Exhibit 10.2

 

INCENTIVE STOCK OPTION AGREEMENT

 

BLUE CALYPSO, INC.

2011 LONG-TERM INCENTIVE PLAN

 

1.                                       Grant of Option.  Pursuant to the Blue
Calypso, Inc. 2011 Long-Term Incentive Plan (the “Plan”), as adopted by Blue
Calypso, Inc., a Nevada corporation (the “Company”), the Company grants to

 

 

 

(the “Participant”)

 

 

 

who is an Employee of the Company, an option (the “Option” or “Stock Option”) to
purchase a total of                                   
(                        ) full shares of Common Stock of the Company (the
“Optioned Shares”) at an “Option Price” equal to $                   per share
(being the Fair Market Value per share of the Common Stock on this Date of Grant
or 110% of such Fair Market Value, in the case of a ten percent (10%) or more
stockholder as provided in Section 422 of the Code), in the amounts, during the
periods and upon the terms and conditions set forth in this Incentive Stock
Option Agreement (the “Agreement”).

 

The “Date of Grant” of this Stock Option is                             
20        .  The “Option Period” shall commence on the Date of Grant and shall
expire on the date immediately preceding the tenth (10th) anniversary of the
Date of Grant (or the date immediately preceding the fifth (5th) anniversary of
the Date of Grant, in the case of a ten percent (10%) or more stockholder as
provided in Section 422 of the Code).  The Stock Option is intended to be an
Incentive Stock Option.

 

2.                                       Subject to Plan.  The Stock Option and
its exercise are subject to the terms and conditions of the Plan, and the terms
of the Plan shall control to the extent not otherwise inconsistent with the
provisions of this Agreement.  The capitalized terms used herein that are
defined in the Plan shall have the same meanings assigned to them in the Plan. 
The Stock Option is subject to any rules promulgated pursuant to the Plan by the
Board or the Committee and communicated to the Participant in writing.  In
addition, if the Plan has not been approved by the Company’s shareholders, the
Stock Option is granted subject to such shareholder approval.

 

3.                                       Vesting; Time of Exercise.  Except as
specifically provided in this Agreement and subject to certain restrictions and
conditions set forth in the Plan, the Optioned Shares shall be vested and the
Stock Option shall be exercisable as follows:

 

a.                                      
                                               of the total Optioned Shares
shall vest and that portion of the Stock Option shall be exercisable on the Date
of Grant.

 

b.                                     
                                               of the total Optioned Shares
shall vest and that portion of the Stock Option shall be exercisable on the
first anniversary of the Date of Grant, provided the Participant is employed by
the Company or a Subsidiary on that date.

 

c.                                      
                                               of the total Optioned Shares
shall vest and that portion of the Stock Option shall become exercisable on the
second anniversary of the Date of Grant, provided the Participant is employed by
the Company or a Subsidiary on that date.

 

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d.                                     
                                               of the total Optioned Shares
shall vest and that portion of the Stock Option shall become exercisable on the
third anniversary of the Date of Grant, provided the Participant is employed by
the Company or a Subsidiary on that date.

 

In the event that (i) a Change in Control occurs, and (ii) this Option Agreement
is not assumed by the surviving corporation or its parent, or the surviving
corporation or its parent does not substitute its own option for this Stock
Option, then immediately prior to the effective date of such Change in Control,
the total Optioned Shares not previously vested shall thereupon immediately
become vested and this Stock Option shall become fully exercisable, if not
previously so exercisable.

 

4.                                       Term; Forfeiture.

 

a.                                       Except as otherwise provided in this
Agreement, to the extent the unexercised  portion of the Stock Option relates to
Optioned Shares which are not vested on the date of the Participant’s
Termination of Service, the Stock Option will be terminated on that date.  The
unexercised portion of the Stock Option that relates to Optioned Shares which
are vested will terminate at the first of the following to occur:

 

i.                                          5 p.m. on the date the Option Period
terminates;

 

ii.                                       5 p.m. on the date which is twelve
(12) months following the date of the Participant’s Termination of Service due
to death or Total and Permanent Disability;

 

iii.                                    5 p.m. on the date of the Participant’s
Termination of Service by the Company for Cause (as defined herein);

 

iv.                                   5 p.m. on the date which is three
(3) months following the date of the Participant’s Termination of Service for
any reason not otherwise specified in this Section 4.a.;

 

v.                                      5 p.m. on the date the Company causes
any portion of the Stock Option to be forfeited pursuant to Section 7 hereof.

 

b.                                      For purposes hereof, “Cause” shall mean
(i) acts of fraud or dishonesty in the course of employment, (ii) violations of
law causing material harm to the Company, (iii) substance abuse causing harm to
the Company or impairing performance, (iv) conviction of a felony involving
moral turpitude, or (v) insubordination, dereliction of duties, habitual
absenteeism, or material failure to follow reasonable Company instructions after
(solely in the case of this clause (v)) notice to the Participant and the
Participant’s failure to correct same within the time period specified in the
notice, which time period shall be not less than ten (10) business days.

 

5.                                       Who May Exercise.  Subject to the terms
and conditions set forth in Sections 3 and 4 above, during the lifetime of the
Participant, the Stock Option may be exercised only by the Participant, or by
the Participant’s guardian or personal or legal representative.  If the
Participant’s Termination of Service is due to his death prior to the dates
specified in Section 4.a. hereof, and the Participant has not exercised the
Stock Option as to the maximum number of vested Optioned Shares as set forth in
Section 3 hereof as of the date of death, the following persons may exercise the
exercisable portion of the Stock Option on behalf of the Participant at any time
prior to the earliest of the dates specified in Section 4.a. hereof: the
personal representative of his estate, or the person who acquired the right to
exercise the Stock Option by bequest or inheritance or by reason of the death of
the Participant; provided that the Stock

 

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Option shall remain subject to the other terms of this Agreement, the Plan, and
Applicable Laws, rules, and regulations.

 

6.                                       No Fractional Shares.  The Stock Option
may be exercised only with respect to full shares, and no fractional share of
stock shall be issued.

 

7.                                       Manner of Exercise.  Subject to such
administrative regulations as the Committee may from time to time adopt, the
Stock Option may be exercised by the delivery of written notice to the Committee
setting forth the number of shares of Common Stock with respect to which the
Stock Option is to be exercised, the date of exercise thereof (the “Exercise
Date”) which shall be at least three (3) days after giving such notice unless an
earlier time shall have been mutually agreed upon, and whether the Optioned
Shares to be exercised will be considered as deemed granted under an Incentive
Stock Option as provided in Section 11.  On the Exercise Date, the Participant
shall deliver to the Company consideration with a value equal to the total
Option Price of the shares to be purchased, payable as follows:  (a) cash,
check, bank draft, or money order payable to the order of the Company, (b) if
the Company, in its sole discretion, so consents in writing, Common Stock
(including Restricted Stock) owned by the Participant on the Exercise Date,
valued at its Fair Market Value on the Exercise Date, and which the Participant
has not acquired from the Company within six (6) months prior to the Exercise
Date, (c) if the Company, in its sole discretion, so consents in writing, by
delivery (including by FAX) to the Company or its designated agent of an
executed irrevocable option exercise form together with irrevocable instructions
from the Participant to a broker or dealer, reasonably acceptable to the
Company, to sell certain of the shares of Common Stock purchased upon exercise
of the Stock Option or to pledge such shares as collateral for a loan and
promptly deliver to the Company the amount of sale or loan proceeds necessary to
pay such purchase price, and/or (d) in any other form of valid consideration
that is acceptable to the Committee in its sole discretion.  In the event that
shares of Restricted Stock are tendered as consideration for the exercise of a
Stock Option, a number of shares of Common Stock issued upon the exercise of the
Stock Option equal to the number of shares of Restricted Stock used as
consideration therefor shall be subject to the same restrictions and provisions
as the Restricted Stock so tendered.

 

Upon payment of all amounts due from the Participant, the Company shall cause
the Common Stock then being purchased to be registered in the Participant’s name
(or the person exercising the Participant’s Stock Option in the event of his
death) promptly after the Exercise Date.  The obligation of the Company to
register shares of Common Stock shall, however, be subject to the condition
that, if at any time the Company shall determine in its discretion that the
listing, registration, or qualification of the Stock Option or the Common Stock
upon any securities exchange or inter-dealer quotation system or under any state
or federal law, or the consent or approval of any governmental regulatory body,
is necessary as a condition of, or in connection with, the Stock Option or the
issuance or purchase of shares of Common Stock thereunder, then the Stock Option
may not be exercised in whole or in part unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained free of
any conditions not reasonably acceptable to the Committee.

 

If the Participant fails to pay for any of the Optioned Shares specified in such
notice or fails to accept delivery thereof, that portion of the Participant’s
Stock Option and right to purchase such Optioned Shares may be forfeited by the
Participant.

 

8.                                       Non-Assignability.  The Stock Option is
not assignable or transferable by the Participant in any form or fashion except
by will or by the laws of descent and distribution.

 

9.                                       Rights as Shareholder.  The Participant
will have no rights as a shareholder with respect to any of the Optioned Shares
until the issuance of a certificate or certificates to the Participant or the
registration of such shares in the Participant’s name for the shares of Common
Stock.  The Optioned

 

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Shares shall be subject to the terms and conditions of this Agreement.  Except
as otherwise provided in Section 10 hereof, no adjustment shall be made for
dividends or other rights for which the record date is prior to the issuance of
such certificate or certificates.  The Participant, by his or her execution of
this Agreement, agrees to execute any documents requested by the Company in
connection with the issuance of a certificate or certificates for the shares of
Common Stock.

 

10.                                 Adjustment of Number of Shares and Related
Matters.  The number of shares of Common Stock covered by the Stock Option, and
the Option Prices thereof, shall be subject to adjustment in accordance with
Articles 11 — 13 of the Plan.

 

11.                                 Incentive Stock Option.  Subject to the
provisions of the Plan, the Stock Option is intended to be an Incentive Stock
Option.  To the extent the number of Optioned Shares exceeds the limit set forth
in Section 6.3 of the Plan, such Optioned Shares shall be deemed granted
pursuant to a Nonqualified Stock Option.  Unless otherwise indicated by the
Participant in the notice of exercise pursuant to Section 7, upon any exercise
of this Stock Option, the number of exercised Optioned Shares that shall be
deemed to be exercised pursuant to an Incentive Stock Option shall equal the
total number of Optioned Shares so exercised multiplied by a fraction, (i) the
numerator of which is the number of unexercised Optioned Shares that could then
be exercised pursuant to an Incentive Stock Option, and (ii) the denominator of
which is the then total number of unexercised Optioned Shares.

 

12.                                 Disqualifying Disposition.  In the event
that Common Stock acquired upon exercise of this Stock Option is disposed of by
the Participant in a “Disqualifying Disposition,” such Participant shall notify
the Company in writing within thirty (30) days after such disposition of the
date and terms of such disposition.  For purposes hereof, “Disqualifying
Disposition” shall mean a disposition of Common Stock that is acquired upon the
exercise of this Stock Option (and that is not deemed granted pursuant to a
Nonqualified Stock Option under Section 11) prior to the expiration of either
two (2) years from the Date of Grant of this Stock Option or one (1) year from
the transfer of shares to the Participant pursuant to the exercise of the Stock
Option.

 

13.                                 Voting.  The Participant, as record holder
of some or all of the Optioned Shares following exercise of this Stock Option,
has the exclusive right to vote, or consent with respect to, such Optioned
Shares until such time as the Optioned Shares are transferred in accordance with
this Agreement; provided, however, that this Section shall not create any voting
right where the holders of such Optioned Shares otherwise have no such right.

 

14.                                 Specific Performance.  The parties
acknowledge that remedies at law will be inadequate remedies for breach of this
Agreement and consequently agree that this Agreement shall be enforceable by
specific performance.  The remedy of specific performance shall be cumulative of
all of the rights and remedies at law or in equity of the parties under this
Agreement.

 

15.                                 Participant’s Representations. 
Notwithstanding any of the provisions hereof, the Participant hereby agrees that
he will not exercise the Stock Option granted hereby, and that the Company will
not be obligated to issue any shares to the Participant hereunder, if the
exercise thereof or the issuance of such shares shall constitute a violation by
the Participant or the Company of any provision of any law or regulation of any
governmental authority.  Any determination in this connection by the Company
shall be final, binding, and conclusive.  The obligations of the Company and the
rights of the Participant are subject to all Applicable Laws, rules, and
regulations.

 

16.                                 Investment Representation.  Unless the
shares of Common Stock are issued to the Participant in a transaction registered
under applicable federal and state securities laws, by his execution hereof, the
Participant represents and warrants to the Company that all Common Stock which
may be

 

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purchased hereunder will be acquired by the Participant for investment purposes
for his own account and not with any intent for resale or distribution in
violation of federal or state securities laws.  Unless the Common Stock is
issued to him in a transaction registered under the applicable federal and state
securities laws, all certificates issued with respect to the Common Stock shall
bear an appropriate restrictive investment legend and shall be held
indefinitely, unless they are subsequently registered under the applicable
federal and state securities laws or the Participant obtains an opinion of
counsel, in form and substance satisfactory to the Company and its counsel, that
such registration is not required.

 

17.                                 Participant’s Acknowledgments.  The
Participant acknowledges that a copy of the Plan has been made available for his
or her review by the Company, and represents that he or she is familiar with the
terms and provisions thereof, and hereby accepts this Stock Option subject to
all the terms and provisions thereof.  The Participant hereby agrees to accept
as binding, conclusive, and final all decisions or interpretations of the
Committee or the Board, as appropriate, upon any questions arising under the
Plan or this Agreement.

 

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

 

19.                                 No Right to Continue Employment.  Nothing
herein shall be construed to confer upon the Participant the right to continue
in the employment of the Company or interfere with or restrict in any way the
right of the Company to discharge the Participant at any time (subject to any
contract rights of the Participant).

 

20.                                 Legal Construction.  In the event that any
one or more of the terms, provisions, or agreements that are contained in this
Agreement 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 Agreement
shall be construed in all respects as if the invalid, illegal, or unenforceable
term, provision, or agreement had never been contained herein.

 

21.                                 Covenants and Agreements as Independent
Agreements. Each of the covenants and agreements that is set forth in this
Agreement shall be construed as a covenant and agreement independent of any
other provision of this Agreement.  The existence of any claim or cause of
action of the Participant against the Company, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of the covenants and agreements that are set forth in this Agreement.

 

22.                                 Entire Agreement.  This Agreement together
with the Plan supersede any and all other prior understandings and agreements,
either oral or in writing, between the parties with respect to the subject
matter hereof and constitute the sole and only agreements between the parties
with respect to the said subject matter.  All prior negotiations and agreements
between the parties with respect to the subject matter hereof are merged into
this Agreement.  Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, have
been made by any party or by anyone acting on behalf of any party, which are not
embodied in this Agreement or the Plan and that any agreement, statement or
promise that is not contained in this Agreement or the Plan shall not be valid
or binding or of any force or effect.

 

23.                                 Parties Bound.  The terms, provisions, and
agreements that are contained in this Agreement shall apply to, be binding upon,
and inure to the benefit of the parties and their respective

 

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heirs, executors, administrators, legal representatives, and permitted
successors and assigns, subject to the limitation on assignment expressly set
forth herein.

 

24.                                 Modification.  No change or modification of
this Agreement shall be valid or binding upon the parties unless the change or
modification is in writing and signed by the parties.  Notwithstanding the
preceding sentence, the Company may amend the Plan to the extent permitted by
the Plan.

 

25.                                 Headings.  The headings that are used in
this Agreement are used for reference and convenience purposes only and do not
constitute substantive matters to be considered in construing the terms and
provisions of this Agreement.

 

26.                                 Gender and Number.  Words of any gender used
in this Agreement shall be held and construed to include any other gender, and
words in the singular number shall be held to include the plural, and vice
versa, unless the context requires otherwise.

 

27.                                 Notice.  Any notice required or permitted to
be delivered hereunder shall be deemed to be delivered only when actually
received by the Company or by the Participant, as the case may be, at the
addresses set forth below, or at such other addresses as they have theretofore
specified by written notice delivered in accordance herewith:

 

a.                                       Notice to the Company shall be
addressed and delivered as follows:

 

Blue Calypso, Inc.

1345 Valwood Parkway

Carrollton, Texas 75006

Attn:

Facsimile:

 

b.                                      Notice to the Participant shall be
addressed and delivered as set forth on the signature page.

 

28.                                 Tax Requirements.  The Participant is hereby
advised to consult immediately with his or her own tax advisor regarding the tax
consequences of this Agreement.  The Company or, if applicable, any Subsidiary
(for purposes of this Section 28, the term “Company” shall be deemed to include
any applicable Subsidiary), shall have the right to deduct from all amounts
hereunder paid in cash or other form, any Federal, state, local, or other taxes
required by law to be withheld in connection with this Award.  The Company may,
in its sole discretion, also require the Participant receiving shares of Common
Stock issued under the Plan to pay the Company the amount of any taxes that the
Company is required to withhold in connection with the Participant’s income
arising with respect to this Award.  Such payments shall be required to be made
when requested by the Company and may be required to be made prior to the
delivery of any certificate representing shares of Common Stock.  Such payment
may be made (i) by the delivery of cash to the Company in an amount that equals
or exceeds (to avoid the issuance of fractional shares under (iii) below) the
required tax withholding obligations of the Company; (ii) if the Company, in its
sole discretion, so consents in writing, the actual delivery by the exercising
Participant to the Company of shares of Common Stock that the Participant has
not acquired from the Company within six (6) months prior to the date of
exercise, which shares so delivered have an aggregate Fair Market Value that
equals or exceeds (to avoid the issuance of fractional shares under (iii) below)
the required tax withholding payment; (iii) if the Company, in its sole
discretion, so consents in writing, the Company’s withholding of a number of
shares to be delivered upon the exercise of the Stock Option, which shares so
withheld have an aggregate Fair Market Value that equals (but does not exceed)
the required tax

 

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withholding payment; or (iv) any combination of (i), (ii), or (iii).  The
Company may, in its sole discretion, withhold any such taxes from any other cash
remuneration otherwise paid by the Company to the Participant.

 

* * * * * * * *

 

[Remainder of Page Intentionally Left Blank

Signature Page Follows.]

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and the Participant, to evidence his consent and
approval of all the terms hereof, has duly executed this Agreement, as of the
date specified in Section 1 hereof.

 

 

 

COMPANY:

 

 

 

BLUE CALYPSO, INC.

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

PARTICIPANT:

 

 

 

 

 

 

 

 

 

 

Signature

 

 

 

 

Name:

 

 

Address:

 

 

 

 

 

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