 

2.                                      Grant of Option.  The Company hereby
grants to the Participant Nonqualified Stock Options (the “Options”) to purchase
                 Shares at the exercise price (the “Exercise Price”) of
$         per Share, subject to the terms and conditions of this Agreement and
the Plan.

 

3.                                      Option Term.  The Options granted hereby
shall expire on                            (the “Expiration Date”), unless
sooner terminated or modified under the provisions of this Agreement or the
Plan.  Except as otherwise set forth herein, the Options may not be exercised
after the Expiration Date.

 

4.                                      Vesting.  The Options shall vest and be
exercisable by the Participant in accordance with the following schedule,
provided that the Participant’s Continuous Service does not terminate prior to
the vesting date:

 

Date

 

Number of Options Vested

 

 

 

 

 

 

 

 

 

 

To the extent vested, Options may be exercised in whole or in part prior to the
Expiration Date except as otherwise provided in this Agreement or the Plan.

 

5.                                      Termination of Continuous Service.

 

(a)                                 Unless otherwise determined by the Committee
and reflected in an employment contract or other applicable agreement between
the Participant and the Company, all Options held by a Participant whose
Continuous Service terminates, other than upon

 

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Retirement, Disability, or death, shall terminate immediately upon such
termination of Continuous Service, provided, however, if such Participant’s
Continuous Service is terminated for reasons other than for cause, as determined
by the Board in its discretion, each vested Option held by such person shall
continue to be exercisable until the earlier of the Expiration Date of such
Option or 180 days after the date of such termination of Continuous Service. 
All vested Options not exercised within the period described in the preceding
sentence shall terminate at the end of such period.

 

(b)                                 In the event of a Participant’s termination
of Continuous Service on account of Disability prior to the termination of the
Participant’s Continuous Service, all unvested Options shall immediately
terminate, and any vested Option held by such person shall continue to be
exercisable until the earlier of twelve (12) months after the date of such
Disability or the Expiration Date of such Option.  All vested Options not
exercised within the period described in the preceding sentence shall terminate
at the end of such period.

 

(c)                                  In the event of termination of a
Participant’s Continuous Service due to the death of the Participant, all
unvested Options shall immediately terminate, and any vested Option held by such
person shall continue to be exercisable until the earlier of twelve (12) months
after the date of death or the Expiration Date of such Option.  All vested
Options not exercised within the period described in the preceding sentence
shall terminate at the end of such period.  In the event of the death of a
Participant after the termination of Participant’s Continuous Service, all
vested Options held by such person shall continue to be exercisable until the
earlier of twelve (12) months after the termination of the Particpant’s
Continuous Service or the Expiration Date of such Option.  All such vested
Options not exercised within the period described in the preceding sentence
shall terminate at the end of such period.

 

(d)                                 In the event of a Participant’s Retirement,
all unvested Options shall automatically vest on the date of such Retirement and
any vested Options shall be exercisable until the earlier of twenty four (24)
months after such Retirement date or the Expiration Date of such Options.  All
such vested Options not exercised within the period described in the preceding
sentence shall terminate at the end of such period.

 

(e)                                  If more than one of the conditions
specified in (a), (b), (c), or (d) above applies to a Participant, the provision
that provides for the latest last date to exercise an Option shall apply

 

6.                                      Non-Assignability.  The Option granted
hereby and any right arising thereunder may not be transferred, assigned,
pledged or hypothecated (whether by operation of law or otherwise), except by
will or the applicable laws of descent and distribution, and the Option and any
right arising thereunder shall not be subject to execution, attachment or
similar process.  Any attempted assignment, transfer, pledge, hypothecation or
other disposition of an Option not specifically permitted herein or in the Plan
shall be null and void and without effect.

 

7.                                      Mode of Exercise.  The exercise price of
Common Stock acquired pursuant to an Option shall be paid in any form of lawful
consideration as the Board determines from time to time, including without
limitation through net settlement or other method of

 

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cashless exercise.  The person exercising an Option (or his or her designee) may
request a certificate for such Shares.

 

8.                                      Plan Controlling.  This Agreement is
intended to conform in all respects with the requirements of the Plan. 
Inconsistencies between the requirements of this Agreement and the Plan shall be
resolved according to the terms of the Plan.  The Participant acknowledges
receipt of a copy of the Plan.

 

9.                                      Rights Prior to Exercise of Option.  The
Participant shall not have any rights as a shareholder with respect to any
Shares subject to the Options prior to the date on which the Participant is
recorded as the holder of such Shares on the records of the Company.

 

10.                               Withholding Obligations.  If the Company has
or will have a legal obligation to withhold any taxes related to the grant,
vesting or exercise of an Option, such Option may not be granted, vested or
exercised in whole or in part, as applicable, unless such tax obligation is
first satisfied in a manner satisfactory to the Company.  The Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under an Option by any of the following
means (in addition to the Company’s right to withhold from any compensation
otherwise payable to the Participant by the Company) or by a combination of such
means: (i) tendering a cash payment in Dollars; (ii) authorizing the Company to
withhold Common Stock from the Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under an
Option, provided, however, that no Common Stock may be withheld with a value
exceeding the minimum amount of tax required to be withheld by law; or
(iii) delivering to the Company owned and unencumbered Common Stock held for the
minimum amount of time necessary to avoid adverse accounting treatment to the
Company, as determined by the Board in its discretion.

 

11.                               Code Section 409A.  This Agreement and the
Plan are intended to provide rights that do not provide for the deferral of
compensation subject to Code Section 409A by means of complying with Treasury
Regulations Section 1.409A-1(b)(5) or to otherwise be exempt from Code
Section 409A.  The provisions of Agreement and the Plan shall be interpreted and
administered in a manner so as to avoid the imposition of additional tax,
interest, or other sanction pursuant to Code Section 409A.  If any provision of
this Agreement or the Plan would otherwise frustrate or conflict with such
intent, the provision, term or condition will be interpreted and deemed amended
so as to avoid such conflict to the fullest extent possible.  If, at any time,
the Board determines that the terms of this Agreement or the Plan may result in
additional tax, interest, or other sanction to an Participant under Code
Section 409A, the Board shall have the authority, but shall not be required, to
enter into an amendment of this Agreement or the Plan that is designed to avoid
such additional tax, interest, or other sanction.  Notwithstanding any other
provision of this Agreement, the Company does not guarantee or warrant to any
Participant or any other person that this Agreement, the Plan, or any Option
that is intended to be exempt from Code Section 409A shall be so exempt, nor
that this Agreement, the Plan, or any Option intended to comply with Code
Section 409A shall so comply, nor will the Company indemnify, defend or hold
harmless any person with respect to the tax consequences of any such failure. 
Each Participant shall be solely responsible for all of the tax consequences to
the Participant of this Agreement, the Plan, or any Option, including any
consequences arising

 

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under Code Section 409A.  The Company provides no guaranty or assurance
concerning the tax consequences to the participants of this Agreement, the Plan,
or any Option.

 

12.                                                                              
Governing Law.  This Agreement and all rights arising hereunder shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Idaho, without regard to such state’s conflict of laws rules.

 

13.                                                                              
No Employment Rights Created.  NEITHER THE PLAN NOR THIS AGREEMENT SHALL BE
CONSTRUED AS GIVING THE PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OR
SERVICE OF THE COMPANY OR ANY AFFILIATE THEREOF, NOR SHALL THEY INTERFERE IN ANY
WAY WITH THE RIGHT OF THE COMPANY OR ANY AFFILIATE THEREOF, AS APPLICABLE, TO
TERMINATE THE PARTICIPANT’S EMPLOYMENT OR SERVICE AT ANY TIME WITH OR WITHOUT
CAUSE.

 

* * * * *

 

Executed as of the day and year first above written.

 

 

 

MINES MANAGEMENT, INC.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

PARTICIPANT

 

 

 

 

 

 

By:

 

 

 

Name:

 

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