Exhibit 10.2

Option No.: ________

ROYAL GOLD, INC.
2004 OMNIBUS LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

Royal Gold, Inc., a Delaware corporation (the “Company”), hereby grants an
option to purchase shares of its common stock, $.01 par value, (the “Stock”) to
the optionee named below. The terms and conditions of the option are set forth
in this cover sheet, in the attachment, and in the Company’s 2004 Omnibus
Long-Term Incentive Plan (the “Plan”).

Grant Date:                               , 200___

Name of Optionee:
                                                                                                              

Optionee’s Social Security Number:           -          -          

Number of Shares Covered by Option:                                         

Option Price per Share: $          .         (At least 100% of Fair Market
Value)

     By signing this cover sheet, you agree to all of the terms and conditions
described in the attached Agreement and in the Plan, a copy of which is also
available upon request to the Corporate Secretary. You acknowledge that you have
carefully reviewed the Plan, and agree that the Plan will control in the event
any provision of this Agreement should appear to be inconsistent.

          Optionee:  

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(Signature)

 
        Company:  

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(Signature)

 
       

  Title:    

     

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Attachment

This is not a stock certificate or a negotiable instrument.

 

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ROYAL GOLD, INC.
2004 OMNIBUS LONG-TERM INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AGREEMENT

     
Nonqualified Stock Option
  This option is not intended to be an incentive stock option under Section 422
of the Internal Revenue Code and will be interpreted accordingly.
 
   
Vesting
  This option is only exercisable before it expires and then only with respect
to the vested portion of the option. Subject to the preceding sentence, you may
exercise this option, in whole or in part, to purchase a whole number of vested
shares not less than 100 shares, unless the number of shares purchased is the
total number available for purchase under the option, by following the
procedures set forth in the Plan and below in this Agreement.
 
   

  Your right to purchase shares of Stock under this option vests as to ___of the
total number of shares covered by this option, as shown on the cover sheet, on
each of the ___anniversaries of the Grant Date, provided you then continue in
Service. The resulting aggregate number of vested shares will be rounded to the
nearest whole number, and you cannot vest in more than the number of shares
covered by this option.
 
   

  Notwithstanding the foregoing vesting rules, if you incur an Involuntary
Termination in connection with a Corporate Transaction, you shall be one hundred
percent (100%) vested as of the date of such Involuntary Termination.
 
   

  For this purpose, Involuntary Termination in connection with a Corporate
Transaction means a termination of your Service during the one year period
commencing with a Corporate Transaction by reason of:
 
   

  (a)      your involuntary discharge by the Company for reasons other than
Cause (as defined in the Plan); or
 
   

  (b)      your voluntary resignation from the Company following (i) a material
adverse change in your title or responsibilities with the Company, (ii)  a
material reduction in your base salary or (iii) receipt of notice that your
principal workplace will be relocated by more than 50 miles.
 
   

  No additional vesting shall occur after your Service has terminated for any
reason.

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Term
  Your option will expire in any event at the close of business at Company
headquarters on the day of the 10th anniversary of the Grant Date, as shown on
the cover sheet. Your option will expire earlier if your Service terminates, as
described below.
 
   
Regular Termination
  If your Service terminates for any reason, other than death, Disability or
Cause, then your option will expire at the close of business at Company
headquarters on the 90th day after your termination date.
 
   
Termination for
Cause
  If your Service is terminated for Cause, then you shall immediately forfeit
all rights to your option and the option shall immediately expire.
 
   
Death
  If your Service terminates because of your death, then your option will expire
at the close of business at Company headquarters on the date twelve (12) months
after the date of death. During that twelve month period, your estate or heirs
may exercise the vested portion of your option.
 
   

  In addition, if you die during the 90-day period described in connection with
a regular termination (i.e., a termination of your Service not on account of
your death, Disability or Cause), and a vested portion of your option has not
yet been exercised, then your option will instead expire on the date twelve
(12) months after your termination date. In such a case, during the period
following your death up to the date twelve (12) months after your termination
date, your estate or heirs may exercise the vested portion of your option.
 
   
Disability
  If your Service terminates because of your Disability, then your option will
expire at the close of business at Company headquarters on the date twelve
(12) months after your termination date.
 
   
Leaves of Absence
  For purposes of this option, your Service does not terminate when you go on a
bona fide employee leave of absence that was approved by the Company in writing,
if the terms of the leave provide for continued Service crediting, or when
continued Service crediting is required by applicable law. However, your Service
will be treated as terminating 90 days after you went on employee leave, unless
your right to return to active work is guaranteed by law or by a contract. Your
Service terminates in any event when the approved leave ends unless you
immediately return to active employee work.
 
   

  The Company determines, in its sole discretion, which leaves count for this
purpose, and when your Service terminates for all purposes under the Plan.
 
   
Notice of Exercise
  When you wish to exercise this option, you must notify the Company by filing
the proper “Notice of Exercise” form at the address given on

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  the form. Your notice must specify how many shares you wish to purchase (in a
parcel of at least 100 shares generally). Your notice must also specify how your
shares of Stock should be registered (in your name only or in your and your
spouse’s names as joint tenants with right of survivorship). The notice will be
effective when it is received by the Company.
 
   

  If someone else wants to exercise this option after your death, that person
must prove to the Company’s satisfaction that he or she is entitled to do so.
 
   
Form of Payment
  When you submit your notice of exercise, you must include payment of the
option price for the shares you are purchasing. Payment may be made in one (or a
combination) of the following forms:
 
   

  ·      Cash, your personal check, a cashier’s check, a money order, wire
transfer or another cash equivalent acceptable to the Company.
 
   

  ·      Shares of Stock which have already been owned by you for more than six
months and which are surrendered to the Company. The value of the shares,
determined as of the effective date of the option exercise, will be applied to
the option price.
 
   

  ·      By delivery (on a form prescribed by the Company) of an irrevocable
direction to a licensed securities broker acceptable to the Company (a
“Qualified Broker”) to sell Stock and to deliver all or part of the sale
proceeds to the Company in payment of the aggregate option price and any
withholding taxes (the “Net Exercise”).
 
   
Withholding Taxes
  You will not be allowed to exercise this option unless you make acceptable
arrangements to pay any withholding or other taxes that may be due as a result
of the option exercise or sale of Stock acquired under this option. In the event
that the Company determines that any federal, state, local or foreign tax or
withholding payment is required relating to the exercise or sale of shares
arising from this grant, the Company shall have the right to require such
payments from you, or withhold such amounts from other payments due to you from
the Company or any Affiliate.
 
   
Transfer of Option
  During your lifetime, only you (or, in the event of your legal incapacity or
incompetency, your guardian or legal representative) may exercise the option.
You cannot transfer or assign this option. For instance, you may not sell this
option or use it as security for a loan. If you attempt to do any of these
things, this option will immediately become invalid. You may, however, dispose
of this option in your will or it may be transferred upon your death by the

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  laws of descent and distribution.
 
   

  Regardless of any marital property settlement agreement, the Company is not
obligated to honor a notice of exercise from your spouse, nor is the Company
obligated to recognize your spouse’s interest in your option in any other way.
 
   
Retention Rights
  Neither your option nor this Agreement give you the right to be retained by
the Company (or any Parent, Subsidiaries or Affiliates) in any capacity. The
Company (and any Parent, Subsidiaries or Affiliates) reserve the right to
terminate your Service at any time and for any reason.
 
   
Shareholder Rights
  You, or your estate or heirs, have no rights as a shareholder of the Company
until a certificate for your option’s shares has been issued (or an appropriate
book entry has been made). No adjustments are made for dividends or other rights
if the applicable record date occurs before your stock certificate is issued (or
an appropriate book entry has been made), except as described in the Plan.
 
   
Forfeiture of Rights
  If you should take actions in competition with the Company, the Company shall
have the right to cause a forfeiture of your rights, including, but not limited
to, the right to cause: (i) a forfeiture of any outstanding option, and (ii)
with respect to the period commencing twelve (12) months prior to your
termination of Service with the Company and ending twelve (12) months following
such termination of Service (A) a forfeiture of any gain recognized by you upon
the exercise of an option or (B) a forfeiture of any Stock acquired by you upon
the exercise of an option (but the Company will pay you the option price without
interest).
 
   

  Unless otherwise specified in an employment or other agreement between the
Company and you, you take actions in competition with the Company if you
directly or indirectly, own, manage, operate, join or control, or participate in
the ownership, management, operation or control of, or are a proprietor,
director, officer, stockholder, member, partner or an employee or agent of, or a
consultant to any business, firm, corporation, partnership or other entity that
is in the business of acquiring or investing in precious metal royalties. Under
the prior sentence, ownership of less than 1% of the securities of a public
company shall not be treated as an action in competition with the Company.
 
   
Adjustments
  In the event of a stock split, a stock dividend or a similar change in the
Stock, the number of shares covered by this option and the option price per
share shall be adjusted (and rounded down to the nearest whole number) if
required pursuant to the Plan. Your option shall be

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  subject to the terms of the agreement of merger, liquidation or reorganization
in the event the Company is subject to such corporate activity.
 
   
Applicable Law
  This Agreement will be interpreted and enforced under the laws of the State of
Delaware, other than any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of this Agreement to the
substantive law of another jurisdiction.
 
   
The Plan
  The text of the Plan is incorporated in this Agreement by reference. Certain
capitalized terms used in this Agreement are defined in the Plan, and have the
meaning set forth in the Plan.
 
   

  This Agreement and the Plan constitute the entire understanding between you
and the Company regarding this option. Any prior agreements, commitments or
negotiations concerning this option are superseded.
 
   
Other Agreements
  You agree, as a condition of the grant of this option, that in connection with
the exercise of the option, you will execute such document(s) as necessary to
become a party to any shareholder agreement or voting trust as the Company may
require.
 
   
Data Privacy
  In order to administer the Plan, the Company may process personal data about
you. Such data includes but is not limited to the information provided in this
Agreement and any changes thereto, other appropriate personal and financial data
about you such as home address and business addresses and other contact
information, payroll information and any other information that might be deemed
appropriate by the Company to facilitate the administration of the Plan.
 
   

  By accepting this option, you give explicit consent to the Company to process
any such personal data. You also give explicit consent to the Company to
transfer any such personal data outside the country in which you work or are
employed, including, with respect to non-U.S. resident Optionees, to the United
States, to transferees who shall include the Company and other persons who are
designated by the Company to administer the Plan.
 
   
Consent to Electronic Delivery
  The Company may choose to deliver certain statutory materials relating to the
Plan in electronic form. By accepting this option grant you agree that the
Company may deliver the Plan prospectus and the Company’s annual report to you
in an electronic format. If at any time you would prefer to receive paper copies
of these documents, as you are entitled to, the Company would be pleased to
provide copies. Please contact ___at ___to request paper copies of these

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  documents.
 
   
Stock Ownership Requirements
  You are required to continue to hold an aggregate of ___percent (___%) of the
shares of Stock acquired by you pursuant to this Nonqualified Stock Option grant
together with all other shares of Stock acquired by you pursuant to any other
option grant made under the Plan (such ___% to be determined after reducing the
shares of Stock covered by this grant and all other option grants made to you
under the Plan by the number shares of Stock equal in value to the amount
required to be withheld to pay taxes in connection with the exercise of this
Option and such other option grants) until the number of shares of Stock owned
by you equals or exceeds ___. If the number of shares of Stock owned by you
exceeds ___, you may dispose of the shares of Stock acquired pursuant to this
Nonqualified Stock Option grant as long as you continue to own at least
___shares of Stock after the disposition.
 
   
Market Stand-off Agreement
  In connection with any underwritten public offering by the Company of its
equity securities pursuant to an effective registration statement filed under
the Securities Act, you agree not to sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or agree to engage in any of the foregoing transactions
with respect to any shares of Stock without the prior written consent of the
Company or its underwriters, for such period of time after the effective date of
such registration statement as may be requested by the Company or the
underwriters (not to exceed 180 days in length).

By signing the cover sheet of this Agreement, you acknowledge that you have
received,
read and understand the Plan and this Agreement, and agree to abide by and be
bound by
their terms.

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