Document:

Exhibit 10.1

 

[I.D. SYSTEMS LOGO]

 

July 15, 2014

 

Norman Ellis

15160 Saddlebrook Court

Poway, CA 92064

 

Dear Norman:

 

On behalf of I.D. Systems, Inc. (“Company”), I am
pleased to offer you the position of Chief Operating Officer, reporting directly to the Company’s President and Chief Executive
Offer, Ken Ehrman. Your start date will be July 21, 2014. The terms of the offer are outlined below.

 

Cash Compensation

 

Your annual base salary will be $300,000, and will be paid in
accordance with the Company’s semi-monthly payroll. In 2014, you will be eligible to receive a prorated cash bonus in the
amount of $200,000. The bonus will be earned upon the successful completion of the Company’s 2014 objectives. To be eligible,
you understand and agree that you must be employed with the Company as of the end of the bonus period.

 

Stock Compensation

 

You will be granted options for the purchase
of 100,000 shares of I.D. Systems, Inc. common stock. The options will vest over three years, with the first vesting occurring
on the first anniversary of the date of grant, which is your start date. The options will have an exercise price equal to the fair
market value of the stock at the date of the grant.

 

Additionally, you will receive 50,000 shares
of restricted stock that have a three year cliff vest. These shares will become fully vested on the third anniversary of the date
of the grant, provided that you are an employee of the Company on the anniversary date.

 

During your employment with the Company,
you will be entitled to all of the Company’s current customary employee benefits. A highlight of our benefits includes:

 

		1.	Health Insurance: Commencing on the first day of employment, you will be
eligible to enroll in the Company’s Health Plan. Commencing on the first of the month after your start date, you will be
eligible to enroll in the Company’s Dental plan.

 

		2.	Vision Insurance: Commencing on the first day of your employment, you will
be eligible to enroll in the Company’s Vision Care Plan.

 

		3.	Section 125 Flexible Spending: Commencing on the first of the month following
your start date, you will be eligible to enroll in the Company’s Flexible Spending Plan.

  

		4.	Company Savings Plan: Within the first month of your employment, you will
be automatically enrolled in the Company’s 401(k) plan with the ability to cease participation or change your contribution
at any time. The Company does not currently match contributions to the plan.

 

		5.	Voluntary short-term disability, long-term disability, and voluntary life
insurance.

 

    	 

    	 

    

  

Your employment is contingent upon receipt
of proof of eligibility to work in the United States. This offer is additionally contingent upon successful completion of our reference
checking processes and background investigation (which may include: criminal, consumer credit, driving and check of educational
credentials), and your execution and delivery of the Company’s Confidentiality and Non-Competition Agreement (a copy of which
is enclosed herewith). Employment with the Company is "at will."

 

Congratulations, Norm! We are excited to
have you as part of our team, and I am personally looking forward to working with you. Please sign and date one copy of this letter
and return it to me together with the executed original Confidentiality and Non-Competition Agreement.

 

 

Sincerely,

 

/s/ Lindsay Estelle

 

Lindsay Estelle

Human Resources Manager

 

 

 

	/s/ Norman Ellis	 	July 21, 2014
	Norman Ellis	 	DateExhibit 10.2

 

STOCK OPTION GRANT AGREEMENT

 

THIS STOCK OPTION GRANT AGREEMENT (the
“Grant Agreement”) is made and entered into by and between I.D. Systems, Inc., a Delaware Corporation (the “Company”)
and the following individual:

 

	Name:  	Norman Ellis (the “Optionee”)
	Address	3061 Silent Wind Way, Henderson, NV 89052

 

The Optionee is granted an option (the
“Option”) to purchase common stock, par value $0.01 per share, of the Company (“Common Stock”),
subject in all events to the terms and conditions of this Grant Agreement, as follows:

 

A.DATE OF GRANT: July 21,
2014

 

B.TYPE OF OPTION: Nonstatutory
Stock Option

 

C.TOTAL SHARES OF COMMON STOCK COVERED
BY OPTION: 100,000 shares (collectively, the “Shares”)

 

D.EXERCISE PRICE OF OPTION:
Fair Market Value (as defined herein) of the Common Stock on July 21, 2014 ($5.24 per Share) (the “Exercise Price”).

 

E.EXPIRATION DATE: July 21,
2024 (the “Expiration Date”)

 

F.VESTING SCHEDULE: The Option
will vest in equal installments over three years, with the first vesting occurring on the first anniversary of the date of the
grant. Notwithstanding the foregoing, the Option may not be exercised with respect to any Shares on or after the earlier of (1)
the date the Option terminates and is canceled in accordance with this Grant Agreement and (2) the Expiration Date.

 

G.EXERCISE OF OPTION FOLLOWING TERMINATION
OF SERVICE: This Option may be exercised for up to 90 days after the Optionee ceases to be a Service Provider (as defined herein),
except that if such cessation results from the death or Disability (as defined herein) of the Optionee, this Option may be exercised
for up to 365 days after the Optionee ceases to be a Service Provider. In no event shall this Option be exercised later than the
Expiration Date as provided above and in no event shall this Option be exercised for more Shares than the Shares which otherwise
have vested as of the date of cessation of status as a Service Provider. Notwithstanding the foregoing, if the Optionee’s
service or employment with the Company terminates for Cause (as defined herein), the Option shall not be exercisable following
the effective date of such termination of service or employment.

 

H.METHOD OF EXERCISE. This Option
is exercisable by delivery of an exercise notice in the form attached as Exhibit A (the “Exercise Notice”)
which shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised
(the “Exercised Shares”), and such other representations and agreements as may be required by the Company. The
Exercise Notice shall be completed by the Optionee and delivered to the Company. The Exercise Notice shall be accompanied by payment
of the aggregate Exercise Price for the Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company
of the fully executed Exercise Notice accompanied by the aggregate Exercise Price. Notwithstanding the foregoing, no Exercised
Shares shall be issued unless such exercise and issuance complies with the requirements relating to the administration of stock
option plans and other applicable equity plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code,
any stock exchange or quotation system on which the Common Stock is listed or quoted, and the applicable laws of any foreign country
or jurisdiction where stock grants or other applicable equity grants are made by the Company; assuming such compliance, for income
tax purposes the Exercised Shares shall be considered transferred to the Optionee on the date the Option is exercised with respect
to such Shares.

 

    	 

    	 

    

 

I.METHOD OF PAYMENT. Payment
of the aggregate Exercise Price shall be by any of the following, or a combination thereof:

 

		1.	cash;

 

		2.	check; or

 

		3.	such other form of consideration as the Company’s Board of Directors or Compensation Committee
thereof (the “Administrator”) shall determine in its discretion, provided that such form of consideration is
permitted by applicable law.

 

Upon exercise of the Option by the Optionee
and prior to the delivery of such Exercised Shares, the Company shall have the right to require the Optionee to remit to the Company
cash in an amount sufficient to satisfy applicable Federal and state tax withholding requirements.

 

J.TAX CONSEQUENCES OF OPTION.
Some of the federal income tax consequences relating to the grant and exercise of this Option, as of the date of this Option, are
set forth below. THE FOLLOWING DESCRIPTION OF FEDERAL INCOME TAX CONSEQUENCES IS NECESSARILY INCOMPLETE (AS THE TAX LAWS AND
REGULATIONS ARE SUBJECT TO CHANGE), AND ASSUMES THAT THE EXERCISE PRICE OF THIS OPTION IS NO LESS THAN THE FAIR MARKET VALUE OF
THE COMMON STOCK UNDERLYING THE OPTION AT THE DATE OF GRANT. MOREOVER, THIS SUMMARY ONLY ADDRESSES THE FEDERAL INCOME TAX CONSEQUENCES
UNDER THE LAWS OF THE UNITED STATES, AND DOES NOT ADDRESS WHETHER AND HOW THE TAX LAWS OF ANY OTHER JURISDICTION MAY APPLY TO THIS
OPTION OR TO THE OPTIONEE. ACCORDINGLY, THE OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF
ANY EXERCISED SHARES. 

 

    	-2-

    	 

    

 

		1.	Grant of the Option. The grant of an Option generally will not result in the imposition
of a tax under the federal income tax laws.

 

		2.	Exercising the Option. The Optionee may incur regular federal income tax liability upon
exercise of a Nonstatutory Stock Option (“NSO”). The Optionee will be treated as having received compensation
income (taxable at ordinary income tax rates) equal to the excess, if any, of the Fair Market Value of the Exercised Shares on
the date of exercise over their aggregate Exercise Price. If the Optionee is an Employee or a former Employee, the Company will
be required to withhold from his or her compensation or collect from the Optionee and pay to the applicable taxing authorities
an amount in cash equal to a specified percentage of this compensation income at the time of exercise, and may refuse to honor
the exercise and refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise.

 

		3.	Disposition of Shares. If the Optionee holds NSO Shares for at least one year, any gain
realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

 

K.NON-TRANSFERABILITY OF OPTION.
Unless otherwise consented to in advance in writing by the Company, this Option may not be transferred in any manner otherwise
than by will or by the laws of descent or distribution and may be exercised during the lifetime of the Optionee only by the Optionee.
The terms of this Grant Agreement shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

 

L.Adjustments
Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. The provisions of Section 15 of the Company’s
2007 Equity Compensation Plan (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Plan”),
be and hereby are, incorporated by reference and shall apply to the Option as if the Option were made under the Plan. By your signature
to this Grant Agreement below, you hereby acknowledge that you have received and reviewed a copy of the Plan. In the case of any
conflict between the Plan and this Grant Agreement, this Grant Agreement shall control.

 

M.SECURITIES MATTERS. All Shares
and Exercised Shares shall be subject to the restrictions on sale, encumbrance and other disposition provided by Federal or state
law. As a condition precedent to the Optionee’s acquisition of Exercised Shares, the Company may require that the Optionee
submit a letter to the Company stating that such Shares are being acquired for investment and not with a view to the distribution
thereof. The Company shall not be obligated to sell or issue any Shares or Exercised Shares pursuant to this Grant Agreement unless,
on the date of sale and issuance thereof, such Shares are either registered under the Securities Act of 1933, as amended, and all
applicable state securities laws, or are exempt from registration thereunder. Any such Shares acquired by the Optionee may bear
a restrictive legend summarizing any restrictions on transferability applicable thereto, including those imposed by Federal and
state securities laws. Notwithstanding anything to the contrary contained herein, in the event that the Company at any time ceases
to be eligible to use Form S-8, or any then effective Form S-8 (or successor form) ceases to be effective for any reason, the Company
shall have no obligation or liability to sell or issue any Shares or Exercised Shares pursuant to this Grant Agreement unless and
until such eligibility or effectiveness is restored.

 

    	-3-

    	 

    

 

N.DEFINED TERMS. For purposes
of this Grant Agreement, the following terms shall have the following meanings:

 

“Cause”,
with respect to any Service Provider, means (unless otherwise determined by the Administrator) such Service Provider’s (i)
conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude; (ii) fraud on or misappropriation of
any funds or property of the Company; (iii) personal dishonesty, willful misconduct, willful violation of any law, rule or regulation
(other than minor traffic violations or similar offenses) or breach of fiduciary duty which involves personal profit; (iv) willful
misconduct in connection with the Service Provider’s duties; (v) chronic use of alcohol, drugs or other similar substances
which affects the Service Provider’s work performance; or (vi) material breach of any provision of any employment, non-disclosure,
non-competition, nonsolicitation or other similar agreement executed by the Service Provider for the benefit of the Company, all
as reasonably determined by the Administrator, which determination will be conclusive.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Consultant”
means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity, other
than an Employee or a Director.

 

“Director”
means a member of the Board of Directors of the Company.

 

“Disability”
means total and permanent disability as defined in Section 22(e)(3) of the Code.

 

“Employee”
means any person, including officers and directors, serving as an employee of the Company or any Parent or Subsidiary. An individual
shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary or any successor. Neither service as Director nor payment of
a Director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

 

    	-4-

    	 

    

 

“Fair Market
Value” means, as of any date, the value of Common Stock determined as follows:

 

(i) if the
Common Stock is listed on any established stock exchange or a national market system, including without limitation the The NASDAQ
Global Market, the Fair Market Value of a Share of Common Stock shall be the closing sales price of a Share of Common Stock as
quoted on such exchange or system for such date (or the most recent trading day preceding such date if there were no trades on
such date), as reported in The Wall Street Journal or such other source as the Committee deems reliable;

 

(ii) if the
Common Stock is regularly quoted by a recognized securities dealer but is not listed in the manner contemplated by clause (i) above,
the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock
for such date (or the most recent trading day preceding such date if there were no trades on such date), as reported in The Wall
Street Journal or such other source as the Committee deems reliable; or

 

(iii) if
neither clause (i) above nor clause (ii) above applies, the Fair Market Value shall be determined in good faith by the Administrator
based on the reasonable application of a reasonable valuation method.

 

“Parent”
means a “parent corporation” of the Company, whether now or hereafter existing, as defined in Section 424(e) of the
Code.

 

“Service Provider”
means an Employee or Consultant.

 

“Subsidiary”
means a “subsidiary corporation” of the Company, whether now or hereafter existing, as defined in Section 424(f) of
the Code.

 

O.OTHER PLANS. No amounts
of income received by the Optionee pursuant to this Grant Agreement shall be considered compensation for purposes of any pension
or retirement plan, insurance plan or any other employee benefit plan of the Company or its subsidiaries, unless otherwise provided
in such plan.

 

P.NO GUARANTEE OF CONTINUED SERVICE.
THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING
EMPLOYMENT WITH THE COMPANY (AND NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES HEREUNDER). THE
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS GRANT AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE
SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED EMPLOYMENT FOR THE VESTING PERIOD, FOR ANY PERIOD,
OR AT ALL, AND SHALL NOT INTERFERE WITH THE OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE EMPLOYMENT RELATIONSHIP
AT ANY TIME, WITH OR WITHOUT CAUSE.

 

    	-5-

    	 

    

 

Q.ENTIRE AGREEMENT; GOVERNING LAW.
This Grant Agreement and to the extent incorporated herein by reference, the Plan, constitute the entire agreement of the parties
with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company
and the Optionee with respect to the subject matter hereof, and may not be modified adversely to the Optionee’s interest
except by means of a writing signed by the Company and Optionee. This Grant Agreement is governed by the internal substantive laws,
but not the choice of law rules, of the State of Delaware.

 

By your signature
and the signature of the Company’s representative below, you and the Company agree that this Option is granted pursuant to
and governed by the terms and conditions of this Grant Agreement. The Optionee has reviewed this Grant Agreement and
to the extent incorporated herein by reference, the Plan, in their entirety, has had an opportunity to obtain the advice of counsel
prior to executing this Grant Agreement and fully understands all provisions of this Grant Agreement. The Optionee hereby agrees
to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to
this Grant Agreement. The Optionee further agrees to notify the Company upon any change in the residence address indicated herein.

 

	OPTIONEE  	 	 	I.D. SYSTEMS, INC.
	 	 	 	 
	 	 	 	 
	/s/ Norman Ellis	 	By: 	/s/ Kenneth S. Ehrman
	 	 	 	 
	 	 	 	 
	Norman Ellis	 	Kenneth S. Ehrman, CEO
	Print Name	 	Print Name/Title
	 	 	 	 
	 	 	 	 
	Date: July 21, 2014	 	Date: July 21, 2014

 

    	-6-

    	 

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

I.D. Systems, Inc.

123 Tice Boulevard, Suite 101

Woodcliff Lake, NJ 07677

Attention:

 

1. Exercise of Option. Effective
as of today, ________________, 20__, the undersigned ("Purchaser") hereby elects to purchase ______________ shares (the
“Shares”) of the Common Stock of I.D. Systems, Inc. (the “Company”) under and pursuant to the Stock Option
Grant Agreement dated July 21, 2014 (the “Option Agreement”). The purchase price for the Shares shall be $5.24, as
required by the Option Agreement.

 

2. Delivery of Payment. Purchaser
herewith delivers to the Company the full purchase price for the Shares.

 

3. Representations of Purchaser.
Purchaser acknowledges that Purchaser has received, read and understood the Option Agreement and agrees to abide by and be bound
by their terms and conditions. Unless the Company is a public corporation which has registered the shares issuable pursuant to
the Option Agreement under the Securities Act of 1933, the Purchaser confirms the representations set forth below:

 

The Purchaser is
acquiring the Shares for his/her own account and the Shares were acquired by him/her for the purpose of investment and not with
a view to distribution or resale thereof in violation of the Securities Act of 1933 (the “Securities Act”). The Purchaser
agrees not to resell or otherwise dispose of all or any part of the Shares purchased by him/her except as permitted by law, including,
without limitation, any regulations under the Securities Act and other applicable securities laws. The Purchaser is able to bear
the economic risk of this investment including a complete loss of the investment.

 

4. Rights as Shareholder. Until
the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company)
of the Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares
covered by the Option, notwithstanding the exercise of the Option. The Shares so acquired shall be issued to the Optionee as soon
as practicable after exercise of the Option. No adjustment will be made for a dividend or other right for which the record date
is prior to the date of issuance, except as provided in Section L of the Option Agreement.

 

5. Tax Consultation. Purchaser understands
that Purchaser may suffer adverse tax consequences as a result of Purchaser's purchase or disposition of the Shares. Purchaser
represents that Purchaser has consulted with any tax consultants Purchaser deems advisable in connection with the purchase or disposition
of the Shares and that Purchaser is not relying on the Company for any tax advice.

 

    	-7-

    	 

    

 

6. Entire Agreement; Governing Law.
The Option Agreement is incorporated herein by reference. This Agreement and the Option Agreement constitute the entire agreement
of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements
of the Company and the Purchaser with respect to the subject matter hereof, and may not be modified adversely to the Purchaser's
interest except by means of a writing signed by the Company and Purchaser. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of the State of Delaware.

 

	Submitted by:	 	Accepted by:
	 	 	 	 
	PURCHASER  	 	I.D. SYSTEMS, INC.
	 	 	 	 
	 	 	 	 
	 	 	By: 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	Print Name	 	Print Name/Title
	 	 	 	 
	Date:	 	 	Date: 	 

 

    	-8-

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