Document:

exv10w23

 

Exhibit 10.23

BIG 5 SPORTING GOODS CORPORATION

STOCK OPTION GRANT NOTICE

(2002 Stock Incentive Plan)

Big 5 Sporting Goods Corporation (the “Company”), pursuant to its 2002 Stock Incentive Plan (the
“Plan”), hereby grants to Optionee the option to purchase the number of Shares of the Company set
forth below (the “Option”). This Option is subject to all of the terms and conditions as set forth
in this Grant Notice, the Stock Option Agreement (the “Option Agreement”) and the Plan, all of
which are attached hereto and incorporated herein in their entirety.

	 	 	 	 	 
	Optionee:

	 	«Name»

	Date of Grant:

	 	                              

	Number of Shares of Common Stock:

	 	                              

	Exercise Price Per Share:

	 	$                            
	Initial Vesting Date:

	 	                               [One year after date of grant]

	Type of Option

	 	                              

Vesting Schedule: Subject to the restrictions and limitations of the Option Agreement and the
Plan, this Option shall vest and become exercisable with respect to 25.00% of the Shares subject to
this Option on the Initial Vesting Date. On each subsequent anniversary of the Initial Vesting
Date, this Option shall become vested and exercisable with respect to an additional 25.00% of the
Shares subject to this Option.

Additional Terms/Acknowledgements: The undersigned Optionee acknowledges receipt of, and has read
and understands and agrees to, the Option Agreement and the Plan. Optionee further acknowledges
that as of the Date of Grant, the Option Agreement and the Plan set forth the entire understanding
between Optionee and the Company regarding the grant by the Company of the Option referred to in
this Grant Notice. Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board or the Administrator upon any questions arising under the Plan.

	 	 	 	 	 	 	 
	BIG 5 SPORTING GOODS CORPORATION	 	OPTIONEE:
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	By:	 	 	 	 
	 	 	 	 	 
	 	 	Signature	 	Signature
	 
	 	 	 	 	 	 
	Title:

	 	 	 	Date:	 	 
	

	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	

	 	 	 	 	 	 

ATTACHMENTS: Stock Option Agreement and 2002 Stock Incentive Plan

SPOUSE OF OPTIONEE:

Spouse has read and understands the Option Agreement and the Plan and is executing this Grant
Notice to evidence Spouse’s consent and agreement to be bound by all of the terms and conditions of
the Option Agreement and the Plan (including those relating to the appointment of the Optionee as
agent for any interest that Spouse may have in the Option Shares).

	 	 	 	 	 
	 

	 	Date:	 	 
	 

	 	 	 	 
	Signature
	 	 	 	 

	 
	Optionee Address:
 
 
	 

 

 

BIG 5 SPORTING GOODS CORPORATION

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (together with the attached grant notice (the “Grant Notice”), the
“Agreement”) is made and entered into as of the date set forth on the Grant Notice by and between
Big 5 Sporting Goods Corporation, a Delaware corporation (the “Company”), and the individual (the
“Optionee”) set forth on the Grant Notice.

     A. Pursuant to the Big 5 Sporting Goods Corporation 2002 Stock Incentive Plan (the “Plan”),
the Administrator has determined that it is to the advantage and best interest of the Company to
grant to Optionee an option (the “Option”) to purchase the number of shares of the Common Stock of
the Company (the “Shares” or the “Option Shares”) set forth on the Grant Notice, at the exercise
price determined as provided herein, and in all respects subject to the terms, definitions and
provisions of the Plan, which is incorporated herein by reference.

     B. Unless otherwise defined herein, capitalized terms used in this Agreement shall have the
meanings set forth in the Plan.

     NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Optionee and
the Company hereby agree as follows:

1. Grant and Terms of Stock Option.

     1.1 Grant of Option. Pursuant to the Grant Notice, the Company has granted to the
Optionee the right and option to purchase, subject to the terms and conditions set forth in the
Plan and this Agreement, all or any part of the number of shares of the Common Stock of the Company
set forth on the Grant Notice at a purchase price per share equal to the exercise price per Share
set forth on the Grant Notice. If the Grant Notice indicates (under “Type of Option”) that this
Option is an “ISO”, then this Option is intended by the Company and Optionee to be an Incentive
Stock Option. However, if the Grant Notice indicates that this Option is a “NQSO”, then this
Option is not intended to be an Incentive Stock Option and is instead intended to be a Nonqualified
Stock Option.

     1.2 Vesting and Exercisability. Subject to the provisions of the Plan and the other
provisions of this Agreement, this Option shall vest and become exercisable in accordance with the
schedule set forth in the Grant Notice. Notwithstanding the foregoing, in the event of termination
of Optionee’s Continuous Status as an Employee, Director or Consultant for any reason, with or
without Cause, including as a result of death or Disability, this Option shall immediately cease
vesting and shall be cancelled to the extent of the number of Shares as to which this Option has
not vested as of the date of termination.

     1.3 Term of Option. No portion of this Option may be exercised more than ten years from
the date of this Agreement. In the event of termination of Optionee’s Continuous Status as an
Employee, Director or Consultant, this Option shall be cancelled as to any

 

 

unvested Shares as
provided in Section 1.2, and shall terminate and be cancelled with respect to any vested Shares on
the earlier of (i) the expiration of the ten year period set forth in the first sentence of this
Section 1.3, or (ii) 90 days after termination of
Optionee’s Continuous Status as an Employee, Director or Consultant (or 12 months in the case of
termination as a result of Optionee’s Disability or death); provided, however, if Optionee’s
Continuous Status as an Employee, Director or Consultant is terminated for Cause, this entire
Option shall be cancelled and terminated as of the date of such termination and shall no longer be
exercisable as to any Shares, whether or not previously vested.

2. Method of Exercise.

     2.1 Delivery of Notice of Exercise. This Option shall be exercisable by written notice in
the form attached hereto as Exhibit A which shall state the election to exercise this Option, the
number of Shares in respect of which this Option is being exercised, and such other representations
and agreements with respect to such Shares as may be required by the Company pursuant to the
provisions of this Agreement and the Plan. Such written notice shall be signed by Optionee (or by
Optionee’s beneficiary or other person entitled to exercise this Option in the event of Optionee’s
death under the Plan) 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. This Option
shall not be deemed exercised until the Company receives such written notice accompanied by the
exercise price and any other applicable terms and conditions of this Agreement are satisfied. This
Option may not be exercised for a fraction of a Share.

     2.2 Restrictions on Exercise. No Shares will be issued pursuant to the exercise of this
Option unless and until there shall have been full compliance with all applicable requirements of
the Securities Act of 1933, as amended (whether by registration or satisfaction of exemption
conditions), all Applicable Laws, and all applicable listing requirements of any national
securities exchange or other market system on which the Common Stock is then 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 necessary or appropriate, in the judgment of
the Administrator, to comply with any Applicable Law.

     2.3 Method of Payment. Payment of the exercise price shall be made in full at the time of
exercise in cash or by check payable to the order of the Company, or, subject in each case to the
advance approval of the Administrator in its sole discretion, (a) by delivery of shares of Common
Stock already owned by Optionee, (b) by delivery of a full recourse promissory note made by
Optionee in favor of the Company, (c) by a “broker’s exercise” involving the sale, at the time of
the exercise of the Option, of Shares having a Fair Market Value equal to the exercise price, and
the simultaneous remission of the exercise price to the Company, or (d) by any combination of the
foregoing. Shares of Common Stock used to satisfy the exercise price of this Option shall be
valued at their Fair Market Value determined on the date of exercise (or if such date is not a
business day, as of the close of the business day immediately preceding such date). In addition,
the Administrator may impose such other conditions in connection with the delivery of shares of
Common Stock in satisfaction of the exercise price as it deems appropriate in its sole discretion,
including without limitation a requirement that the shares of Common Stock delivered have been held

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by the Optionee for a specified period of time. Any promissory note delivered pursuant to this
Section 2.3 shall have terms and provisions (including, without limitation, those relating to the
maturity date, payment schedule and interest rate) as determined by the Administrator in its sole
discretion, shall be secured by the Shares acquired and shall comply with all Applicable Laws
(including, without limitation, state and federal margin requirements).

     2.4 Notice of Disqualifying Disposition of Incentive Stock Option. If this Option is an
Incentive Stock Option and the Optionee sells or otherwise disposes of any of the Shares acquired
upon exercise of this Option on or before the later of (i) two years after the date of grant, or
(ii) one year after the date such Shares were acquired, the Optionee shall immediately notify the
Company in writing of such disposition. The Optionee agrees that he or she may be subject to
income tax withholding by the Company on the taxable income recognized as a result of such
disposition and that the Optionee shall be required to satisfy such withholding obligations either
by making a payment to the Company in cash or by withholding from current earnings of the Optionee.

3. 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 or to a beneficiary designated pursuant to the Plan,
and may be exercised during the lifetime of Optionee only by Optionee. Subject to all of the other
terms and conditions of this Agreement, following the death of Optionee, this Option may, to the
extent it remained unexercised (but vested and exercisable by Optionee in accordance with its
terms) on the date of death, be exercised by Optionee’s beneficiary or other person entitled to
exercise this Option in the event of Optionee’s death under the Plan. Notwithstanding the first
sentence of this Section 3, (i) if this Option is a Nonqualified Stock Option, this Option may be
assigned pursuant to a qualified domestic relations order as defined by the Code, and exercised by
the spouse of the Optionee who obtained such Option pursuant to such qualified domestic relations
order, and (ii) this Option may be assigned, in connection with the Optionee’s estate plan, in
whole or in part, during the Optionee’s lifetime to one or more members of the Optionee’s immediate
family or to a trust established exclusively for one or more of such immediate family members.
Rights under the assigned portion may be exercised by the person or persons who acquire a
proprietary interest in such Option pursuant to the assignment. The terms applicable to the
assigned portion shall be the same as those in effect for the Option immediately before such
assignment and shall be set forth in such documents issued to the assignee as the Administrator
deems appropriate. For purposes of this Section 3, the term “immediate family” means an
individual’s spouse, children, stepchildren, grandchildren and parents.

4. Market StandOff. The Optionee agrees not to sell, make any short sale of, loan, grant any
option for the purchase of, or otherwise dispose of (including by means of sales pursuant to Rule
144) any shares of Common Stock, or any securities convertible into or exchangeable or exercisable
for Common Stock, during the 180-day period beginning on the effective date of the registration
statement for the initial public offering of the Company’s stock and during the 90-day period
beginning on the effective date of the registration statement for any other underwritten offering
(except as part of such underwritten registration), unless the managing underwriters for the
registered public offering otherwise agree. This provision shall expire two years after the date
of the initial public offering of the Company’s stock.

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5. General.

     5.1 Governing Law. This Agreement shall be governed by and construed under the laws of
the state of Delaware applicable to Agreements made and to be performed entirely in Delaware,
without regard to the conflicts of law provisions of Delaware or any other jurisdiction.

     5.2 Notices. Any notice required or permitted under this Agreement shall be given in
writing by express courier or by postage prepaid, United States registered or certified mail,
return receipt requested, to the address set forth below or to such other address for a party as
that party may designate by 10 days advance written notice to the other parties. Notice shall be
effective upon the earlier of receipt or 3 days after the mailing of such notice.

	 	 	 
	If to the Company:

	 	Big 5 Sporting Goods Corporation
	

	 	2525 East El Segundo Boulevard
	

	 	El Segundo, CA 90245
	

	 	Attention: Senior Vice President and General Counsel

     If to Optionee, at the address set forth on the Grant Notice.

     5.3 Community Property. Without prejudice to the actual rights of the spouses as between
each other, for all purposes of this Agreement, the Optionee shall be treated as agent and
attorney-in-fact for that interest held or claimed by his or her spouse with respect to this Option
and the parties hereto shall act in all matters as if the Optionee was the sole owner of this
Option. This appointment is coupled with an interest and is irrevocable.

     5.4 Modifications. This Agreement may be amended, altered or modified only by a writing
signed by each of the parties hereto.

     5.5  Application to Other Stock. In the event any capital stock of the Company or any
other corporation shall be distributed on, with respect to, or in exchange for shares of Common
Stock as a stock dividend, stock split, reclassification or recapitalization in connection with any
merger or reorganization or otherwise, all restrictions, rights and obligations set forth in this
Agreement shall apply with respect to such other capital stock to the same extent as they are, or
would have been applicable, to the Option Shares on or with respect to which such other capital
stock was distributed.

     5.6 Additional Documents. Each party agrees to execute any and all further documents and
writings, and to perform such other actions, which may be or become reasonably necessary or
expedient to be made effective and carry out this Agreement.

     5.7 No Third-Party Benefits. Except as otherwise expressly provided in this Agreement,
none of the provisions of this Agreement shall be for the benefit of, or enforceable by, any
third-party beneficiary.

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     5.8 Successors and Assigns. Except as provided herein to the contrary, this Agreement
shall be binding upon and inure to the benefit of the parties, their respective successors and
permitted assigns.

     5.9 No Assignment. Except as otherwise provided in this Agreement, the Optionee may not
assign any of his, her or its rights under this Agreement without the prior written consent of the
Company, which consent may be withheld in its sole discretion. The Company shall be permitted to
assign its rights or obligations under this Agreement, but no such assignment shall release the
Company of any obligations pursuant to this Agreement.

     5.10 Severability. The validity, legality or enforceability of the remainder of this
Agreement shall not be affected even if one or more of the provisions of this Agreement shall be
held to be invalid, illegal or unenforceable in any respect.

     5.11 Equitable Relief. The Optionee acknowledges that, in the event of a threatened or
actual breach of any of the provisions of this Agreement, damages alone will be an inadequate
remedy, and such breach will cause the Company great, immediate and irreparable injury and damage.
Accordingly, the Optionee agrees that the Company shall be entitled to injunctive and other
equitable relief, and that such relief shall be in addition to, and not in lieu of, any remedies
they may have at law or under this Agreement.

     5.12 Arbitration.

               5.12.1 General. Any controversy, dispute, or claim between the parties to this Agreement,
including any claim arising out of, in connection with, or in relation to the formation,
interpretation, performance or breach of this Agreement shall be settled exclusively by
arbitration, before a single arbitrator, in accordance with this section 5.12 and the then most
applicable rules of the American Arbitration Association. Judgment upon any award rendered by the
arbitrator may be entered by any state or federal court having jurisdiction thereof. Such
arbitration shall be administered by the American Arbitration Association. Arbitration shall be
the exclusive remedy for determining any such dispute, regardless of its nature. Notwithstanding
the foregoing, either party may in an appropriate matter apply to a court pursuant to California
Code of Civil Procedure Section 1281.8, or any comparable provision, for provisional relief,
including a temporary restraining order or a preliminary injunction, on the ground that the award
to which the applicant may be entitled in arbitration may be rendered ineffectual without
provisional relief. Unless mutually agreed by the parties otherwise, any arbitration shall take
place in the City of Los Angeles, California.

               5.12.2. Selection of Arbitrator. In the event the parties are unable to agree upon an
arbitrator, the parties shall select a single arbitrator from a list of nine arbitrators drawn by
the parties at random from a list of twenty persons (which shall be retired judges or corporate or
litigation attorneys experienced in stock options and buy-sell agreements) provided by the office
of the American Arbitration Association having jurisdiction over Los Angeles, California. If the
parties are unable to agree upon an arbitrator from the list so drawn, then the parties shall each
strike names alternately from the list, with the first to strike being determined by lot. After
each party has used four strikes, the remaining name

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on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator
is selected.

               5.12.3 Applicability of Arbitration; Remedial Authority. This agreement to resolve any
disputes by binding arbitration shall extend to claims against any parent, subsidiary or affiliate
of each party, and, when acting within such capacity, any officer, director, shareholder, employee
or agent of each party, or of any of the above, and shall apply as well to claims arising out of
state and federal statutes and local ordinances as well as to claims arising under the common law.
In the event of a dispute subject to this paragraph the parties shall be entitled to reasonable
discovery subject to the discretion of the arbitrator. The remedial authority of the arbitrator
(which shall include the right to grant injunctive or other equitable relief) shall be the same as,
but no greater than, would be the remedial power of a court having jurisdiction over the parties
and their dispute. The arbitrator shall, upon an appropriate motion, dismiss any claim without an
evidentiary hearing if the party bringing the motion establishes that he or it would be entitled to summary judgement if the matter had
been pursued in court litigation. In the event of a conflict between the applicable rules of the
American Arbitration Association and these procedures, the provisions of these procedures shall
govern.

               5.12.4 Fees and Costs. Any filing or administrative fees shall be borne initially by the
party requesting arbitration. The Company shall be responsible for the costs and fees of the
arbitration, unless the Optionee wishes to contribute (up to 50%) to the costs and fees of the
arbitration. Notwithstanding the foregoing, the prevailing party in such arbitration, as
determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled,
to the extent permitted by law, to reimbursement from the other party for all of the prevailing
party’s costs (including but not limited to the arbitrator’s compensation), expenses, and
attorneys’ fees.

               5.12.5 Award Final and Binding. The arbitrator shall render an award and written opinion,
and the award shall be final and binding upon the parties. If any of the provisions of this
paragraph, or of this Agreement, are determined to be unlawful or otherwise unenforceable, in whole
or in part, such determination shall not affect the validity of the remainder of this Agreement,
and this Agreement shall be reformed to the extent necessary to carry out its provisions to the
greatest extent possible and to insure that the resolution of all conflicts between the parties,
including those arising out of statutory claims, shall be resolved by neutral, binding arbitration.
If a court should find that the arbitration provisions of this Agreement are not absolutely
binding, then the parties intend any arbitration decision and award to be fully admissible in
evidence in any subsequent action, given great weight by any finder of fact, and treated as
determinative to the maximum extent permitted by law.

     5.13 Headings. The section headings in this Agreement are inserted only as a matter of
convenience, and in no way define, limit, extend or interpret the scope of this Agreement or of any
particular section.

     5.14 Number and Gender. Throughout this Agreement, as the context may require, (a) the
masculine gender includes the feminine and the neuter gender includes the masculine and the
feminine; (b) the singular tense and number includes the plural, and the

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plural tense and number includes the singular; (c) the past tense includes the present, and the present tense includes the
past; (d) references to parties, sections, paragraphs and exhibits mean the parties, sections,
paragraphs and exhibits of and to this Agreement; and (e) periods of days, weeks or months mean
calendar days, weeks or months.

     5.15 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

     5.16 Complete Agreement. The Grant Notice, this Agreement and the Plan constitute the
parties’ entire agreement with respect to the subject matter hereof and supersede all agreements,
representations, warranties, statements, promises and understandings, whether oral or written, with
respect to the subject matter hereof.

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EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION

Big 5 Sporting Goods Corporation

2525 East El Segundo Boulevard

El Segundo, CA 90245

Attn: Senior Vice President and General Counsel

Ladies and Gentlemen:

     The undersigned hereby elects to exercise the option indicated below:

Option Grant Date:                                                             

Type of Option: Incentive Stock Option / Nonqualified Stock Option

Number of Shares Being Exercised:                                                   

Exercise Price Per Share:                                                             

Total Exercise Price: $                                                  

Method of Payment:                                                   

     Enclosed herewith is payment in full of the total exercise price and a copy of the Grant
Notice.

     My exact name, current address and social security number for purposes of the stock
certificates to be issued and the shareholder list of the Company are:

	 	 	 
	Name:

	 	 
	

	 	 

	 	 	 
	Address:

	 	 
	

	 	 
	

	 	 
	

	 	 

	 	 	 
	Social Security Number:

	 	 
	

	 	 

	 	 	 	 	 
	

	 	 	 	Sincerely,
	 
	 	 	 	 
	 
	 	 	 	 
	Dated:

	 	 
	 	 
	

	 	 
	 	 
	

	 	 	 	(Optionee’s Signature)

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Exhibit 10.24

Description of Compensation Payable to Non-Employee Directors

     The following summarizes the current compensation and benefits received by the Company’s
non-employee directors. It is intended to be a summary of existing arrangements and is not
intended to provide any additional rights to any director.

Non-employee directors receive an annual retainer of $20,000 for service on the board of directors,
plus $2,500 for attendance at each regularly scheduled meeting of the board of directors or each
committee meeting not otherwise held on the day of a board meeting, and $1,000 for attendance by
telephone at any specially called board meeting or committee meeting. The Chairs of the Audit
Committee and Compensation Committee receive additional annual retainers of $10,000 and $5,000,
respectively. In addition, in 2004, the Company adopted a policy pursuant to which each
non-employee director was initially granted options to purchase 10,000 shares of the Company’s
common stock and will annually be granted options to purchase 5,000 shares of such stock. The
options will have an exercise price equal to the fair market value of the Company’s common stock on
the date of grant and will vest in four equal annual installments. Initial grants under the policy
were made in August 2004 and annual grants thereafter will be made on the date of the Company’s
annual meeting of stockholders. Directors are also reimbursed for all out-of-pocket expenses
incurred in attending such meetings.

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