Document:

exv10w9

 

Exhibit 10.9

NITROSECURITY, INC.

2007 Stock Incentive Plan

1. Purpose.

     The purpose of this 2007 Stock Incentive Plan (the “Plan”) of NitroSecurity, Inc., a Delaware
corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing
the Company’s ability to attract, retain and motivate persons who are expected to make important
contributions to the Company and by providing such persons with equity ownership opportunities and
performance-based incentives that are intended to better align the interests of such persons with
those of the Company’s stockholders. Except where the context otherwise requires, the term
“Company” shall include any of the Company’s present or future parent or subsidiary corporations as
defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the “Code”) and any other business venture (including, without
limitation, joint venture or limited liability company) in which the Company has a controlling
interest, as determined by the Board of Directors of the Company (the “Board”).

2. Eligibility.

     All of the Company’s employees, officers, directors, consultants and advisors are eligible to
be granted options, stock appreciation rights (“SARs”), restricted stock, restricted stock units
and other stock-based awards (each, an “Award”) under the Plan. Each person who receives an Award
under the Plan is deemed a “Participant.”

3. Administration and Delegation.

     (a) Administration by Board of Directors. The Plan will be administered by the Board.
The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may
construe and interpret the terms of the Plan and any Award agreements entered into under the Plan.
The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award in the manner and to the extent it shall deem expedient to carry the Plan into effect and
it shall be the sole and final judge of such expediency. All decisions by the Board shall be made
in the Board’s sole discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to the authority
delegated by the Board shall be liable for any action or determination relating to or under the
Plan made in good faith.

     (b) Appointment of Committees. To the extent permitted by applicable law, the Board
may delegate any or all of its powers under the Plan to one or more committees or subcommittees of
the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a
Committee of the Board or the officers referred to in Section 3(c) to the extent that the Board’s
powers or authority under the Plan have been delegated to such Committee or officers.

 

 

     (c) Delegation to Officers. To the extent permitted by applicable law, the Board may
delegate to one or more officers of the Company the power to grant Awards (subject to any
limitations under the Plan) to employees or officers of the Company or any of its present or future
subsidiary corporations and to exercise such other powers under the Plan as the Board may
determine, provided that the Board shall fix the terms of the Awards to be granted by such officers
(including the exercise price of such Awards, which may include a formula by which the exercise
price will be determined) and the maximum number of shares subject to Awards that the officers may
grant; provided further, however, that no officer shall be authorized to grant Awards to any
“executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) or to any “officer” of the Company (as defined by Rule 16a-1
under the Exchange Act).

4. Stock Available for Awards.

     (a) Number of Shares. Subject to adjustment under Section 10, Awards may be made
under the Plan for up to the number of shares of common stock, $0.01 par value per share, of the
Company (the “Common Stock”) that is equal to the sum of:

          (1) 63,444 shares of Common Stock; plus

          (2) such additional number of shares of Common Stock (up to 436,556 shares) as is equal to the
number of shares of Common Stock subject to awards granted under the Company’s 1999 Stock Option
Plan, 2000 Stock Option Plan and 2005 Stock Incentive Plan that expire, terminate or are otherwise
surrendered, canceled, forfeited or repurchased by the Company at their original issuance price
pursuant to a contractual repurchase right (subject, however, in the case of Incentive Stock
Options (as hereinafter defined) to any limitations of the Code); plus

          (3) an annual increase, to be added on the first calendar day of each year during the term of
the Plan beginning in 2009, equal to the lesser of (i) 500,000 shares of Common Stock, (ii) 5% of
the outstanding shares of Common Stock on such date and (iii) an amount determined by the Board.

     If any Award expires or is terminated, surrendered or canceled without having been fully
exercised, is forfeited in whole or in part (including as the result of shares of Common Stock
subject to such Award being repurchased by the Company at the original issuance price pursuant to a
contractual repurchase right), or is settled in cash or otherwise results in any Common Stock not
being issued, the unused Common Stock covered by such Award shall again be available for the grant
of Awards under the Plan. Further, shares of Common Stock tendered to the Company by a Participant
to exercise an Award shall be added to the number of shares of Common Stock available for the grant
of Awards under the Plan. However, in the case of Incentive Stock Options (as hereinafter
defined), the foregoing provisions shall be subject to any limitations under the Code. Shares
issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury
shares.

     (b) Per-Participant Limit. Subject to adjustment under Section 10, the maximum number
of shares of Common Stock with respect to which Awards may be granted to any

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Participant under the Plan shall be 63,444 per calendar year. For purposes of the foregoing
limit, the combination of an Option (as defined below) in tandem with a SAR shall be treated as a
single Award. The per-Participant limit described in this Section 4(b) shall be construed and
applied consistently with Section 162(m) of the Code or any successor provision thereto, and the
regulations thereunder (“Section 162(m)”).

     (c) Substitute Awards. In connection with a merger or consolidation of an entity with
the Company or the acquisition by the Company of property or stock of an entity, the Board may
grant Awards in substitution for any options or other stock or stock-based awards granted by such
entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan.
Substitute Awards shall not count against the overall share limit set forth in Section 4(a), except
as may be required by reason of Section 422 and related provisions of the Code.

5. Stock Options.

     (a) General. The Board may grant options to purchase Common Stock (each, an “Option”)
and determine the number of shares of Common Stock to be covered by each Option, the exercise price
of each Option and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option that is not intended to be an Incentive Stock Option (as
hereinafter defined) shall be designated a “Nonstatutory Stock Option.”

     (b) Incentive Stock Options. An Option that the Board intends to be an “incentive
stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be
granted to employees of NitroSecurity, Inc., any of NitroSecurity, Inc.’s present or future parent
or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities
the employees of which are eligible to receive Incentive Stock Options under the Code, and shall be
subject to and shall be construed consistently with the requirements of Section 422 of the Code.
The Company shall have no liability to a Participant, or any other party, if an Option (or any part
thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or for
any action taken by the Board, including without limitation the conversion of an Incentive Stock
Option to a Nonstatutory Stock Option.

     (c) Exercise Price. The Board shall establish the exercise price of each Option and
specify such exercise price in the applicable option agreement. The exercise price shall be not
less than 100% of the Fair Market Value (as defined below) on the date the Option is granted;
provided that if the Board approves the grant of an Option with an exercise price to be determined
on a future date and the date of grant is deemed to be the date the Board approved the Option
(rather than such future date), the exercise price shall be not less than 100% of the Fair Market
Value on such future date.

     (d) Duration of Options. Each Option shall be exercisable at such times and subject
to such terms and conditions as the Board may specify in the applicable option agreement.

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     (e) Exercise of Option. Options may be exercised by delivery to the Company of a
written notice of exercise signed by the proper person or by any other form of notice (including
electronic notice) approved by the Board together with payment in full as specified in Section 5(f)
for the number of shares for which the Option is exercised. Shares of Common Stock subject to the
Option will be delivered by the Company following exercise either as soon as practicable or,
subject to such conditions as the Board shall specify, on a deferred basis (with the Company’s
obligation to be evidenced by an instrument providing for future delivery of the deferred shares at
the time or times specified by the Board).

     (f) Payment Upon Exercise. Common Stock purchased upon the exercise of an Option
granted under the Plan shall be paid for as follows:

          (1) in cash or by check, payable to the order of the Company;

          (2) except as may otherwise be provided in the applicable option agreement, by (i) delivery of
an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the
Company sufficient funds to pay the exercise price and any required tax withholding or (ii)
delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions
to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;

          (3) to the extent provided for in the applicable option agreement or approved by the Board, in
its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common
Stock owned by the Participant valued at their fair market value as determined by (or in a manner
approved by) the Board (“Fair Market Value”), provided (i) such method of payment is then permitted
under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by
the Participant for such minimum period of time, if any, as may be established by the Board in its
discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled
vesting or other similar requirements;

          (4) to the extent permitted by applicable law and provided for in the applicable option
agreement or approved by the Board, in its sole discretion, by (i) delivery of a promissory note of
the Participant to the Company on terms determined by the Board, or (ii) payment of such other
lawful consideration as the Board may determine; or

          (5) by any combination of the above permitted forms of payment.

6. Stock Appreciation Rights.

     (a) General. The Board may grant Awards consisting of SARs entitling the holder, upon
exercise, to receive an amount of Common Stock or cash or a combination thereof (such form to be
determined by the Board) determined in whole or in part by reference to appreciation, from and
after the date of grant, in the fair market value of a share of Common Stock over the exercise
price established pursuant to Section 6(c). The date as of which such appreciation is determined
shall be the exercise date.

     (b) Grants. SARs may be granted in tandem with, or independently of, Options granted
under the Plan.

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          (1) Tandem Awards. When SARs are expressly granted in tandem with Options, (i) the SAR
will be exercisable only at such time or times, and to the extent, that the related Option is
exercisable (except to the extent designated by the Board in connection with a Reorganization
Event) and will be exercisable in accordance with the procedure required for exercise of the
related Option; (ii) the SAR will terminate and no longer be exercisable upon the termination or
exercise of the related Option, except to the extent designated by the Board in connection with a
Reorganization Event and except that a SAR granted with respect to less than the full number of
shares covered by an Option will not be reduced until the number of shares as to which the related
Option has been exercised or has terminated exceeds the number of shares not covered by the SAR;
(iii) the Option will terminate and no longer be exercisable upon the exercise of the related SAR;
and (iv) the SAR will be transferable only with the related Option.

          (2) Independent SARs. A SAR not expressly granted in tandem with an Option will
become exercisable at such time or times, and on such conditions, as the Board may specify in the
applicable SAR agreement.

     (c) Exercise Price. The Board shall establish the exercise price of each SAR and
specify it in the applicable SAR agreement. The exercise price shall not be less than 100% of the
Fair Market Value on the date the SAR is granted; provided that if the Board approves the grant of
a SAR with an exercise price to be determined on a future date, the exercise price shall be not
less than 100% of the Fair Market Value on such future date.

     (d) Duration of SARs. Each SAR shall be exercisable at such times and subject to such
terms and conditions as the Board may specify in the applicable SAR agreement.

     (e) Exercise of SARs. SARs may be exercised by delivery to the Company of a written
notice of exercise signed by the proper person or by any other form of notice (including electronic
notice) approved by the Board, together with any other documents required by the Board.

7. Restricted Stock; Restricted Stock Units.

     (a) General. The Board may grant Awards entitling recipients to acquire shares of
Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of
such shares at their issue price or other stated or formula price (or to require forfeiture of such
shares if issued at no cost) from the recipient in the event that conditions specified by the Board
in the applicable Award are not satisfied prior to the end of the applicable restriction period or
periods established by the Board for such Award. Instead of granting Awards for Restricted Stock,
the Board may grant Awards entitling the recipient to receive shares of Common Stock or cash to be
delivered at the time such Award vests (“Restricted Stock Units”) (Restricted Stock and Restricted
Stock Units are each referred to herein as a “Restricted Stock Award”).

     (b) Terms and Conditions. The Board shall determine the terms and conditions of a
Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the
issue price, if any.

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     (c) Additional Provisions Relating to Restricted Stock.

          (1) Dividends. Participants holding shares of Restricted Stock will be entitled to
all ordinary cash dividends paid with respect to such shares, unless otherwise provided by the
Board. Unless otherwise provided by the Board, if any dividends or distributions are paid in
shares, or consist of a dividend or distribution to holders of Common Stock other than an ordinary
cash dividend, the shares, cash or other property will be subject to the same restrictions on
transferability and forfeitability as the shares of Restricted Stock with respect to which they
were paid.

          (2) Stock Certificates. The Company may require that any stock certificates issued in
respect of shares of Restricted Stock shall be deposited in escrow by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the
applicable restriction periods, the Company (or such designee) shall deliver the certificates no
longer subject to such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts
due or exercise rights of the Participant in the event of the Participant’s death (the “Designated
Beneficiary”). In the absence of an effective designation by a Participant, “Designated
Beneficiary” shall mean the Participant’s estate.

     (d) Additional Provisions Relating to Restricted Stock Units.

          (1) Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e.,
settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to
receive from the Company one share of Common Stock or an amount of cash equal to the Fair Market
Value of one share of Common Stock, as provided in the applicable Award agreement. The Board may,
in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a
mandatory basis or at the election of the Participant.

          (2) Voting Rights. A Participant shall have no voting rights with respect to any
Restricted Stock Units.

          (3) Dividend Equivalents. To the extent provided by the Board, in its sole
discretion, a grant of Restricted Stock Units may provide Participants with the right to receive an
amount equal to any dividends or other distributions declared and paid on an equal number of
outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid
currently or credited to an account for the Participants, may be settled in cash and/or shares of
Common Stock and may be subject to the same restrictions on transfer and forfeitability as the
Restricted Stock Units with respect to which paid, as determined by the Board, in its sole
discretion, subject in each case to such terms and conditions as the Board shall establish, in each
case to be set forth in the applicable Award agreement.

8. Other Stock-Based Awards.

     Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part
by reference to, or are otherwise based on, shares of Common Stock or other property, may be
granted hereunder to Participants (“Other Stock Based Awards”), including without limitation Awards
entitling recipients to receive shares of Common Stock to be delivered in the

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future. Such Other Stock Based Awards shall also be available as a form of payment in the
settlement of other Awards granted under the Plan or as payment in lieu of compensation to which a
Participant is otherwise entitled. Other Stock Based Awards may be paid in shares of Common Stock
or cash, as the Board shall determine. Subject to the provisions of the Plan, the Board shall
determine the terms and conditions of each Other Stock Based Award, including any purchase price
applicable thereto.

9. Performance Awards.

     (a) Grants. Restricted Stock Awards and Other Stock-Based Awards under the Plan may
be made subject to the achievement of performance goals pursuant to this Section 9 (“Performance
Awards”), subject to the limit in Section 4(b)(1) on shares covered by such grants.

     (b) Committee. Grants of Performance Awards to any Covered Employee intended to
qualify as “performance-based compensation” under Section 162(m) (“Performance-Based Compensation”)
shall be made only by a Committee (or subcommittee of a Committee) comprised solely of two or more
directors eligible to serve on a committee making Awards qualifying as “performance-based
compensation” under Section 162(m). In the case of such Awards granted to Covered Employees,
references to the Board or to a Committee shall be deemed to be references to such Committee or
subcommittee. “Covered Employee” shall mean any person who is, or whom the Committee, in its sole
discretion, determines may be, a “covered employee” under Section 162(m)(3) of the Code.

     (c) Performance Measures. For any Award that is intended to qualify as
Performance-Based Compensation, the Committee shall specify that the degree of granting, vesting
and/or payout shall be subject to the achievement of one or more objective performance measures
established by the Committee, which shall be based on the relative or absolute attainment of
specified levels of one or any combination of the following: (a) net income, (b) earnings before
or after discontinued operations, interest, taxes, depreciation and/or amortization, (c) operating
profit before or after discontinued operations and/or taxes, (d) sales, (e) sales growth, (f)
earnings growth, (g) cash flow or cash position, (h) gross margins, (i) stock price, (j) market
share, (k) return on sales, assets, equity or investment, (l) improvement of financial ratings, (m)
achievement of balance sheet or income statement objectives or (n) total stockholder return and may
be absolute in their terms or measured against or in relationship to other companies comparably,
similarly or otherwise situated. Such performance measures may be adjusted to exclude any one or
more of (i) extraordinary items, (ii) gains or losses on the dispositions of discontinued
operations, (iii) the cumulative effects of changes in accounting principles, (iv) the writedown of
any asset, and (v) charges for restructuring and rationalization programs. Such performance
measures: (i) may vary by Participant and may be different for different Awards; (ii) may be
particular to a Participant or the department, branch, line of business, subsidiary or other unit
in which the Participant works and may cover such period as may be specified by the Committee; and
(iii) shall be set by the Committee within the time period prescribed by, and shall otherwise
comply with the requirements of, Section 162(m). Awards that are not intended to qualify as
Performance-Based Compensation may be based on these or such other performance measures as the
Board may determine.

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     (d) Adjustments. Notwithstanding any provision of the Plan, with respect to any
Performance Award that is intended to qualify as Performance-Based Compensation, the Committee may
adjust downwards, but not upwards, the cash or number of Shares payable pursuant to such Award, and
the Committee may not waive the achievement of the applicable performance measures except in the
case of the death or disability of the Participant or a change in control of the Company.

     (e) Other. The Committee shall have the power to impose such other restrictions on
Performance Awards as it may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for Performance-Based Compensation.

10. Adjustments for Changes in Common Stock and Certain Other Events.

     (a) Changes in Capitalization. In the event of any stock split, reverse stock split,
stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any dividend or distribution to holders of
Common Stock other than an ordinary cash dividend, (i) the number and class of securities available
under this Plan and the numbers of shares set forth in Section 4(a), (ii) the per-Participant limit
set forth in Section 4(b), (iii) the number and class of securities and exercise price per share of
each outstanding Option, (iv) the share and per-share provisions and the exercise price of each
SAR, (v) the number of shares subject to, and the repurchase price per share subject to, each
outstanding Restricted Stock Award, and (vi) the share- and per-share-related provisions and the
purchase price, if any, of each outstanding Other Stock Based Award, shall be equitably adjusted by
the Company (or substituted Awards may be made, if applicable) in the manner determined by the
Board. Without limiting the generality of the foregoing, in the event the Company effects a split
of the Common Stock by means of a stock dividend and the exercise price of and the number of shares
subject to an outstanding Option are adjusted as of the date of the distribution of the dividend
(rather than as of the record date for such dividend), then an optionee who exercises an Option
between the record date and the distribution date for such stock dividend shall be entitled to
receive, on the distribution date, the stock dividend with respect to the shares of Common Stock
acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding
as of the close of business on the record date for such stock dividend.

     (b) Reorganization Events

          (1) Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation
of the Company with or into another entity as a result of which all of the Common Stock of the
Company is converted into or exchanged for the right to receive cash, securities or other property
or is cancelled, (b) any exchange of all of the Common Stock of the Company for cash, securities or
other property pursuant to a share exchange transaction or (c) any liquidation or dissolution of
the Company.

          (2) Consequences of a Reorganization Event on Awards Other than Restricted Stock
Awards. In connection with a Reorganization Event, the Board may take any one or more of the
following actions as to all or any (or any portion of) outstanding Awards other than Restricted
Stock Awards on such terms as the Board determines: (i) provide that Awards shall

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be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant,
provide that the Participant’s unexercised Awards will terminate immediately prior to the
consummation of such Reorganization Event unless exercised by the Participant within a specified
period following the date of such notice, (iii) provide that outstanding Awards shall become
exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in
whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization
Event under the terms of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make
or provide for a cash payment to a Participant equal to the excess, if any, of (A) the Acquisition
Price times the number of shares of Common Stock subject to the Participant’s Awards (to the extent
the exercise price does not exceed the Acquisition Price) over (B) the aggregate exercise price of
all such outstanding Awards and any applicable tax withholdings, in exchange for the termination of
such Awards, (v) provide that, in connection with a liquidation or dissolution of the Company,
Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the
exercise price thereof and any applicable tax withholdings) and (vi) any combination of the
foregoing. In taking any of the actions permitted under this Section 10(b), the Board shall not be
obligated by the Plan to treat all Awards, all Awards held by a Participant or all Awards of the
same type, identically.

          (3) For purposes of clause (i) above, an Option shall be considered assumed if, following
consummation of the Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of the Reorganization
Event, the consideration (whether cash, securities or other property) received as a result of the
Reorganization Event by holders of Common Stock for each share of Common Stock held immediately
prior to the consummation of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
shares of Common Stock); provided, however, that if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an
affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation,
provide for the consideration to be received upon the exercise of Options to consist solely of
common stock of the acquiring or succeeding corporation (or an affiliate thereof) equivalent in
value (as determined by the Board in its sole discretion) to the per share consideration received
by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

          (4) Consequences of a Reorganization Event on Restricted Stock Awards. Upon the
occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the
repurchase and other rights of the Company under each outstanding Restricted Stock Award shall
inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise,
apply to the cash, securities or other property which the Common Stock was converted into or
exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as
they applied to the Common Stock subject to such Restricted Stock Award. Upon the occurrence of a
Reorganization Event involving the liquidation or dissolution of the Company, except to the extent
specifically provided to the contrary in the instrument evidencing any Restricted Stock Award or
any other agreement between a Participant and the

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Company, all restrictions and conditions on all Restricted Stock Awards then outstanding shall
automatically be deemed terminated or satisfied.

11. General Provisions Applicable to Awards.

     (a) Transferability of Awards. Except as the Board may otherwise determine or provide
in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by
the person to whom they are granted, either voluntarily or by operation of law, except by will or
the laws of descent and distribution or, other than in the case of an Incentive Stock Option,
pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent relevant in the
context, shall include references to authorized transferees.

     (b) Documentation. Each Award shall be evidenced in such form (written, electronic or
otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition
to those set forth in the Plan.

     (c) Board Discretion. Except as otherwise provided by the Plan, each Award may be
made alone or in addition or in relation to any other Award. The terms of each Award need not be
identical, and the Board need not treat Participants uniformly.

     (d) Termination of Status. The Board shall determine the effect on an Award of the
disability, death, termination or other cessation of employment, authorized leave of absence or
other change in the employment or other status of a Participant and the extent to which, and the
period during which, the Participant, or the Participant’s legal representative, conservator,
guardian or Designated Beneficiary, may exercise rights under the Award.

     (e) Withholding. The Participant must satisfy all applicable federal, state, and
local or other income and employment tax withholding obligations before the Company will deliver
stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company
may decide to satisfy the withholding obligations through additional withholding on salary or
wages. If the Company elects not to or cannot withhold from other compensation, the Participant
must pay the Company the full amount, if any, required for withholding or have a broker tender to
the Company cash equal to the withholding obligations. Payment of withholding obligations is due
before the Company will issue any shares on exercise or release from forfeiture of an Award or, if
the Company so requires, at the same time as is payment of the exercise price unless the Company
determines otherwise. If provided for in an Award or approved by the Board in its sole discretion,
a Participant may satisfy such tax obligations in whole or in part by delivery of shares of Common
Stock, including shares retained from the Award creating the tax obligation, valued at their Fair
Market Value; provided, however, except as otherwise provided by the Board, that the total tax
withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s
minimum statutory withholding obligations (based on minimum statutory withholding rates for federal
and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable
income). Shares surrendered to satisfy tax withholding requirements cannot be subject to any
repurchase, forfeiture, unfulfilled vesting or other similar requirements.

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     (f) Amendment of Award.

          (1) The Board may amend, modify or terminate any outstanding Award, including but not limited
to, substituting therefor another Award of the same or a different type, changing the date of
exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option,
provided that the Participant’s consent to such action shall be required unless (A) the Board
determines that the action, taking into account any related action, would not materially and
adversely affect the Participant’s rights under the Plan or (B) the change is permitted under
Section 10 hereof.

          (2) The Board may, without stockholder approval, amend any outstanding Award granted under the
Plan to provide an exercise price per share that is lower than the then-current exercise price per
share of such outstanding Award. The Board may also, without stockholder approval, cancel any
outstanding award (whether or not granted under the Plan) and grant in substitution therefor new
Awards under the Plan covering the same or a different number of shares of Common Stock and having
an exercise price per share lower that the then-current exercise price per share of the cancelled
award.

     (g) Conditions on Delivery of Stock. The Company will not be obligated to deliver any
shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously
delivered under the Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied, including any
applicable securities laws and any applicable stock exchange or stock market rules and regulations,
and (iii) the Participant has executed and delivered to the Company such representations or
agreements as the Company may consider appropriate to satisfy the requirements of any applicable
laws, rules or regulations.

     (h) Acceleration. The Board may at any time provide that any Award shall become
immediately exercisable in full or in part, free of some or all restrictions or conditions, or
otherwise realizable in full or in part, as the case may be.

12. Miscellaneous.

     (a) No Right To Employment or Other Status. No person shall have any claim or right
to be granted an Award, and the grant of an Award shall not be construed as giving a Participant
the right to continued employment or any other relationship with the Company. The Company
expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a
Participant free from any liability or claim under the Plan, except as expressly provided in the
applicable Award.

     (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no
Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any
shares of Common Stock to be distributed with respect to an Award until becoming the record holder
of such shares.

     (c) Effective Date and Term of Plan. The Plan shall become effective upon closing of
the Company’s initial public offering. No Awards shall be granted under the Plan after the

11

 

expiration of 10 years from the date on which the Plan was adopted by the Board, but Awards
previously granted may extend beyond that date.

     (d) Amendment of Plan. The Board may amend, suspend or terminate the Plan or any
portion thereof at any time provided that (i) to the extent required by Section 162(m), no Award
granted to a Participant that is intended to comply with Section 162(m) after the date of such
amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and
until such amendment shall have been approved by the Company’s stockholders if required by Section
162(m) (including the vote required under Section 162(m)); and (ii) no amendment that would require
stockholder approval under the rules of The Nasdaq Stock Market may be made effective unless and
until such amendment shall have been approved by the Company’s stockholders. In addition, if at
any time the approval of the Company’s stockholders is required as to any other modification or
amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock
Options, the Board may not effect such modification or amendment without such approval Unless
otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this
Section 12(d) shall apply to, and be binding on the holders of, all Awards outstanding under the
Plan at the time the amendment is adopted, provided the Board determines that such amendment does
not materially and adversely affect the rights of Participants under the Plan.

     (e) Authorization of Sub-Plans. The Board may from time to time establish one or more
sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of
various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this
Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems
necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with
the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board
shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within
the affected jurisdiction and the Company shall not be required to provide copies of any supplement
to Participants in any jurisdiction which is not the subject of such supplement.

     (f) Compliance with Code Section 409A. No Award shall provide for deferral of
compensation that does not comply with Section 409A of the Code, unless the Board, at the time of
grant, specifically provides that the Award is not intended to comply with Section 409A of the
Code. The Company shall have no liability to a Participant, or any other party, if an Award that
is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant or for
any action taken by the Board.

     (g) Governing Law. The provisions of the Plan and all Awards made hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware, excluding
choice-of-law principles of the law of such state that would require the application of the laws of
a jurisdiction other than such state.

Adopted by the Board of Directors on November 6, 2007

Approved by the stockholders on November 9, 2007

12exv10w10

 

Exhibit 10.10

NITROSECURITY, INC.

Form of

Incentive Stock Option Agreement

Granted Under 2007 Stock Incentive Plan

	1.	 	Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on                     , 200___(the “Grant Date”) to                    , an
employee of the Company (the “Participant”), of an option to purchase, in whole or in part, on the
terms provided herein and in the Company’s 2007 Stock Incentive
Plan (the “Plan”), a total of                     shares (the “Shares”) of common stock, $0.01 par value per share, of the
Company (“Common Stock”) at $                     per Share. Unless earlier terminated, this option
shall expire at 5:00 p.m., Eastern time, on                     (the “Final Exercise Date”).

     It is intended that the option evidenced by this agreement shall be an incentive stock option
as defined in Section 422 of the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder (the “Code”). Except as otherwise indicated by the context, the term
“Participant,” as used in this option, shall be deemed to include any person who acquires the right
to exercise this option validly under its terms.

	2.	 	Vesting Schedule.

     This option will become exercisable (“vest”) as to                     .

     The right of exercise shall be cumulative so that to the extent the option is not exercised in
any period to the maximum extent permissible it shall continue to be exercisable, in whole or in
part, with respect to all Shares for which it is vested until the earlier of the Final Exercise
Date or the termination of this option under Section 3 hereof or the Plan.

	3.	 	Exercise of Option.

     (a) Form of Exercise. Each election to exercise this option shall be in writing,
signed by the Participant, and received by the Company at its principal office, accompanied by this
agreement, and payment in full in the manner provided in the Plan. The Participant may purchase
less than the number of shares covered hereby, provided that no partial exercise of this option may
be for any fractional share or for fewer than ten whole shares.

     (b) Continuous Relationship with the Company Required. Except as otherwise provided
in this Section 3, this option may not be exercised unless the Participant, at the time he or she
exercises this option, is, and has been at all times since the Grant Date, an employee or officer
of, or consultant or advisor to, the Company or any parent or subsidiary of the Company as defined
in Section 424(e) or (f) of the Code (an “Eligible Participant”).

     (c) Termination of Relationship with the Company. If the Participant ceases to be an
Eligible Participant for any reason, then, except as provided in paragraphs (d) and (e) below, the
right to exercise this option shall terminate three months after such cessation (but in no event

 

 

after the Final Exercise Date), provided that this option shall be exercisable
only to the extent that the Participant was entitled to exercise this option on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final Exercise Date,
violates the non-competition or confidentiality provisions of any employment contract,
confidentiality and nondisclosure agreement or other agreement between the Participant and the
Company, the right to exercise this option shall terminate immediately upon written notice to the
Participant from the Company describing such violation.

     (d) Exercise Period Upon Death or Disability. If the Participant dies or becomes
disabled (within the meaning of Section 22(e)(3) of the Code) prior to the Final Exercise Date
while he or she is an Eligible Participant and the Company has not terminated such relationship for
“cause” as specified in paragraph (e) below, this option shall be exercisable, within the period of
one year following the date of death or disability of the Participant, by the Participant (or in
the case of death by an authorized transferee), provided that this option shall be
exercisable only to the extent that this option was exercisable by the Participant on the date of
his or her death or disability, and further provided that this option shall not be exercisable
after the Final Exercise Date.

     (e) Termination for Cause. If, prior to the Final Exercise Date, the Participant’s
employment is terminated by the Company for Cause (as defined below), the right to exercise this
option shall terminate immediately upon the effective date of such termination of employment. If
the Participant is party to an employment or severance agreement with the Company that contains a
definition of “cause” for termination of employment, “Cause” shall have the meaning ascribed to
such term in such agreement. Otherwise, “Cause” shall mean willful misconduct by the Participant
or willful failure by the Participant to perform his or her responsibilities to the Company
(including, without limitation, breach by the Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or other similar agreement between the
Participant and the Company), as determined by the Company, which determination shall be
conclusive. The Participant shall be considered to have been discharged for Cause if the Company
determines, within 30 days after the Participant’s resignation, that discharge for cause was
warranted.

	4.	 	Tax Matters.

     (a) Withholding. No Shares will be issued pursuant to the exercise of this option
unless and until the Participant pays to the Company, or makes provision satisfactory to the
Company for payment of, any federal, state or local withholding taxes required by law to be
withheld in respect of this option.

     (b) Disqualifying Disposition. If the Participant disposes of Shares acquired upon
exercise of this option within two years from the Grant Date or one year after such Shares were
acquired pursuant to exercise of this option, the Participant shall notify the Company in writing
of such disposition.

2

 

	5.	 	Nontransferability of Option.

     This option may not be sold, assigned, transferred, pledged or otherwise encumbered by the
Participant, either voluntarily or by operation of law, except by will or the laws of descent and
distribution, and, during the lifetime of the Participant, this option shall be exercisable only by
the Participant.

	6.	 	Provisions of the Plan.

     This option is subject to the provisions of the Plan, a copy of which is furnished to the
Participant with this option.

     IN WITNESS WHEREOF, the Company has caused this option to be executed under its corporate seal
by its duly authorized officer. This option shall take effect as a sealed instrument.

	 	 	 	 	 	 	 
	 	 	NITROSECURITY, INC.
	 
	 	 	 	 	 	 
	Dated:                     

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 

3

 

PARTICIPANT’S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the terms and conditions
thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s 2007 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

4

 

NOTICE OF STOCK OPTION EXERCISE

Date:                     

NitroSecurity, Inc.

230 Commerce Way, Suite 325

Portsmouth, NH 03801

Attention: Treasurer

Dear Sir or Madam:

     I am the holder of an Incentive Stock Option granted to me under the NitroSecurity, Inc. (the
“Company”) 2007 Stock Incentive Plan on
                     for the purchase of                      shares of Common
Stock of the Company at a purchase price of $                    per share.

     I hereby exercise my option to purchase                     shares of Common Stock (the “Shares”), for
which I have enclosed
                    
[method of payment] in the amount of $                    . Please register
my stock certificate as follows:

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	(if applicable, check relevant box)
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 	 	o
	 	TEN COM
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	o
	 	TEN ENT
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Address:
	 	 	 	 	 	o
	 	JT TEN
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	o
	 	UNIF GIFT MIN ACT
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

Very truly yours,

                                        

(Signature)

5

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