Exhibit 10.1

 

NONQUALIFIED STOCK OPTION CANCELLATION AGREEMENT

 

THIS NONQUALIFIED STOCK OPTION CANCELLATION AGREEMENT (the “Agreement”), dated
as of August 27, 2013 (hereinafter the “Effective Date”), is made by and between
Command Security Corporation, a New York corporation (the “Company”), and Barry
I. Regenstein (the “Executive”).

 

WHEREAS, the Company has previously entered into a nonqualified stock option
agreement under which the Executive was granted an option to purchase 500,000
shares of the Company’s common stock, dated as of August 30, 2004 (the “Option
Agreement”); and

 

WHEREAS, the Executive currently holds a vested nonqualified stock option to
purchase 362,718 shares of the Company’s common stock for $1.35 per share under
the Option Agreement (the “Option”); and

 

WHEREAS, the Company and the Executive have mutually agreed to cancel the Option
in exchange for a lump sum cash payment from the Company to the Executive, upon
the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties hereby agree as follows:

 

1.     Cancellation of Option. As of the Effective Date, the Option, which the
parties acknowledge is the only option to purchase shares of the Company’s
common stock held by the Executive that remains outstanding, shall no longer be
exercisable and shall be deemed canceled and terminated (without any further
action on the part of the Executive or the Company). Except with respect to the
cash payment described in Section 2 below, the Company shall not have any
further obligations or liabilities to the Executive with respect to the Option
or under any agreements evidencing and/or governing the grant of the Option.

 

2.     Cash Payment. As soon as practicable following the Effective Date,
subject to the Executive’s execution of this Agreement, the Company shall pay to
the Executive a lump sum cash payment of $72,544, less all applicable federal,
state and local taxes.

 

3.     General Release. In consideration of the cash payment provided to the
Executive under this Agreement, the sufficiency of which the Executive hereby
acknowledges, the Executive releases the Company and its subsidiaries and all of
their past, present and future shareholders, directors, officers, employees,
agents, divisions, parents, subsidiaries, related companies, affiliates and
assigns, from any and all claims, charges, demands, suits, rights or causes of
action, at law or equity or otherwise, which he may ever have had, has now or
may ever have in the future or which his heirs, executors or assigns can or
shall have, against any or all of them, whether known or unknown, up until the
Effective Date, on account of or arising out of the Option Agreement or the
Option. The Executive specifically waives the benefit of any statute or rule of
law, which, if applied to the instant Agreement, would otherwise exclude from
its binding effect any claims not now known by the Executive to exist.

 

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4.Miscellaneous.

 

(a)        Code Section 409A. The Option was designed to be exempt from Section
409A of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (“Section 409A”). All payments and benefits under this Agreement are
intended either to be exempt from, or to comply with, the requirements of
Section 409A, and this Agreement shall be interpreted in accordance with such
intent.

 

(b)        No Rights to Employment. Nothing contained in this Agreement shall be
construed as giving the Executive any right to be retained, in any position, as
an employee, consultant or director of the Company.

 

(c)        Successors.

 

     (i)         This Agreement is personal to the Executive and without the
prior written consent of the Company shall not be assignable by the Executive.
This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the Executive’s legal representatives.

 

     (ii)        This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the Company and its successors. Other than to a successor
to substantially all of the Company’s business, the Company may not assign its
rights and obligations hereunder without the prior written consent of the
Executive, and in the case of any permitted assignment, the Company shall cause
such successor to assume this Agreement.

 

(d)        Governing Law. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York without regard to
the principles of conflicts of law thereof, or the principles of conflicts of
laws of any other jurisdiction which could cause the application of the laws of
any jurisdiction other than the State of New York.

 

(e)        Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction and shall not constitute a part of this Agreement.

 

(f)         Signature in Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

 

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

    The Company:               COMMAND SECURITY CORPORATION                    
  /s/ N. Paul Brost       Name:  N. Paul Brost       Title:  Chief Financial
Officer  

 

 

  The Executive:                 /s/ Barry I. Regenstein     Barry I. Regenstein
 

 

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