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 EXHIBIT 10.1



MOBILESMITH,
INC.


INCENTIVE
STOCK OPTION AGREEMENT


THIS
INCENTIVE STOCK OPTION AGREEMENT, made and entered into as of the
21th day of November, 2016, by and between MobileSmith, Inc., a
Delaware corporation (the “Company”), and _______ (the
“Participant”).


WHEREAS, the
committee appointed under the MobileSmith, Inc. Equity Compensation
Plan (the “Committee”) granted Participant an option to
purchase shares of the Company’s Common Stock, $0.001 par
value per share (the “Common Stock”), pursuant to the
MobileSmith, Inc. 2016 Equity Compensation Plan (the
“Plan”) (capitalized terms used herein shall have the
meanings set out in the Plan unless otherwise specified in this
Agreement); and


WHEREAS, this
Agreement evidences the grant of such option.


NOW,
THEREFORE, in consideration of the foregoing, of the mutual
promises set forth below and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound,
agree as follows:


1. Grant of Option. The Committee
hereby grants Participant an option to purchase from the Company,
during the period specified in Section 2 of this Agreement, a total
of ___ shares of Stock, at
the purchase price of $_______ per share (the “Purchase
Price”), in accordance with the terms and conditions stated
in this Agreement. The shares of Stock subject to the option
granted hereby are referred to below as the “Shares,”
and the option to purchase such Shares is referred to below as the
“Option”.


2. Vesting and Exercise of Option.
The Option shall vest and become exercisable in increments in
accordance with the schedule set forth below, provided that the
Option shall vest and become exercisable with respect to an
increment as specified only if Participant is employed with the
Company on the specified date for such increment:


1/12 of
the number of options granted at the end of every quarter starting
the quarter ending December 31, 2016.


 


The
schedule set forth above is cumulative, so that Shares as to which
the Option has become vested and exercisable on and after a date
indicated by the schedule may be purchased pursuant to exercise of
the Option at any subsequent date prior to termination of the
Option. The Option may be exercised at any time and from time to
time to purchase up to the number of Shares as to which it is then
vested and exercisable.


Notwithstanding the
foregoing, the Option shall vest and become exercisable, to the
extent not already vested and exercisable, upon a Change of Control
or a Corporate Reorganization, if the Company shall send
Participant prior written notice of the effectiveness of such event
and the last day on which Participant may exercise the Option.
Participant may, upon compliance with all of the terms of this
Agreement and the Plan, purchase any or all of the Shares with
respect to which the Option is vested and exercisable on or prior
to the last day specified in such notice, and, to the extent the
Option is not exercised, it shall terminate at 5:00 P.M., eastern
standard time, on the last day specified in such notice. The last
day specified in the notice shall not be less than twenty (20) days
after the date of the notice.


3. Termination of Option. The
Option shall remain exercisable as specified in Section 2 above
until the earliest to occur of the dates specified below, upon
which date the Option shall terminate:


(a) the date all of the
Shares are purchased pursuant to the terms of this
Agreement;


(b) in the event of
Participant’s death or disability prior to Termination of
Service of Participant, the Option shall remain exercisable until
one year following the Participant’s death or
disability;


(c) upon the expiration
of ninety (90) days following the Termination of Service of
Participant or thirty (30) days in the event such Termination is
Voluntary or for Cause


(d) at 5:00 P.M.,
eastern standard time, on the last date specified in the notice
described in Section 2 above, in the event of a Change of Control
or Corporate Reorganization, except to the extent that the Option
is assumed by the surviving entity or an affiliate thereof in
connection with such Change in Control or Corporate Reorganization;
or


(e) the fourth year
anniversary of the Grant Date at 5:00 P.M., eastern standard
time.


Upon
its termination, the Option shall have no further force or effect
and Participant shall have no further rights under the Option or to
any Shares which have not been purchased pursuant to prior exercise
of the Option.


 



 

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4. Manner
of Exercise of Option.


(a) The Option may be
exercised only by (i) Participant’s completion, execution and
delivery to the Company of a notice of exercise and, if required by
the Company, an “investment letter” as supplied by the
Company confirming Participant’s representations and
warranties in Section 17 of this Agreement, including the
representation that Participant is acquiring the Shares for
investment only and not with a view to the resale or other
distribution thereof, and (ii) the payment to the Company, pursuant
to the terms of this Agreement, of an amount equal to the Purchase
Price multiplied by the number of Shares being purchased as
specified in Participant’s notice of exercise.
Participant’s notice of exercise shall be given in the manner
specified in Section 12 but any exercise of the Option shall be
effective only when the items required by the preceding sentence
are actually received by the Company. The notice of exercise and
the “investment letter” may be in the form set forth in
Exhibit A attached to this Agreement. Payment of the aggregate
Purchase Price for Shares Participant has elected to purchase shall
be made by cash or good check. Notwithstanding anything to the
contrary in this Agreement, the Option may be exercised only if
compliance with all applicable federal and state securities laws
can be effected.


(b) Subject to the
provisions of Section 4 of the Plan, upon any exercise of the
Option by Participant or as soon thereafter as is practicable, the
Company shall issue and deliver to Participant a certificate or
certificates evidencing such number of Shares as Participant has
then elected to purchase. Such certificate or certificates shall be
registered in the name of Participant and shall bear the legend
specified in Section 16 of this Agreement and any legend required
by any federal or state securities laws and by the state in which
the Company is incorporated.


5. Definitions;
Authority of Committee.


(a) A “Change in
Control” shall be deemed to have occurred if, after the class
of stock then subject to this Agreement becomes publicly traded,
(i) the direct or indirect beneficial ownership (within the meaning
of Section 13(d) of the Act and Regulation 13D thereunder) of fifty
percent (50%) or more of the class of securities then subject to
this Agreement is acquired or becomes held by any person or group
of persons (within the meaning of Section 13(d)(3) of the Act), but
excluding the Company and any employee benefit plan sponsored or
maintained by the Company, or (ii) assets or earning power
constituting more than fifty percent (50%) of the assets or earning
power of the Company and its subsidiaries (taken as a whole) is
sold, mortgaged, leased or otherwise transferred, in one or more
transactions not in the ordinary course of the Company’s
business, to any such person or group of persons; provided,
however, that a Change in Control shall not be deemed to have
occurred upon an investment by one or more venture capital funds,
Small Business Investment Companies (as defined in the Small
Business Investment Act of 1958, as amended) or similar financial
investors. For the purposes of this Agreement, the class of stock
then subject to this Agreement shall be deemed to be
“publicly traded” if such stock is listed or admitted
to unlisted trading privileges on a national securities exchange or
as to which sales or bid and offer quotations are reported in the
automated system operated by the National Association of Securities
Dealers, Inc.


(b) A “Corporate
Reorganization” means the happening of any one (1) of the
following events: (i) the dissolution or liquidation of the
Company; (ii) a capital reorganization, merger or consolidation
involving the Company, unless (A) the transaction involves only the
Company and one or more of the Company’s parent corporation
and wholly-owned (excluding interests held by employees, officers
and directors) subsidiaries; or (B) the shareholders who had the
power to elect a majority of the board of directors of the Company
immediately prior to the transaction have the power to elect a
majority of the board of directors of the surviving entity
immediately following the transaction; (iii) the sale of all or
substantially all of the assets of the Company to another
corporation, person or business entity; or (iv) an acquisition of
Company stock, unless the shareholders who had the power to elect a
majority of the board of directors of the Company immediately prior
to the acquisition have the power to elect a majority of the board
of directors of the Company immediately following the transaction;
provided, however, that a Corporate Reorganization shall not be
deemed to have occurred upon an investment by one or more venture
capital funds, Small Business Investment Companies (as defined in
the Small Business Investment Act of 1958, as amended) or similar
financial investors.


(c) “Termination
of Service” shall have the meaning defined in the
Plan.


(d) All determinations
made by the Committee with respect to the interpretation,
construction and application of any provision of this Agreement
shall be final, conclusive and binding on the parties.


6. Default Treatment.


(a) The Option shall be
construed so that it is in compliance with the requirements of
section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). If for any reason the Option does not meet the
requirements of section 422 of the Code and the regulations
thereunder, then the Option or any portion of the Option, as
necessary, shall be deemed a Nonqualified Stock Option granted
under the Plan.


(b) If the aggregate
Fair Market Value, determined on the date of grant, of the stock to
which this Option and any other incentive stock options are
exercisable for the first time by Participant during any calendar
year under the Plan or any other stock option plan of the Company
exceeds $100,000 (or such other amount as the Code may specify),
the Option shall be deemed a Nonqualified Stock Option granted
under the Plan to the extent of such excess.


7. Rights Prior to Exercise.
Participant will have no rights as a shareholder with respect to
the Shares except to the extent that Participant has exercised the
Option and has been issued and received delivery of a certificate
or certificates evidencing the Shares so purchased.


8. Sale or Other Disposition by Majority
Interest. Participant hereby irrevocably appoints the
Company and its President, or either of them, as
Participant’s agents and attorneys-in-fact, with full power
of substitution for and in Participant’s name, to sell,
exchange, transfer or otherwise dispose of all or a portion of
Participant’s Shares and to do any and all things and to
execute any and all documents and instruments (including, without
limitation, any stock transfer powers) in connection therewith,
such powers of attorney not to become operable until such time as
the holder or holders of a majority of the issued and outstanding
shares of Stock of the Company sell, exchange, transfer or
otherwise dispose of, or contract to sell, exchange, transfer or
otherwise dispose of, all or a majority of the issued and
outstanding shares of Stock of the Company. Any sale, exchange,
transfer or other disposition of all or a portion of
Participant’s Shares pursuant to the foregoing powers of
attorney shall be made upon substantially the same terms and
conditions (including sale price per share) applicable to a sale,
exchange, transfer or other disposition of shares of Stock of the
Company owned by the holder or holders of a majority of the issued
and outstanding shares of Stock of the Company. For purposes of
determining the sale price per share of the Shares under this
Section 8, there shall be excluded the consideration (if any) paid
or payable to the holder or holders of a majority of the issued and
outstanding shares of Common Stock of the Company in connection
with any employment, consulting, noncompetition or similar
agreements which such holder or holders may enter into in
connection with or subsequent to such sale, transfer, exchange or
other disposition. The foregoing power of attorney shall not impose
or be deemed to impose any fiduciary duty or any other duty (except
as set forth in this Section 8) or obligation on either the Company
or its President, shall be irrevocable and coupled with an interest
and shall not terminate by operation of law, whether by the death,
bankruptcy or adjudication of incompetence or insanity of
Participant or the occurrence of any other event.


9. Engagement of Participant.
Nothing in this Agreement shall be construed as constituting a
commitment, guarantee, agreement or understanding of any kind or
nature that the Company shall continue to employ Participant, nor
shall this Agreement affect in any way the right of the Company to
terminate the employment of Participant at any time and for any
reason. By Participant’s execution of this Agreement,
Participant acknowledges and agrees that Participant’s
employment is “at will.” No change of
Participant’s duties as an employee of the Company shall
result in, or be deemed to be, a modification of any of the terms
of this Agreement.


 



 

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10. Burden and Benefit; Company.
This Agreement shall be binding upon, and shall inure to the
benefit of, the Company and Participant, and their respective
heirs, personal and legal representatives, successors and assigns.
As used in this Section 10, the term the “Company”
shall also include any corporation which is the parent or a
subsidiary of the Company or any corporation or entity which is an
affiliate of the Company by virtue of common (although not
identical) owner-ship, and for which Participant is providing
services in any form during Participant’s employment with the
Company or any such other corporation or entity. Participant hereby
consents to the enforcement of any and all of the provisions of
this Agreement by or for the benefit of the Company and any such
other corporation or entity.


11. Entire Agreement. This
Agreement and the Plan under which it is issued contain the entire
agreement between the parties with respect to the subject matter
hereof and supersedes all prior agreements or understandings, oral
or written, with respect to the subject matter herein. Participant
accepts the Option in full satisfaction of any and all obligations
of the Company to grant stock options to Participant as of the date
hereof.


12. Notices. Any and all notices
under this Agreement shall be in writing, and sent by hand delivery
or by certified or registered mail (return receipt requested and
first-class postage prepaid), in the case of the Company, to its
principal executive offices to the attention of the President, and,
in the case of Participant, to Participant’s address as shown
on the Company’s records.


13. Governing Law. This Agreement
shall be construed and enforced in accordance with the laws of the
state in which the Company is incorporated, without reference to
its conflicts of laws rules or the principles of the choice of
law.


14. Modifications. No change or
modification of this Agreement shall be valid unless the same is in
writing and signed by the parties hereto.


15. Terms and Conditions of Plan.
The terms and conditions included in the Plan, the receipt of a
copy of which Participant hereby acknowledges by execution of this
Agreement, are incorporated by reference herein, and to the extent
that any conflict may exist between any term or provision of this
Agreement and any term or provision of the Plan, such term or
provision of the Plan shall control.


17. Covenants and Representations and
Covenants of Participant.


Participant
represents, warrants, covenants and agrees with the Company as
follows:


(a) The Option is being
received for Participant’s own account without the
participation of any other person, with the intent of holding the
Option and the Shares issuable pursuant thereto for investment and
without the intent of participating, directly or indirectly, in a
distribution of the Shares and not with a view to, or for resale in
connection with, any distribution of the Shares or any portion
thereof.


(b) Participant is not
acquiring the Option or any Shares based upon any representation,
oral or written, by any person with respect to the future value of,
or income from, the Shares, but rather upon an independent
examination and judgment as to the prospects of the
Company.


(c) Participant has had
the opportunity to ask questions of and receive answers from the
Company and its executive officers and to obtain all information
necessary for Participant to make an informed decision with respect
to the investment in the Company represented by the Option and any
Shares issued upon its exercise.


(d) Participant is able
to bear the economic risk of any investment in the Shares,
including the risk of a complete loss of the investment, and
Participant acknowledges that Participant must continue to bear the
economic risk of any investment in Shares received upon exercise of
the Option for an indefinite period.


(e) Participant
understands and agrees that the Shares subject to the Option may be
issued and sold to Participant without registration under any state
or federal laws relating to the registration of securities and in
that event will be issued and sold in reliance on exemptions from
registration under appropriate state and federal laws.


(f) Shares issued to
Participant upon exercise of the Option will not be offered for
sale, sold or transferred by Participant other than pursuant to:
(i) an effective registration under applicable state securities
laws or in a transaction which is otherwise in compliance with
those laws; (ii) an effective registration under the Securities Act
of 1933, or a transaction otherwise in compliance with such Act;
and (iii) evidence satisfactory to the Company of compliance with
all applicable state and federal securities laws. The Company shall
be entitled to rely upon an opinion of counsel satisfactory to it
with respect to compliance with the foregoing laws.


(g) The Company will be
under no obligation to register the Shares issuable pursuant to the
Option or to comply with any exemption available for sale of the
Shares by Participant without registration, and the Company is
under no obligation to act in any manner so as to make Rule 144
promulgated under the Securities Act of 1933 available with respect
to any sale of the Shares by Participant.


(h) Participant has not
relied upon the Company with respect to any tax consequences
related to the grant or exercise of this Option, or the disposition
of Shares purchased pursuant to its exercise. Participant
acknowledges that, as a result of the grant and/or exercise of the
Option, Participant may incur a substantial tax liability.
Participant assumes full responsibility for all such consequences
and the filing of all tax returns and elections Participant may be
required or find desirable to file in connection therewith. In the
event any valuation of the Option or Shares purchased pursuant to
its exercise must be made under federal or state tax laws and such
valuation affects any return or election of the Company,
Participant agrees that the Company may determine such value and
that Participant will observe any determination so made by the
Company in all returns and elections filed by Participant. In the
event the Company is required by applicable law to collect any
withholding, payroll or similar taxes by reason of the grant or any
exercise of the Option, Participant agrees that the Company may
withhold such taxes from any monetary amounts otherwise payable by
the Company to Participant and that, if such amounts are
insufficient to cover the taxes required to be collected by the
Company, Participant will pay to the Company such additional
amounts as are required.


(i) The agreements,
representations, warranties and covenants made by Participant
herein with respect to the Option shall also extend to and apply to
all of the Shares issued to Participant from time to time pursuant
to exercise of the Option. Acceptance by Participant of any
certificate representing Shares shall constitute a confirmation by
Participant that all such agreements, representations, warranties
and covenants made herein shall be true and correct at that
time.


(j) In the event any
underwriter of securities of the Company requests Participant to
sign any agreement restricting resale of the Shares in connection
with any public offering by the Company, Participant agrees to sign
such agreement, provided the officers of the Company have signed an
agreement no less restrictive. The Company may instruct its
transfer agent not to transfer the Shares if requested by an
underwriter as described above.


(k) Participant hereby
agrees to comply with any plan, policy or other document of the
Company approved by the Board of Directors of the Company to ensure
compliance with securities laws, rules and regulations both during
the term of employment of Participant and for one (1) year
thereafter. The Company may impose stop-transfer restrictions with
respect to Shares acquired upon exercise of the Options to enforce
this provision.


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IN
WITNESS WHEREOF, the parties hereto have caused this Award
Agreement to be executed effective as of the day and year first
above written.


 


MOBILESMITH,
INC.


 


By:_____________________________________


Print
Name:



 


PARTICIPANT:


 


By:_____________________________________


Print
Name:





 

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EXHIBIT
A


 


Attention:
Board of Directors


MobileSmith,
Inc.


5400
Trinity Rd, Suite 208


Raleigh,
North Carolina 27607


 


 


Re:
Exercise of Incentive Stock Option


Dear
Member of the Board:


Pursuant to the
terms and conditions of that certain Incentive Stock Option
Agreement dated as of _______________, 20_____ (the
“Agreement”) between _________________________ and
MobileSmith, Inc. (the “Company”), I desire to purchase
____________ Shares of the Stock of the Company and hereby tender
payment in full for such Shares in accordance with the terms of the
Agreement.


I
hereby reaffirm that the representations and warranties made in
Section 17 of the Agreement are true and correct on the date hereof
as if made on the date hereof.


Very
truly yours,


 


Print
Name:


 


Date:
__________________________


 


 


 




 

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