Exhibit 10.2

 

MESA LABORATORIES, INC.

 

STOCK OPTION AWARD AGREEMENT

 

(Pursuant to the 2014 Equity Plan)

 

Version 1.3

 

This Stock Option Award Agreement (“Agreement”) sets forth below the terms and
conditions for grants of either incentive or non-qualified stock options by MESA
LABORATORIES, INC., a Colorado corporation (the "Company"), pursuant to the
Company’s 2014 Equity Plan (“Plan”), to an officer, director, employee or
advisor of the Company or a Subsidiary thereof (the "Participant"). The Plan,
these terms and conditions, and the grant of stock options under the Plan are
administered and approved by the Compensation Committee of the Board of
Directors of the Company (the “Committee”).

 

For purposes of this Agreement, the term "Subsidiary" shall mean any corporation
in an unbroken chain of corporations beginning with the Participant’s
corporation if, at the time of granting of the stock option, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

 

In the event of any conflict between the terms and conditions stated in this
Agreement and the terms and conditions of the Plan, the terms and conditions of
the Plan shall govern.

 

By acceptance of Options under this Agreement, the Participant acknowledges
receipt of a copy of the Plan and recognizes and agrees that all determinations,
interpretations or other actions respecting the Plan may be made by the
Committee, and that such determinations, interpretations or other actions are
final, conclusive and binding upon all parties, including the Participant.

 

1.     Grant of Option. The Company from time to time may grant to the
Participant the right and option to purchase all or any part of the number of
Shares of the Company’s Common Stock (“Shares”) indicated in a Notice of Stock
Option Grant issued to the Participant (such number being subject to adjustment
as provided in Section 17 hereof) pursuant to the terms and conditions set forth
herein (the "Option").

 

2.     Acceptance of Option. Within one (1) year following the grant of the
Option, the Participant must acknowledge receipt of the Option and Agree to the
Terms and Conditions of this Agreement, either by serving written notice to the
Company, or by accepting the Option within the Company’s on-line Option
administration system.

 

3.     Term of Option. The term of the Option shall be from the Grant Date until
the Expiration Date, both as indicated in the Notice of Stock Option Grant, up
to a maximum term of ten (10) years, subject to earlier termination or extension
as provided in Sections 14, 15 and 16 hereof. The Option and all rights
hereunder with respect thereto, to the extent such rights shall not have been
previously exercised, shall terminate and become null and void upon expiration
of the term hereof.

 

4.     Purchase Price of Option. The purchase price of the Shares of the Common
Stock covered by the Option shall be indicated as the Exercise Price Per Share
in the Notice of Stock Option Grant, such purchase price being at least one
hundred percent (100%) of the fair market value per share of such Shares on the
Grant Date of the Option, subject to adjustment as provided in Section 17
hereof.

 

5.     Time of Exercise of Option. Except as otherwise stated herein, the
specified number of Shares of the Option may be exercised, at those times and
during those periods as stated in the Vesting Schedule in the Notice of Stock
Option Grant, subject to adjustment as provided in Section 17 hereof; provided
that, except as otherwise provided in Sections 14, 15 and 16 hereof, the Option
may not be exercisable at any time by the Participant unless the Participant
shall have been in the continuous employ or service of the Company or a
Subsidiary from the Grant Date to the date of the exercise of the Option.

 

6.     Method of Exercising the Option. Subject to the terms and conditions of
this Agreement and those of the Plan, the Option may be exercised by written or
electronic notice to the Company at its principal place of business, or through
the Company’s on-line Option management system. Such notice shall state the
election to exercise the Option, and the number of full Shares that are being
exercised. Such notice shall be accompanied by payment of the full purchase
price of such Shares, or other payment method as described in Section 7 hereof.
The Company shall deliver Shares either electronically or in certificate form as
soon as practicable after the aforesaid notice. The Shares as to which the
Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option, or, if the Option shall be exercised
by the Participant and if the Participant shall so request in the notice
exercising the Option, shall be registered in the name of the Participant and
another person jointly, with right of survivorship. In the event the Option
shall be exercised, pursuant to Section 15 or Section 16 hereof, by any person
or persons other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.
All Shares that shall be purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.

 

7.     Payment of Option. As determined by the Committee at or after the Award
Date, payment of the exercise price of an Option may be made, in whole or in
part, in the form of (i) cash or cash equivalents, (ii) withholding of Shares
from the Option based on the Fair Market Value of the Shares on the date the
Option is exercised, (iii) broker-assisted market sales, or (iv) any other
“cashless exercise” arrangement.

 

8.     Payment of Taxes. All taxes required to be withheld under applicable tax
laws in connection with the Participant’s receipt of Shares upon exercise of a
non-qualified Option, must be paid to the Company by the Participant, in cash,
immediately upon advice of the Company, unless an alternate arrangement to
satisfy withholding requirements has been made between the Company and the
Participant pursuant to the terms and conditions of the Plan.

 

9.     No Obligation to Exercise. The granting of the Option hereof shall impose
no obligation upon the Participant to exercise such Option.

10.     Acceleration and Exercise Upon Change of Control. Notwithstanding the
provisions of Section 5 hereof, the exercise period set forth in Section 5
hereof shall be treated as described in Article 13.6 of the Plan, subject to the
condition that no Option shall be exercisable after the Expiration Date of the
Option.

 

11.     Rights as a Shareholder. The holder of the Option shall have no rights
as a shareholder of the Company with respect to the Shares covered by the Option
until the due exercise of the Option and the date of the issuance of the Shares.
No adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such Option is exercised, except as
provided in Section 17 hereof.

 

12.     No transferability. The Option shall not be transferable otherwise than
by Will, the laws of descent and distribution, or as permitted by the rules and
regulations of the Securities and Exchange Commission, and the Option may be
exercised, during the lifetime of the Participant, only by the Participant or by
the Participant's court appointed guardian as set forth in Section 16 hereof.
More particularly (but without limiting the generality of the foregoing), the
Option may not be assigned, transferred (except as provided above), pledged, or
hypothecated in any way, shall not be assignable by operation of law and shall
not be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge, hypothecation, or other disposition of the Option
contrary to the provisions hereof, and the levy of any execution, attachment, or
similar process upon the Option, shall be null and void and without effect and
shall terminate the Option.

 

13.     Incentive Stock Options. The following provisions shall apply, in
addition to the other provisions of the Plan and this Agreement which are not
inconsistent therewith, to Options intended to qualify as incentive stock
options (“ISOs”) under Section 422 of the Code:

 

(a) Options may be granted as ISOs only to individuals who are employees of the
Corporation or any present or future “subsidiary corporation” or “parent
corporation” as those terms are defined in Section 424 of the Code
(collectively, “Related Corporations”) and Options shall not be granted as ISOs
to independent contractors;

 

(b) for purposes of Section 16 of this Agreement, “Disability” shall mean
“permanent and total disability” as defined in Section 22(e)(3) of the Code;

 

(c) Options held by a Participant shall be eligible for treatment as ISOs only
if the fair market value (determined as at the Grant Date) of the Shares with
respect to which such Options and all other options intended to qualify as
“incentive stock options” under Section 422 of the Code held by such individual
and granted under the Plan or any other plan of a Related Corporation and which
are exercisable for the first time by such individual during any one calendar
year does not exceed U.S.$100,000; and

 

(d) by accepting an Option granted as an ISO under the Plan, each Participant
agrees to notify the Company in writing immediately after such Participant makes
a “Disqualifying Disposition” of any stock acquired pursuant to the exercise of
such ISO; for this purpose, a Disqualifying Disposition is any disposition
occurring on or before the later of (i) the date two years following the date
the ISO was granted or (ii) the date one year following the date the ISO was
exercised.

 

14.     Termination of Services. In the event that the services of the
Participant as an employee, director or officer of the Company or a Subsidiary
shall be terminated (otherwise than by reason of death, disability or cause, as
specifically defined below), the Option (and any other Option or Options held by
the Participant to the extent not previously exercised) may be exercised by the
Participant (to the extent that the Participant shall have been entitled to do
so at the termination of the Participant's services) at any time within one (1)
month after such termination. So long as the Participant shall continue to
provide services to the Company or Subsidiary as an employee, director or
officer, the Option shall not be affected by any change of duties or position.

 

In the event the Participant’s employment is terminated for cause while employed
by the Company or a Subsidiary, all unexercised Options shall be immediately
cancelled, in addition to any other remedy which the Company may have. For
purposes of this Section 14, the term “cause” shall include only the following
acts committed by the Participant while employed by the Company or a Subsidiary:
(a) theft, bribery or fraud; (b) competing with the business of the Company, its
operating groups or any other of the Company’s affiliates; (c) soliciting for
employment any employees of the Company, its operating groups or any other of
the Company’s affiliates; or (d) disclosing confidential information which is
material to the Company and/or its affiliates.

 

15.     Death of Participant. If the Participant shall die while providing
services to the Company or Subsidiary, the Option may be exercised (to the
extent that the Participant shall have been entitled to do so at the date of the
Participant's death) by a legatee or legatees of the Participant under the
Participant's duly probated Last Will and Testament, or by the Participant's
duly appointed personal representative, at any time within one (1) year after
the death of the Participant, subject to the condition that no Option may be
exercised after ten (10) years from the Date of Grant.

 

16.     Disability of Participant. If the Participant's service to the Company
or a Subsidiary is terminated by reason of the Disability (as hereinafter
defined) of the Participant, the Option may be exercised (to the extent that the
Participant shall have been entitled to do so at the date the Participant's
service with the Company or a Subsidiary was terminated due to the Disability of
the Participant) by the Participant or the Participant's court appointed
guardian at any time within one (1) year after the Participant ceased to provide
services to the Company or a Subsidiary, subject to the condition that no Option
may be exercised after ten (10) years from the Date of Grant. For purposes of
this Agreement, the term "Disability" means a condition for which the
Participant becomes eligible for a disability benefit under the long term
disability insurance policy issued to the Company providing basic long term
disability insurance benefits, or under any other long term disability plan
which hereafter may be maintained by the Company, whether or not the Participant
is covered by such plan. In the event of a dispute, the determination of whether
a Participant has incurred a Disability will be made by the Committee and may be
supported by the advice of a physician competent in the area to which such
Disability relates.

 

17.     Adjustments upon Changes in Capital Structure. Changes in Capital
Structure will be treated in accordance with Article 14 of the Plan.

 

Without limiting the generality of the foregoing, for clarification, no
adjustment shall be made with respect to the number or price of Shares subject
to the Option upon the occurrence of any of the following events:

 

(a) The grant or exercise of any other Options which may be granted or exercised
under any qualified or nonqualified stock option plan or under any other
Participant benefit plan of the Company, whether or not such Options were
outstanding on the Grant Date of the Option or thereafter granted;

 

(b) The sale of any Shares of Common Stock by the Company in any public
offering, including, without limitation, Shares sold upon the exercise of any
overallotment Option granted to the underwriter in connection with such
offering;

 

(c) The issuance, sale or exercise of any warrants to purchase Shares of Common
Stock, whether or not such warrants were outstanding on the Date of Grant of the
Option or thereafter issued;

 

(d) The issuance or sale of rights, promissory notes or other securities
convertible into Shares of Common Stock in accordance with the terms of such
securities ("Convertible Securities"), whether or not such Convertible
Securities were outstanding on the Date of Grant of the Option or were
thereafter issued or sold;

 

(e) The issuance or sale of Common Stock upon conversion or exchange of any
Convertible Securities, whether or not any adjustment in the purchase price was
made or required to be made upon the issuance or sale of such Convertible
Securities and whether or not such Convertible Securities were outstanding on
the Date of Grant of the Option or were thereafter issued or sold; or

 

(f) Upon any amendment to or change in the terms of any rights or warrants to
subscribe for or purchase, or Options for the purchase of, Common Stock or
Convertible Securities or in the terms of any Convertible Securities, including,
but not limited to, any extension of any expiration date of any such right,
warrant or Option, any change in any exercise or purchase price provided for in
any such right, warrant or Option, any extension of any date through which any
Convertible Securities are convertible into or exchangeable for Common Stock or
any change in the rate at which any Convertible Securities are convertible into
or exchangeable for Common Stock.

 

18.     No Advice Regarding Agreement. The Company is not providing any tax,
legal or financial advice, nor is the Company making any recommendations
regarding the Participant’s participation in the Plan, or the Participant’s
acquisition or sale of the underlying Shares. The Participant is hereby advised
to consult with his or her own personal tax, legal and financial advisors
regarding his or her participation in the Plan before taking any action related
to the Plan.

 

19.     Insider Trading Restrictions/Market Abuse Laws. The Participant
acknowledges that the Participant may be subject to insider trading restrictions
and/or market abuse laws, which may affect the Participant’s ability to acquire
or sell shares of Common Stock under the Plan during such times as the
Participant is considered to have “inside information” regarding the Company (as
defined by the laws in the Participant’s country). Any restrictions under these
laws or regulations are separate from and in addition to any restrictions that
may be imposed under the Company’s insider trading policy. The Participant
acknowledges that it is his or her responsibility to comply with any applicable
restrictions, and the Participant is advised to speak to his or her personal
advisor on this matter.

 

20.     Reservation of Stock. The Company shall at all times during the term of
the Option reserve and keep available such number of Shares of Common Stock as
will be sufficient to satisfy the requirements of this Agreement, shall pay all
original issue and transfer taxes with respect to the issue and transfer of
Shares pursuant hereto and all other fees and expenses necessarily incurred by
the Company in connection therewith, and will from time to time use its best
efforts to comply with all laws and regulations which, in the opinion of counsel
for the Company, shall be applicable.