ADVANCED CANNABIS SOLUTIONS, INC. 2014 EQUITY INCENTIVE PLAN Incentive Stock Option Agreement

Exhibit 10.2

ADVANCED CANNABIS SOLUTIONS, INC.

2014 EQUITY INCENTIVE PLAN

Incentive Stock Option Agreement

This INCENTIVE STOCK OPTION AGREEMENT (this “Agreement”), made and entered into on the 1st day of May, 2015 (the “Grant Date”), by and between Robert L. Frichtel (the “Participant”) and Advanced Cannabis Solutions, Inc., a Colorado corporation (the “Company”), sets forth the terms and conditions of stock options issued to the Participant pursuant to the Company's 2014 Equity Incentive Plan (the “Plan”) and this Agreement, which options have been approved by the Company’s Board of Directors. Any capitalized terms used but not defined herein shall have the meaning prescribed in Annex A or in the Plan.

1.

Grant of Stock Option.

Subject to the provisions of this Agreement and the Plan, the Company hereby grants to the Participant 300,000 incentive stock options (the “Options”) to purchase up to 300,000 shares of the Company's common stock, $0.001 par value per share (the “Common Stock”). The Options are granted as of the Grant Date pursuant to, and subject to the terms and conditions of, the Plan.

2.

Exercise Price.

The exercise price per share of Common Stock subject to the Options is $3.75 (the “Exercise Price”).

3.

Vesting.

Subject to Section 4 hereof, the Options shall vest in equal annual installments over a period of three years with the first installment of 100,000 options to purchase 100,000 shares of Common Stock vesting upon execution of this Agreement, and each subsequent installment vesting annually thereafter so long as the Participant continuously remains an employee, officer, director, or consultant of the Company from the Grant Date through such date(s). The Options shall be exercisable on any date to the extent vested and outstanding on such date. For purposes of this Agreement, employment or service relationship with the Company shall include employment with or provision of services to the Company's affiliates (including Subsidiaries) and/or its successors. As set forth in Section 12 herein, nothing in this Agreement or the Plan shall confer upon the Participant any right to continue in the employ or service of the Company or any of its affiliates (including Subsidiaries) or interfere in any way with the right of the Company or any such affiliates (including Subsidiaries) to terminate the Participant's employment or service relationship at any time.

4.

Termination of Employment or Service.

(a)

In the event of the Participant's termination of employment or service relationship, whether as an employee, officer, director or consultant, by either the Company or its affiliates (including Subsidiaries) without Cause, or by the Participant, any portion of the Options that has not vested as of the date of such termination of employment or service relationship shall immediately expire, and the vested Options shall expire within 90 days after such termination of employment or service relationship. In the event of the Participant's termination of employment or service relationship by reason of the Participant's death or Disability, the vested Options shall expire within 180 days after such termination of employment or service relationship.

(b)

In the event of the Participant's termination of employment or service relationship, whether as an employee, officer, director or consultant, by the Company or its affiliates (including Subsidiaries) for Cause, any portion of the Options that is outstanding as of the date of such termination of employment or service relationship shall immediately be forfeited.

5.

Term of Options.

All unexercised Options shall expire as to all shares of Common Stock underlying the Options on May 1, 2019 (the “Expiration Date”), unless sooner terminated as provided in Section 4 hereof.

6.

Method of Stock Option Exercise.

(a)

The Options may be exercised during their term, in whole or in part, to the extent they have become vested and exercisable pursuant to Sections 3 and/or 4 and have not yet been forfeited or expired, by the Participant providing notice in writing to the Company, signifying the Participant’s election to exercise the Options (the “Notice of Exercise”). The Notice of Exercise shall be in such manner and on such form as designated by the Company and pursuant to procedures established by the Company.

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(b)

The payment of the Exercise Price shall be subject to the following:

(i)

Payment of Exercise Price. The Exercise Price shall be payable in cash or by wire transfer to the Company’s bank account, for the full purchase price of the shares being purchased, plus such amount, if any, as is required for withholding taxes and for fees related to any agent(s), if applicable.

(ii)

If requested by the Company, a written acknowledgement by the Participant, in the form contained in the Notice of Exercise that an investment in the Common Stock of the Company involves a high degree of risk, that the Participant has received a copy of the Company's financial statements for the most recently ended fiscal year for which such statement is available (which are available at www.sec.gov), and that the Participant has had the opportunity to ask questions of management concerning the Company prior to the exercise of the Options (the Company to provide such information as the Participant may reasonably request in writing, provided that such information has been disclosed to the public).

(iii)

The Exercise Price per share of Common Stock purchased upon the exercise of the Options shall be paid at the time of such exercise.

(c)

The Company may cause each certificate evidencing the purchased Common Stock to be endorsed with one or more legends setting forth the restrictions on transfer or otherwise of such Common Stock.

(d)

Certificates for shares of the Common Stock so purchased will be issued as soon as practicable. The Company, however, shall not be required to issue or deliver a certificate for any shares until it has complied with all requirements of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, any stock exchange on which the Company’s Common Stock may then be listed and all applicable state laws in connection with the issuance or sale of such shares or the listing of such shares on said exchange. Until the issuance of the certificate for such shares, the Participant, or such other person as may be entitled to exercise these Options, shall have none of the rights of a stockholder with respect to shares subject to the Options.

7.

Taxes. Participant understands that, upon the exercise of the Options, Participant may recognize income, for federal and state income tax purposes. The acceptance of the shares underlying the Options by the Participant shall constitute an agreement by the Participant to report such income in accordance with then applicable law and to cooperate with the Company in establishing the amount of such income and corresponding deduction to the Company 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 Participant’s then current compensation, or, if such current compensation is insufficient to satisfy withholding tax liability, the Company may require the Participant to make a cash payment to cover such liability as a condition of the exercise of the Option.

8.

Non-transferability. The Options shall not be transferable by the Participant (as defined below) other than by will or by the laws of descent and distribution. The Options shall be exercisable, subject to the terms of the Plan and this Agreement, only by the Participant, the Participant's estate or beneficiary, the guardian or legal representative of the Participant, or any person to whom such Options are transferred pursuant to this Section 8.  For purposes of this Section 8, the term “Participant” includes such guardian, legal representative and other permitted transferee.

9.

Successors, Assigns and Transferees. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and each of their respective successors, assigns and permitted transferees (including, upon the death of the Participant, the Participant's estate).

10.

Administration. The authority to manage and control the operation and administration of this Agreement shall be vested in the Committee, and the Committee shall have all powers with respect to this Agreement as it has with respect to the Plan.  In the event of any question or controversy relating to the terms of the Plan and this Agreement, the decision of the Committee shall be conclusive.

11.

Incorporation of Plan. Subject to the limitations contained in Section 10 of this Agreement, all terms and conditions of the Plan are incorporated herein and made part hereof as if stated herein. The Participant may obtain a copy of the Plan by contacting the Company's Chief Financial Officer.

12.

Not an Employment or Service Contract. Neither this Agreement nor any Options, or the Plan, shall confer on the Participant any right with respect to continuance of employment or other service with the Company or any of its affiliates (including Subsidiaries), nor shall they interfere in any way with any right(s) that the Company or any such affiliates (including Subsidiaries) would otherwise have to terminate or modify the terms of the Participant's employment or other service, at any time.  

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13.

Insider Trading Policy. The Participant hereby certifies as to his / her agreement to comply with any policies, instructions, guidelines or procedures covering trading in the Company’s securities that the Company adopts from time to time, as may relate to the Options and underlying shares issued hereunder.

14.

Exercise on Certain Record Dates. Notwithstanding anything to the contrary contained in this Agreement or the Plan, in the event the Company sets a record date (“Record Date”) in connection with a distribution of bonus shares or dividends, rights offering, stock split, reverse stock split or capital reduction (each an “Event”), the Participant shall not be eligible to exercise the Options on the Record Date.

15.

Integration. This Agreement and the other documents referred to herein, including without limitation the Plan, or delivered pursuant hereto, which form a part hereof contain the entire understanding of the parties with respect to their subject matter. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein. This Agreement, including without limitation the Plan, supersedes all prior agreements and understandings between the parties with respect to its subject matter.

16.

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but which together constitute one and the same instrument. Notwithstanding the foregoing, any duly authorized officer of the Company may execute this Agreement by providing an appropriate facsimile signature and any counterpart or amendment hereto containing such facsimile signature shall for all purposes be deemed an original instrument duly executed by the Company.

17.

Modification; Waiver. No provision of this Agreement may be amended, modified, or waived unless such amendment or modification is agreed to in writing and signed by the Participant and by a duly authorized officer of the Company, and such waiver is set forth in writing and signed by the party to be charged. No waiver by either party hereto at any time of any breach by the other party hereto of any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

THIS AGREEMENT SHALL BE NULL AND VOID AB INITIO, AND THE GRANT OF OPTIONS REFLECTED HEREIN, SHALL BE DEEMED FORFEITED, UNLESS THE COMPANY RECEIVES, WITHIN TWO WEEKS OF ITS TENDER OF THIS AGREEMENT TO THE PARTICIPANT, ONE COPY HEREOF BEARING THE PARTICIPANT’S ORIGINAL COUNTERSIGNATURE BELOW.

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IN WITNESS WHEREOF, the Participant has executed this Agreement on the Participant's own behalf, thereby representing that the Participant has carefully read and understands this Agreement and the Plan as of the day and year first written above, and the Company has caused this Agreement to be executed in its name and on its behalf, all as of the date first written above.

Agreed to and Accepted

this 1st day of May, 2015

/s/ Robert L. Frichtel          

Robert L. Frichtel

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Annex A

Certain Definitions

A.

“Cause” shall only mean

(i)

the willful and continued failure of the Participant to perform substantially the Participant’s duties (other than any such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness) after a written demand for substantial performance is delivered to the Participant by the Company, which specifically identifies the manner in which the Company believes the Participant has not substantially performed the Participant’s duties; or

(ii)

the willful engaging by the Participant in illegal conduct or gross misconduct that is materially and demonstrably detrimental to the Company and/or its affiliates (including Subsidiaries), monetarily or otherwise.

For purposes of this provision, no act, or failure to act, on the part of the Participant shall be considered “willful” unless done, or omitted to be done, by the Participant in bad faith or without reasonable belief that the Participant’s action or omission was in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, upon the instructions of the Chairman or another Board Member of the Company, upon the instructions of the Company's Chief Executive Officer or Chief Financial Officer, or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company and its affiliates (including Subsidiaries).

(iii)

the Participant’s conviction of, or plea of nolo contendere to, any felony of theft, fraud, embezzlement or violent crime.

B.

“Disability” shall mean the absence of the Participant from the Participant’s duties under his employment or service relationship on a full-time basis for an aggregate of 180 days within any given period of 270 consecutive days (in addition to any statutorily required leave of absence and any leave of absence approved by the Company) as a result of incapacity of the Participant, despite any reasonable accommodation required by law, due to bodily injury or disease or any other mental or physical illness, which will, in the opinion of a physician selected by the Company or its insurers and acceptable to the Participant or the Participant’s legal representative, be permanent and continuous during the remainder of the Participant’s life.

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