Exhibit 10.2


 





LILIS
ENERGY, INC. 2012 EQUITY INCENTIVE PLAN


NON-EMPLOYEE
DIRECTOR STOCK OPTION AWARD AGREEMENT


 


This
Stock Option Award Agreement (the "Agreement"), is made as of the [     ] day of [             ], by and between Lilis Energy, Inc.,
a Nevada corporation (the "Company"), and [                ] (the "Participant").


 


WHEREAS,
the Company desires to encourage and enable the Participant to acquire a proprietary interest in the Company through ownership
of shares of the Company's Common Stock, par value $0.0001 per share (the "Shares"), pursuant to the terms and conditions
of the Company's 2012 Equity Incentive Plan, as amended (the "Plan"), and this Agreement. Such ownership will provide
the Participant with additional incentive to promote the success of the Company.


 


NOW,
THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the
parties agree as follows:


 


		1.	Definitions.
                                         For purposes of this Agreement, all capitalized terms used herein and not otherwise defined
                                         herein shall have the meanings ascribed to them in the Plan.



 


		2.	Grant
                                         of Option. The Company hereby grants to the Participant options (the "Options")
                                         to purchase 250,000 Shares at the exercise price (the "Exercise Price") of
                                         $[ ] per Share (the “Initial Grant Options”) and 200,000 options (the “Follow-On
                                         Options” and together with the Initial Grant Options, the “Options”),
                                         subject to the terms and conditions of this Agreement and the Plan.



 


		3.	Expiration
                                         Date. The Options granted hereby shall expire upon the earlier of (a) five (5) years
                                         from the date the Options vest and become exercisable pursuant to Section 4 or (b) [ten
                                         year anniversary of the date first set forth herein] (such date being the "Expiration
                                         Date"). Except as may be otherwise set forth herein, the Options may not be exercised
                                         after the Expiration Date.



 


		4.	Vesting.



 


	 	(i)	The Initial Grant Options shall vest and be exercisable by the Participant
on the date first set forth herein.
	 	 	 
	 	(ii)	The Follow-On Options shall vest and be exercisable by the Participant
in accordance with the following schedule:




 


	 	Date	 	Number Options Vested
	 	[first anniversary of date first set forth herein]
 
	 	66,667 Options
	 	 	 	 
	 	[second anniversary of date first set forth herein]
 
	 	66,667 Options
	 	 	 	 
	 	[third anniversary of date first set forth herein]
 
	 	66,666 Options



 


		5.	Separation
                                         from Service.



 


		(a)	If
                                         the Participant's service is terminated by the Company for Cause (as defined in the Plan),
                                         then all options shall immediately terminate and no longer be exercisable.



 


		(b)	If
                                         the Participant terminates his service, then all Options shall terminate and no longer
                                         be exercisable on the date that is 90 days after the date of termination of the Participant's
                                         Continuous Service (as defined in the Plan), but not later than the Expiration Date.
                                         No Options shall vest following the date of termination of the Participant's Continuous
                                         Service (as defined in the Plan).



 




    	 



    	 



    

 


		(c)	If,
                                         before the Expiration Date, the Participant's service is terminated by the Company other
                                         than for Cause (as defined in the Plan), upon a Change in Control (as defined in the
                                         Plan) of the Company or upon the death or Disability (as defined in the Plan) of the
                                         Participant, then, all unexercisable Options shall become exercisable and remain exercisable
                                         until the Expiration Date. All vested Options not exercised within the period described
                                         in the preceding sentence shall terminate.



 


		(d)	Notwithstanding
                                         anything herein to the contrary, in the event of Participant's Disability (as defined
                                         in the Plan), the Participant may exercise the Options at any time within one (1) year
                                         after the Date of Termination (as defined in the Plan) but not later than the Expiration
                                         Date.



 


		(e)	Notwithstanding
                                         anything herein to the contrary, in the event of Participant's death or if a Participant
                                         should die within a period of 90 days after termination of the Participant's Continuous
                                         Service for reason other than Cause (as defined in the Plan), the personal representatives
                                         of the Participant's estate or the person or persons who shall have acquired the Options
                                         from the Participant by bequest or inheritance may exercise the Options at any time within
                                         one (1) year after the date of death, but not later than the Expiration Date.



 


		6.	Sale,
                                         Merger or Dissolution. In the event of a Change in Control, the Company shall give
                                         the Participant notice thereof and the Options, whether or not currently vested and exercisable,
                                         shall become immediately vested and exercisable immediately prior to the effective date
                                         of such event, and the Board shall have the power and discretion to provide alternatives
                                         regarding the terms and conditions for the exercise of, or modification of, the Options
                                         in accordance with the Plan.



 


		7.	Non-Assignability.
                                         The Option granted hereby and any right arising thereunder may not be transferred, assigned,
                                         pledged or hypothecated (whether by operation of law or otherwise), except by will or
                                         the applicable laws of descent and distribution, and the Options and any rights arising
                                         thereunder shall not be subject to execution, attachment or similar process. The Options
                                         shall be exercisable during the lifetime of the Participant only by the Participant.
                                         Any attempted assignment, transfer, pledge, hypothecation or other disposition of an
                                         Option not specifically permitted herein or in the Plan shall be null and void and without
                                         effect.



 


		8.	Mode
                                         of Exercise.



 


(a)       The
Options may be exercised by delivery of an irrevocable notice of exercise in by the Participant to the Company, stating the number
of shares being purchased.


 


(b)       The
right to receive the Shares of the Company's Common Stock upon exercise of the Options shall beconditioned upon the delivery by
the Participant of payment for shares and withholding taxes incurred by reason of the exercise and certain representations, if
requested by the Administrator. Acceptable forms of consideration for exercising the Options may include:


 


(i)       cash,
check or wire transfer (denominated in U.S. Dollars);


 


(ii)      subject
to the Company's discretion to refuse for any reason and at any time to accept such consideration and subject to any conditions
or limitations established by the Administrator, other shares of the Company's Common Stock held by the Participant which have
a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Options to be exercised;


 


(iii)     delivery
of a notice that the Participant has placed a market sell order with a broker with respect to the Shares then issuable upon exercise
of the Options, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company
in satisfaction of the aggregate payments required; provided, that payment of such proceeds is then made to the Company upon settlement
of such sale;


 


(iv)       subject
to the Company's discretion to refuse for any reason and at any time to accept such consideration and subject to any conditions
or limitations established by the Administrator, cashless "net exercise" arrangement pursuant to which the Company will
reduce the number of shares issued upon exercise by the largest whole number of shares having an aggregate Fair Market Value that
does not exceed the aggregate exercise price, together with required withholding amounts (if any), provided that the Company shall
accept a cash or other payment from the Participant to the extent of any remaining balance not satisfied by such reduction in
the number of whole shares to be issued;


 




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(v)       such
other consideration and method of payment for the issuance of Shares of Common Stock to the extent permitted by Applicable Laws
and acceptable to the Administrator; and any combination of the foregoing methods of payment.


 


		9.	Recapitalization.
                                         The number of Shares covered by the Options and the Exercise Price shall be proportionately
                                         adjusted for any increase or decrease in the number or type of issued Shares resulting
                                         from a stock split, reverse stock split, stock dividend, combination or reclassification
                                         of the Common Stock, or any other increase or decrease in the number of issued shares
                                         of Common Stock effected without receipt of consideration by the Company. The conversion
                                         of any convertible securities of the Company shall not be deemed to have been "effected
                                         without receipt of consideration." Such adjustment shall be made by the Board, whose
                                         determination in that respect shall be final, binding and conclusive.



 


		10.	Plan
                                         Controlling. This Agreement is intended to conform in all respects with the requirements
                                         of the Plan. Inconsistencies between the requirements of this Agreement and the Plan
                                         shall be resolved according to the terms of the Plan. The Participant acknowledges receipt
                                         of a copy of the Plan.



 


		11.	Rights
                                         Prior to Exercise of Option. The Participant shall not have any rights as a shareholder
                                         with respect to any Shares subject to the Option prior to the date on which he is recorded
                                         as the holder of such Shares on the records of the Company.



 


		12.	Withholding
                                         Taxes. The Company shall have the right to require the Participant or his beneficiaries
                                         or legal representatives to remit to the Company, in cash, an amount sufficient to satisfy
                                         any federal, state and local withholding tax requirements, including upon the grant,
                                         vesting or exercise of this Option. Whenever payments under the Plan or this Agreement
                                         are to be made to any Participant in cash, such payments shall be net of any amounts
                                         sufficient to satisfy all applicable taxes, including without limitation, all applicable
                                         federal, state and local withholding tax requirements to be withheld or submitted by
                                         the Company concerning such payments. The Board may, in its sole discretion, allow the
                                         Participant to satisfy withholding tax obligations by electing to have the Company withhold
                                         from the Shares to be issued upon exercise of an Option that number of Shares having
                                         a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market
                                         Value of the Shares to be withheld shall be determined on the date that the amount of
                                         tax to be withheld is to be determined.



 


		13.	Section
                                         409A. The Options granted hereunder are intended to comply with or be exempt from
                                         the requirements of Code Section 409A, and the Agreement shall be interpreted accordingly.
                                         In no event, however, shall the Company be liable to the Participant for any tax, penalties
                                         or interest that may be due in respect of any the Options as a result of the application
                                         of Code Section 409A.



 


		14.	Governing
                                         Law. This Agreement and all rights arising hereunder shall be governed by, and construed
                                         and interpreted in accordance with, the laws of the State of Colorado.



 


NEITHER
THE PLAN NOR THIS AGREEMENT SHALL BE CONSTRUED AS GIVING THE PARTICIPANT THE RIGHT TO BE RETAINED IN THE EMPLOY OR SERVICE OF
THE COMPANY OR ANY AFFILIATE THEREOF, NOR SHALL THEY INTERFERE IN ANY WAY WITH THE RIGHT OF THE COMPANY OR ANY AFFILIATE THEREOF,
AS APPLICABLE, TO TERMINATE THE PARTICIPANT'S EMPLOYMENT OR SERVICE AT ANY TIME WITH OR WITHOUT CAUSE.


 


REMAINDER
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IN
WITNESS WHEREOF, I have signed this certificate as of the date first written above.


 


	LILIS
    ENERGY, INC.	 
	 	 	 
	By:	 	 
	Name:	Kevin
    Nanke	 
	Title:	Executive
    Vice President and Chief Financial Officer	 
	 	 	 
	PARTICIPANT	 
	 	 	 
	By:	 	 
	Name: 	[                                  ] 	 


 


 


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