Document:

Exhibit 10.2

HOUSTON
WIRE & CABLE COMPANY

2006
STOCK PLAN

FORM OF DIRECTOR

STOCK OPTION AGREEMENT

NONQUALIFIED
STOCK OPTION

[DATE]

[NAME]

[ADDRESS]

I am pleased to inform you that effective as of
[DATE], pursuant to the HOUSTON WIRE & CABLE COMPANY 2006 STOCK PLAN (“Plan”),
the Board of Directors (“Board”) of HOUSTON WIRE & CABLE COMPANY (“Company”)
has granted to you a nonqualified stock option (“Option”) to acquire
shares of Common Stock (“Shares”) of the Company.

1.                                       Option
Grant.  This Notice constitutes
notice of the grant to you as of [DATE] (“Date of Grant”) of an Option
to purchase, subject to the terms and conditions of this Notice and the Plan,
all or any part of [NUMBER OF SHARES] (            )
Shares of the Company at a price of [PRICE] ($          )
per Share.  The number of Shares and the
price per Share are subject to adjustment, as provided in the Plan.

2.                                       Term.  The term of the Option shall
be for a period of ten (10) years from the date hereof and shall expire at the
close of regular business hours at the Company’s principal office, Houston Wire
& Cable Company, 10201 North Loop East, Houston, Texas 70729, on the last
day of the term of the Option, unless the Option expires earlier as herein
provided.  The term of the Option shall
expire on the date on which your term as a director of the Company ends,
including without limitation your death, resignation or removal in accordance
with the By-Laws of the Company.

3.                                       Vesting.  Subject to the other terms and
conditions of this Notice and the Plan, the Option shall vest entirely on
[DATE].  This Option may be exercised
only to the extent, if any, that it is then vested.

4.                                       Exercise.  There are no limitations on
the number of times this Option may be exercised, provided, however, that (i)
this Option may not be exercised more than once in any calendar year without
the Company’s prior written consent; and (ii) no more than the total number of
Shares specified in paragraph 1 can be purchased pursuant to this Option.  The Option may be exercised by giving written
notice (in a form substantially similar to Appendix A attached hereto)
to the Treasurer of the Company at its principal office, stating the number of
Shares with respect to which the Option is being exercised and tendering
payment for the full purchase price of such Shares.  The purchase price must be paid in cash,
unless another method is authorized by the Committee.  You are responsible for the payment of any
taxes (other than stock transfer taxes) arising in connection with the issuance
or transfer of shares pursuant to the Option and, on the Company’s demand, will
promptly pay any taxes required to be collected or withheld by the Company.

 

5.                                       Insider Trading Policy.  The
exercise of the Option and any sale of the Shares issuable upon such exercise
are subject to the provisions of the Company’s Insider Trading Policy, as in
effect from time to time.

6.                                       Nontransferability.  You
may not transfer, sell, pledge, encumber or otherwise dispose of the Option,
except that you may, with the prior written approval of the Committee, transfer
the Option to the following persons or entities:  (i) immediate family members, (ii)
custodianships under the Uniform Transfers to Minors Act or any similar
statute, (iii) trusts for the benefit of any immediate family member, (iv)
trusts created by you for your primary benefit, and (v) upon termination of a
custodianship under the Uniform Transfers to Minors Act or similar statute or
the termination of a trust by the custodian or trustee thereof, or the partial
or complete liquidation of an entity, to the person or persons who, in
accordance with the terms of such custodianship, trust or entity, are entitled
to receive Options held in custody, trust or by the entity.

7.                                       Plan Governs.  The
terms of this Stock Option Agreement shall be subject to the terms of the Plan.
If there is any inconsistency between the terms of this Stock Option Agreement
and the terms of the Plan, the Plan’s terms shall govern. All capitalized terms
shall have the meanings ascribed to them in the Plan, unless otherwise set
forth herein. A copy of the Plan is attached hereto and the terms of the Plan
are hereby incorporated by reference.

8.                                       Employment and Stockholder Status.  This
Stock Option Agreement neither gives you the right to be retained as an
employee of the Company, nor confers upon you or any holder hereof any right as
a stockholder of the Company prior to the issuance of Shares pursuant to the
exercise of the Option.

9.                                       Acceptance.  The exercise of the Option is
conditioned upon your acceptance of this Stock Option Agreement and your return
of an executed copy to the Treasurer of the Company within 30 days after
receipt hereof.

 

	
  

  	
  HOUSTON WIRE
  & CABLE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  

 

 

I acknowledge receipt of the Houston Wire &
Cable Company 2006 Stock Plan, as amended (the “Plan”) and hereby accept
this Nonqualified Stock Option subject to all the terms and conditions
thereof.  I agree to accept as binding,
conclusive and final all decisions and interpretations of the Board or the
Committee, each as defined in the Plan, regarding any questions arising under
the Plan or this Stock Option Agreement.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature:

  	
   

  	
   

  

 

 

APPENDIX
A

Houston
Wire & Cable Company

10201
North Loop East

Houston,
Texas  77029

Attn:  Treasurer

NOTICE
OF EXERCISE OF NONQUALIFIED STOCK OPTION

I
hereby give notice of my election to exercise, to the extent stated below, the
nonqualified stock option (“Option”) granted to me on [DATE] to purchase
[NUMBER OF SHARES]  shares of common
stock, par value $0.01 per share, of Houston Wire & Cable Company (“Shares”)
at a price of [PRICE] per Share, pursuant to the HOUSTON WIRE & CABLE
COMPANY 2006 STOCK PLAN.  I hereby elect
to exercise such Option to the extent of                                 
Shares.  Payment in the amount of $                    
equal to the full purchase price of such Shares is enclosed.

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (signature)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (printed name)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (address)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (city, state,
  zip code)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Social Security
  Number)

  

 

THIS
DOCUMENT IS TO BE USED TO EXERCISE YOUR STOCK OPTIONS.Exhibit 10.3

Description of
Senior Management Bonus Program

The
following is a description of the senior management bonus program, as adopted
by the compensation committee (the “Committee”) of the board of directors of
Houston Wire & Cable Company (the “Company”) on December 20, 2006.  The bonus program provides for the payment of
discretionary annual cash bonuses to employees who are considered management
level.  The bonus program is administered
by the Committee, which has full authority to select participants, set bonus
amounts and fix performance targets.  The
Company’s board of directors receives a report from the Committee of all awards
granted and targets established.

For
each participant, the potential bonus award is based on the employee’s salary
for the year with respect to which the bonus is payable (the “Bonus Year”).  In order for any bonus to be paid, the
Company must achieve the operating income threshold (the “Threshold”) set by
the Committee for the Bonus Year.  If the
Threshold is met, then the participant may receive a “basic” bonus equal to a
percentage (ranging from 0% to 40%) of his or her salary, depending on the
Company’s performance with respect to targets established for three incentive
factors: operating income, revenue and inventory turns.  70% of the bonus is based on meeting the
established targets for operating income, 20% of the bonus is based on meeting
the established targets for revenues, and 10% of the bonus is based on meeting
the established targets for inventory turns. 
The full basic bonus of 40% of salary will be available if the Company
achieves the maximum target for each of the three incentive factors.  The bonus available for each incentive factor
will be calculated on a stand alone basis (provided the Threshold is met) and
will be calculated on a pro rata, straight line basis between the 0 and 40%
level, provided the specific target for such incentive factor has been met.

The
program also provides that a bonus of an additional 10% of salary may be
awarded if the Company achieves certain sales thresholds with respect to
certain proprietary products, provided established gross margins are
maintained, and that a bonus of an additional 5% of salary may be awarded in
the event the Company makes one or more acquisitions during the Bonus Year and
the acquired businesses meet established financial goals.  The maximum bonus paid (the basic bonus plus
the additional bonuses) may not exceed 55% of the participant’s base
salary.  All bonuses are payable the year
following the Bonus Year, after receipt of (and subject to) the audit of the
financial statements for the Bonus Year.

No
award will be paid for any full or partial year to a participant whose
employment with the Company terminates prior to the time the bonus is
paid.  In all cases the payment is in the
discretion of the Committee, and the Committee retains the right to terminate a
participant’s participation in the bonus program at any time, in which case no
bonus may be paid.

The
Chief Executive Officer’s bonus, as described in his employment contract, is
based on performance targets established by the Committee and board of
directors each year.

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