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COMMAND SECURITY CORPORATION COMMON STOCK OPTION

Stock Option Agreement

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This Stock Option Agreement involves

COMMAND SECURITY CORP

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Title: COMMAND SECURITY CORPORATION COMMON STOCK OPTION
Governing Law: New York     Date: 4/19/2007
Industry: Security Systems and Services     Sector: Services

COMMAND SECURITY CORPORATION COMMON STOCK OPTION, Parties: command security corp
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NEITHER THIS OPTION (THE " OPTION ") NOR THE SHARES OF COMMON STOCK OR OTHER SECURITIES RECEIVABLE UPON THE EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE " ACT ") OR ANY APPLICABLE STATE SECURITIES LAWS. THIS OPTION AND THE SHARES OF COMMON STOCK OR OTHER SECURITIES RECEIVABLE UPON THE EXERCISE HEREOF MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED OR HYPOTHECATED, EXCEPT IN COMPLIANCE WITH THE ACT, THE RULES AND REGULATIONS THEREUNDER AND APPLICABLE STATE LAWS.

 

Registered Holder:

MARC W. BROWN

 

 

Certificate Number:

A5

 

 

Date of Issuance:

APRIL 12, 2007

 

 

COMMAND SECURITY CORPORATION

 

COMMON STOCK OPTION

 

This certifies that the Registered Holder is entitled to purchase from Command Security Corporation, a New York corporation (the " Company "), subject to the occurrence of certain specified time vesting criteria, at any time commencing from the Date of Issuance and ending at 11:59 p.m., New York City time, on the tenth (10 th ) anniversary date of the Date of Issuance hereof, at the purchase price per share (the " Exercise Price ") of $3.00, an aggregate of fifty thousand (50,000) shares (the “ Shares ”) of Common Stock, $.0001 par value, of the Company; provided that this Option shall be exercisable only with respect to “Earned Options” as set forth in the schedule contained in Section 2 of this Option. The number of Shares purchasable upon exercise of this Option and the Exercise Price shall be subject to adjustment from time to time as set forth herein.

 

This Option may be exercised in whole or in part by presentation of this Option with the Exercise Agreement, a form of which is attached hereto as Exhibit I (the " Exercise Agreement "), duly executed and simultaneous payment of the Exercise Price (subject to any adjustment) at the principal office of the Company. Payment of such price shall be made at the option of the Holder hereof in cash or by certified check or bank cashier's check.

 

This Option is subject to the terms and conditions of the Company's 2005 Stock Incentive Plan (the " Plan "), the terms of which are hereby incorporated herein by reference. Terms used herein and not otherwise defined shall have the meanings as set forth in the Plan. In the event of any conflict between the terms of this Option and those contained in the Plan, the terms of the Plan shall determine the outcome of such conflict and shall prevail. This Option is a Non-Qualified Stock Option as determined under the Plan.

 

This Option is subject to the following provisions:

 

Section 1.   Certain Definitions . When used in this Option, the following terms, when capitalized, shall have the meanings set forth below. Certain other terms are defined in the text of this Option.

 

 


 

 

 

 

1.1.   " Act " means the Securities Act of 1933, as amended, and any successor law or statute thereto.

 

1.2.   " Common Stock " means the Company's Common Stock, par value $.0001 per share.

 

1.3.   " Company " means Command Security Corporation, a New York corporation, and any other corporation or any other entity which shall succeed to or assume the obligations of the Company.

 

1.4   Conversion Shares ” means the Shares of Common Stock that have been purchased upon the exercise of this Option.

 

1.5.   " Date of Issuance " is the date set forth on the first page of this Option.

 

1.6.   " Earned Options " means that portion of the Option Grant that has been earned as a result of the passage of time as set forth in Section 2 hereto.

 

1.7.   " Registered Holder ” or " Holder " means the person whom this Option was originally issued.

 

1.8.   " Option Grant " means the total number of Options granted to the Holder which are each convertible into shares of Common Stock upon the attainment of specified vesting criteria set forth herein.

 

Section 2.   Vesting Criteria .

 

2.1.   This Option, and the Shares of Common Stock that may be purchased hereunder, shall vest with respect to one-twelfth (1/12) of the aggregate number of Shares on the Date of Issuance and on the same date of each succeeding month (and the balance, if any of the Shares that is subject to this Option may be purchased in the 12 th month from the Date of Issuance), so long as the Holder is still an employee of the Company on such date. The portion of this Option that shall have so vested and become exercisable is referred to herein as the “ Earned Option .”

 

2.2.   Notwithstanding the foregoing, upon a Change of Control of the Company occurring during the Holder’s employment by the Company or during a period of 30 days thereafter, this entire Option shall vest and become exercisable. For purposes of this Agreement, a " Change in Control " shall mean:

 

(i)   The acquisition (other than by or from the Company), at any time after the date hereof, by any person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the " Exchange Act "), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors (together with such common stock, " Voting Securities "); or

 

(ii)   If the six members who comprise the Company’s Board of Directors on the Issuance Date cease for any reason to comprise a majority of the members of the Board; or

 

 

2


 

 

 

(iii)   Approval by the shareholders of the Company of (x) a reorganization, merger or consolidation with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then outstanding voting securities, (y) a liquidation or dissolution of the Company or (z) the sale of all or substantially all of the assets of the Company, unless the approved reorganization, merger, consolidation, liquidation, dissolution or sale is subsequently abandoned.

 

Section 3.   Adjustments .

 

In order to prevent dilution of the rights granted under this Option, the Exercise Price and the number of shares of other securities to be received upon the exercise hereof shall be adjusted as set forth in the Plan.

 

Section 4.   Exercise of Option . Upon any partial exercise of this Option, there shall be countersigned and issued to the Holder hereof a new Option in respect of the Shares as to which this Option shall not have been exercised. This Option may be exchanged at the principal office of the Company by surrender of this Option properly endorsed either separately or in combination with one or more other Options for one or more new Options of the same aggregate number of shares of Common Stock evidenced by the Option or Options exchanged. No fractional Shares will be issued upon the exercise of rights to purchase hereunder, but the Company shall pay the cash value of any fraction of a Share upon the exercise of this Option.

 

Section 5.   Registered Holder Termination . In the event of the voluntary or involuntary termination (including by reason of death) of employment of the original Registered Holder of the Option for any reason whatsoever, all Options which have not vested pursuant to Sections 2.1 or 2.2 hereof shall expire and become void


 
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