**Exhibit10.2**

 

**NON-QUALIFIED STOCK OPTION AGREEMENT**

**1993 AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN**

 

This Stock Option Agreement (this “Agreement”) is entered into by andbetween CellStar Corporation, a Delaware corporation (the “Company”), and **                        **(the “Optionee”), an employee of the Company. The Company and the Optioneeagree as follows:

 

1.             Grant of Option. Pursuant to the CellStar Corporation 1993 Amended and Restated Long-TermIncentive Plan (the “Plan”) and a duly adopted resolution of the Committee, theCompany grants to the Optionee an option (the “Stock Option”) to purchase fromthe Company a total of **                          ****shares** (the “Optioned Shares”) of Common Stock of theCompany at **$                    per share** (being the Fair Market Value per share of Common Stock onthe Date of Grant), in the amounts, during the periods, and upon the terms andconditions set forth in this Agreement and in the Plan.  The Date of Grant of this Stock Option is **                          **.  This Stock Option is not intended to qualifyas an “incentive stock option” within the meaning of Section 422 of theCode.

 

2.             Interpretation.  This Stock Option and itsexercise are subject to the terms and conditions of the Plan, which terms andconditions are incorporated herein by reference; however, unless specificallypermitted by the Committee, the terms of the Plan shall not be considered anenlargement of any benefits under this Agreement.  **Capitalized terms used andnot otherwise defined herein shall have the meanings assigned to them in thePlan.**  This Stock Option issubject to any rules promulgated pursuant to the Plan by the Board or theCommittee and communicated to the Optionee in writing.

 

3.             Vesting; Time of Exercise.  Exceptas specifically provided in this Agreement and subject to certain restrictionsand conditions set forth in the Plan, this Stock Option may be exercised, inwhole or in part, in accordance with the following schedule:

 
| **Percentage  Exercisable** | ** ** | **Period**                                                    | ** ** |
|-----------------------------|------------|---------------------------------------------------------------|------------|
|                        |       |                                                          |       |
| 0                           | %          | Immediately                                                   |       |
|                        |       |                                                          |       |
| 25                          | %          | On and after the first  anniversary of the Date of Grant;     |       |
|                        |       |                                                          |       |
| 50                          | %          | On and after the second  anniversary of the Date of Grant;    |       |
|                        |       |                                                          |       |
| 75                          | %          | On and after the third  anniversary of the Date of Grant; and |       |
|                        |       |                                                          |       |
| 100                         | %          | On and after the fourth  anniversary of the Date of Grant.    |       |

 

**Notwithstanding anything to thecontrary set forth herein, this Stock Option may be exercised, in whole or inpart, immediately upon the closing of an initial public offering of the stockof the Company’s Greater China Operations on the Hong Kong Stock Exchange whichyields to the Company US$50 million or more in cash or cash equivalents.**

 

1

----

 

**Furthernotwithstanding anything to the contrary set forth herein, this Stock Optionmay be exercised, in whole or in part, immediately upon the occurrence of  (a) if a non-employee director is notnominated and re-elected to the Board of Directors; or (b) for anemployee, if such employee’s employment is terminated Without Cause.  “Without Cause” shall mean termination of theemployee’s employment by the Company other than a termination for Cause.  “Cause” shall mean (i) grossincompetence, (ii) willful misconduct that causes or is likely to causeeconomic harm to the Company, as determined by the Board of Directors of theCompany in good faith, (iii) failure to follow directions of the CEO orthe Board of Directors, (iv) conviction of, or entry of a pleading ofguilty or nolo contender to, any crime involving moral turpitude or entry of anorder duly issued by any federal or state regulatory agency having jurisdictionin the matter permanently prohibiting the Employee from participating in theconduct of the affairs of the Company, or (v) any other material breach ofany provision of such employee’s employment agreement, if any.**

 

The unexercised portion of this Stock Option from one annual period maybe carried over to a subsequent annual period or periods, and the right of theOptionee to exercise the Stock Option as to such unexercised portion shallcontinue for the entire term.  In noevent may the Stock Option be exercised in whole or in part, however, after theexpiration of the term set forth in Section 4 below.

 

4.                                       Term; Rights in Event of Termination ofEmployment.  This Stock Option, and all unexercisedOptioned Shares granted to the Optionee hereunder, will terminate and beforfeited at the first of the following to occur:

 

(a)                                  5 p.m. on **                            **;

 

(b)                                 5 p.m. on the date which is twelve (12)months following the Optionee’s termination of employment due to death or Totaland Permanent Disability;

 

(c)                                  5 p.m. on the date which is three (3) monthsfollowing the Optionee’s termination of employment due to Retirement; or

 

(d)           5 p.m. on the30th day after the day of any other termination of employment.

 

In the event of the Optionee’s termination of employment undersubsections (b),(c) or (d) above, the Stock Option will beexercisable, for the periods indicated, only to the extent that it has vested(pursuant to Section 3 above) as of the date of termination of employment.

 

5.                                       Who May Exercise.  Subjectto the terms and conditions set forth in Sections 3 and 4 above and thefollowing sentence, during the lifetime of the Optionee, this Stock Option maybe exercised only by the Optionee.  Ifthe Optionee’s employment terminates as a result of death or Total andPermanent Disability prior to the termination date specified in Section 4(a) hereof,the following persons may exercise this Stock Option (to the extent it is exercisableon the date of termination of employment) on behalf of the Optionee at any timeprior to the earlier of the dates specified in Sections 4(a) or (b) hereof:  (i) if the Optionee’s employment isterminated due to Total and Permanent Disability, the legal representative ofthe Optionee; or (ii) if the Optionee dies, the personal representative ofhis estate, or the person who acquires the right to exercise this Stock

 

2

----

 

Option by bequest or inheritance or by reason of the death of theOptionee; provided that this Stock Option shall remain subject to the otherterms of this Agreement, the Plan, and applicable laws, rules, and regulations.

 

6.             Restrictions.  This Stock Option may be exercised only withrespect to full shares, and no fractional share of stock shall be issued.

 

7.             Manner ofExercise.  Subject to suchadministrative regulations as the Board or the Committee may from time to timeadopt, this Stock Option may be exercised by the delivery to the Company of (i) writtennotice setting forth the number of shares of Common Stock with respect to whichthe Stock Option is to be exercised and the date of exercise thereof (the “ExerciseDate”), which shall be at least three (3) days after giving such notice,unless an earlier time shall have been mutually agreed upon; and (ii) considerationwith a value equal to the total Option Exercise Price for the shares to bepurchased, payable as follows:  (a) cash,certified check, bank draft, or money order payable to the order of theCompany,  (b) Common Stock(including Restricted Stock), valued at its Fair Market Value on the ExerciseDate, (c) by delivery (including by FAX) to the Company or its designatedagent of an executed irrevocable option exercise form together with irrevocableinstructions from the Optionee to a broker or dealer, reasonably acceptable tothe Company, to sell certain of the shares of Common Stock purchased uponexercise of the Stock Option or to pledge such shares as collateral for a loanand promptly deliver to the Company the amount of sale or loan proceedsnecessary to pay such Option Exercise Price and/or (d) in any other formof valid consideration that is acceptable to the Committee in its solediscretion; provided that, with respect to a cashless exercise of the StockOption (in accordance with clause (c) above), the Stock Option will bedeemed exercised on the date of sale of the shares of Common Stock receivedupon exercise.  In the event that sharesof Restricted Stock are tendered as consideration for the exercise of the StockOption, a number of shares of Common Stock issued upon the exercise of theStock Option, equal to the number of shares of Restricted Stock used asconsideration therefor, shall be subject to the same restrictions as theRestricted Stock so submitted.

 

Upon payment of all amounts due from the Optionee, the Company shallcause certificates for the Optioned Shares then being purchased to be deliveredto the Optionee (or the person exercising the Optionee’s Stock Option in theevent of his death) at its principal business office (or other mutually agreedupon location) within ten (10) business days after the Exercise Date. Theobligation of the Company to deliver shares of Common Stock shall, however, besubject to the condition that if at any time the Board or the Committee shalldetermine in its discretion that the listing, registration, or qualification ofthe Stock Option or the Optioned Shares upon any securities exchange or underany state or federal law, or the consent or approval of any governmentalregulatory body, is necessary or desirable as a condition of, or in connectionwith, the Stock Option or the issuance or purchase of shares of Common Stockthereunder, then the Stock Option may not be exercised in whole or in partunless such listing, registration, qualification, consent, or approval shallhave been effected or obtained free of any conditions not acceptable to theCommittee.

 

If the Optionee fails to pay for any of the Optioned Shares specified insuch notice or fails to accept delivery thereof, then the Optionee’s right topurchase such Optioned Shares may be terminated by the Company.

 

3

----

 

8.             DisqualifyingDisposition.  In the event thatCommon Stock acquired upon exercise of this Stock Option is disposed of by theOptionee prior to the expiration of either two years from the Date of Grant ofsuch Stock Option or one year from the transfer of shares to the Optioneepursuant to the exercise of such Stock Option, such Optionee shall notify theCompany in writing within thirty (30) days after such disposition of the dateand terms of such disposition.

 

9              Non-Assignability.  This Stock Option is not assignable ortransferable by the Optionee except by will or by the laws of descent anddistribution.

 

10.           Rights asStockholder.  The Optionee will haveno rights as a stockholder with respect to any shares covered by this StockOption until the issuance of a certificate or certificates to the Optionee forthe shares.  Except as otherwise providedin Section 11 hereof, no adjustment shall be made for dividends or otherrights for which the record date is prior to the issuance of such certificateor certificates.

 

11.           Adjustment ofNumber of Shares and Related Matters. The number of shares of Common Stock covered by this Stock Option, andthe Option Exercise Price thereof, shall be subject to adjustment in accordancewith Article 12 of the Plan.

 

12.           Optionee’sRepresentations.  Notwithstanding anyof the provisions hereof, the Optionee hereby agrees that he or she will notexercise this Stock Option, and that the Company will not be obligated to issueany shares to the Optionee hereunder, if the exercise thereof or the issuanceof such shares shall constitute a violation by the Optionee or the Company ofany provision of any law or regulation of any governmental authority.  Any determination in this connection by theBoard or the Committee shall be final, binding, and conclusive.  The obligations of the Company and the rightsof the Optionee are subject to all applicable laws, rules, and regulations.

 

13.           InvestmentRepresentation.  Unless the CommonStock is issued to the Optionee in a transaction registered under applicablefederal and state securities laws, by his or her execution hereof, the Optioneerepresents and warrants to the Company that all Common Stock which may bepurchased hereunder will be acquired by the Optionee for investment purposesfor his or her own account and not with any intent for resale or distributionin violation of federal or state securities laws.  Unless the Common Stock is issued to theOptionee in a transaction registered under the applicable federal and statesecurities laws, all certificates issued with respect to the Common Stock shallbear an appropriate restrictive investment legend.

 

14.           Optionee’sAcknowledgments.  The Optioneeacknowledges receipt of a copy of the Plan and represents that he or she isfamiliar with the terms and provisions thereof, and hereby accepts this Optionsubject to all the terms and provisions thereof. The Optionee hereby agrees toaccept as binding, conclusive, and final all decisions or interpretations ofthe Board or the Committee upon any questions arising under the Plan or thisAgreement.

 

15.           Law Governing.  This Agreement shall be governed by,construed, and enforced in accordance with the laws of the State of Texas(excluding any conflict of laws rule or principle of Texas law that mightrefer the governance, construction, or interpretation of this agreement to thelaws of another state).

 

4

----

 

16.           No Right toContinued Employment.  Nothing hereinshall be construed to confer upon the Optionee the right to continue in theemployment of the Company or any Subsidiary or interfere with or restrict inany way the right of the Company or any Subsidiary to discharge the Optionee atany time (subject to any contract rights of the Optionee).

 

17.           LegalConstruction.  In the event that anyone or more of the terms, provisions, or agreements that are contained in thisAgreement shall be held by a Court of competent jurisdiction to be invalid,illegal, or unenforceable in any respect for any reason, the invalid, illegal,or unenforceable term, provision, or agreement shall not affect any other term,provision, or agreement that is contained in this Agreement and this Agreementshall be construed in all respects as if the invalid, illegal, or unenforceableterm, provision, or agreement had never been contained herein.

 

18.           Covenants andAgreements as Independent Agreements. Each of the covenants and agreements that is set forth in this Agreementshall be construed as a covenant and agreement independent of any otherprovision of this Agreement.  Theexistence of any claim or cause of action of the Optionee against the Company,whether predicated on this Agreement or otherwise, shall not constitute adefense to the enforcement by the Company of the covenants and agreements thatare set forth in this Agreement.

 

19.           Entire Agreement.  This Agreement, together with the Plan,supersedes any and all other prior understandings and agreements, either oralor in writing, between the parties with respect to the subject matter hereofand constitutes the sole and only agreement between the parties with respect tothe said subject matter.  All priornegotiations and agreements between the parties with respect to the subjectmatter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations,inducements, promises, or agreements, oral or otherwise, have been made by anyparty or by anyone acting on behalf of any party, which are not embodied inthis Agreement or the Plan and that any agreement, statement or promise that isnot contained in this Agreement or the Plan shall not be valid or binding or ofany force or effect.

 

20.           Parties Bound.  The terms, provisions, representations,warranties, covenants, and agreements that are contained in this Agreementshall apply to, be binding upon, and inure to the benefit of the parties andtheir respective heirs, executors, administrators, legal representatives, andpermitted successors and assigns.

 

21.           Modification.  No change or modification of this Agreementshall be valid or binding upon the parties unless the change or modification isin writing and signed by the parties. Notwithstanding the preceding sentence, the Company may amend the Planto the extent permitted in the Plan.

 

22.           Headings.  The headings that are used in this Agreementare used for reference and convenience purposes only and do not constitutesubstantive matters to be considered in construing the terms and provisions ofthis Agreement.

 

23.           Gender and Number.  Words of any gender used in this Agreementshall be held and construed to include any other gender, and words in thesingular number shall be held to include the plural, and vice versa, unless thecontext requires otherwise.

 

5

----

 

24.                                 Notice.  Any notice required orpermitted to be delivered hereunder shall be deemed to be delivered only whenactually received by the Company or by the Optionee, as the case may be, at theaddresses set forth below, or at such other addresses as they have theretoforespecified by written notice delivered in accordance herewith:

 

(A)                              Notice to the Company shall be addressed anddelivered as follows:

 

CELLSTAR CORPORATION

1730 BRIERCROFT COURT

CARROLLTON, TEXAS 75006

ATTENTION:  GENERAL COUNSEL

 

(B)                                Notice to the Optionee shall be addressed anddelivered as follows:

 

 

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executedby its duly authorized officer, and the Optionee, to evidence his or herconsent and approval of all the terms hereof, has duly executed this Agreement,as of **                              **.

 
| ** ** | **CellStar  Corporation** |
|------------|---------------------------|
|       |                      |
|       |                      |
| ** ** | **By:**                   |   |
|       |                      |
|       |                      |
| ** ** | **Optionee:**             |
|       |                      |
|       |                      |
|       |                      |

 

6

----