Exhibit 10.11


 


2007 STOCK INCENTIVE PLAN

STOCK OPTION GRANT NOTICE AND

STOCK OPTION AGREEMENT


 


EMRISE Corporation, a
Delaware corporation (the “Company”), pursuant to its 2007 Stock
Incentive Plan, hereby grants to the holder listed below (“Participant”),
an option to purchase the number of shares of the Common Stock set forth below
(the “Option”). This Option is subject to all of the terms and
conditions as set forth herein and in the Stock Option Agreement attached
hereto as Exhibit A (the “Stock Option Agreement”) and the
Plan, which are incorporated herein by reference. Unless otherwise defined
herein, terms defined in the Plan shall have the same defined meanings in this
Grant Notice and the Stock Option Agreement.


 


	
  Participant:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Grant Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares:

  	
   

  	
   

  
	
  Subject to the Option

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Expiration Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  £
  Incentive Stock Option   £
  Non-Qualified Stock Option

  
	
   

  	
   

  	
   

  
	
  Vesting Schedule:

  	
   

  	
   

  



 


By his or her signature,
Participant agrees to be bound by the terms and conditions of the Plan, the
Stock Option Agreement and this Grant Notice. Participant has reviewed the
Stock Option Agreement, the Plan and this Grant Notice in their entirety, has
had an opportunity to obtain the advice of counsel prior to executing this
Grant Notice and fully understands all provisions of this Grant Notice, the
Stock Option Agreement and the Plan. Participant hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the
Administrator of the Plan upon any questions arising under the Plan or the
Option.


 


	
  EMRISE CORPORATION

  	
  PARTICIPANT

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Print Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Email Address:

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
   

  
											



 

















 


EXHIBIT A

TO STOCK OPTION GRANT NOTICE


 


STOCK OPTION AGREEMENT


 


Pursuant to the Stock
Option Grant Notice (“Grant Notice”) to which this Stock Option
Agreement (this “Agreement”) is attached, EMRISE Corporation, a Delaware
corporation (the “Company”), has granted to Participant an option under
the Company’s 2007 Stock Incentive Plan to purchase the number of shares of the
Common Stock as indicated in the Grant Notice.


 


ARTICLE I

GENERAL


 


1.1           Defined Terms. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings ascribed thereto in the Plan and the Grant Notice.


 


1.2           Incorporation of Terms of Plan. The
Option is subject to the terms and conditions of the Plan which are
incorporated herein by reference.


 


ARTICLE II

GRANT OF OPTION


 


2.1           Grant of Option. In consideration
of Participant’s past and/or continued employment with or service to the
Company or a Subsidiary and for other good and valuable consideration,
effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”),
the Company irrevocably grants to Participant the option to purchase any part
or all of an aggregate of the number of shares of Common Stock set forth in the
Grant Notice, upon the terms and conditions set forth in the Plan and this
Agreement (the “Option”). Unless designated as a Non-Qualified Stock
Option in the Grant Notice, the Option shall be an Incentive Stock Option to
the maximum extent permitted by law.


 


2.2           Exercise Price. The exercise price
of the shares of Common Stock subject to the Option shall be as set forth in
the Grant Notice, without commission or other charge; provided, however, that (i) the
exercise price per share of the shares subject to the Option shall not be less
than 100% of the Fair Market Value of a share of Common Stock on the Grant
Date, and (ii) if this Option is designated as an Incentive Stock Option,
the exercise price per share of the shares subject to the Option shall not be
less than 110% of the Fair Market Value of a share of Common Stock on the Grant
Date in the case of a Participant then owning (within the meaning of Section 424(d) of
the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the
Code).


 


2.3           Consideration to the Company. In
consideration of the grant of the Option by the Company, Participant agrees to
render faithful and efficient services to the Company or any Subsidiary.
Nothing in the Plan or this Agreement shall confer upon Participant any right
to (a) continue in the employ of the Company or any Subsidiary or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries, which are hereby expressly reserved, to 


 


Exhibit A

To Stock Option Grant Notice


 

















 


discharge Participant, if Participant is an Employee,
or (b) continue to provide services to the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company or its
Subsidiaries, which are hereby expressly reserved, to terminate the services of
Participant, if Participant is a consultant, at any time for any reason
whatsoever, with or without Cause, except to the extent expressly provided
otherwise in a written agreement between the Company, a Subsidiary and
Participant, or (c) continue to serve as a member of the Board or shall
interfere with or restrict in any way the rights of the Company, which are
hereby expressly reserved, to discharge Participant in accordance with the
Company’s Bylaws.


 


ARTICLE III

PERIOD OF EXERCISABILITY


 


3.1           Commencement of Exercisability.


 


(a)   Subject to
the provisions of this Section 3.1 and Sections 3.3, the
Option shall become vested and exercisable in such amounts and at such times as
are set forth in the Grant Notice; provided, however, that, except as set forth
in writing by the Administrator, no Option shall be exercisable by any Holder
who is then subject to Section 16 of the Exchange Act within the period
ending six months after the Grant Date.


 


(b)   The Option shall
automatically vest in full upon (i) the occurrence of a Change in Control,
(ii) the date of Participant’s Termination of Employment or Termination of
Directorship by the Company or any Subsidiary unless such termination
constituted a termination for Cause.


 


(c)   Subject to
the provisions of Section 3.1(b), no portion of the Option which is
unexercisable at the date of Participant’s Termination of Employment,
Termination of Consultancy or Termination of Directorship, as applicable, shall
thereafter become vested and exercisable, except as may be otherwise provided
by the Administrator or as set forth in a written agreement between the Company
and Participant.


 


(d)   Notwithstanding
anything herein to the contrary, this Option shall not be exercisable by any
Holder until and unless the Option and the shares underlying the Option are
qualified in the State of California.


 


3.2           Duration of Exercisability. The
installments provided for in the vesting schedule set forth in the Grant Notice
are cumulative. Each such installment which becomes vested and exercisable
pursuant to the vesting schedule set forth in the Grant Notice shall remain
vested and exercisable until it becomes unexercisable under Section 3.3.


 


3.3           Expiration of Option. The Option
may not be exercised to any extent by anyone after the first to occur of the
following events:


 


(a)   The
Expiration Date set forth on the Grant Notice;


 


(b)   The
expiration of ten years from the Grant Date;


 


A-2

















 


(c)   If this
Option is designated as an Incentive Stock Option and Participant owned (within
the meaning of Section 424(d) of the Code), at the time the Option
was granted, more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or “parent
corporation” of the Company (each within the meaning of Section 424 of the
Code), the expiration of five years from the date the Option was granted; or


 


(d)   Except as
set forth in a written agreement with the Company, the expiration of one calendar year following the date
of Participant’s Termination of Employment or Termination of Directorship if
such termination occurs other than by reason of Participant’s death or disability,
unless such termination constituted a termination for Cause;


 


(e)   The
expiration of one year following the date of Participant’s Termination of
Employment or Termination of Directorship by reason of Participant’s death or
disability; or


 


(f)    The date of
Participant’s Termination of Employment or Termination of Directorship by the
Company or any Subsidiary by reason of Participant’s discharge for Cause.


 


Participant acknowledges
that an Incentive Stock Option exercised more than three months after Participant’s
termination of status as an Employee, other than by reason of death or
disability, will be taxed as a Non-Qualified Stock Option.


 


3.4           Special Tax Consequences.
Participant acknowledges that, to the extent that the aggregate Fair Market
Value (determined as of the time the Option is granted) of all shares of Common
Stock with respect to which Incentive Stock Options, including the Option, are
exercisable for the first time by Participant in any calendar year exceeds
$100,000 (or such other limitation as imposed by Section 422(d) of
the Code), the Option and such other options shall be treated as not qualifying
under Section 422 of the Code but rather shall be considered Non-Qualified
Stock Options. Participant further acknowledges that the rule set forth in
the preceding sentence shall be applied by taking Options and other “incentive
stock options” into account in the order in which they were granted, as
determined under Section 422(d) of the Code and the Treasury
Regulations thereunder.


 


ARTICLE IV

EXERCISE OF OPTION


 


4.1           Person Eligible to Exercise. Except
as provided in Sections 5.2(b), during the lifetime of Participant, only
Participant may exercise the Option or any portion thereof (unless it has been
disposed of pursuant to a DRO). Subject to such conditions and procedures as
the Administrator may require, a Permitted Transferee may exercise the Option
or any portion thereof during Participant’s lifetime. Subject to such
conditions and procedures as the Administrator may require, after the death of
Participant, any exercisable portion of the Option may, prior to the time when
the Option becomes unexercisable under Section 3.3, be exercised by
Participant’s personal representative, by any person empowered to do so under
the deceased 


 


A-3

















 


Participant’s will or under the then applicable laws
of descent and distribution, or by a Permitted Transferee.


 


4.2           Partial Exercise. Any exercisable
portion of the Option or the entire Option, if then wholly exercisable, may be
exercised in whole or in part at any time prior to the time when the Option or
portion thereof becomes unexercisable under Section 3.3.


 


4.3           Manner of Exercise. The Option, or
any exercisable portion thereof, may be exercised solely by delivery to the
Secretary of the Company or such other person or entity designated by the
Board, or his, her, or its office, as applicable, of all of the following prior
to the time when the Option or such portion thereof becomes unexercisable under
Section 3.3:


 


(a)   An exercise
notice in writing signed by Participant or any other person then entitled to
exercise the Option or portion thereof, stating that the Option or portion
thereof is thereby exercised, such notice complying with all applicable rules established
by the Administrator. Such notice shall be substantially in the form attached
as Exhibit A to this Agreement (or such other form as is prescribed
by the Administrator); and


 


(b)   Subject to Section 6.2(d) of
the Plan:


 


(i)            Full payment (in
cash or by check) for the shares with respect to which the Option or portion
thereof is exercised; or


 


(ii)           Such payment may be
made, in whole or in part, through the delivery of shares of Common Stock which
have been owned by Participant for at least six months, duly endorsed for
transfer to the Company with a Fair Market Value on the date of delivery equal
to the aggregate exercise price of the Option or exercised portion thereof; or


 


(iii)          Through the
delivery of a notice that Participant has placed a market sell order with a
broker with respect to shares of Common Stock then issuable upon exercise of
the Option, and that the broker has been directed to pay a sufficient portion
of the net proceeds of the sale to the Company in satisfaction of the Option
exercise price; provided, that payment of such proceeds is made to the Company
upon settlement of such sale; or


 


(iv)          Subject to any
applicable laws, any combination of the consideration provided in the foregoing
paragraphs (i), (ii) and (iii); and


 


(c)   A bona fide
written representation and agreement, in such form as is prescribed by the
Administrator, signed by Participant or the other person then entitled to
exercise such Option or portion thereof, stating that the shares of Common
Stock are being acquired for Participant’s own account, for investment and
without any present intention of distributing or reselling said shares or any
of them except as may be permitted under the Securities Act and then applicable
rules and regulations thereunder and any other applicable law, and that
Participant or other person then entitled to exercise such Option or portion
thereof will indemnify the Company against and hold it free and harmless from
any loss, damage, expense or liability resulting to the Company if any sale or
distribution of the shares by such person is 


 


A-4

















 


contrary to the representation and agreement referred
to above. The written representation and agreement referred to in this
subsection (c) shall, however, not be required if the shares to be issued
pursuant to such exercise have been registered under the Securities Act, and
such registration is then effective in respect of such shares; and


 


(d)   The receipt
by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in the form of consideration used by
Participant to pay for such shares under Section 4.3(b), subject to
Section 12.5 of the Plan; and


 


(e)   In the
event the Option or portion thereof shall be exercised pursuant to Section 4.1
by any person or persons other than Participant, appropriate proof of the right
of such person or persons to exercise the Option; and


 


(f)    Such other
representations and documents as the Administrator, in its absolute discretion,
deems necessary or advisable to effect compliance with all applicable
provisions of the Securities Act and any other federal or state securities laws
or regulations.


 


4.4           Conditions to Issuance of Stock Certificates.
The shares of Common Stock deliverable upon the exercise of the Option, or any
portion thereof, may be either previously authorized but unissued shares or
issued shares which have then been reacquired by the Company. Such shares shall
be fully paid and nonassessable. The Company shall not be required to issue or
deliver any shares of Common Stock purchased upon the exercise of the Option or
portion thereof prior to fulfillment of all of the following conditions:


 


(a)   The
admission of such shares to listing on all stock exchanges or quotation systems
on which such class of stock is then listed or admitted for trading;


 


(b)   The
completion of any registration or other qualification of such shares under any
state or federal law, or under the rulings or regulations of the Securities and
Exchange Commission or any other governmental regulatory body which the
Administrator shall, in its absolute discretion, deem necessary or advisable;


 


(c)   The
obtaining of any approval or other clearance from any state or federal
governmental agency that the Administrator shall, in its absolute discretion,
determine to be necessary or advisable;


 


(d)   The lapse
of such reasonable period of time following the exercise of the Option as the
Administrator may establish from time to time for reasons of administrative
convenience, provided that in no event shall such lapse constitute an
additional deferral of compensation under Section 409A of the Code; and


 


(e)   The receipt
by the Company of full payment for such shares, including payment of any
applicable withholding tax, which may be in the form of consideration used by
Participant to pay for such shares under Section 4.3(b), subject to
Section 12.5 of the Plan.


 


4.5           Rights as Stockholder. The holder
of the Option shall not be, nor have any of the rights or privileges of, stockholders
of the Company in respect of any shares purchasable upon 


 


A-5

















 


the exercise of any part of an Option unless and until
certificates representing such shares have been issued by the Company to such
holder.


 


ARTICLE V

OTHER PROVISIONS


 


5.1           Administration. The Administrator
shall have the power to interpret the Plan and this Agreement and to adopt such
rules for the administration, interpretation and application of the Plan
as are consistent therewith and to interpret, amend or revoke any such rules.
All actions taken and all interpretations and determinations made by the
Administrator in good faith shall be final and binding upon Participant, the
Company and all other interested persons. No member of the Administrator shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan, this Agreement or the Option. In its
absolute discretion, the Board may at any time and from time to time exercise
any and all rights and duties of the Administrator under the Plan and this
Agreement.


 


5.2           Option Not Transferable.


 


(a)   Subject to Section 5.2(b),
the Option may not be sold, pledged, assigned or transferred in any manner
other than by will or the laws of descent and distribution or, subject to the
consent of the Administrator, pursuant to a DRO, unless and until the shares
underlying the Option have been issued, and all restrictions applicable to such
shares have lapsed.  Neither the Option
nor any interest or right therein shall be liable for the debts, contracts or
engagements of Participant or his or her successors in interest or shall be
subject to disposition by transfer, alienation, anticipation, pledge,
encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect,
except to the extent that such disposition is permitted by the preceding
sentence.


 


(b)   Notwithstanding
Section 5.1(a), with the consent of the Administrator and to the
extent the Option is not intended to qualify as an Incentive Stock Option, the
Option may be transferred to one or more Permitted Transferees, subject to the
terms and conditions set forth in Section 12.1(b) of the Plan.


 


5.3           Restrictive Legends and Stop-Transfer Orders.


 


(a)   The share
certificate or certificates evidencing the shares of Stock purchased hereunder
shall be endorsed with any legends that may be required by state or federal
securities laws.


 


(b)   Participant
agrees that, the Administrator may, in its absolute discretion, take whatever
additional actions it deems appropriate to ensure the observance and
performance of the representations and agreements set forth herein;


 


(c)   Participant
agrees that, the Administrator may, in its absolute discretion, take whatever
additional actions it deems appropriate to effect compliance with the Securities
Act and any other federal or state securities laws or regulations and any other



 


A-6

















 


applicable law, including, without limitation, placing
legends on share certificates and issuing stop-transfer orders covering such
shares. Without limiting the generality of the foregoing, the Administrator may
require an opinion of counsel acceptable to it to the effect that any
subsequent transfer of shares acquired on an Option exercise does not violate
the Securities Act.


 


(d)   The Company
shall not be required: (i) to transfer on its books any shares of Common
Stock that have been sold or otherwise transferred in violation of any of the
provisions of this Agreement, or (ii) to treat as owner of such shares of Common
Stock or to accord the right to vote or pay dividends to any purchaser or other
transferee to whom such shares shall have been so transferred.


 


5.4           Shares to Be Reserved. The Company
shall at all times during the term of the Option reserve and keep available
such number of shares of Common Stock as will be sufficient to satisfy the
requirements of this Agreement.


 


5.5           Notices. Any notice to be given
under the terms of this Agreement to the Company shall be addressed to the
Company in care of the Secretary of the Company at the address given beneath
the signature of the Company’s authorized officer on the Grant Notice, and any
notice to be given to Participant shall be addressed to Participant at the
address given beneath Participant’s signature on the Grant Notice. By a notice
given pursuant to this Section 5.5, either party may hereafter
designate a different address for notices to be given to that party. Any notice
which is required to be given to Participant shall, if Participant is then
deceased, be given to the person entitled to exercise his or her Option
pursuant to Section 4.1 by written notice under this Section 5.5.
Any notice shall be deemed duly given when sent via email or when sent by
certified mail (return receipt requested) and deposited (with postage prepaid)
in a post office or branch post office regularly maintained by the United
States Postal Service.


 


5.6           Titles. Titles are provided herein
for convenience only and are not to serve as a basis for interpretation or
construction of this Agreement.


 


5.7           Governing Law; Severability. This
Agreement shall be administered, interpreted and enforced under the internal
laws of the State of Delaware without regard to conflicts of laws principles
thereof. Should any provision of this Agreement be determined by a court of law
to be illegal or unenforceable, the other provisions shall nevertheless remain
effective and shall remain enforceable.


 


5.8           Conformity to Securities Laws.
Participant acknowledges that the Plan is intended to conform to the extent
necessary with all provisions of the Securities Act and the Exchange Act and
any and all regulations and rules promulgated by the Securities and
Exchange Commission thereunder, and state securities laws and regulations.
Notwithstanding anything herein to the contrary, the Plan shall be
administered, and the Option is granted and may be exercised, only in such a
manner as to conform to such laws, rules and regulations. To the extent
permitted by applicable law, the Plan and this Agreement shall be deemed
amended to the extent necessary to conform to such laws, rules and
regulations.


 


5.9           Amendments. This Agreement may not
be modified, amended or terminated except by an instrument in writing, signed
by Participant or such other person as may be 


 


A-7

















 


permitted to exercise the Option pursuant to Section 4.1
and by a duly authorized representative of the Company.


 


5.10         Successors and Assigns. The Company
may assign any of its rights under this Agreement to single or multiple
assignees, and this Agreement shall inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Agreement shall be binding upon Participant and his or her heirs,
executors, administrators, successors and assigns.


 


1.1           Notification of Disposition. If
this Option is designated as an Incentive Stock Option, Participant shall give
prompt notice to the Company of any disposition or other transfer of any shares
of Common Stock acquired under this Agreement if such disposition or transfer
is made (a) within two years from the Grant Date with respect to such
shares or (b) within one year after the transfer of such shares to him.
Such notice shall specify the date of such disposition or other transfer and
the amount realized, in cash, other property, assumption of indebtedness or
other consideration, by Participant in such disposition or other transfer.


 


5.11         Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan or this Agreement, if
Participant is subject to Section 16 of the Exchange Act, the Plan, the
Option and this Agreement shall be subject to any additional limitations set
forth in any applicable exemptive rule under Section 16 of the Exchange
Act (including any amendment to Rule 16b-3 of the Exchange Act) that are
requirements for the application of such exemptive rule. To the extent
permitted by applicable law, this Agreement shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.


 


5.12         Entire Agreement. The Plan and this
Agreement (including all Exhibits hereto) constitute the entire agreement of
the parties and supersede in their entirety all prior undertakings and
agreements of the Company and Participant with respect to the subject matter
hereof.


 


A-8

















 


EXHIBIT A

TO STOCK OPTION AGREEMENT


 


FORM OF EXERCISE
NOTICE


 


Effective as of today,
                            ,
                        
the undersigned (“Participant”) hereby elects to exercise
Participant’s option to purchase                       
shares of the Common Stock (the “Shares”) of EMRISE Corporation, a
Delaware corporation (the “Company”), under and pursuant to the 2007
Stock Incentive Plan and the Stock Option Grant Notice and Stock Option
Agreement dated                               
(the “Option Agreement”). Capitalized terms used herein without
definition shall have the meanings given in the Option Agreement.


 


	
  Grant Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Shares as to

  	
   

  	
   

  
	
  which Option is Exercised:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $

  
	
   

  	
   

  	
   

  
	
  Certificate to be issued in name
  of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Payment delivered herewith:

  	
   

  	
  $                  (Representing
  the full Exercise Price for the Shares, as well as any applicable

  
	
   

  	
   

  	
  withholding tax) Form of Payment:

  	
   

  
	
   

  	
   

  	
   

  	
  (Please specify)

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  £
  Incentive Stock Option   £
  Non-Qualified Stock Option

  



 


Participant acknowledges
that Participant has received, read and understood the Plan and the Option
Agreement. Participant agrees to abide by and be bound by their terms and
conditions. Participant understands that Participant may suffer adverse tax
consequences as a result of Participant’s purchase or disposition of the
Shares. Participant represents that Participant has consulted with any tax
consultants Participant deems advisable in connection with the purchase or
disposition of the Shares and that Participant is not relying on the Company
for any tax advice. The Plan and Option Agreement are incorporated herein by
reference. This Exercise Notice, the Plan and the Option Agreement constitute
the entire agreement of the parties and supersede in their entirety all prior
undertakings and agreements of the Company and Participant with respect to the
subject matter hereof.


 


ACCEPTED
BY:


 


	
  EMRISE CORPORATION

  	
  PARTICIPANT

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
  Print Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
   

  	
  Address:

  	
   

  
										



 


 


Exhibit A

To Stock Option Agreement