THIS
OPTION (THE “ OPTION ”) HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “
ACT ”), OR ANY APPLICABLE STATE SECURITIES LAWS. THIS
OPTION MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED OR
HYPOTHECATED, EXCEPT IN COMPLIANCE WITH THE ACT, THE RULES AND
REGULATIONS THEREUNDER AND APPLICABLE STATE
LAWS.
MANY OF
THE TERMS AND CONDITIONS OF THIS OPTION ARE GOVERNED BY, AND SET
FORTH IN, THAT CERTAIN EMPLOYMENT AGREEMENT DATED SEPTEMBER 29,
2007 (THE “ EMPLOYMENT AGREEMENT ”) BETWEEN THE
COMPANY AND THE REGISTERED HOLDER, WHICH TERMS AND CONDITIONS ARE
INTENDED TO SUPPLEMENT THIS OPTION AS IF THEY WERE SET FORTH
HEREIN. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OR CONDITIONS
SET FORTH IN THIS AGREEMENT AND THOSE SET FORTH IN THE EMPLOYMENT
AGREEMENT, THE TERMS AND PROVISIONS SET FORTH IN THE EMPLOYMENT
AGREEMENT SHALL BE DETERMINATIVE AND CONTROL THE OUTCOME OF SUCH
CONFLICT.
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Registered Holder:
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EDWARD
S. FLEURY
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Certificate Number:
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A-9
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Date of Issuance:
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SEPTEMBER 29, 2008
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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 set forth above and ending at 11:59 p.m., New York
City time, on the tenth (10 th ) anniversary date of the
Date of Issuance, at the purchase price per share (the “
Exercise Price” ) of THREE DOLLARS AND THIRTY-SIXTY
AND EIGHT-TENTHS CENTS ($3.368), an
aggregate of five hundred thousand (500,000) shares (the “
Option Shares ”) of Common Stock, $.0001 par value, of
the Company; provided that this Option shall be exercisable
only with respect to “ Vested Options ” as set
forth in the schedule contained in Section 1 of this Option
and in the Employment Agreement. The number of Option Shares
purchasable upon exercise of this Option and the Exercise Price
shall be subject to adjustment from time to time as set forth
herein and in the Employment Agreement.
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 Registered
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 be determinative and control the
outcome of such conflict.
This Option is
subject to the following additional provisions:
Section
1.
Vesting
Criteria .
1.1.
This Option, and the Option Shares
that may be purchased hereunder, shall vest with respect to
one-thirty-sixth (1/36 th ) of the aggregate number of
Option Shares on the first day of each calendar month immediately
following Date of Issuance, subject to modification as
provided in the Employment Agreement. The portion of this Option
that shall have so vested and become exercisable is referred to
herein as the “ Vested Option .”
1.2.
Notwithstanding the foregoing, upon
a termination of the Registered Holder’s employment with the
Company under certain circumstances ( i ) following a Change
in Control of the Company (as such term is defined in the
Employment Agreement), the further vesting of this Option may be
modified and ( ii ) not following a Change in Control of the
Company, the further vesting of this Option shall expire and become
void and shall no longer be exercisable, in each case as set forth
in the Employment Agreement. Further, upon a termination of the
Registered Holder’s employment with the Company, the Vested
Option may be required to be exercised, if at all, within the time
periods set forth in the Employment Agreement.
2.1.
In the event that, after the date
hereof, the outstanding shares of Common Stock shall be increased
or decreased or changed into or exchanged for a different number or
kind of shares of capital stock or other securities of the Company
or of another corporation through reorganization, merger or
consolidation, recapitalization, reclassification, stock split,
split-up, combination or exchange of shares or declaration of any
dividends payable in Common Stock, the number of shares and kind of
shares of capital stock or other securities of the Company (and the
option price per share) subject to the unexercised portion of the
Option shall be proportionately adjusted to reflect such event (to
the nearest possible full share), and such adjustment shall be
effective and binding for all purposes of this
Agreement.
2.2
If any capital reorganization or
reclassification of the capital stock of the Company or any
consolidation or merger of the Company with another entity, or the
sale of all or substantially all its assets to another entity,
shall be effected after the date hereof in such a way that holders
of Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then the Company
shall thereafter have the right to deliver, upon the exercise of
the Option in accordance with the terms and conditions specified in
this Agreement and in lieu of the shares of Common Stock
immediately the