Document:

exv10w5

 

Exhibit 10.5

NITROSECURITY, INC.

2005 STOCK INCENTIVE PLAN

1. Purpose

     The purpose of this 2005 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 align their interests 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
receive options, 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
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 (each, 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 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. Subject to adjustment under Section 8, Awards may be made
under the Plan for up to 7,500,000 shares of common stock, $0.01 par value per share, of the
Company (the “Common Stock”). If any Award expires or is terminated, surrendered or canceled
without having been fully exercised or 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 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.

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 which 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 the Company, any of the Company’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 pursuant to Section 9(f), 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; provided, however, that the

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exercise price shall not be less than 100% of the Fair Market Value (as defined below) at the
time the Option is granted.

     (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.

     (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 the Board may otherwise provide in an 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) when the Common Stock is registered under the Exchange Act, by delivery 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 by the Board, 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.

     (g) Substitute Options. 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 Options in substitution for any options or other stock or stock-based awards granted by such
entity or an affiliate thereof. Substitute Options may be granted on such terms as the Board deems
appropriate in the circumstances, notwithstanding any limitations on Options contained in the other
sections of this Section 5 or in Section 2.

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6. Restricted Stock

     (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 to be
delivered at the time such shares of Common Stock vest (“Restricted Stock Units”) subject to such
terms and conditions on the delivery of the shares of Common Stock as the Board shall determine
(each Award for Restricted Stock or Restricted Stock Units, 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 repurchase (or forfeiture) and the issue
price, if any.

     (c) Stock Certificates. Any stock certificates issued in respect of a Restricted
Stock Award shall be registered in the name of the Participant and, unless otherwise determined by
the Board, deposited 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.

7. 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 Unit Awards”), including without limitation stock
appreciation rights and Awards entitling recipients to receive shares of Common Stock to be
delivered in the future. Such Other Stock Unit 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 Unit 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 conditions of each Other Stock Unit Awards, including any purchase price
applicable thereto.

8. 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 distribution to holders of Common Stock
other than an ordinary cash dividend, (i) the number and class of securities available under this

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Plan, (ii) the number and class of securities and exercise price per share of each outstanding
Option, (iii) the repurchase price per share subject to each outstanding Restricted Stock Award,
and (iv) the terms of each other outstanding Award shall be appropriately adjusted by the Company
(or substituted Awards may be made, if applicable) to the extent determined by the Board.

     (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 by or (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 shall take any one or more of the
following actions as to all or any outstanding Awards on such terms as the Board determines: (i)
provide that Awards shall 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 Options or other unexercised Awards shall
become exercisable in full and 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 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 (A) the Acquisition Price times the number of shares of Common Stock subject
to the Participant’s Options or other Awards (to the extent the exercise price does not exceed the
Acquisition Price) minus (B) the aggregate exercise price of all such outstanding Options or other
Awards, in exchange for the termination of such Options or other 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 (vi) any
combination of the foregoing.

          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

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exercise of Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in fair market value to the per share
consideration received by holders of outstanding shares of Common Stock as a result of the
Reorganization Event.

          To the extent all or any portion of an Option becomes exercisable solely as a result of clause
(ii) above, the Board may provide that upon exercise of such Option the Participant shall receive
shares subject to a right of repurchase by the Company or its successor at the Option exercise
price; such repurchase right (x) shall lapse at the same rate as the Option would have become
exercisable under its terms and (y) shall not apply to any shares subject to the Option that were
exercisable under its terms without regard to clause (ii) above.

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

9. 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, retirement, 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.

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     (e) Withholding. Each Participant shall pay to the Company, or make provision
satisfactory to the Company for payment of, any taxes required by law to be withheld in connection
with an Award to such Participant. If provided for in an Award or approved by the Company, 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.
The Company may, to the extent permitted by law, deduct any such tax obligations from any payment
of any kind otherwise due to a Participant.

     (f) Amendment of Award. 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 the Board determines that the action, taking into account any related action, would not
materially and adversely affect the Participant.

     (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.

10. 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

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holder of such shares. Notwithstanding 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 such 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.

     (c) Effective Date and Term of Plan. The Plan shall become effective on the date on
which it is adopted by the Board. No Awards shall be granted under the Plan after the completion
of 10 years from the earlier of (i) the date on which the Plan was adopted by the Board or (ii) the
date the Plan was approved by the Company’s stockholders, 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.

     (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) 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, without regard to
any applicable conflicts of law.

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First Amendment to 2005 Stock Incentive Plan

     The 2005 Stock Incentive Plan (the “Plan”) of NitroSecurity, Inc., a Delaware corporation, be,
and hereby is, amended as follows:

     1. Section 4 of the Plan is hereby amended by deleting “7,500,000” and inserting “65,276,467”
in lieu thereof.

     2. The following Section 5(h) is hereby added to the Plan:

     “(h) Stockholders Agreement. Each option agreement evidencing the grant of an Option
hereunder shall require that, upon exercise of the Option, in whole or in part, the Participant
shall become a party to the Amended and Restated Stockholders Agreement between the Company and
certain of its stockholders (as may be further amended and/or restated from time to time) by
delivering a counterpart signature page thereto.”

	 	 	 
	 

	 	Adopted by the Board of Directors on

January 3, 2006
	 
	 	 
	 

	 	Approved by the stockholders as of

January 6, 2006exv10w6

 

Exhibit 10.6

Agreement No.2005/04

NITROSECURITY, INC.

Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Terry B. Christensen, 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 2005 Stock Incentive Plan (the “Plan”), a total of 234,364 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (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 shall be exercisable (“vested”) as to 84,364 Shares immediately, and shall become
exercisable as to (i) an additional 25,000 Shares on April 15, 2005 and (ii) an additional
41662/3 Shares on each one-month anniversary of April 15, 2005 until October
15, 2007.

     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. If the Participant ceases to be an Eligible Participant prior to October
15, 2012, during the thirty-day period following such cessation, the Participant may elect to
convert this option, to the extent exercisable, to a nonstatutory stock option, and the Shares
underlying such nonstatutory stock option shall remain exercisable until October 15, 2012.
Notwithstanding the foregoing, if the Participant 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, or any
nonstatutory option into which is has been converted, 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) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material 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,
which breach is not cured within ten (10) days following written notice of such breach. 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. Acceleration of Options.

     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions

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is satisfied: (x) all or substantially all of the individuals and entities who were the
beneficial owners of the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) and the then-outstanding securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting Securities”) immediately
prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).

5. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6. 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.

3

 

7. 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.

8. 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.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 

4

 

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 2005 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	P.O. Box 962
	 

	 	 	 	Wolfeboro, NH 03894

 

 

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”) 2005 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 [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:

	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 

     I represent, warrant and covenant as follows:

     1. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

     2. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.

     3. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

     4. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.

 

 

     5. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under
the Securities Act or an exemption from registration is then available; (iii) in any event, the
exemption from registration under Rule 144 will not be available for at least one year and even
then will not be available unless a public market then exists for the Common Stock, adequate
information concerning the Company is then available to the public, and other terms and conditions
of Rule 144 are complied with; and (iv) there is now no registration statement on file with the
Securities and Exchange Commission with respect to any stock of the Company and the Company has no
obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

 

(Signature)

 

 

Agreement No. 2005/05

NITROSECURITY, INC.

Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Terry B. Christensen, 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 2005 Stock Incentive Plan (the “Plan”), a total of 900,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (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 shall become exercisable (“vest”) as to 1/36 of the original
number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary
of the Grant Date.

     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. During such three-month period, the Participant may elect to convert this
option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such
nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the
foregoing, if the Participant 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, or any nonstatutory option into
which is has been converted, 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) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material 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,
which breach is not cured within ten (10) days following written notice of such breach. 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. Acceleration of Options.

     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions is
satisfied: (x) all or substantially all of the individuals and entities who were the beneficial

2

 

owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).

5. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6. 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.

7. 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

3

 

and distribution, and, during the lifetime of the Participant, this option shall be
exercisable only by the Participant.

8. 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.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 

4

 

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 2005 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	P.O. Box 962
	 

	 	 	 	Wolfeboro, NH 03894

 

 

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”) 2005 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 [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:

	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 

     I represent, warrant and covenant as follows:

     6. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.

     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.

     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

 

 

Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

 

(Signature)

 

 

Agreement 2005/16

NITROSECURITY, INC.

Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Seth McClead, 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 2005 Stock Incentive Plan (the “Plan”), a total of 100,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on February
20, 2015 (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 shall become exercisable (“vest”) as to 1/6 of the original
number of Shares on July 3, 2005, and as to an additional 1/36 of the
original number of Shares on each one-month anniversary of July 3, 2005 until the thirty-month
anniversary of July 3, 2005.

     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) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “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. Acceleration of Options.

     This option shall vest in full immediately upon (i) the closing of an initial underwritten
public offering of the Company’s securities pursuant to a registration statement under the
Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).

     A “Change in Control Event” shall mean:

     (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change in Control Event: (A) any

 

 

acquisition directly from the Company, or (B) any acquisition by any corporation pursuant to a
Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (b)
of this definition; or

     (b) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent that such ownership
existed prior to the Business Combination).

5. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6. 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.

7. 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.

8. 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: 4/1/2005 	By:  	/s/ Terry B. Christensen
 	 
	 	 	Terry B. Christensen 	 
	 	 	President and Chief Executive Officer 	 
	 

 

 

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 2005 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Seth McClead
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	35 Cricket Brook
	 

	 	 	 	Dover, NH 03820

 

 

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”) 2005 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 [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:

	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 

     I represent, warrant and covenant as follows:

     7. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.

     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.

     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

 

 

Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

 

(Signature)

 

 

Agreement No. 2005/38

NITROSECURITY, INC.

Nonstatutory Stock Option Agreement

Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on February 21, 2005 (the “Grant Date”) to Kenneth Levine (the “Participant”) of an
option to purchase, in whole or in part, on the terms provided herein and in the Company’s 2005
Stock Incentive Plan (the “Plan”), a total of 580,000 shares (the “Shares”) of common stock, $0.01
par value per share, of the Company (“Common Stock”) at $0.15 per Share. Unless earlier
terminated, this option shall expire at 5:00 p.m., Eastern time, on February 21, 2015 (the “Final
Exercise Date”).

     It is intended that the option evidenced by this agreement shall not 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 shall become exercisable (“vest”) as to 1/24 of the original
number of Shares on each one-month anniversary of the Grant Date until the two-year anniversary of
the Grant Date.

     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) Termination for Cause. 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.

     (c) 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

 

 

and the Company has not terminated such relationship as specified in paragraph (b) above, 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.

4. Acceleration of Options.

     This option shall vest in full immediately upon (i) the closing of an initial underwritten
public offering of the Company’s securities pursuant to a registration statement under the
Securities Act of 1933, as amended, or (ii) a Change in Control Event (as defined below).

     A “Change in Control Event” shall mean:

     (a) the acquisition by an individual, entity or group (within the meaning of Section 13(d)(3)
or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a “Person”)
of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more
of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control Event: (A) any acquisition directly
from the Company, or (B) any acquisition by any corporation pursuant to a Business Combination (as
defined below) which complies with clauses (x) and (y) of subsection (b) of this definition; or

     (b) the consummation of a merger, consolidation, reorganization, recapitalization or share
exchange involving the Company or a sale or other disposition of all or substantially all of the
assets of the Company (a “Business Combination”), unless, immediately following such Business
Combination, each of the following two conditions is satisfied: (x) all or substantially all of the
individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding securities entitled to vote generally in the election
of directors, respectively, of the resulting or acquiring corporation in such Business Combination
(which shall include, without limitation, a corporation which as a result of such transaction owns
the Company or substantially all of the Company’s assets either directly or through one or more
subsidiaries) (such resulting or acquiring corporation is referred to herein as the “Acquiring
Corporation”) in substantially the same proportions as their ownership of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such
Business Combination and (y) no Person (excluding any employee benefit plan (or related trust)
maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly
or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring
Corporation, or of the combined voting power of the then-outstanding securities of such corporation
entitled to vote

2

 

generally in the election of directors (except to the extent that such ownership existed prior
to the Business Combination).

5. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6. 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.

7. 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.

8. 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: 4/1/2005 	By:  	/s/ Terry B. Christensen
 	 
	 	 	Terry B. Christensen 	 
	 	 	President and Chief Executive Officer 	 
	 

 

 

Agreement
No. 2005/05

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 2005 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Kenneth Levine
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	36 Bellevue Street
	 

	 	 	 	Wellesley, MA 02481

 

 

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 a Nonstatutory Stock Option granted to me under the NitroSecurity, Inc.
(the “Company”) 2005 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 [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:

	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 

     I represent, warrant and covenant as follows:

     8. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933 (the “Securities Act”), or any rule or regulation under the Securities Act.

     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.

     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.

     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the Shares
cannot be sold, transferred or otherwise disposed of unless they are subsequently

2

 

registered under the Securities Act or an exemption from registration is then available; (iii)
in any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

 

(Signature)

3

 

Agreement No. 2005/70

NITROSECURITY, INC.

Incentive Stock Option Agreement

Granted Under 2005 Stock Incentive Plan

1. Grant of Option.

     This agreement evidences the grant by NitroSecurity, Inc., a Delaware corporation (the
“Company”), on July 1, 2005 (the “Grant Date”) to Terry B. Christensen, 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 2005 Stock Incentive Plan (the “Plan”), a total of 1,050,000 shares (the
“Shares”) of common stock, $0.01 par value per share, of the Company (“Common Stock”) at $0.15 per
Share. Unless earlier terminated, this option shall expire at 5:00 p.m., Eastern time, on June 30,
2015 (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 shall become exercisable (“vest”) as to 1/36 of the original
number of Shares on each one-month anniversary of the Grant Date until the three-year anniversary
of the Grant Date.

     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

4

 

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. During such three-month period, the Participant may elect to convert this
option, to the extent exercisable, to a nonstatutory stock option, and the Shares underlying such
nonstatutory stock option shall remain exercisable until February 21, 2018. Notwithstanding the
foregoing, if the Participant 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, or any nonstatutory option into
which is has been converted, 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) Discharge for Cause. If the Participant, prior to the Final Exercise Date, is
discharged by the Company for “cause” (as defined below), the right to exercise this option shall
terminate immediately upon the effective date of such discharge. “Cause” shall mean (i) conviction
of a felony, or a misdemeanor where imprisonment is imposed, (ii) commission of any act of theft,
fraud or falsification of any employment or Company records in any material way, (iii) the
Participant’s failure or inability to perform any material reasonable assigned duties after written
notice from the Company of, and a reasonable opportunity to cure, such failure or inability, or
(iv) material 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,
which breach is not cured within ten (10) days following written notice of such breach. 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. Acceleration of Options.

     This option shall vest in full immediately upon (i) the termination of the Participant’s
employment by the Company without “cause” or (ii) a Change in Control Event (as defined below).

     A “Change in Control Event” shall mean the consummation of a merger, consolidation,
reorganization, recapitalization or share exchange involving the Company or a sale or other
disposition of all or substantially all of the assets of the Company (a “Business Combination”),
unless, immediately following such Business Combination, each of the following two conditions is
satisfied: (x) all or substantially all of the individuals and entities who were the beneficial

5

 

owners of the then-outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) and the then-outstanding securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”) immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors, respectively, of the resulting
or acquiring corporation in such Business Combination (which shall include, without limitation, a
corporation which as a result of such transaction owns the Company or substantially all of the
Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring
corporation is referred to herein as the “Acquiring Corporation”) in substantially the same
proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person
(excluding any employee benefit plan (or related trust) maintained or sponsored by the Company or
by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the
then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting
power of the then-outstanding securities of such corporation entitled to vote generally in the
election of directors (except to the extent that such ownership existed prior to the Business
Combination).

5. Agreement in Connection with Public Offering.

     The Participant agrees, in connection with the initial underwritten public offering of the
Company’s securities pursuant to a registration statement under the Securities Act of 1933, as
amended, (i) not to sell, make short sale of, loan, grant any options for the purchase of, or
otherwise dispose of any shares of Common Stock held by the Participant (other than those shares
included in the offering) without the prior written consent of the Company or the underwriters
managing such initial underwritten public offering of the Company’s securities for a period of 180
days from the effective date of such registration statement, and (ii) to execute any agreement
reflecting clause (i) above as may be requested by the Company or the managing underwriters at the
time of such offering.

6. 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.

7. 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

6

 

and distribution, and, during the lifetime of the Participant, this option shall be
exercisable only by the Participant.

8. 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.

 	 
	 	By:  	/s/ Lisa J. Duquette
 	 
	 	 	Lisa J. Duquette 	 
	 	 	Vice President of Finance & Administration 	 
	 

7

 

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 2005 Stock
Incentive Plan.

	 	 	 	 	 
	 	 	PARTICIPANT:
	 
	 	 	 	 
	 	 	/s/ Terry B. Christensen
	 	 	 
	 
	 	 	 	 
	 

	 	Address:
	 	7 Sinclair Drive
	 

	 	 	 	Exeter, NH 03833

 

 

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”) 2005 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 [insert method of payment] in the amount of $______. Please register my
stock certificate as follows:

	 	 	 	 	 	 	 
	 

	 	Name(s):
	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Address:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Tax I.D. #:	 	 	 	 
	 

	 	 	 	 	 	 

     I represent, warrant and covenant as follows:

     9. I am purchasing the Shares for my own account for investment only, and not with a view to,
or for sale in connection with, any distribution of the Shares in violation of the Securities Act
of 1933, as amended (the “Securities Act”), or any rule or regulation under the Securities Act.

     9. I have had such opportunity as I have deemed adequate to obtain from representatives of the
Company such information as is necessary to permit me to evaluate the merits and risks of my
investment in the Company.

     10. I have sufficient experience in business, financial and investment matters to be able to
evaluate the risks involved in the purchase of the Shares and to make an informed investment
decision with respect to such purchase.

     11. I can afford a complete loss of the value of the Shares and am able to bear the economic
risk of holding such Shares for an indefinite period.

     12. I understand that (i) the Shares have not been registered under the Securities Act and are
“restricted securities” within the meaning of Rule 144 under the Securities Act, (ii) the

 

 

Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently
registered under the Securities Act or an exemption from registration is then available; (iii) in
any event, the exemption from registration under Rule 144 will not be available for at least one
year and even then will not be available unless a public market then exists for the Common Stock,
adequate information concerning the Company is then available to the public, and other terms and
conditions of Rule 144 are complied with; and (iv) there is now no registration statement on file
with the Securities and Exchange Commission with respect to any stock of the Company and the
Company has no obligation or current intention to register the Shares under the Securities Act.

Very truly yours,

 

     (Signature)

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