Exhibit 10.8.2

COST PLUS, INC.

DIRECTOR OPTION AGREEMENT

Cost Plus, Inc., a California corporation (the “Company”), has granted to
                    (the “Optionee”) an option to purchase a total of 12,000
shares of the Company’s Common Stock (the “Optioned Stock”), at the price
determined as provided herein, and in all respects subject to the terms,
definitions and provisions of the Company’s 1996 Director Option Plan (the
“Plan”) adopted by the Company which is incorporated herein by reference. The
terms defined in the Plan shall have the same defined meanings herein.

1. Nature of the Option. This Option is a nonstatutory option and is not
intended to qualify as an incentive stock option as defined in Section 422 of
the Code.

2. Exercise Price. The exercise price is $            for each share of Common
Stock.

3. Exercise of Option. This Option shall be exercisable during its term in
accordance with the provisions of Section 8 of the Plan as follows:

(a) Right to Exercise.

(i) This Option shall become exercisable in installments cumulatively with
respect to twenty-five percent (25%) of the Optioned Stock on March 24, 2009,
and with respect to an additional twenty-five percent (25%) of the Optioned
Stock on each of the second, third and fourth anniversaries of the date of
grant, so that one hundred percent (100%) of the Optioned Stock shall be
exercisable on the fourth anniversary of the date of grant, subject to the
Optionee’s continued service as a Director through each such vesting date;
provided, however, that in no event shall any Option be exercisable prior to the
date the stockholders of the Company approve the Plan.

(ii) This Option may not be exercised for a fraction of a share.

(iii) In the event of Optionee’s death, disability or other termination of
service as a Director, the exercisability of the Option is governed by Section 8
of the Plan.

(b) Method of Exercise. This Option shall be exercisable by written notice which
shall state the election to exercise the Option and the number of Shares in
respect of which the Option is being exercised. Such written notice, in the form
attached hereto as Exhibit A, shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company. The
written notice shall be accompanied by payment of the exercise price.

4. Method of Payment. Payment of the exercise price shall be by any of the
following, or a combination thereof, at the election of the Optionee:

(a) cash;

(b) check; or

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(c) surrender of other shares which (x) shall be valued at its Fair Market Value
on the date of exercise, and (ii) must be owned free and clear of any liens,
claims, encumbrances or security interests, if accepting such Shares, in the
sole discretion of the Committee, shall not result in any adverse accounting
consequences to the Company; or

(d) delivery of a properly executed exercise notice together with such other
documentation as the Company and the broker, if applicable, shall require to
effect an exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price.

5. Restrictions on Exercise. This Option may not be exercised if the issuance of
such Shares upon such exercise or the method of payment of consideration for
such shares would constitute a violation of any applicable federal or state
securities or other law or regulations, or if such issuance would not comply
with the requirements of any stock exchange upon which the Shares may then be
listed. As a condition to the exercise of this Option, the Company may require
Optionee to make any representation and warranty to the Company as may be
required by any applicable law or regulation.

6. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by the Optionee. The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

7. Term of Option. This Option may not be exercised more than seven (7) years
from the date of grant of this Option, and may be exercised during such period
only in accordance with the Plan and the terms of this Option.

8. Taxation Upon Exercise of Option. Optionee understands that, upon exercise of
this Option, he or she will recognize income for tax purposes in an amount equal
to the excess of the then Fair Market Value of the Shares purchased over the
exercise price paid for such Shares. Since the Optionee is subject to
Section 16(b) of the Securities Exchange Act of 1934, as amended, under certain
limited circumstances the measurement and timing of such income (and the
commencement of any capital gain holding period) may be deferred, and the
Optionee is advised to contact a tax advisor concerning the application of
Section 83 in general and the availability a Section 83(b) election in
particular in connection with the exercise of the Option. Upon a resale of such
Shares by the Optionee, any difference between the sale price and the Fair
Market Value of the Shares on the date of exercise of the Option, to the extent
not included in income as described above, will be treated as capital gain or
loss.

9. Code Section 409A. Under Code Section 409A, an Option that vests after
December 31, 2004 (or that vested on or prior to such date but which was
materially modified after October 3, 2004) that was granted with a per Share
exercise price that is determined by the Internal Revenue Service (the “IRS”) to
be less than the Fair Market Value of a Share on the date of grant (a “discount
option”) may be considered “deferred compensation.” An Option that is a
“discount option” may result in (i) income recognition by Optionee prior to the
exercise of the Option, (ii) an additional twenty percent (20%) federal income
tax, and (iii) potential penalty and interest charges. The “discount option” may
also result in additional state income, penalty and interest tax to the
Optionee.

 

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Optionee acknowledges that the Company cannot and has not guaranteed that the
IRS will agree that the per Share exercise price of this Option equals or
exceeds the Fair Market Value of a Share on the date of grant in a later
examination. Optionee agrees that if the IRS determines that the Option was
granted with a per Share exercise price that was less than the Fair Market Value
of a Share on the date of grant, Optionee shall be solely responsible for
Optionee’s costs related to such a determination.

10. Entire Agreement; Governing Law. The Plan is incorporated herein by
reference. The Plan and this Option agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the internal substantive laws but not
the choice of law rules of California.

11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND AGREES THAT THE
VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY
CONTINUING AS A DIRECTOR AT THE WILL OF THE COMPANY (AND NOT THROUGH THE ACT OF
BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). OPTIONEE
FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS
CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT
CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A DIRECTOR
FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND WILL NOT INTERFERE WITH
OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS
A DIRECTOR AT ANY TIME, WITH OR WITHOUT CAUSE.

 

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DATE OF GRANT:                                 

 

COST PLUS, INC.

a California corporation

By:      

Barry J. Feld, President and Chief

Executive Officer

Optionee acknowledges receipt of a copy of the Plan, a copy of which is attached
hereto, and represents that he or she is familiar with the terms and provisions
thereof, and hereby accepts this Option subject to all of the terms and
provisions thereof. Optionee hereby agrees to accept as binding, conclusive and
final all decisions or interpretations of the Board upon any questions arising
under the Plan.

Dated:                             

 

   Name, Optionee

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EXHIBIT A

COST PLUS, INC.

DIRECTOR OPTION EXERCISE NOTICE

Cost Plus, Inc.

200 4th Street

Oakland, CA 94607

Attention: Corporate Secretary

1. Exercise of Option. The undersigned (“Optionee”) hereby elects to exercise
Optionee’s option to purchase                     shares of the Common Stock
(the “Shares”) of Cost Plus, Inc. (the “Company”) under and pursuant to the
Company’s 1996 Director Option Plan and the Director Option Agreement dated
                            (the “Agreement”).

2. Representations of Optionee. Optionee acknowledges that Optionee has
received, read and understood the Agreement.

3. Rights as Shareholder. Until the issuance (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company) of the Shares, no right to vote or receive dividends or any other
rights as a shareholder will exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Shares so acquired will be
issued to Optionee as soon as practicable after exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section 10 of the Plan.

4. Tax Consequences. Optionee understands that Optionee may suffer adverse tax
consequences as a result of Optionee’s purchase or disposition of the Shares.
Optionee represents that Optionee has consulted with any tax consultant(s)
Optionee deems advisable in connection with the purchase or disposition of the
Shares and that Optionee is not relying on the Company for any tax advice.

5. Delivery of Payment. Optionee herewith delivers to the Company the aggregate
purchase price for the Shares that Optionee has elected to purchase and has made
provision for the payment of any federal or state withholding taxes required to
be paid or withheld by the Company.

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6. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this Exercise Notice shall
inure to the benefit of the successors and assigns of the Company. Subject to
the restrictions on transfer herein set forth, this Exercise Notice shall be
binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.

7. Severability; Interpretation. In the event that any provision hereof becomes
or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Exercise Notice shall continue in full force and effect. Any
dispute regarding the interpretation of this Exercise Notice shall be submitted
by Optionee or by the Company forthwith to the Committee which shall review such
dispute at its next regular meeting. The resolution of such a dispute by the
Committee shall be final and binding on all parties.

8. Entire Agreement; Governing Law. The Agreement is incorporated herein by
reference. This Exercise Notice and the Agreement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof. This Exercise Notice and the Agreement are governed by California law
except for that body of law pertaining to conflict of laws.

 

Submitted by:     Accepted by: OPTIONEE:     COST PLUS, INC.       By:     Name,
Optionee      

Barry J. Feld, President and Chief

Executive Officer

Address:                       Dated:                                         
                                                     
Dated:                                     
                                                    

 

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