EMPLOYMENT AGREEMENT
Execution
Copy
THIS
EMPLOYMENT AGREEMENT
the
“Agreement”),
entered into as of September 29, 2008 (the “Effective
Date”),
between COMMAND
SECURITY CORPORATION,
a New
York corporation (the “Company”),
and
XXXXXX
X. XXXXXX
(the
“Executive”).
The
Company and the Executive are sometimes referred to in this Agreement
individually as a “Party”
and
collectively as the “Parties.”
RECITAL
The
Company desires to provide for the service and employment of the Executive
with
the Company and the Executive desires to perform services for, and be employed
by, the Company, in accordance with the terms and subject to the conditions
provided herein. All references herein to Sections shall be deemed to refer
to
the Sections of this Agreement, unless otherwise specified.
Accordingly,
in consideration of the premises and the respective covenants and agreements
of
the Parties herein contained, and for other good and valuable consideration,
the
receipt and sufficiency of which are hereby acknowledged, and intending to
be
legally bound hereby, the Parties hereby agree as follows:
1. Employment.
The
Company hereby agrees to employ the Executive, and the Executive hereby agrees
to serve the Company, upon the terms and subject to the conditions set forth
herein.
2. Term.
The term
of employment of the Executive by the Company hereunder (the “Term”)
will
commence as of the Effective Date and will end on the third anniversary of
the
Effective Date, unless further extended or sooner terminated as hereinafter
provided. Notwithstanding the foregoing, either the Company or the Executive
shall have the right to terminate this Agreement for any reason (or for no
reason) and end the Term at any time during Year 1 (as defined below in this
Section
2)
by
giving the other Party written notice thereof at least 30 days’ prior to the
first anniversary of the Effective Date, subject to the satisfaction of any
payment or other obligations of the Party providing such notice as set forth
in
this Agreement. Commencing on the third anniversary of the Effective Date,
and
on the first day of each one-year anniversary thereafter, the Term shall
automatically be extended for one additional year on
terms
no less favorable than in effect prior to such extension
unless
either Party shall have given notice to the other Party (a “Non-Renewal
Notice”)
at
least 60 days prior to such anniversary that it or he, as the case may be,
does
not wish to extend the Term. References herein to the Term
shall be
deemed to refer to both the initial term of this Agreement and any extended
term
hereof. Notwithstanding the foregoing, the Term shall end on the Date of
Termination (as defined in Section
6(c)
hereof).
If, pursuant to this Section
2,
either
Party properly provides the Non-Renewal Notice of its or his decision to not
extend the Term, the expiration of the Term and the termination of this
Agreement as a result thereof shall be deemed for all intents and purposes
to be
a termination of this Agreement pursuant to Section
6(d).
As used
in this Agreement, “Year
1”
means
the initial 12-month period commencing on the Effective Date and ending on
September 28, 2009; “Year
2”
means
the 12-month period commencing on September 29, 2009 and ending on September
28,
2010; and “Year
3”
means
the 12-month period commencing on September 29, 2010 and ending on September
28,
2011.
3. Nature
of Performance.
(a) Position
and Duties.
During
the Term, the Executive shall serve as Chief Executive Officer of the Company
and shall have such responsibilities, duties
and authority as are customary to such position including, without limitation,
overall supervision of the day-to-day operations of the Company and its
divisions. The Executive
shall
report directly to, and be subject to the direction and authority of, the Board
of Directors of the Company (the “Board”).
As
soon
as reasonably practicable following the Effective Date, the Board shall, to
the
extent permitted by applicable law take all action necessary to exercise its
rights under Article III Sections 2, 3 and 4 of the Company’s Bylaws to (i)
increase the number of directors constituting the entire Board from six (6)
to
seven (7); (ii) appoint Executive to fill the vacancy created by such increase;
and (iii) assign Executive to the class of directors with a term expiring at
the
Company’s next annual meeting of the Company’s shareholders.
In
addition, the Board shall duly consider recommending to the Company’s
shareholders that the Executive be appointed to the Board at the next annual
meeting of the Company’s shareholders and including the Executive on the slate
of Board Nominees in its related proxy materials to be filed and mailed in
connection with such annual meeting, subject to the recommendation thereof
by
the Nominating and Corporate Governance Committee of the Board and to the
determination by the Board that no matters, circumstances or other factors
exist
that would cause the Board to reasonably conclude that the election of the
Executive as a member of the Board would not be in the best interests of the
Company and its shareholders.
(b) Indemnification.
To the
fullest extent permitted by law, including, without limitation, the New York
Business Corporation Law and the Company's Certificate of Incorporation and
By-laws, the Company shall promptly indemnify the Executive for all amounts
(including, without limitation, judgments, fines, settlement payments, losses,
damages, costs and expenses (including reasonable attorneys' fees)) incurred
or
paid by the Executive in connection with any action, proceeding, suit or
investigation (a “Proceeding”)
arising out of or relating to the performance by the Executive of services
for,
or acting as a fiduciary of any employee benefit plans, programs or arrangements
of the Company or as a director, officer or employee of, the Company or any
subsidiary thereof. The Company shall advance to the Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within 15
days after receipt by the Company of a written request from the Executive for
such advance. The Company also agrees to maintain a directors’ and officers'
liability insurance policy covering the Executive to the maximum extent the
Company provides such coverage for any of its other executive officers.
Following the Term, the Company shall continue to indemnify and maintain such
insurance for the benefit of the Executive with respect to such services
performed during the Term, to the same extent as the Company indemnifies or
maintains such insurance for any of its officers, directors, employees or
fiduciaries, as applicable. Notwithstanding
any other provision of this Agreement to the contrary, no termination of
Executives employment for any reason shall serve to deprive Executive of the
benefits of this Section
3(b).
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4. Place
of Performance.
In
connection with the Executive's employment by the Company, the Executive shall
be based at the current principal executive offices of the Company in
Lagrangeville, New York, or at any other location as designated by the Board
of
Directors of the Company that is within 60 miles of either (i)
such
executive offices or (ii)
the
Borough of Manhattan, in New York, New York, except for travel as reasonably
required in connection with the performance of the Executive’s duties hereunder.
5. Compensation
and Related Matters.
(a)
Annual
Compensation.
(i) Base
Salary.
For
services rendered by the Executive to the Company pursuant to this Agreement,
the Company shall pay to the Executive an annual base salary (the Executive’s
annual base salary as in effect from time to time hereunder is hereinafter
referred to as the “Base
Salary”)
of
$290,000, such salary to be paid in conformity with the Company's policies
relating to salaried employees and executive officers generally. From time
to
time (but not less than annually), the Board or the compensation committee
of
the Board (the “Committee”)
will
review the Executive’s performance and will consider increasing the Base Salary
based on such performance, the performance and financial condition of the
Company and such other factors as the Board or the Committee, as the case may
be, shall deem appropriate. Notwithstanding the foregoing, any decision to
increase the Base Salary, and the amount thereof, if any, shall be in the sole
and absolute discretion of the Board or the Committee, as the case may be;
provided
that any
annual increase in Base Salary for the Executive awarded by the Board or
the Committee shall not be less, on a percentage basis, than the
higher of the increases, if any, for the corresponding year awarded by the
Board
or the Committee to either the Company's President or Chief Operating
Officer (either, a “Key
Officer”).
In
addition, the Executive shall be eligible for an increase whether or not an
increase is awarded to the Key Officers. Once increased,
the Base Salary shall not be reduced or diminished during the Term.
(ii) Annual
Bonus.
The
Executive shall be eligible to participate in any annual incentive plan of
the
Company in effect from time to time, and shall be entitled to receive such
amounts (each, a “Bonus”)
as may
be authorized, declared and paid by the Company pursuant to the terms of such
plan. In the event the Company does not have a bonus or incentive plan in place
at the time that a bonus is to be paid, the Board will make a good faith
evaluation of the Executive’s contribution to the Company and will duly reward
the Executive for the Company’s growth, profitability and other successes under
his leadership, as determined by the Committee.
3
(b) Stock
Option. On
the
Effective Date, the Company shall grant the Executive a stock option (the
“Option”)
to
purchase an aggregate of five hundred thousand (500,000) shares (as adjusted
for
any recapitalization, stock split, stock dividend or similar event affecting
the
number of the Company’s outstanding shares of Common Stock (as defined below)
generally, the “Option
Shares”)
of the
Company’s common stock, par value $0.001 per share (“Common
Stock”),
at a
price equal to the average closing price of such Common Stock on the American
Stock Exchange for the 20 trading days immediately preceding (but not including)
the Effective Date, subject to the vesting criteria and other limitations
described in this Section
5(b)
and in
the Stock Option Agreement attached hereto as Exhibit
A.
(i) Vesting
Generally.
Except
as provided below in paragraphs (ii)
or
(iii)
of
this
Section 5(b),
the
Option will vest, and may be exercised by the Executive during the time that
he
shall be employed by the Company under this Agreement, with respect to
1/36th
of the
Option Shares on the 1st
day of
each calendar month during the Term,
beginning October 1, 2008.
(ii) Vesting
Ends Upon Termination for any Reason—No Change in Control.
Except
as provided in Section
5(b)(iii)
below,
if the Executive's employment is terminated or the Executive resigns for any
reason (or for no reason) including, without limitation (A)
by
reason of the Executive's death or Disability; (B)
by the
Company with or without Cause; or (C)
voluntarily by the Executive with or without Good Reason, the Option:
(1) may
be
exercised only with respect to that portion of the Option that has vested prior
to such termination or resignation (subject to Section
6(d)(C)(1)
or (2));
and
(2) shall
terminate, be null and void and may no longer be exercised with respect to
the
portion of the Option that has not vested as of and upon the effective date
of
such termination or resignation.
(iii) Vesting
upon Termination following Change in Control.
Following the closing of a transaction that constitutes a “Change in Control” of
the Company (as defined in Section
6(f)),
so
long as the Executive continues to be employed by the Company (or any successor
company) under this Agreement, the Option shall continue to vest in accordance
with its terms on a monthly basis as provided in paragraph
(i)
of this
Section
5(b);
provided:
(A) If,
following a Change in Control, (1)
the
Executive’s employment is terminated for Cause or by reason of his death or
Disability; (2)
the
Executive voluntarily resigns (other than for Good Reason); or (3)
this
Agreement terminates as a result of the delivery by either Party to the other
Party of a Non-Renewal Notice, the Option:
(x) may
be
exercised only with respect to that portion of the Option that has vested prior
to such termination or resignation (subject to Section
6(d)(C)(1) or (2));
and
4
(y) shall
terminate, be null and void and may no longer be exercised with respect to
the
portion of the Option that has not vested as of and upon the effective date
of
such termination or resignation.
(B) If,
following a Change in Control, (1)
the
Executive’s employment is terminated without Cause; or (2)
the
Executive resigns for Good Reason, the Option shall accelerate and may be
exercised as to a portion, or all, of the Option Shares (subject to Section
6(d)(C)(1)
or (2)),
as
follows:
(x) if
such
termination or resignation occurs during Year 1, the Option shall accelerate
and
may be exercised with respect to 50% of the Option Shares, and the portion
of
the Option that has not vested prior to such termination or resignation (after
giving effect to such acceleration) shall terminate, be null and void and may
no
longer be exercised as of and upon the effective date of such termination or
resignation;
(y) if
such
termination or resignation occurs during Year 2, the Option shall accelerate
and
may be exercised with respect to 75% of the Option Shares, and the portion
of
the Option that has not vested prior to such termination or resignation (after
giving effect to such acceleration) shall terminate, be null and void and may
no
longer be exercised as of and upon the effective date of such termination or
resignation; and
(z) if
such
termination or resignation occurs during Year 3, the Option shall accelerate
and
may be exercised with respect to 100% of the Option Shares.
(c) Automobile
and Medical Allowance.
During
the Term, the Executive shall be entitled to receive an annual, non-accountable
expense allowance and payment of $25,000 in respect of (i)
all
health
insurance (covering hospitalization, prescription drugs and doctor’s
visits) for
him
and his family and (ii)
an
automobile of his choosing. Such expense allowance shall be in lieu of any
health
insurance (including, without limitation, any coverage for any hospitalization,
prescription drugs and doctor’s visits) from
the
Company in respect of (A)
health
benefits for the Executive or any member of his family or (B)
an
automobile during the Term or at any time or for any period following the
termination of this Agreement for any reason, whether or not otherwise required
under any law, regulation, Company policy or otherwise, the rights to all of
which the Executive hereby knowingly and voluntarily waives in all respects.
Such
$25,000 annual payment shall be made in a lump sum on the Effective Date and
on
each anniversary of the Effective Date during the Term.
(d) Other
Benefits.
During
the Term, the Executive shall be entitled to participate in all other employee
benefit plans, programs and arrangements of the Company, as now or hereinafter
in effect, that are applicable to the Company's employees generally or to any
of
its executive officers, as the case may be, subject to and on a basis consistent
with the terms, conditions and overall administration of such plans, programs
and arrangements, and subject to Section
5(c)
hereof.
During the Term, the Company shall provide to the Executive all of the fringe
benefits and perquisites that are available to the Company's employees generally
or to any of its executive officers, as the case may be, subject to and on
a
basis consistent with the terms, conditions and overall administration of such
benefits and perquisites, except as otherwise provided in this Agreement.
5
(e) Vacations
and Other Leaves.
During
the Term, the Executive shall be entitled to paid vacation of four weeks
annually and other paid absence for holidays in which banks in New York are
closed, in accordance with policies applicable generally to executive officers
of the Company; provided
that the
Executive shall use his best efforts to ensure that the timing and duration
of
vacations do not materially interfere with the normal functioning of the
Company’s business activities or the performance of the Executive’s duties
hereunder. The Executive shall be entitled to cash compensation (based on his
prevailing Base Salary) for up to two weeks of any vacation time unused by
Executive in each 12-month period within the Term.
(f) Expenses.
During
the Term, the Executive shall be entitled to receive prompt reimbursement for
all reasonable expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and accommodations while away from
home on business or at the request of and in the service of the Company;
provided
that
such expenses are incurred and accounted for in accordance with the policies
and
procedures in existence on the Effective Date or hereafter established by the
Company from time to time.
(g) Other
Services.
The
Company shall furnish the Executive with office space, secretarial assistance
and such other facilities and services as shall be suitable to the Executive's
position and adequate for the performance of his duties hereunder.
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6.
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Termination.
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(a) Termination
Events.
The
Executive's employment hereunder may be terminated during Year 1 as described
in
Section
2
and
otherwise without breach of this Agreement in accordance with only under the
following circumstances:
(i) Death.
The
Executive's employment hereunder shall terminate upon his death.
(ii) Cause.
The
Company may terminate the Executive's employment hereunder for "Cause." For
purposes of this Agreement, “Cause”
shall
mean the Executive’s:
(A) failure
to timely cure any material violation of any of the terms and conditions of
this
Agreement or any written agreement the Executive may from time to time have
with
the Company following written notice thereof (as specified below);
(B) failure
to timely cure any material failure to perform his assigned duties and
responsibilities for any reason other than as a result of his Disability (as
defined in Section
6(a)(iii))
following written notice thereof (as specified below);
6
(C) conviction
of or plea of guilty or no contest to a (1)
criminal misdemeanor that either (x)
involves dishonesty or theft or (y)
results
in the Executive receiving a sentence of imprisonment or confinement of six
months or more or (2)
felony;
(D) conviction
of or plea of guilty or no contest to a crime involving moral turpitude;
or
(E) failure
to timely cure any unsatisfactory performance of his duties or responsibilities
hereunder as a consequence of alcohol or drug abuse by the Executive following
written notice thereof (as specified below).
(iii) A
termination for Cause pursuant to clauses (A),
(B),
or
(E)
of this
Section
6(a)(ii)
shall
not take effect unless the following provisions of this paragraph are complied
with. The Executive shall be given written notice by the Board of its intention
to terminate him for Cause. Such notice shall (A)
state
in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Cause is based
and
(B)
be
given within three months of the Board learning of such act or acts or failure
or failures to act. The Executive shall have 30 days after the date that such
written notice has been received by the Executive to cure such conduct. Upon
receipt of such written notice, the Executive shall be entitled to a hearing
before the Board. Such hearing shall be held within 15 days of such notice
to
the Executive, provided he requests such hearing within ten days of the written
notice from the Board of the intention to terminate him for Cause. If, within
five days following such hearing, the Board provides the Executive with written
notice confirming that, in its judgment, grounds exist for termination for
Cause
on the basis of the original notice, the employment of the Executive shall
terminate for Cause; provided
that the
Executive shall not thereafter be precluded from challenging the Company’s
determination to terminate the Executive for Cause. Nothing
herein shall be deemed to allow the Date of Termination (as hereinafter defined)
for
Cause
pursuant to clauses (A),
(B),
or
(E)
of this
Section
6(a)(ii) to
occur
prior to the expiration of the 30 day cure period provided for
above.
(iv) Disability.
The
Company may terminate the Executive's employment hereunder for “Disability.” For
purposes of this Agreement, “Disability”
shall
mean the Executive’s material inability, by reason of illness or other physical
or mental disability, to perform the principal duties required by the position
held by the Executive at the inception of such illness or disability, for any
consecutive 180-day period. A determination of Disability shall be subject
to
the certification of a qualified medical doctor agreed to by the Company and
the
Executive or, if the Executive is unable to designate a doctor as a consequence
of his condition, by the Executive’s legal representative. If the Company and
the Executive cannot agree on the designation of a doctor, then each Party
shall
nominate a qualified medical doctor and the two doctors shall select a third
doctor, and the third doctor shall make the determination as to Disability.
7
(iv) Termination
by the Executive.
The
Executive may terminate his employment hereunder (A)
for
Good Reason or (B)
by
voluntarily resigning without Good Reason. For the purpose of this Agreement,
“Good
Reason”
shall
mean (A)
any
material diminution in the Executive’s title, position, responsibilities,
authority or duties described in Section
3(a)
hereof;
(B)
any
breach of the provisions of Section
4
hereof
with respect to the place of performance of the Executive’s services hereunder;
or, (C)
any
breach by the Company of the provisions of Section
3(b)
or
Section
5
hereof
with respect to compensation and related matters. A termination by the Executive
for Good Reason pursuant to clauses (A),
(B)
or
(C)
of this
Section
6(a)(iv)
shall
not take effect unless the following provisions of this paragraph are complied
with. The Company shall be given written notice by the Executive of his
intention to terminate this Agreement for Good Reason. Such notice shall
(1)
state
in detail the particular act or acts or failure or failures to act that
constitute the grounds on which the proposed termination for Good Reason is
based and (2)
be
given within 30 days of the Executive learning of such act or acts or failure
or
failures to act. The Company shall have 30 days after the date that such written
notice has been received by the Company to cure such conduct. Upon receipt
of
such written notice, the Board shall be entitled to request a meeting with
the
Executive to discuss the Executive’s request to terminate this Agreement for
Good Reason. Such hearing shall be held within 15 days of such notice to the
Executive, provided the Board requests such hearing within ten days of the
written notice from the Executive of his intention to terminate this Agreement
for Good Reason. If, within five days following such hearing, the Executive
provides the Board with written notice confirming that, in his judgment, grounds
exist for termination for Good Reason on the basis of the original notice,
the
employment of the Executive shall terminate for Good Reason; provided
that the
Company shall not thereafter be precluded from challenging the Executive’s
determination to terminate this Agreement for Good Reason.
(b) Notice
of Termination.
Any
termination of the Executive's employment by the Company or by the Executive
(other than termination under Section
6(a)(i))
shall
be communicated by written Notice of Termination to the other Party in
accordance with Section
11
hereof.
For purposes of this Agreement, a “Notice
of Termination”
shall
mean a written notice that shall indicate the specific termination provision
in
this Agreement relied upon and, in the case of a termination by the Company
for
Cause or by the Executive for Good Reason, shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(c) Date
of Termination.
“Date
of Termination”
shall
mean (i)
if the
Executive's employment is terminated by his death, the date of his death;
(ii)
if the
applicable Term expires because either Party has provided the other Party a
Non-Renewal Notice in accordance with Section
2
hereof,
the expiration of the prevailing Term; or (iii)
if the
Executive's employment is terminated or the Executive resigns for any other
reason (or for no reason), the date specified in the Notice of Termination,
subject to compliance with the terms and conditions of this
Agreement.
8
(d) Termination
Upon Death; Disability; for Cause; Voluntary Termination (other than for Good
Reason); Failure to Extend Term.
If the
Executive's employment is terminated or this Agreement terminates (i)
by
reason of the Executive's death or Disability; (ii)
by the
Company for Cause; (iii)
voluntarily by the Executive (other than for Good Reason); or (iv)
by
either Party as a result of the delivery by such Party to the other Party of
a
Non-Renewal Notice:
(A)
the
Company shall, as soon as practicable, but no later than 30 days following
the
Date of Termination, pay the Executive (or the Executive's beneficiary, as
the
case may be) all unpaid amounts, if any, to which the Executive is entitled
through the Date of Termination under Sections
5(a)(i),
5(c)
and
5(e)
(to the
extent earned but not paid or taken, and reduced or offset to reflect any
advance payment relating to any period following the Date of Termination) and
shall reimburse the Executive for expenses incurred by the Executive but not
reimbursed prior to the Date of Termination, subject to and in accordance with
Section
5(f)
hereof
(the amounts described in this paragraph (A) are collectively referred to herein
as the “Accrued
Obligations”);
(B)
the
Executive's entitlements in respect of the Option shall be as provided for
in
Section
5(b)(ii)
or
Section
5(b)(iii),
as
applicable; and
(C)
the
Executive's entitlements in respect of any other options, share units and any
other long-term incentive awards that may have been granted to the Executive
pursuant to Section
5(d)
that are
outstanding as of the Date of Termination shall be as provided for in the
respective agreements setting forth the terms and conditions of each award,
if
any, it being specifically understood that, except as provided in Section
6(d)(B)
with
respect to the Option, any unvested options, share units and any other awards
shall, upon termination of the Executive’s employment pursuant to this
Section
6(d),
be
forfeited as of the Date of Termination; provided
that any
stock options or other rights to acquire capital stock of the Company that
have
vested and may be exercised by the Executive (or his estate) as of the Date
of
Termination must be exercised, if at all, (1)
within
180 days following the Date of Termination in connection with a termination
upon
the Executive’s death or Disability and (2)
within
60 days following the Date of Termination in the event that the Executive has
been terminated or for Cause or has voluntarily terminated this Agreement by
resigning (other than for Good Reason) or this Agreement has terminated upon
the
expiration of the Term because either Party has provided the other Party with
a
Non-Renewal Notice, after which time, such options and rights shall expire
and
terminate. Upon satisfaction of the Company’s obligations under paragraphs
(A),
(B)
and
(C)
of this
Section
6(d),
the
Company shall have no further obligations to the Executive under this Agreement
or otherwise, except for the Company’s continuing obligations under Section
3(b)
hereof
and the indemnification and advancement of expenses provisions of the Company’s
Certificate of Incorporation and By-laws.
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(e) Termination
by the Company (other than for Cause, Disability or Death) or by the Executive
for Good Reason—No Change in Control.
If the
Executive's employment is terminated or this Agreement terminates (i)
by the
Company (other than for Cause or upon the Executive’s Disability or death) or
(ii)
by the
Executive for Good Reason, then, subject to compliance with the provisions
of
Sections
7
and
8
hereof
and except as otherwise provided in Section
6(f)
hereof,
within 20 days following the Date of Termination:
(A) the
Company shall pay to the Executive or otherwise cause to be satisfied the
Accrued Obligations;
(B) (i) If
such
termination occurs during Year 1, Company shall pay the Executive a lump sum
amount equal to the lesser of (1)
the
balance of his Base Salary for the remainder of Year 1 and (2)
three
months’ Base Salary;
(ii) If
such
termination occurs during Year 2, Company shall pay the Executive a lump sum
amount equal to six months’ Base Salary; or
(ii) If
such
termination occurs during Year 3 or thereafter, Company shall pay the Executive
a lump sum amount equal to one year of Base Salary;
(iii) the
Company shall reimburse the Executive for expenses incurred by the Executive
but
not reimbursed prior to the Date of Termination, subject to and in accordance
with Section
5(f)
hereof;
(iv) the
Executive's entitlements in respect of the Option shall be as provided for
in
Section
5(b)(ii)
or
Section
5(b)(iii),
as
applicable; and
(v) the
Executive's entitlements in respect of any other options, share units and any
other long-term incentive awards that may have been granted to the Executive
pursuant to Section
5(d)
that are
outstanding as of the Date of Termination shall be as provided for in the
respective agreements setting forth the terms and conditions of each award,
if
any, it being specifically understood that, except as provided in Section
6(d)(B)
with
respect to the Option, any unvested options, share units and any other awards
shall, upon termination of the Executive’s employment pursuant to this
Section
6(e),
be
forfeited as of the Date of Termination; provided
that any
stock options or other rights to acquire capital stock of the Company that
have
vested and may be exercised by the Executive (or his estate) as of the Date
of
Termination must be exercised, if at all, within 180 days following the Date
of
Termination in connection with a termination of the Executive’s employment
pursuant to this Section
6(e),
after
which time, such options and rights shall expire and terminate.
Upon
satisfaction of the Company’s obligations under this Section
6(e),
the
Company shall have no further obligations to the Executive under this Agreement
or otherwise, except as may be provided below in Section
6(f)
in
connection with the termination of the Executive’s employment following a Change
in Control, if and to the extent applicable, except for the Company’s continuing
obligations under Section
3(b)
hereof
and the indemnification and advancement of expenses provisions of the Company’s
Certificate of Incorporation and By-laws.
10
(f) Termination
of Employment Following a Change in Control.
(i) Termination
Upon Death; Disability; for Cause; Voluntary Termination (other than for Good
Reason); Failure to Extend Term.
If the
Executive's employment is terminated or this Agreement terminates (A)
by
reason of the Executive's death or Disability; (B)
by the
Company for Cause; (C)
voluntarily by the Executive (other than for Good Reason); or (D)
by
either Party as a result of the delivery by such Party to the other Party of
a
Non-Renewal Notice, the Executive shall be entitled to the payments, rights
and
benefits provided in and in accordance with Section
6(d).
(ii) Termination
of Employment by the Company (other than for Cause, Disability or Death) or
by
the Executive for Good Reason.
If,
following a Change in Control, (A)
the
Company (or any successor to the Company by virtue of such Change in Control,
as
the case may be) shall terminate the Executive's employment (other than for
Cause, or upon the Executive’s Disability or death) or (B)
the
Executive shall terminate his employment for Good Reason, the Executive shall
be
entitled to the payments, rights and benefits provided in and in accordance
with
Section
6(e).
For
the
purpose of this Agreement, a “Change
in Control”
shall
mean the occurrence of any of the following events:
(1) any
“person”
or
“group,”
(as
such terms are defined and applied in Section 13(d) of the Securities Exchange
Act of 1934 (the “1934
Act”))
that
is not the beneficial owner (within the meaning of Rule 13d-3 promulgated under
the 1934 Act), directly or indirectly, of more than ten percent (10%) of the
Company’s issued and outstanding voting securities as of the Effective Date is
or becomes (directly or indirectly) the “beneficial owner” (within the meaning
of Rule 13d-3 promulgated under the 1934 Act), of the voting securities of
the
Company representing more than 50% of the total issued and outstanding voting
securities of the Company; or
(2) a
majority of the Board consists of individuals other than “Incumbent Directors,”
which term means the members of the Board on the Effective Date; provided
that any
individual becoming a director subsequent to such date whose election or
nomination for election was supported by two-thirds of the directors who then
comprised the Incumbent Directors shall be considered to be an Incumbent
Director; or
(3) the
Board
adopts any plan of liquidation providing for the distribution of all or
substantially all of the Company’s assets or business, other than in connection
with a bankruptcy, insolvency or similar event involving the Company;
or
11
(4) all
or
substantially all of the assets or business of the Company is disposed of
pursuant to a merger, consolidation or other transaction (unless the
stockholders of the Company immediately prior to such merger, consolidation
or
other transaction beneficially own, directly or indirectly, in substantially
the
same proportion as they owned the voting securities of the Company, all of
the
voting securities or other ownership interests of the entity or entities, if
any, that succeed to the business of the Company); or
(5) the
Company combines with another company and is the surviving corporation but,
immediately after the combination, the holders of voting securities of the
Company immediately prior to the combination hold, directly or indirectly,
50%
or less of the voting securities (measured by number of votes entitled to be
cast) of the combined company (there being excluded from the number of shares
held by such stockholders, but not from the voting securities of the combined
company, any shares received by affiliates of such other company in exchange
for
stock of such other company).
(g) Nature
of Payment.
Any
amounts due under this Section
6
are in
the nature of severance payments considered to be reasonable by the Company
and
are not in the nature of a penalty.
7. Company
Policies.
(a) The
Executive shall strictly follow and adhere to all written policies of the
Company (“Company
Policies”)
that
are not inconsistent with this Agreement or applicable law including, without
limitation, securities laws compliance (including, without limitation, use
or
disclosure of material nonpublic information, restrictions on sales of Company
stock, and reporting requirements), conflicts of interest (including, without
limitation, doing business with the Company or its affiliates without the prior
approval of the Board), and employee harassment.
(b) Whenever
any rights under this Agreement depend on the terms of a Company Policy, plan
or
program established or maintained by the Company, any determination of these
rights shall be made on the basis of the policy, plan or program in effect
at
the time as of which the determination is made. No reference in this Agreement
to any policy, plan or program established or maintained by the Company shall
preclude the Company from prospectively changing or amending or terminating
that
policy, plan or program or adopting a new policy, plan or program in lieu of
the
then-existing policy, plan or program. Notwithstanding
any provision of this Section
7(b)
to the
contrary, in the event of an inconsistency between the terms of this Agreement
and the contents of any such Company Policy, plan or program, the terms of
this
Agreement shall control the relationship between the parties
hereto.
12
8. Confidentiality.
The
Executive will not at any time (whether during or after Executive’s employment
with the Company) disclose (other than as may be required by law or order of
a
court or governmental body) or use for Executive’s own benefit or purposes, or
for the benefit or purpose of any other person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise, any trade secrets or non-public information, data, or other
confidential information relating to customers, employees, job applicants,
services, development programs, prices, costs, marketing, trading, investment,
sales activities, promotion, processes, systems, credit and financial data,
financing methods, plans, proprietary computer software, request for proposal
documents, or the business and affairs of the Company generally, or of any
affiliate of the Company; provided, however, that the foregoing shall not apply
to information which is generally known to the industry or the public other
than
as a result of the Executive’s breach of this covenant or that was known to the
Executive prior to the Effective Date. The Executive agrees that upon
termination of his employment with the Company for any reason, he will return
to
the Company immediately all memoranda, books, papers, plans, information,
letters and other data, and all copies thereof or therefrom (whether in written,
printed or electronic form), in any way relating to the business of the Company
and its affiliates. The Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions
of
this Section
8
would be
inadequate and, in recognition of this fact, the Executive agrees that, in
the
event of such a breach or threatened breach, in addition to any remedies at
law,
the Company, without posting any bond, shall be entitled to obtain equitable
relief in the form of specific performance, a temporary restraining order,
a
temporary or permanent injunction or any other equitable remedy which may then
be available.
9. Exclusive
Services; Covenant Not to Compete during Term.
The
Executive shall devote all of his working time and efforts to the business
and
affairs of the Company and shall not engage in activities that interfere with
such performance; provided
that
this Agreement shall not be interpreted to prohibit the Executive from managing
his personal investments and affairs, engaging in charitable activities or
serving on the board of directors of any other corporation or other entity
so
long as such activities do not interfere with the performance of his duties
hereunder, subject to compliance with the Company Policies referred to in
Section
7.
Further, the Executive agrees, in consideration of the payments, rights and
benefits provided or to be provided to the Executive hereunder, that at any
time
during the Executive’s employment with the Company the Executive shall not, in
any location, engage in any business, whether as an employee, consultant,
partner, principal, agent, representative or stockholder (other than as a
beneficial owner of less than one percent (1%) of the outstanding equity
interests of such business) or in any other corporate or representative capacity
with any other business, whether in corporate, proprietorship, partnership
form
or otherwise, where such business is engaged in any activity which competes
with
the business of the Company as conducted on the Effective Date or at any other
time during the Term.
10. Successors;
Binding Agreement.
(a) Neither
this Agreement nor any rights hereunder may be assigned or otherwise
hypothecated by the Executive (except by will or by operation of the laws of
intestate succession or except as expressly provided in this Agreement or in
any
plan or agreement that is the subject matter hereof) or by the Company, except
that the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the
business and/or assets of the Company, by agreement in form and substance
reasonably satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, “Company”
shall
mean the Company as defined above and any successor to its business and/or
assets as aforesaid that executes and delivers the agreement provided for in
this Section
10
or that
otherwise becomes bound by the terms and provisions of this Agreement by
operation of law.
13
(b) This
Agreement and all rights of the Executive hereunder shall inure to the benefit
of and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be payable
to him hereunder if he had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement
to
the Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
11. Notices.
For
the
purposes of this Agreement, notices, demands and all other communications
provided for in this Agreement shall be in writing and, except with respect
to
notices, demands and all other communications mailed by United States certified
or registered mail which shall be deemed given three business days after being
mailed, shall be deemed to have been duly given when delivered personally,
dispatched by private courier such as Federal Express or United Parcel Service,
or (unless otherwise specified) mailed by United States certified or registered
mail, return receipt requested, postage prepaid, addressed as follows:
If
to the Company:
Command
Security Corporation
Lexington
Park
Route
55
Lagrangeville,
N.Y. 12540
Attn:
Chairman, Board of Directors
with
a copy to:
Xxxxx
& XxXxxxx LLP
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxx Xxxxx, Esq.
xxxxxx@xx.xxx
If
to the Executive:
Xxxxxx
X.
Xxxxxx
0
Xxxxxxx
Xxxxx
Xxxxxx
Xxxxxx, XX 00000
xxxxxxxx@xxxxxxxxx.xxx
14
with
a copy to:
Xxxxxxx
Xxxxxxx LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxx X. Xxxxxx, Esq.
xxxx.xxxxxx@xxxxxxx.xx.xxx
or
to
such other address as any Party may have furnished to the other in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
12. Miscellaneous.
No
provisions of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing signed by the
Executive and a duly authorized officer of the Company. No waiver by either
Party at any time of any breach by the other Party of, or compliance with,
any
condition or provision of this Agreement to be performed by such other Party
shall be deemed a waiver of similar or dissimilar provisions or conditions
at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either Party that are not set forth expressly in this
Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York without regard
to its conflicts of law principles. All payments hereunder shall be subject
to
applicable federal, State and local tax withholding requirements.
13. Company's
and Executive's Representations and Warranties.
(a) The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement and that the performance of its obligations under
this
Agreement will not violate any agreement between it and any other person, firm
or organization.
(b) The
Executive represents and warrants that he has the legal right to enter into
this
Agreement and perform all of the material obligations on his part to be
performed hereunder in accordance with its terms and that he is not a party
to
any agreement or understanding, written or oral, that prevents him from entering
into this Agreement or performing his material obligations under this Agreement.
Notwithstanding any other provision of this Agreement, in the event of a breach
of any representation or warranty on the Executive's part, the Company shall
have the right to terminate this Agreement forthwith, but in no event before
complying with the notice provisions set forth herein, and the Company shall
have no further obligations to the Executive except as otherwise provided in
this Agreement.
14. Validity.
The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
15. Counterparts.
This
Agreement may be executed counterparts, each of which shall be deemed to be
an
original but both of which together will constitute one and the same instrument.
15
16. Arbitration.
Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before one arbitrator to be
mutually agreed upon by the parties hereto. In the event the parties are unable
to agree upon an arbitrator, the Company and the Executive shall each appoint
an
arbitrator, and these two arbitrators shall select a third, who shall be the
arbitrator. Arbitration shall be held in New York, New York, in the Borough
of
Manhattan, in accordance with the rules of the American Arbitration Association
then in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction; provided however, that the Company shall be entitled to
seek a restraining order or injunction in any court of competent jurisdiction
to
prevent any continuation of any violation of the provisions of Section
8
or
9
of this
Agreement and the Executive hereby consents that such restraining order or
injunction may be granted without the necessity of the Company's posting any
bond, it being acknowledged and agreed that any breach or threatened breach
of
the provisions of Section
8
or
9
will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company. Each Party shall bear its own costs and
expenses (including, without limitation, legal fees) in connection with any
arbitration proceeding instituted hereunder, except that the each Party agrees
to pay the reasonable costs and attorney fees incurred by the other Party
resulting from such other Party’s successful enforcement of the terms and
provisions of this Agreement or resulting from such Party’s successful defense
against any claims, actions, or proceedings made or initiated by the other
Party
hereunder. Furthermore, each Party shall bear its own costs and expenses
(including, without limitation, legal fees) in connection with any efforts
by
the Company to seek a restraining order or injunction to prevent an alleged
violation of the provisions of Section
8
or
9
of the
Agreement, except that the each Party agrees to pay the reasonable costs and
attorney fees incurred by the other Party resulting from such other Party’s
successful defense against any such proceedings initiated by the other Party
hereunder.
17. Survival.
The
respective rights and obligations of the parties hereunder shall survive any
termination of the Executive's employment to the extent necessary to the
intended preservation of such rights and obligations.
18. Expenses
in connection with this Agreement.
The
Company shall pay all of the Executive’s reasonable legal fees and expenses in
connection with the preparation, negotiation and execution of this Agreement
in
an amount not to exceed $5,000 (or $7,500 if reasonably required and requested
by the Executive).
19. Entire
Agreement.
This
Agreement and the Option Agreement attached hereto as Exhibit A set forth the
entire agreement of the Parties in respect of the subject matter contained
herein and therein and all other prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any Party, and any prior
agreement of the parties hereto in respect of the subject matter contained
herein is hereby superseded by this Agreement and terminated and cancelled.
To
the extent that this Agreement and any other agreement between the Parties
provide duplicative payments or benefits, this Agreement and any such other
agreement shall be construed so as to prevent such duplication.
[Signatures
on following page]
16
IN
WITNESS WHEREOF,
the
Parties have executed this Agreement as of the Effective Date.
|
COMMAND
SECURITY CORPORATION
|
||||
|
By:
|
/s/
Xxxxx X.Xxxxxxxxxx
|
|||
|
Name:
Xxxxx X. Xxxxxxxxxx
|
||||
|
Title:
President and Chief Financial Officer
|
||||
|
EXECUTIVE
|
||||
|
/s/
Xxxxxx X. Xxxxxx
|
||||
|
Xxxxxx
X. Xxxxxx
|
||||
17
EXHIBIT
A
STOCK
OPTION
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.
|
|
Registered
Holder:
|
XXXXXX
X. XXXXXX
|
|
|
|
|
|
|
Certificate
Number:
|
A-9
|
|
|
|
|
|
|
Date
of Issuance:
|
SEPTEMBER
29, 2008
|
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 (10th)
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.
A-1
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 (1/36th)
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.
Section
2. Adjustments.
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 theretofore
deliverable upon the exercise of the Option, such shares of stock, securities
or
assets (including, without limitation, cash) as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore so
deliverable had such reorganization, reclassification, consolidation, merger
or
sale not taken place.
A-2
Section
3. Exercise
of Option.
Upon any
partial exercise of this Option, there shall be countersigned and issued to
the
Registered Holder hereof a new Option in respect of the Option 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 Option Shares evidenced
by the Option or Options exchanged. No fractional Option Shares will be issued
upon the exercise of rights to purchase hereunder, but the Company shall pay
the
cash value of any fraction of an Option Share upon the exercise of this Option.
Section
4. No
Voting Rights.
This
Option will not entitle the Registered Holder hereof to any voting rights or
other rights as a stockholder of the Company.
Section
5. Section
83(b) Election.
If as a
result of exercising all or any part of this Option, the Registered Holder
receives Option Shares that are subject to a “substantial risk of forfeiture”
and are not “transferable” as those terms are defined for purposes of Section
83(a) of the Internal Revenue Code, then such Registered Holder may elect under
Section 83(b) of the Internal Revenue Code to include in the Registered Holder's
gross income, for the Registered Holder's taxable year in which the Option
Shares are transferred to the Registered Holder, the excess of the fair market
value of such Option Shares at the time of transfer (determined without regard
to any restriction other than one that by its terms will never lapse), over
the
amount paid for the Option Shares. If the Registered Holder makes the Section
83(b) election described above, the Registered Holder shall (i)
make
such election in a manner that is satisfactory to the Committee, (ii)
provide
the Company with a copy of such election, (iii)
agree
to promptly notify the Company if any Internal Revenue Service or state tax
agent, on audit or otherwise, questions the validity or correctness of such
election or of the amount of income reportable on account of such election,
and
(iv)
agree
to such tax withholding as the Company may reasonably require in its sole and
absolute discretion.
Section
6. No
Right to Employment.
This
Option shall not confer upon the Registered Holder any right to
employment.
Section
7. Compliance
with the Act; Transferability.
7.1. Compliance
with the Act.
The
Registered Holder acknowledges that neither this Option nor the Option Shares
issuable upon exercise of this Option have been registered under the Act or
the
securities laws of any state and agrees that this Option and all Option Shares
purchased upon exercise hereof shall be disposed of only in accordance with
the
Securities Act of 1933, as amended (the “Act”),
and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder and applicable state securities laws. Except as provided herein,
the
Registered Holder further agrees not to offer, sell, transfer or otherwise
dispose of this Option or any of such Option Shares issuable upon exercise
of
this Option to any other person unless a registration statement covering the
sale, transfer or other disposition shall then be effective under the Act and
except in compliance with any applicable state securities laws, or there shall
have been delivered to the Company an opinion of counsel reasonably acceptable
to the Company to the effect that such offer, sale, transfer or other
disposition may be effected without compliance with the registration and
prospectus delivery requirements of the Act and any applicable state securities
laws. Each certificate evidencing Option Shares purchased upon exercise of
this
Option shall bear a legend to the foregoing effect, and the Registered Holder
and any other Person to whom a certificate for Option Shares is to be delivered
shall be required, at or before receipt of such certificate, to execute and
deliver to the Company a letter to the effect that it is acquiring the Option
Shares evidenced by such certificate for its own account and not with a view
to,
or for resale in connection with, any distribution thereof.
A-3
7.2. Transferability
of Options.
This
Option shall be transferable only on the books of the Company maintained at
the
principal office of the Company. The transferability of the Option is limited
to
the Registered Holder's estate or family trust for which the Registered Holder
is a trustee and the sole beneficiary.
Section
8. Notice
of Certain Events.
8.
1. Adjustment
of Exercise Price.
Immediately upon any adjustment of the Exercise Price, the Company will give
written notice thereof to the Registered Holder.
8.2. Dividend
Distributions, etc.
The
Company will give written notice to the Registered Holder at least ten calendar
days prior to the date on which the Company closes its books or takes a record
(i)
with
respect to any dividend or distribution upon the Common Stock, and (ii)
with
respect to any pro
rata
subscription offer to holders of Common Stock (although the Company shall have
no obligation to cause to occur any of the events set forth in the foregoing
subparagraphs (i) or (ii)).
8.3. Other
Events.
The
Company will give written notice to the Registered Holder at least ten (10)
calendar days prior to the date on which any dissolution, liquidation, capital
reorganization, reclassification, consolidation or merger (in which the Company
is not the surviving corporation) or sale of all or substantially all of the
Company's assets will take place.
Section
9. Supplements
and Amendments.
The
Board of Directors of Company may from time to time supplement or amend this
Option in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with the Company's
policies or operations as in effect on the date hereof.
Section
10. Notices.
Except
as otherwise expressly provided herein, all notices referred to in this Option
will be in writing and will be delivered personally, mailed by registered or
certified first class mail, return receipt requested, postage prepaid or
transmitted by telegram, telecopy or telex, and will be deemed to have been
given when so delivered, mailed or transmitted to the Company or to the
Registered Holder as set forth in the Employment Agreement.
Section
11. Other.
The
Registered Holder hereof may be treated by the Company and all other persons
dealing with this Option as the absolute owner hereof for any purpose and as
the
person entitled to exercise the rights represented hereby, or to the transfer
hereof on the books of the Company any notice to the contrary notwithstanding,
and until such transfer on such books, the Company may treat the Registered
Holder hereof as the owner for all purposes.
Section
12. Law
Governing.
This
Agreement shall be construed in accordance with and governed by the internal
laws of the State of New York, without regard to any conflict of law rule or
principle that would give effect to the laws of another
jurisdiction.
Section
13. Interpretation.
The
Registered Holder accepts this Option subject to all the terms and provisions
of
the this Agreement, the Employment Agreement and the Plan, and the terms and
conditions of the Employment Agreement and the Plan that relate to the Option
are incorporated herein by reference as if set forth in full herein.
A-4
IN
WITNESS WHEREOF,
the
Company has caused this Option to be signed by its duly authorized officer
and
to be dated the Date of Issuance hereof.
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COMMAND
SECURITY CORPORATION
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By:
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Xxxxx
X. Xxxxxxxxxx
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President
and Chief Financial Officer
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AGREED
TO
AND
ACCEPTED:
OPTIONEE:
Xxxxxx
X.
Xxxxxx
A-5
EXHIBIT
I
COMMON
STOCK OPTION
EXERCISE
AGREEMENT
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TO:
_____________________________
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DATED:
_______________
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The
undersigned, pursuant to the provisions set forth in the attached Option
(Certificate No. __________), hereby agrees to subscribe for the purchase of
________ Option Shares of the Common Stock covered by such Option and makes
payment herewith in full therefor at the price per Option Share provided by
such
Option.
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By:________________________________
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Name:______________________________
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Address:____________________________
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________________________________
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Witness:________________________________
Name:__________________________________
Address:_______________________________
______________________________
A-6
