Exibit 10.2
 
Vape Holdings, Inc.

INCENTIVE STOCK OPTION AGREEMENT

This INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”) is made and entered
into as of this ____ day of ______________,, by and between Vape Holdings, Inc.,
a Delaware corporation ("Corporation"), and ________________________________
(referred to herein as the "Optionee").  Corporation and Optionee shall
sometimes herein be referred to as “Party” or “Parties.”  Capitalized terms not
otherwise defined herein shall have the meanings set forth in that certain 2014
Incentive and Nonstatutory Stock Option Plan approved by the Corporation.

WHEREAS, the Board of Directors of the Corporation (the “Board”) has authorized
the granting to Optionee of an incentive stock option ("Option") to purchase
shares of common stock of the Corporation (the "Shares") upon the terms and
conditions hereinafter stated; and

WHEREAS, the Board and stockholders of the Corporation have heretofore adopted a
2014 Incentive and Nonstatutory Stock Option Plan (the "Plan"), pursuant to
which this Option is being granted;

WHEREAS, it is the intention of the parties that this Option be an Incentive
Stock Option (a Qualified Stock Option);

NOW, THEREFORE, in consideration of the covenants herein set forth, the parties
hereto agree as follows:

1.           Shares; Price.  The Corporation hereby grants to Optionee the right
to purchase, upon and subject to the terms and conditions herein stated,
________________________ Shares for cash (or other consideration acceptable to
the Board, in their sole and absolute discretion) at the price of
$_____________per Share, such price being not less than the fair market value
per share of the Shares covered by these Options as of the date hereof and as
determined by the Board of Directors of the Corporation.

2.           Term of Option; Continuation of Employment.  This Option shall
expire, and all rights hereunder to purchase the Shares shall terminate, ten
(10) years from the date hereof.  This Option shall earlier terminate subject to
Paragraphs 5 and 6 hereof if, and as of the date, Optionee ceases to be an
employee of the Corporation.  Nothing contained herein shall be construed to
interfere in any way with the right of the Corporation to terminate the
employment or engagement, as applicable, of Optionee or to increase or decrease
the compensation of Optionee from the rate in existence at the date hereof.

3.           Vesting of Option.  Subject to the provisions of Paragraphs 5 and 6
hereof, this Option shall vest and become exercisable during the term of
Optionee's employment or engagement in whole or in part beginning on the date of
this Agreement.
 
 
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4.           Manner of Exercising Option.

(a)           In order to exercise this Option with respect to all or any part
of the Shares for which this Option is at the time exercisable, Optionee (or any
other person or persons exercising the Option) must take the following actions:

(i)           Execute and deliver to the Corporation a written notice of
exercise stating the number of Shares being purchased (in whole shares only) and
such other information set forth on the form of Notice of Exercise attached
hereto as Appendix A.

(ii)           Pay the aggregate Exercise Price for the purchased shares in one
or more of the following forms:

(A)           Cash or check made payable to the Corporation; or

(B)           A promissory note payable to the Corporation, but only to the
extent authorized by the Corporation.

Should the Shares be registered under Section 12 of the 1934 Act at the time the
Option is exercised, then the Exercise Price may also be paid as follows:

(C)           In Shares held by Optionee (or any other person or persons
exercising the Option) for the requisite period necessary to avoid a charge to
the Corporation’s earnings for financial reporting purposes and valued at Fair
Market Value on the Exercise Date; or

(D)           To the extent the Option is exercised for vested Shares, through a
special sale and remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently provide irrevocable
instructions (a) to a Corporation-approved brokerage firm to effect the
immediate sale of the purchased shares and remit to the Corporation, out of the
sale proceeds available on the settlement date, sufficient funds to cover the
aggregate Exercise Price payable for the purchased shares plus all applicable
Federal, State and local income and employment taxes required to be withheld by
the Corporation by reason of such exercise and (b) to the Corporation to deliver
the certificates for the purchased shares directly to such brokerage firm in
order to complete the sale.

(iii)           Furnish to the Corporation appropriate documentation that the
person or persons exercising the Option (if other than Optionee) have the right
to exercise this Option.

(iv)           Execute and deliver to the Corporation such written
representations as may be requested by the Corporation in order for it to comply
with the applicable requirements of Federal and State securities laws.

(v)           Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing or retaining Optionee) for the satisfaction of all Federal,
State and local income and employment tax withholding requirements applicable to
the Option exercise, if any.
 
 
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(vi)           Execute and deliver to the Corporation a written statement as
provided for in Paragraph 11 hereof.

(b)           As soon as practical after the Exercise Date, the Corporation
shall issue to or on behalf of Optionee (or any other person or persons
exercising this Option) a certificate for the purchased Option Shares, with the
appropriate legends affixed thereto.

(c)           In no event may this option be exercised for any fractional
shares.

(d)           This Option shall not be assignable or transferable, except by
will or by the laws of descent and distribution, and shall be exercisable only
by Optionee during his or her lifetime.

5.           Termination of Employment or Engagement.  If Optionee shall cease
to serve as an employee of the Corporation for any reason, whether voluntarily
or involuntarily, other than by his or her death or the conclusion of the term
of a written consulting agreement, provided such term exceeds one year, Optionee
shall have the right at any time within thirty (30) days after date Optionee
ceases to be an employee of the Corporation, or the remaining term of this
Option, whichever is the lesser, to exercise in whole or in part this Option to
the extent, but only to the extent, that this Option was exercisable as of the
last day of employment or engagement, as applicable, and had not previously been
exercised; provided, however, that if Optionee’s termination of employment or
engagement was caused by permanent disability (within the meaning of Section
22(e)(3) of the Code), the foregoing thirty (30) day period shall be extended to
six (6) months; or

Notwithstanding anything herein to the contrary, all rights under this Option
shall expire in any event on the date specified in Paragraph 2 hereof.

6.           Death of Optionee.  If the Optionee shall die while an employee of
the Corporation, Optionee’s personal representative or the person entitled to
Optionee’s rights hereunder may at any time during the remaining term of this
Option, exercise this Option and purchase Shares to the extent, but only to the
extent, that Optionee could have exercised this Option as of the date of
Optionee’s death; provided, in any case, that this Option may be so exercised
only to the extent that this option has not previously been exercised by
Optionee.

7.           No Rights as Stockholder.  Optionee shall have no rights as a
stockholder with respect to the Shares covered by any installment of this Option
until the date of the issuance of a stock certificate to Optionee, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such stock certificate or certificates are issued except as
provided in Paragraph 8 hereof.

8.           Recapitalization.  Subject to any required action by the
stockholders of the Corporation, the number of Shares covered by this Option,
and the price per Share thereof, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a subdivision
or consolidation of shares or the payment of a stock dividend, or any other
increase or decrease in the number of such shares affected without receipt of
consideration by the Corporation; provided however that the conversion of any
convertible securities of the Corporation shall not be deemed having been
"effected without receipt of consideration by the Corporation."
 
 
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In the event of a proposed dissolution or liquidation of the Corporation, a
merger or consolidation in which the Corporation is not the surviving entity, or
a sale of all or substantially all of the assets of the Corporation, this Option
shall terminate immediately prior to the consummation of such proposed action,
unless otherwise provided by the Board.  The Board may, at its sole and absolute
discretion and without obligation, declare that this Option shall terminate as
of a date fixed by the Board and grant Optionee the right for a period
commencing thirty (30) days prior to and ending immediately prior to such date,
or during the remaining term of this Option, whichever occurs sooner, to
exercise this Option as to all or any part of the Shares, without regard to the
installment provision of Paragraph 3; provided, however, that such exercise
shall be subject to the consummation of such dissolution, liquidation, merger,
consolidation or sale.

Subject to any required action by the stockholders of the Corporation, if the
Corporation shall be the surviving entity in any merger or consolidation, this
Option thereafter shall pertain to and apply to the securities to which a holder
of Shares equal to the Shares subject to this Option would have been entitled by
reason of such merger or consolidation, and the vesting provisions of Section 6
shall continue to apply.

In the event of a change in the Shares of the Corporation as presently
constituted, which is limited to a change of all of its authorized Shares
without par value into the same number of Shares with a par value, the Shares
resulting from any such change shall be deemed to be the Shares within the
meaning of this Agreement.

To the extent that the foregoing adjustments relate to shares or securities of
the Corporation, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.  Except as
hereinbefore expressly provided, Optionee shall have no rights by reason of any
subdivision or consolidation of share of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, and the number and price of shares subject to this Option
shall not be affected by, and no adjustments shall be made by reason of, any
dissolution, liquidation, merger or consolidation, or any issue by the
Corporation of shares of stock of any class or securities convertible into
shares of stock of any class.

The grant of this Option shall not affect in any way the right or power of the
Corporation to make adjustments, reclassifications, reorganizations or changes
in its capital or business structure or to merge, consolidate, dissolve or
liquidate or to sell or transfer all or any part of its business or assets.

9.           Taxation upon Exercise of Option.  Optionee understands that, upon
exercise of this Option, Optionee may recognize income, for federal and state
income tax purposes, in an amount equal to the amount by which the fair market
value of the Shares, determined as of the date of exercise, exceeds the Exercise
Price.  The acceptance of the Shares by Optionee shall constitute an agreement
by Optionee to report such income in accordance with then applicable law and to
cooperate with Corporation in establishing the amount of such income and
corresponding deduction to the Corporation for its income tax
purposes.  Withholding for federal or state income and employment tax purposes
will be made, if and as required by law, from Optionee's then current
compensation, or, if such current compensation is insufficient to satisfy
withholding tax liability, the Corporation may require Optionee to make  cash
payment to cover such liability as a condition of the exercise of this Option.
 
 
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10.         Modification, Extension and Renewal of Options.  Subject to the
terms and conditions and within the limitations of the 2014 Incentive and
Nonstatutory Stock Option Plan (the “Plan”), the Board may modify an Option as
well as extend or renew outstanding Options granted under the Plan or accept the
surrender of outstanding Options (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution for such Options, provided
such action is permissible under Section 422 of the Internal Revenue Code of
1986 (the “Code”) and state law.
 
If the Corporation experiences a change in control or a sale of substantially
all of the Corporation’s assets, the vesting period shall fully accelerate,
where the Optionees may exercise the entire amount of Options specified in
Paragraph 3 herein.

Notwithstanding the foregoing provisions of this Paragraph 10, however, no
modification of an Option shall, without the consent of the Optionee, alter to
the Optionee's detriment or impair any rights or obligations under any Option
theretofore granted under the Plan.

11.         Investment Intent; Restrictions on Transfer.  Optionee represents
and agrees that if Optionee exercises this Option in whole or in part, Optionee
will in each case acquire the Shares upon such exercise for the purpose of
investment and not with a view to, or for resale in connection with, any
distribution thereof; and that upon such exercise of this Option in whole or in
part, Optionee (or any person or persons entitled to exercise this Option under
the provisions of Paragraphs 5 and 6 hereof) shall furnish to the Corporation a
written statement to such effect, satisfactory to the Corporation in form and
substance.  The Corporation, at its option, may include a legend on each
certificate representing Shares issued pursuant to any exercise of this Option,
stating in effect that such Shares have not been registered under the Securities
Act of 1933, as amended (the "Act"), and that the transferability thereof is
restricted.  If the Shares represented by this Option are registered under the
Act, either before or after the exercise of this Option in whole or in part, the
Optionee shall be relieved of the foregoing investment representation and
agreement and shall not be required to furnish the Corporation with the
foregoing written statement.

Optionee further represents that Optionee has had access to the financial
statements or books and records of the Corporation, has had the opportunity to
ask questions of the Corporation concerning its business, operations and
financial condition, and to obtain additional information reasonably necessary
to verify the accuracy of such information, and further represents that Optionee
(either such experience and knowledge in investment, financial and business
matters in investments similar to the stock of the Corporation that Optionee is
capable of evaluating the merits and risks thereof and has the capacity to
protect his or her own interest in connection therewith.
 
 
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12.         Registration Rights.

(a)           Piggyback Registration Rights.  If the Corporation at any time
proposes to register any of its securities under the Act, including under an S-8
Registration Statement, an SB-2 Registration Statement or otherwise, it will
each such time give written notice to all holders of outstanding or exercised
options of its intention so to do.  Upon the written request of a holder or
holders of any such outstanding or exercised options given within thirty (30)
days after receipt of any such notice, the Corporation will use its best efforts
to cause all such outstanding or exercised options, the holders of which shall
have so requested registration thereof, to be registered under the Act (with the
securities which the Corporation at the time propose to register), all to the
extent requisite to permit the sale or other disposition by the prospective
sellers of the outstanding or exercised options so registered; provided,
however, that the Corporation may, as a condition precedent to its effecting
such registration, require each prospective seller to agree with the Corporation
and the managing underwriter or underwriters of the offering to be made by the
Corporation in connection with such registration that such seller will not sell
any securities of the same class or convertible into the same class as those
registered by the Corporation (including any class into which the securities
registered by the Corporation are convertible) for such reasonable period after
such registration becomes effective as shall then be specified in writing by
such underwriter or underwriters if in the opinion of such underwriter or
underwriters the Corporation's offering would be materially adversely affected
in the absence of such an agreement.

(b)           Procedures.  In connection with the registration of any securities
pursuant to Section 12(a) hereof, the Corporation and the Optionee covenant and
agree as follows:

(i)           The Corporation shall pay all costs, fees, and expenses incurred
by the Corporation and the Optionee in connection with the Registration
Statement and the offering thereunder including, without limitation, the
Corporation’s legal fees and expenses of counsel, accounting fees, printing
expenses, and blue sky fees and expenses (but excluding discounts or selling
commissions of any underwriter or broker dealer acting on behalf of the
Corporation or the Optionee).

(ii)          The Corporation shall take all necessary action which may be
reasonably required in qualifying or registering the securities included in the
Registration Statement for offering and sale under the securities or blue sky
laws of all states reasonably requested by Optionee, provided that the
Corporation shall not be obligated to qualify as a foreign corporation to do
business under the laws of any such jurisdiction.

(iii)         The Corporation shall indemnify Optionee and each person, if any,
who controls Optionee within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), against all
loss, claim, damage, expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim whatsoever)
to which any of them may become subject under the Act, the Exchange Act or
otherwise, arising from the Registration Statement.
 
 
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(iv)         The Corporation shall, as soon as practicable after the effective
date of the Registration Statement, and in any event within fifteen (15) months
thereafter, make "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement  (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least twelve (12) consecutive months beginning after the effective date of the
Registration Statement.

(v)          The Corporation shall (A) deliver promptly to Optionee  and its
counsel, upon request, copies of all correspondence between the Securities and
Exchange Commission (the “Commission”) and the Corporation, its counsel, or
auditors and all memoranda relating to discussions with the Commission or its
staff with respect to the Registration Statement; and (B) permit Optionee and
its counsel to perform such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the Registration Statement,
as it deems reasonably necessary to comply with applicable securities laws or
rules of the National Association of Securities Dealers, Inc. and/or the
Financial Industry Regulatory Authority.  Such investigation shall include, but
not be limited to, access to financial and accounting information and
opportunities to discuss the business of the Corporation with the Corporation's
officers and independent auditors, all to such reasonable extent, at such
reasonable times and as often as Optionee and its counsel shall reasonably
request.

(vi)         The Corporation shall cause all securities of Optionee registered
pursuant to a Registration Statement to be listed on any national securities
exchange or quoted on any automated quotation system on which similar securities
of the Corporation are listed or quoted.

13.         Stand-off Agreement.  Optionee agrees that in connection with any
registration of the Corporation's securities, that upon the request of the
Corporation or any underwriter managing an underwritten offering of the
Corporation's securities, that Optionee shall not sell, short any sale of, loan,
grant an option for, or otherwise dispose of any of the Shares (other than
Shares included in the offering) without the prior written consent of the
Corporation or such managing underwriter, as applicable, for a period of at
least one hundred eighty (180) days following the effective date of registration
of such offering.
 
 
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14.         Notices.  Any notice required to be given pursuant to this Option or
the Plan shall be in writing and shall be deemed to be delivered upon receipt
or, in the case of notices by the Corporation, five (5) days after deposit in
the US. mail, postage prepaid, addressed to Optionee at the address last
provided to the Corporation by Optionee for his or her employee records.

15.         Agreement Subject to Plan; Applicable Law.  This Agreement is made
pursuant to the Plan and shall be interpreted to comply therewith.  A copy of
such Plan is available to Optionee, at no charge, at the principal office of the
Corporation.  Any provision of this Agreement inconsistent with the Plan shall
be considered void and replaced with the applicable provision of the Plan.  This
Agreement has been granted, executed and delivered in the State of California,
and the interpretation and enforcement shall be governed by the laws thereof and
subject to the exclusive jurisdiction of the courts therein.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

  Vape Holdings, Inc.    
 
   
BY:  Kyle Tracey
ITS: Chief Executive Officer
         
                              , Optionee

 
 
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Appendix A

NOTICE OF EXERCISE

Vape Holdings, Inc.
20265 Ventura Blvd., Suite A
Woodland Hills, CA 91364

____________________
(date)

Re: Incentive Stock Option

Notice is hereby given pursuant to Section 4 of my Incentive Stock Option
Agreement that I elect to purchase the number of shares set forth below at the
Exercise Price set forth in my option agreement:

Stock Option
dated:                                                                ______________________

Number of shares being
purchased:                                    ______________________

Option Exercise
Price:                                                           
$_____________________

A check in the amount of the aggregate price of the shares being purchased is
attached.

I hereby confirm that such shares are being acquired by me for my own account
for investment purposes, and not with a view to, or for resale in connection
with, any distribution thereof.

Further, I understand that, as a result of this exercise of rights, I may
recognize income in an amount equal to the amount by which the fair market value
of the Shares exceeds the Exercise Price.  I agree to report such income in
accordance with then applicable law and to cooperate with Corporation in
establishing the withholding and corresponding deduction to the Corporation for
its income tax purposes.

I agree to provide to the Corporation such additional documents or information
as may be required pursuant to the Corporation's 2014 Incentive and Nonstatutory
Stock Option Plan.

_________________________
  (Signature)

_________________________
        (Name of Optionee)
 
 
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