exv10w2



 






Exhibit 10.2




CAPITALSOURCE INC.

SECOND AMENDED AND RESTATED EQUITY INCENTIVE PLAN




FORM OF NON-QUALIFIED OPTION AGREEMENT

FOR DIRECTOR




	 	 	 	 	 
	Non-qualified Option	 	This option is not intended to be an incentive option under Section 422 of the
Internal Revenue Code and will be interpreted accordingly.
	 
	 	 	 	 
	Vesting	 	This option is exercisable only as to the vested portion of the shares of Stock
(the “Shares”) shown in the notice of grant of stock options (the “Grant
Notice”). The option may be exercised, in whole or in part, to purchase a whole
number of vested Shares of not less than 100 Shares, unless the number of
vested 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.
	 
	 	 	 	 
	 	 	Notwithstanding the vesting schedule set forth in the Grant Notice, in the
event of a Change of Control (as defined in this Agreement), the option Shares
will become 100% vested.
	 
	 	 	 	 
	 	 	For purposes of this Agreement:
	 
	 	 	 	 
	

	 	•
	 	“Change of Control” means (i) the dissolution or liquidation of the
Company or a merger, consolidation, or reorganization of the Company with one
or more other entities in which the Company is not the surviving entity, (ii) a
sale of substantially all of the assets of the Company to another person or
entity, or (iii) any transaction (including without limitation a merger or
reorganization in which the Company is the surviving entity) which results in
any person or entity (other than persons who are shareholders or Affiliates
immediately prior to the transaction) owning 50% or more of the combined voting
power of all classes of Shares of the Company or its successor.
Notwithstanding the foregoing a transaction described in clause (i) or clause
(ii) of the preceding sentence shall not be a Change of Control if persons who
are shareholders of the Company or its Affiliates immediately prior to the

transaction continue to own 50% or more of the combined voting power of the
Company or the resulting entity immediately following the transaction.

	 
	 	 	 	 
	

	 	No additional Shares will vest after your Service has terminated for any reason.
	 
	 	 	 	 
	Term	 	Your option will expire in any event on the Expiration Date shown on the Grant
Notice. Your option will expire earlier if your Service terminates, as
described below.
	 
	 	 	 	 
	Regular Termination	 	If your Service terminates for any reason, other than Cause, then the unvested
portion of your option shall expire immediately and the vested portion of your
option will expire at the close of business at Company headquarters on the
earlier of the Expiration Date or the third anniversary of 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.
	 
	 	 	 	 
	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 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
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 indicated on the Grant Notice 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 or another
cash equivalent acceptable to the Company.
	 
	 	 	 	 
	 	 	-      Shares 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.
	 
	 	 	 	 
	 	 	-       To the extent a public market for the Shares exists as determined by
the Company, by delivery (on a form prescribed by the Company) of an
irrevocable direction to a licensed securities broker acceptable to the Company
to sell Shares and to deliver all or part of the sale proceeds to the Company
in payment of the aggregate option price and any withholding taxes (if approved
in advance by the Compensation Committee of the Board).
	 
	 	 	 	 
	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; and
	 
	 	 	 	 
	

	 	•
	 	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 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.
	 
	 	 	 	 
	 	 	Notwithstanding the restrictions on transfer in this section of the Agreement,
the Board may authorize, in their sole discretion, the transfer of a vested
option (in whole or in part) to a member of your immediate family or a trust
for the benefit of your immediate family.
	 
	 	 	 	 
	Shareholder Rights	 	You, or your estate or heirs, have no rights as a shareholder of the Company
until the Shares have been issued upon exercise of your option and either a
certificate evidencing your Shares has been issued or an appropriate entry has
been made on the Company’s books. No adjustments are made for distributions or
other rights if the applicable record date occurs before your certificate is
issued (or an appropriate book entry is made), except as described in the Plan.
	 
	 	 	 	 
	Adjustments	 	In the event of a split, a distribution or a similar change in the Shares, the
number of Shares covered by this option and the option price per Share may be
adjusted (and






 









 






	 	 	 	 	 
	 	 	rounded down to the nearest whole number) pursuant to the Plan.
Your option shall be 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, the associated Grant Notice 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.







By signing the Grant Notice, you agree to all of the terms and
conditions described above, in the Grant Notice and in the Plan.