Document:

Exhibit 10.2

 

CASTLEROCK SECURITY HOLDINGS, INC.

 

2010 EQUITY INCENTIVE PLAN

 

STOCK OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

 

Pursuant
to your Stock Option Grant Notice (“Grant Notice”)
and this Stock Option Agreement, CastleRock Security Holdings, Inc. (the “Company”) has granted you an option
under its 2010 Equity Incentive Plan (the “Plan”) to
purchase the number of shares of the Company’s Common Stock indicated in your
Grant Notice at the exercise price indicated in your Grant Notice.  Defined terms not explicitly defined in this
Stock Option Agreement but defined in the Plan shall have the same definitions
as in the Plan.

 

The
details of your option are as follows:

 

1.                                      VESTING.  Subject to the limitations contained herein, your
option will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

 

2.                                      NUMBER
OF SHARES AND EXERCISE PRICE.  The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant
Notice may be adjusted from time to time for Capitalization Adjustments.

 

3.                                      METHOD
OF PAYMENT.  Payment of
the exercise price is due in full upon exercise of all or any part of your
option.  You may elect to make payment of
the exercise price in cash or by check or in any other manner permitted by your  Grant Notice, which may include one
or more of the following:

 

(a)                                  In the Company’s
sole discretion at the time your option is exercised and provided that at the
time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street Journal, pursuant to a program developed
under Regulation T as promulgated by the Federal Reserve Board that, prior to
the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Company from the sales proceeds.

 

(b)                                  Provided that
at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by
delivery of already-owned shares of Common Stock either that you have held for
the period required to avoid a charge to the Company’s reported earnings
(generally six (6) months) or that you did not acquire, directly or
indirectly from the Company, that are owned free and clear of any liens,
claims, encumbrances or security interests, and that are valued at Fair Market
Value on the date of exercise.  “Delivery”
for these purposes, in the sole discretion of the Company at the time you
exercise your option, shall include delivery to the Company of your attestation
of ownership of such shares of Common Stock in a form approved by the
Company.  Notwithstanding the foregoing,
you may not exercise your option by tender to the Company of Common Stock to
the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.

 

 

4.                                      WHOLE
SHARES.  You may exercise your option
only for whole shares of Common Stock.

 

5.                                      SECURITIES
LAW COMPLIANCE. 
Notwithstanding anything to the contrary contained herein, you may not
exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of
Common Stock are not then so registered, the Company has determined that such
exercise and issuance would be exempt from the registration requirements of the
Securities Act.  The exercise of your
option also must comply with other applicable laws and regulations governing
your option, and you may not exercise your option if the Company determines
that such exercise would not be in material compliance with such laws and
regulations.

 

6.                                      TERM.  You may not exercise your option before the
commencement of its term or after its term expires.  The term of your option commences on the Date
of Grant and expires upon the earliest of the following:

 

(a)                                  three (3) months
after the termination of your Continuous Service for any reason other than
Cause, Disability or death, provided that if during any part of such three (3) month
period you may not exercise your option solely because of the condition set
forth in the preceding paragraph relating to “Securities Law Compliance,” your
option shall not expire until the earlier of the Expiration Date or until it
shall have been exercisable for an aggregate period of three (3) months
after the termination of your Continuous Service;

 

(b)                                  twelve (12)
months after the termination of your Continuous Service due to your Disability;

 

(c)                                  eighteen (18)
months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;

 

(d)                                  immediately
upon the termination of your Continuous Service if for Cause;

 

(e)                                  the Expiration
Date indicated in your Grant Notice; or

 

(f)                                    the day before
the tenth (10th) anniversary of the Date of Grant.

 

If
your option is an Incentive Stock Option, in order to obtain the federal income
tax advantages associated with an Incentive Stock Option, the Code requires
that at all times beginning on the date of grant of your option and ending on
the day three (3) months before the date of your option’s exercise, you
must be an employee of the Company or an Affiliate, except in the event of your
death or your permanent and total disability, as defined in Section 22(e) of
the Code.  The Company has provided for
extended exercisability of your option under certain circumstances for your
benefit but cannot guarantee that your option will necessarily be treated as an
Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your employment terminates or if
you otherwise exercise your option more than three (3) months after the
date your employment with the Company or an Affiliate terminates.

 

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7.                                      EXERCISE.

 

(a)                                  You may
exercise the vested portion of your option during its term by delivering a
Notice of Exercise (in a form designated by the Company) together with the
exercise price to the Secretary of the Company, or to such other person as the
Company may designate, during regular business hours, together with such
additional documents as the Company may then require.

 

(b)                                  By exercising
your option you agree that, as a condition to any exercise of your option, the
Company may require you to enter into an arrangement providing for the payment
by you to the Company of any tax withholding obligation of the Company arising
by reason of (1) the exercise of your option, (2) the lapse of any
substantial risk of forfeiture to which the shares of Common Stock are subject
at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.

 

(c)                                  If your option
is an Incentive Stock Option, by exercising your option you agree that you will
notify the Company in writing within fifteen (15) days after the date of any
disposition of any of the shares of the Common Stock issued upon exercise of
your option that occurs within two (2) years after the date of your option
grant or within one (1) year after such shares of Common Stock are
transferred upon exercise of your option.

 

8.                                      TRANSFERABILITY.

 

(a)                                  If your option
is an Incentive Stock Option, your option is not transferable, except by will
or by the laws of descent and distribution, and is exercisable during your life
only by you.  Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory
to the Company, you may designate a third party who, in the event of your
death, shall thereafter be entitled to exercise your option.

 

(b)                                  If your option
is a Nonstatutory Stock Option, your option is not transferable, except (i) by
will or by the laws of descent and distribution, (ii) with the prior written
approval of the Company, by instrument to an inter vivos or testamentary trust,
in a form accepted by the Company, in which the option is to be passed to
beneficiaries upon the death of the trustor (settlor) and (iii) with the
prior written approval of the Company, by gift, in a form accepted by the
Company, to a permitted transferee under Rule 701 of the Securities Act.

 

9.                                      OPTION
NOT A SERVICE CONTRACT.  Your
option is not an employment or service contract, and nothing in your option
shall be deemed to create in any way whatsoever any obligation on your part to
continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. 
In addition, nothing in your option shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

 

10.                               WITHHOLDING
OBLIGATIONS.

 

(a)                                  At the time you
exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any

 

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other amounts payable to you, and otherwise agree to
make adequate provision as instructed by the Company (including by means of a “cashless
exercise” pursuant to a program developed under Regulation T as promulgated by
the Federal Reserve Board to the extent instructed by the Company), for any
sums required to satisfy the federal, state, local and foreign tax withholding
obligations of the Company or an Affiliate, if any, which arise in connection
with the exercise of your option.

 

(b)                                  The Company
may, in its sole discretion, and in compliance with any applicable legal conditions
or restrictions, withhold from fully vested shares of Common Stock otherwise
issuable to you upon the exercise of your option a number of whole shares of
Common Stock having a Fair Market Value, determined by the Company as of the
date of exercise, not in excess of the minimum amount of tax required to be
withheld by law (or such lower amount as may be necessary to avoid variable
award accounting).  Any adverse
consequences to you arising in connection with such share withholding procedure
shall be your sole responsibility.

 

(c)                                  You may not
exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. 
Accordingly, you may not be able to exercise your option when desired
even though your option is vested, and the Company shall have no obligation to
issue a certificate for such shares of Common Stock or release such shares of
Common Stock from any escrow provided for herein unless such obligations are
satisfied.

 

11.                               NOTICES.  Any notices provided for in your option or
the Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

 

12.                               GOVERNING
PLAN DOCUMENT.  Your option
is subject to all the provisions of the Plan, the provisions of which are
hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to
time be promulgated and adopted pursuant to the Plan.  In the event of any conflict between the
provisions of your option and those of the Plan, the provisions of the Plan
shall control.

 

4Exhibit 10.3

 

CASTLEROCK SECURITY HOLDINGS, INC. 

2010 EQUITY INCENTIVE PLAN

 

STOCK APPRECIATION RIGHT AGREEMENT

 

Pursuant
to your Stock Appreciation Right Grant Notice (“Grant
Notice”) and this Stock Appreciation Right Agreement (the “SAR Agreement”), CastleRock
Security Holdings, Inc. (the “Company”)
has granted you a Stock Appreciation Right (“SAR”)
under its 2010 Equity Incentive Plan (the “Plan”)
with respect to the number of shares of the Company’s Common Stock indicated in
your Grant Notice at the grant value (“Grant Value”)
indicated in your Grant Notice.  Defined
terms not explicitly defined in this SAR Agreement but defined in the Plan
shall have the same definitions as in the Plan.

 

1.                                      VESTING.  Subject to the limitations contained herein,
your SAR will vest as provided in your Grant Notice, provided that vesting will
cease upon the termination of your Continuous Service.

 

2.                                      NUMBER
OF SHARES AND GRANT VALUE.  The
Grant Value of each share of Common Stock subject to your SAR will be not less
than one hundred percent (100%) of the Fair Market Value of such share of
Common Stock on the Date of Grant.  The
number of shares of Common Stock subject to your SAR and the Grant Value per
share may be adjusted from time to time for Capitalization Adjustments.

 

3.                                      WHOLE
SHARES.  You may exercise your SAR only
for whole shares of Common Stock.

 

4.                                      SECURITIES
LAW COMPLIANCE. 
Notwithstanding anything to the contrary contained herein, you may not
exercise your SAR unless the shares of Common Stock issuable upon such exercise
are then registered under the Securities Act. 
The exercise of your SAR also must comply with other applicable laws and
regulations governing your SAR, and you may not exercise your SAR if the
Company determines that such exercise would not be in material compliance with
such laws and regulations.

 

5.                                      TERM.  You may not exercise your SAR before the
commencement of its term or after its term expires.  The term of your SAR commences on the Date of
Grant and expires upon the earliest of the following:

 

(a)                                  three (3) months
after the termination of your Continuous Service for any reason, provided that
if during any part of such three (3) month period you may not exercise
your SAR solely because of the condition set forth in the preceding paragraph
relating to “Securities Law Compliance,” your SAR shall not expire until the
earlier of the Expiration Date indicated in your Grant Notice or until it shall
have been exercisable for an aggregate period of three (3) months after
the termination of your Continuous Service;

 

(b)                                  the Expiration
Date indicated in your Grant Notice; or

 

(c)                                  the day before
the tenth (10th) anniversary of the Date of Grant.

 

 

6.                                      EXERCISE.

 

(a)                                  You may
exercise the vested portion of your SAR during its term by delivering a Notice
of Exercise (in a form designated by the Company) together with the exercise
price to the Secretary of the Company, or to such other person as the Company
may designate, during regular business hours, together with such additional
documents as the Company may then require.

 

(b)                                  By exercising
your SAR you agree that, as a condition to any exercise of your SAR, the
Company may require you to enter into an arrangement providing for the payment
by you to the Company of any tax withholding obligation of the Company arising
by reason of (1) the exercise of your SAR, (2) the lapse of any
substantial risk of forfeiture to which the shares of Common Stock are subject
at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.

 

(c)                                  By exercising
your SAR you agree that the Company (or a representative of the underwriter(s))
may, in connection with the first underwritten registration of the offering of
any securities of the Company under the Securities Act, require that you not sell,
dispose of, transfer, make any short sale of, grant any option for the purchase
of, or enter into any hedging or similar transaction with the same economic
effect as a sale, any shares of Common Stock or other securities of the Company
held by you, for a period of time specified by the underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of the
registration statement of the Company filed under the Securities Act.  You further agree to execute and deliver such
other agreements as may be reasonably requested by the Company and/or the
underwriter(s) that are consistent with the foregoing or that are
necessary to give further effect thereto. 
In order to enforce the foregoing covenant, the Company may impose stop
transfer instructions with respect to your shares of Common Stock until the end
of such period.

 

7.                                      VALUE
OF SAR.  Upon exercise of your SAR, you
will be entitled to receive from the Company an amount equal to the
Appreciation in the shares of Common Stock covered by the SAR that are
exercised.  For this purpose, “Appreciation” means the excess of (i) the
aggregate Fair Market Value (on the date of the exercise of the Stock
Appreciation Right) of the shares of Common Stock covered by the SAR that are
exercised, over (ii) the aggregate Grant Value for such shares.

 

8.                                      PAYMENT.  The Company shall satisfy its obligation to
pay amounts owed upon exercise of this SAR in shares of Common Stock.  Payment of such amounts shall commence as
soon as administratively practicable after the date of exercise of such SAR.

 

9.                                      TRANSFERABILITY.  Your SAR is not transferable, except (i) by
will or by the laws of descent and distribution, and (ii) with the prior
written approval of the Company, by instrument to an inter vivos or testamentary
trust, in a form accepted by the Company, in which the SAR is to be passed to
beneficiaries upon the death of the trustor (settlor).

 

10.                               SAR NOT
A SERVICE CONTRACT.  Your SAR is
not an employment or service contract, and nothing in your SAR shall be deemed
to create in any way whatsoever any obligation on your part to continue in the
employ of the Company or an Affiliate, or of the 

 

2

 

Company
or an Affiliate to continue your employment. 
In addition, nothing in your SAR shall obligate the Company or an
Affiliate, their respective stockholders, Boards of Directors, Officers or
Employees to continue any relationship that you might have as a Director or
Consultant for the Company or an Affiliate.

 

11.                               WITHHOLDING
OBLIGATIONS.

 

(a)                                  At the time
your SAR is exercised, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any
other amounts payable to you, and otherwise agree to make adequate provision as
instructed by the Company, for any sums required to satisfy the federal, state,
local and foreign tax withholding obligations of the Company or an Affiliate,
if any, which arise in connection with the exercise of your SAR.

 

(b)                                  The Company
may, in its sole discretion, and in compliance with any applicable legal
conditions or restrictions, withhold from the amounts otherwise payable to you
upon the exercise of your SAR an amount not exceeding the minimum amount of tax
required to be withheld by law.

 

12.                               NOTICES.  Any notices provided for in your SAR or the
Plan shall be given in writing and shall be deemed effectively given upon
receipt or, in the case of notices delivered by mail by the Company to you,
five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

 

13.                               GOVERNING
PLAN DOCUMENT.  Your SAR is
subject to all the provisions of the Plan, the provisions of which are hereby
made a part of your SAR, and is further subject to all interpretations,
amendments, rules and regulations, which may from time to time be
promulgated and adopted pursuant to the Plan. 
In the event of any conflict between the provisions of your SAR and
those of the Plan, the provisions of the Plan shall control.

 

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