Document:

EXHIBIT
10.48

 

ARGYLE SECURITY, INC.

 

2007 OMNIBUS SECURITIES AND
INCENTIVE PLAN

 

DIRECTOR RESTRICTED STOCK
AWARD AGREEMENT

 

THIS
AGREEMENT effective as of                               ,
200  , by and between Argyle Security, Inc., a Delaware corporation
(the “Company”), and                                     
(the “Awardee”).

 

WITNESSETH:

 

WHEREAS,
the Company has adopted the Argyle Security, Inc. 2007 Omnibus Securities
and Incentive Plan (the “Plan”) for the benefit of its employees,
nonemployee directors and consultants and the employees, nonemployee directors
and consultants of its affiliates, and

 

WHEREAS,
the Committee has authorized the award to the Awardee of shares of Restricted
Stock (“Restricted Shares”) under the Plan, on the terms and conditions
set forth in the Plan and as hereinafter provided,

 

NOW,
THEREFORE, in consideration of the premises contained herein, the Company and
the Awardee hereby agree as follows:

 

1.                                       Definitions.

 

Terms used in this Agreement
which are defined in the Plan shall have the same meanings as set forth in the
Plan.

 

2.                                       Award
of Restricted Shares.

 

The Committee hereby awards
to the Awardee [insert # of shares] Restricted Shares. All such
Restricted Shares shall be subject to the transferability restrictions and forfeiture
provisions contained in Sections 4, 5 and 6, such restrictions to become
effective immediately upon execution of this Agreement by the parties hereto.

 

3.                                       Stock
Certificates.

 

The Company agrees to
promptly, upon execution of this Agreement, cause a stock certificate for the 

Restricted Shares to be prepared and delivered to the Awardee hereunder, each
bearing the following legend:

 

“The transferability of this
certificate and the shares of stock represented hereby are subject to the terms
and conditions (including forfeiture) of an Agreement entered into between the
registered owner and Argyle Security Acquisition Corporation, effective as of                       ,
200  . Copies of such Agreement are on file in the offices of the
Secretary, Argyle Security Acquisition Corporation, 200 Concord Plaza, Suite 700,
San Antonio, Texas 78216.

 

 

4.                                       Vesting.

 

The Restricted Shares shall immediately vest and
become transferable pursuant to the terms of the Plan on the date such
Restricted Shares are granted.

 

5.                                       Termination
of Director Status.

 

Sections 6.2, 6.4 and 6.5 of
the Plan shall control.

 

6.                                       Restriction
on Transferability.

 

Subject to Section 9,
the Restricted Shares shall not be transferable unless and until (and solely to
the extent) the Awardee satisfies the vesting requirements contained in Section 4.

 

7.                                       Voting
and Dividend Rights.

 

The Awardee shall have the
voting and dividend rights of a shareholder of Common Stock with respect to the
Restricted Shares; provided, however, that dividends paid in
shares of Common Stock shall be deposited with the Company, together with a
stock power endorsed in blank or other appropriate instrument of transfer and
shall be subject to the same Restrictions as the Restricted Shares.

 

8.                                       Regulation
by the Committee.

 

This Agreement and the
Restricted Shares shall be subject to the administrative procedures and rules as
the Committee shall adopt. All decisions of the Committee upon any question
arising under the Plan or under this Agreement, shall be conclusive and binding
upon the Awardee.

 

9.                                       Change
of Control.

 

Notwithstanding the vesting
requirements contained in Section 4, upon a Change of Control, in the sole
discretion of the Committee, either (a) all of the Restricted Shares shall
automatically become fully vested, no longer subject to Restrictions and freely
transferable, in each case as of the date of such Change of Control, or (b) the
shares of Restricted Stock shall be cancelled and the Company shall, within 30 days,
make a cash payment to the Awardee equal to the Fair Market Value of such
Shares immediately prior to the Change of Control. If the Company fails to make
the payment described in clause (b) of the immediately preceding sentence
within 30 days following the Change of Control, the Restricted Shares shall
automatically become fully vested, no longer subject to Restrictions and freely
transferable as of the next day.

 

For purposes of this
Agreement, the term “Change of Control” shall mean the earliest of the
following to occur:

 

(a)                                  The public
announcement by the Company or any person (other than the Company, any
subsidiary of the Company or any employee benefit plan of the Company or of

 

2

 

any subsidiary of the
Company) (“Person”) that such Person, who or which, together with all “affiliates”
and “associates” (within the meanings of such terms under Rule 12b-2 of
the Exchange Act) of such Person, shall be the beneficial owner of fifty percent
(50%) or more of the Company’s voting stock then outstanding;

 

(b)                                 The
commencement of, or after the first public announcement of any Person to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming the beneficial owner of the Company’s voting stock
aggregating fifty percent (50%)  or
more of the Company’s then outstanding voting stock;

 

(c)                                  The
announcement of any transaction relating to the Company required to be
described pursuant to the requirements of Item 6(e) of Schedule 14A of
Regulation 14A of the Securities and Exchange Commission under the Exchange
Act;

 

(d)                                 A proposed
change in the constituency of the Board such that, during any period of two (2) consecutive
years, individuals who at the beginning of such period constitute the Board
cease for any reason to constitute at least a majority thereof, unless the
election or nomination for election by the shareholders of the Company of each
new director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were members of the Board at the beginning
of the period;

 

(e)                                  The Company
enters into an agreement of merger, consolidation, share exchange or similar
transaction with any other corporation other than a transaction which would
result in the Company’s voting stock outstanding immediately prior to the
consummation of such transaction continuing to represent (either by remaining
outstanding or by being converted into voting stock of the surviving entity) at
least two-thirds (2/3) of the combined voting power of the Company’s or such
surviving entity’s outstanding voting stock immediately after such transaction;

 

(f)                                    The Board
approves a plan of liquidation or dissolution of the Company or an agreement
for the sale or disposition by the Company (in one transaction or a series of
transactions) of all or substantially all of the Company’s assets to a person
or entity which is not an affiliate of the Company; or

 

(g)                                 Any other event
which shall be deemed by a majority of the members of the Board to constitute a
“Change of Control.”

 

Notwithstanding
anything to the contrary contained in this Section 9, the Board is hereby
authorized to make any modifications to the above “Change of Control”
definition as it determines in its sole discretion to be necessary for purposes
of compliance with Section 409A of the Code, to the extent applicable.

 

10.                                 Amendment.

 

The Committee may amend this
Agreement at any time and from time to time; provided, however,
that no amendment of this Agreement that would impair the Awardee’s rights or
entitlements with respect to the Restricted Shares shall be effective without
the prior written consent of the Awardee.

 

3

 

11.                                 Plan
Terms.

 

The terms of the Plan are
hereby incorporated herein by reference.

 

12.                                 Effective
Date of Award.

 

The award of each Restricted
Share under this Agreement shall be effective as of the date first written
above.

 

13.                                 Awardee
Acknowledgment.

 

By executing this Agreement,
the Awardee hereby acknowledges that he or she has received and read the Plan
and this Agreement and that he or she agrees to be bound by all of the terms of
both the Plan and this Agreement.

 

4

 

	
  ATTEST:

  	
   

  	
  ARGYLE
  SECURITY ACQUISITION

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Donald F. Neville

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  , Awardee

  
	
   

  	
   

  	
  [Name]

  
					

 

5

 

ARGYLE
SECURITY, INC.

 

2007 OMNIBUS SECURITIES AND
INCENTIVE PLAN

 

EMPLOYEE RESTRICTED STOCK
AWARD AGREEMENT

 

THIS AGREEMENT is
effective as of                                     ,
200  , by and between Argyle Security, Inc., a Delaware corporation
(the “Company”), and                                   
(the “Awardee”).

 

WITNESSETH:

 

WHEREAS, the Company has
adopted the Argyle Security, Inc. 2007 Omnibus Securities and Incentive
Plan (the “Plan”) for the benefit of its employees, nonemployee
directors and consultants and the employees, nonemployee directors and
consultants of its affiliates, and

 

WHEREAS, the Committee
has authorized the award to the Awardee of shares of Restricted Stock (“Restricted
Shares”) under the Plan, on the terms and conditions set forth in the Plan
and as hereinafter provided,

 

NOW, THEREFORE, in
consideration of the premises contained herein, the Company and the Awardee
hereby agree as follows:

 

1.                                       Definitions.

 

Terms
used in this Agreement which are defined in the Plan shall have the same
meanings as set forth in the Plan.

 

2.                                       Award of Restricted Shares.

 

The
Committee hereby awards to the Awardee [insert
# of shares] Restricted
Shares. All such Restricted Shares shall be subject to the transferability
restrictions and forfeiture provisions contained in Sections 4, 5 and 6, such
restrictions to become effective immediately upon execution of this Agreement
by the parties hereto.

 

3.                                       Stock Certificates.

 

The Company
agrees to promptly, upon execution of this Agreement, cause a stock certificate
for the 

Restricted Shares to be prepared and delivered to the Awardee hereunder, each
bearing the following legend:

 

“The
transferability of this certificate and the shares of stock represented hereby
are subject to the terms and conditions (including forfeiture) of an Agreement
entered into between the registered owner and Argyle Security Acquisition Corporation,
effective as of                               ,
200    .  Copies of
such Agreement are on file in the

 

 

offices of the Secretary, Argyle Security Acquisition Corporation,
200 Concord Plaza, Suite 700, San Antonio, Texas 78216.

 

4.                                       Vesting.

 

The
Restricted Shares shall vest, no longer be subject to Restrictions and become
transferable pursuant to the terms of the Plan in accordance with the following
schedule.  One-third of the Restricted
Shares (rounded to the nearest whole Restricted Share, except for the final
vesting date, which relates to all remaining unvested Restricted Shares) shall
vest on each of the following dates:

 

December 31, 2008

December 31, 2009

December 31, 2010

 

Notwithstanding the above schedule, the Awardee shall
be one hundred percent (100%) vested in the Restricted Shares if the Awardee’s
employment with the Company shall terminate on account of the Awardee’s (a) Total
and Permanent Disability, (b) death or (c) retirement upon or after
attaining age sixty-five (65) with at least five (5) full years of service
for the Company and/or an Affiliate. The Optionee shall forfeit any unvested
portion of the Restricted Stock upon termination of employment with the Company
for any reason other than the Awardee’s Total and Permanent Disability, death
or retirement upon or after attaining age sixty-five (65).

 

5.                                       Termination of Employment.

 

Sections
6.2, 6.4 and 6.5 of the Plan shall control.

 

6.                                       Restriction on Transferability.

 

Subject
to Section 9,  the Restricted
Shares shall not be transferable unless and until (and solely to the extent)
the Awardee satisfies the vesting requirements contained in Section 4.

 

7.                                       Voting and Dividend Rights.

 

The
Awardee shall have the voting and dividend rights of a shareholder of Common
Stock with respect to the Restricted Shares; provided, however,
that dividends paid in shares of Common Stock shall be deposited with the
Company, together with a stock power endorsed in blank or other appropriate
instrument of transfer and shall be subject to the same Restrictions as the
Restricted Shares.

 

8.                                       Regulation by the Committee.

 

This
Agreement and the Restricted Shares shall be subject to the administrative
procedures and rules as the Committee shall adopt. All decisions of the
Committee upon any question arising under the Plan or under this Agreement,
shall be conclusive and binding upon the Awardee.

 

2

 

9.                                       Change of Control.

 

Notwithstanding
the vesting requirements contained in Section 4, upon a Change of Control,
in the sole discretion of the Committee, either (a) all of the Restricted
Shares shall automatically become fully vested, no longer subject to
Restrictions and freely transferable, in each case as of the date of such
Change of Control, or (b) the shares of Restricted Stock shall be
cancelled and the Company shall, within 30 days, make a cash payment to
the Awardee equal to the Fair Market Value of such Shares immediately prior to
the Change of Control. If the Company fails to make the payment described in
clause (b) of the immediately preceding sentence within 30 days
following the Change of Control, the Restricted Shares shall automatically
become fully vested, no longer subject to Restrictions and freely transferable
as of the next day.

 

For
purposes of this Agreement, the term “Change of Control” shall mean (i) for
an Awardee who is a party to an employment agreement with the Company or an
Affiliate which agreement provides for a definition of “Change of Control”
therein, “Change of Control” shall have the same meaning as provided for in
such agreement, or (ii) for an Awardee who is not a party to such an
agreement, “Change of Control” shall mean the earliest of the following to
occur:

 

(a)                                  The public announcement by the Company or
any person (other than the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the Company) (“Person”)
that such Person, who or which, together with all “affiliates” and “associates”
(within the meanings of such terms under Rule 12b-2 of the Exchange Act)
of such Person, shall be the beneficial owner of fifty  percent
(50%)  or more of the Company’s voting stock then
outstanding;

 

(b)                                 The commencement of, or after the first
public announcement of any Person to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the beneficial owner
of the Company’s voting stock aggregating fifty  percent
(50%) or more of the Company’s then outstanding voting stock;

 

(c)                                  The announcement of any transaction
relating to the Company required to be described pursuant to the requirements
of Item 6(e) of Schedule 14A of Regulation 14A of the Securities and
Exchange Commission under the Exchange Act;

 

(d)                                 A proposed change in the constituency of
the Board such that, during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute at least a majority thereof, unless the election or
nomination for election by the shareholders of the Company of each new director
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who were members of the Board at the beginning of the period;

 

(e)                                  The Company enters into an agreement of
merger, consolidation, share exchange or similar transaction with any other
corporation other than a transaction which would result in the Company’s voting
stock outstanding immediately prior to the consummation of such transaction
continuing to represent (either by remaining

 

3

 

outstanding or by being converted into voting stock of
the surviving entity) at least two-thirds (2/3)  of
the combined voting power of the Company’s or such surviving entity’s
outstanding voting stock immediately after such transaction;

 

(f)                                    The Board approves a plan of liquidation
or dissolution of the Company or an agreement for the sale or disposition by
the Company (in one transaction or a series of transactions) of all or
substantially all of the Company’s assets to a person or entity which is not an
affiliate of the Company; or

 

(g)                                 Any other event which shall be deemed by
a majority of the members of the Board to constitute a “Change of Control.”

 

Notwithstanding anything
to the contrary contained in this Section 9, the Board is hereby
authorized to make any modifications to the above “Change of Control”
definition as it determines in its sole discretion to be necessary for purposes
of compliance with Section 409A of the Code, to the extent applicable.

 

10.                                 Withholding.

 

If the
Company or an Affiliate shall be required to withhold any amounts in connection
with the Awardee’s Restricted Stock Award by reason of any federal, state or
local tax rules or regulations, the Company or Affiliate shall be entitled
to deduct and withhold such amounts.

 

11.                                 Amendment.

 

The
Committee may amend this Agreement at any time and from time to time; provided,
however, that no amendment of this Agreement that would impair the
Awardee’s rights or entitlements with respect to the Restricted Shares shall be
effective without the prior written consent of the Awardee.

 

12.                                 Plan Terms.

 

The
terms of the Plan are hereby incorporated herein by reference.

 

13.                                 Effective Date of Award.

 

The
award of each Restricted Share under this Agreement shall be effective as of
the date first written above.

 

14.                                 Awardee Acknowledgment.

 

By
executing this Agreement, the Awardee hereby acknowledges that he or she has
received and read the Plan and this Agreement and that he or she agrees to be
bound by all of the terms of both the Plan and this Agreement.

 

4

 

	
  ATTEST:

  	
   

  	
  ARGYLE SECURITY, INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Donald F. Neville

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  , Awardee

  
	
   

  	
   

  	
  [Name]

  
					

 

5Exhibit 10.49

 

ARGYLE
SECURITY, INC.

 

2007
OMNIBUS SECURITIES AND INCENTIVE PLAN

 

STOCK
OPTION AGREEMENT

 

INCENTIVE
STOCK OPTION

 

THIS
AGREEMENT effective as of                                       ,
200   , by and between Argyle Security, Inc., a Delaware corporation
(the “Company”), and                                                                   
(the “Optionee”).

 

WITNESSETH:

 

WHEREAS,
the Company has adopted the Argyle Security, Inc. 2007 Omnibus Securities
and Incentive Plan (the “Plan”) for the benefit of its employees,
nonemployee directors and consultants and the employees, nonemployee directors
and consultants of its affiliates, and

 

WHEREAS,
the Committee has authorized the grant to the Optionee of an Option under the
Plan, on the terms and conditions set forth in the Plan and as hereinafter
provided,

 

NOW,
THEREFORE, in consideration of the premises contained herein, the Company and
the Optionee hereby agree as follows:

 

1.             Definitions.

 

Terms used in this Agreement which are defined in the Plan
shall have the same meaning as set forth in the Plan.

 

2.             Grant
of Option.

 

The Committee hereby grants to the Optionee an option
to purchase [insert # of shares] shares of the Company’s Common
Stock (“Shares”) for an Option price per Share equal to [insert price]  (not
less than the Fair Market Value of a Share on the date of this Agreement and
not less than one hundred ten percent (110%) of the Fair Market Value of a
Share if the Optionee is a ten percent (10%) or greater shareholder of the
Company as described in Section 7.3 of the Plan) (the “Option”).
The Option is intended by the Committee to be an Incentive Stock Option and the
provisions hereof shall be interpreted on a basis consistent with such intent.

 

3.             Option
Terms and Exercise Period.

 

(a)           The Option shall be exercised, and
payment by the Optionee of the Option price shall be made, pursuant to the
terms of the Plan.

 

(b)           All or any part of the Option may be
exercised by the Optionee no later than ten (10) years (five (5) years
if the Optionee is a ten percent (10%) or greater shareholder of

 

 

 

 

the Company as described in Section 7.3 of the
Plan) after the date of this Agreement.

 

(c)           Except as otherwise provided in Section 10,
this Agreement and the Option shall terminate on the earlier of (i) the
(10th) anniversary (no later than the tenth anniversary) (the fifth (5th)
anniversary if the Optionee is a ten percent (10%) or greater shareholder of
the Company as described in Section 7.3 of the Plan) of the date of this
Agreement, or (ii) the date the Option is fully exercised.

 

4.             Vesting.

 

Options
to purchase one-third of the Shares (rounded to the nearest whole Share, except
for the final vesting date, which relates to all remaining unvested Shares)
shall vest and become exercisable on each of the following dates:

 

December 31,
2008

 

December 31,
2009

 

December 31,
2010

 

Notwithstanding the above schedule, the Optionee shall
be one hundred percent (100%) vested in the Option if the Optionee’s employment
with the Company shall terminate on account of the Optionee’s (a) Total
and Permanent Disability, (b) death or (c) retirement upon or after
attaining age sixty-five (65) with at least five (5) full years of service
for the Company and/or an Affiliate. The Optionee shall forfeit any unvested portion
of the Option upon termination of employment with the Company for any reason
other than the Optionee’s Total and Permanent Disability, death or retirement
upon or after attaining age sixty-five (65).

 

5.             Termination
of Employment.

 

Sections 6.2, 6.4 and 6.5 of
the Plan shall control.

 

6.             Restrictions
on Transfer of Option.

 

This Agreement and the Option shall not be
transferable otherwise than by will or by the laws of descent and distribution,
and the Option shall be exercisable, during the Optionee’s lifetime, solely by
the Optionee, except on account of the Optionee’s Total and Permanent
Disability or death.

 

7.             Exercise
of Option.

 

(a)           The Option shall become exercisable
at such time as shall be provided herein or in the Plan and shall be exercisable
by written notice of such exercise, in the form prescribed by the Committee, to
the Secretary of the Company, at its principal office. The notice shall specify
the number of Shares for which the Option is being exercised.

 

(b)           Shares purchased pursuant to the
Option shall be paid for in full at the time of such purchase in cash, in
Shares, including Shares acquired pursuant to the Plan, or part in cash and
part in Shares. Shares transferred in payment of the Option price shall be
valued as of

 

 

 

 

the date of transfer based on their Fair Market Value.

 

8.             Regulation
by the Committee.

 

This Agreement and the Option shall be subject to any
administrative procedures and rules as the Committee shall adopt. All
decisions of the Committee upon any question arising under the Plan or under
this Agreement, shall be conclusive and binding upon the Optionee and any
person or persons to whom any portion of the Option has been transferred by
will or by the laws of descent and distribution.

 

9.             Rights
as a Shareholder.

 

The Optionee shall have no rights as a shareholder
with respect to Shares subject to the Option until certificates for Shares of
Common Stock are issued to the Optionee.

 

10.           Change
of Control.

 

Notwithstanding the vesting requirements contained in Section 4,
upon a Change of Control, in the sole discretion of the Committee, either (a) the
Option shall automatically become fully vested and exercisable as of the date
of such Change of Control, or (b) the Option shall terminate and the
Company shall, within 30 days, make a cash payment to the Optionee equal
to the product of (i) the number of Shares set forth in Section 1,
multiplied by (ii) the excess of the Fair Market Value of a Share of
Common Stock immediately prior to the Change of Control over the Option price.
If the Company fails to make the payment described in clause (b) of the
immediately preceding sentence within days following the Change of Control, the
Option shall automatically become fully vested and exercisable as of the next
day.

 

For purposes of this Agreement, the term “Change of
Control” shall mean (i) for an Optionee who is a party to an
employment agreement with the Company or an Affiliate which agreement provides
for a definition of “Change of Control” therein, “Change of Control”
shall have the same meaning as provided for in such agreement, or (ii) for
an Optionee who is not a party to such an agreement, “Change of Control”
shall mean the earliest of the following to occur:

 

(a)           The public announcement by the
Company or any person (other than the Company, any subsidiary of the Company or
any employee benefit plan of the Company or of any subsidiary of the Company) (“Person”)
that such Person, who or which, together with all “affiliates” and “associates”
(within the meanings of such terms under Rule 12b-2 of the Exchange Act)
of such Person, shall be the beneficial owner of (fifty percent (50%) or more
of the Company’s voting stock then outstanding;

 

(b)           The commencement of, or after the
first public announcement of any Person to commence, a tender or exchange offer
the consummation of which would result in any Person becoming the beneficial
owner of the Company’s voting stock aggregating fifty percent (50%) or more of
the Company’s then outstanding voting stock;

 

(c)           The announcement of any transaction
relating to the Company required to be described pursuant to the requirements
of Item 6(e) of Schedule 14A of Regulation 14A of the

 

 

 

 

 

Securities and Exchange Commission under the Exchange
Act;

 

(d)           A proposed change in the constituency
of the Board such that, during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute at least a majority thereof, unless the election or
nomination for election by the shareholders of the Company of each new director
was approved by a vote of at least two-thirds (2/3) of the directors then still
in office who were members of the Board at the beginning of the period;

 

(e)           The Company enters into an agreement
of merger, consolidation, share exchange or similar transaction with any other
corporation other than a transaction which would result in the Company’s voting
stock outstanding immediately prior to the consummation of such transaction
continuing to represent (either by remaining outstanding or by being converted
into voting stock of the surviving entity) at least two-thirds (2/3) of the
combined voting power of the Company’s or such surviving entity’s outstanding
voting stock immediately after such transaction;

 

(f)            The Board approves a plan of
liquidation or dissolution of the Company or an agreement for the sale or
disposition by the Company (in one transaction or a series of transactions) of
all or substantially all of the Company’s assets to a person or entity which is
not an affiliate of the Company; or

 

(g)           Any other event which shall be deemed
by a majority of the members of the Board to constitute a “Change of Control.”

 

Notwithstanding anything
to the contrary contained in this Section 10, the Board is hereby
authorized to make any modifications to the above “Change of Control”
definition as it determines in its sole discretion to be necessary for purposes
of compliance with Section 409A of the Code, to the extent applicable.

 

11.           Reservation
of Shares.

 

With respect to the Option, the Company hereby agrees
to at all times reserve for issuance and/or delivery upon payment by the
Optionee of the Option price, such number of Shares as shall be required for
issuance and/or delivery upon such payment pursuant to the Option.

 

12.           Delivery
of Share Certificates.

 

Within a reasonable time after the exercise of the
Option, the Company shall cause to be delivered to the Optionee, his or her
legal representative or his or her beneficiary, a certificate for the Shares
purchased pursuant to the exercise of the Option.

 

13.           Withholding.

 

In the event the Optionee elects to exercise the
Option (or any part thereof), if the Company or an Affiliate shall be required
to withhold any amounts by reason of any federal, state or local tax rules or
regulations in respect of the issuance of Shares to the Optionee, the

 

 

 

 

Company or Affiliate shall be entitled to deduct and
withhold such amounts.

 

14.           Amendment.

 

The Committee may amend this Agreement at any time and
from time to time; provided, however, that no amendment of this
Agreement that would materially and adversely impair the Optionee’s rights or
entitlements with respect to the Option shall be effective without the prior
written consent of the Optionee (unless such amendment is required in order to
cause the Award hereunder to qualify as “performance-based” compensation within
the meaning of Section 162 (m) of the Code and applicable
interpretive authority thereunder).

 

15.           Plan
Terms.

 

The
terms of the Plan are hereby incorporated herein by reference.

 

16.           Effective
Date of Grant.

 

The Option shall be effective as of the date first
written above.

 

17.           Optionee
Acknowledgment.

 

By executing this Agreement, the Optionee hereby
acknowledges that he or she has received and read the Plan and this Agreement
and that he or she agrees to be bound by all of the terms of both the Plan and
this Agreement.

 

	
  ATTEST:

  	
   

  	
  ARGYLE SECURITY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Donald F. Neville

  
	
   

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  , Optionee

  
	
   

  	
   

  	
   

  	
  Name:

  

 

 

ARGYLE
SECURITY, INC.

 

2007
OMNIBUS SECURITIES AND INCENTIVE PLAN

 

STOCK
OPTION AGREEMENT

 

EMPLOYEE
NON-QUALIFIED STOCK OPTION

 

THIS AGREEMENT effective
as of                              ,
200  , by and between Argyle Security, Inc., a Delaware  corporation (the “Company”), and                               
(the “Optionee”).

 

WITNESSETH:

 

WHEREAS, the Company has
adopted the Argyle Security, Inc 2007 Omnibus Securities and Incentive Plan
(the “Plan”) for the benefit of its employees, nonemployee directors and
consultants and the employees, nonemployee directors and consultants of its
affiliates, and

 

WHEREAS, the Committee
has authorized the grant to the Optionee of an Option under the Plan, on the
terms and conditions set forth in the Plan and as hereinafter provided,

 

NOW, THEREFORE, in
consideration of the premises contained herein, the Company and the Optionee
hereby agree as follows:

 

1.                                       Definitions.

 

Terms
used in this Agreement which are defined in the Plan shall have the same
meaning as set forth in the Plan.

 

2.                                       Grant of Option.

 

The
Committee hereby grants to the Optionee an option to purchase [insert # of
shares] shares of the Company’s Common Stock (“Shares”) for
an Option price per Share equal to [insert
price] (not less than the
Fair Market Value of a Share on the date of this Agreement) (the “Option”).
The Option is intended by the Committee to be a Non-Qualified Stock Option and
the provisions hereof shall be interpreted on a basis consistent with such
intent.

 

3.                                       Option Terms and Exercise Period.

 

(a)                                  The Option shall be exercised, and
payment by the Optionee of the Option price shall be made, pursuant to the
terms of the Plan.

 

(b)                                 All or any part of the Option may be
exercised by the Optionee no later than the tenth (10th) anniversary of the
date of this Agreement.

 

(c)                                  Except as otherwise provided in Section 10,
this Agreement and the Option shall terminate on the earlier of (i) the
tenth (10th) anniversary of the date of this Agreement or (ii) the date
the Option is fully exercised.

 

 

4.                                       Vesting.

 

Options
to purchase one-third of the Shares (rounded to the nearest whole Share, except
for the final vesting date, which relates to all remaining unvested Shares)
shall vest and become exercisable on each of the following dates:

 

December 31,
2008

December 31,
2009

December 31,
2010

 

Notwithstanding
the above schedule, the Optionee shall be one hundred percent (100%) vested in
the Option if the Optionee’s employment with the Company shall terminate on
account of the Optionee’s (a) Total and Permanent Disability, (b) death
or (c) retirement upon or after attaining age sixty-five (65) with at
least five (5) full years of service for the Company and/or an Affiliate.
The Optionee shall forfeit any unvested portion of the Option upon termination
of employment with the Company for any reason other than the Optionee’s Total
and Permanent Disability, death or retirement upon or after attaining age
sixty-five (65).

 

5.                                       Termination of Employment.

 

Sections
6.2., 6.4 and 6.5 of the Plan shall control.

 

6.                                       Restrictions on Transfer of Option.

 

This
Agreement and the Option shall not be transferable otherwise than (a) by
will or by the laws of descent and distribution or (b) by gift to any
Family Member of the Optionee, and the Option shall be exercisable, during the
Optionee’s lifetime, solely by the Optionee, except on account of the Optionee’s
Total and Permanent Disability or death, and solely by the transferee in the
case of a transfer by gift to a Family Member of the Optionee.

 

7.                                       Exercise of Option.

 

(a)                                  The Option shall become exercisable at
such time as shall be provided herein or in the Plan and shall be exercisable
by written notice of such exercise, in the form prescribed by the Committee, to
the Secretary of the Company, at its principal office. The notice shall specify
the number of Shares for which the Option is being exercised.

 

(b)                                 Shares purchased pursuant to the Option
shall be paid for in full at the time of such purchase in cash, in Shares,
including Shares acquired pursuant to the Plan, or part in cash and part in
Shares. Shares transferred in payment of the Option price shall be valued as of
the date of transfer based on their Fair Market Value.

 

8.                                       Regulation by the Committee.

 

This
Agreement and the Option shall be subject to the administrative procedures and rules as
the Committee shall adopt. All decisions of the Committee upon any question
arising under the Plan or under this Agreement, shall be conclusive and binding
upon the 

 

2

 

Optionee and any person or persons to whom any portion
of the Option has been transferred by will, by the laws of descent and
distribution or by gift to a Family Member of the Optionee.

 

9.                                       Rights as a Shareholder.

 

The
Optionee shall have no rights as a shareholder with respect to Shares subject
to the Option until certificates for Shares of Common Stock are issued to the
Optionee.

 

10.                                 Change of Control.

 

Notwithstanding
the vesting requirements contained in Section 4, upon a Change of Control,
in the sole discretion of the Committee, either (a) the Option shall
automatically become fully vested and exercisable as of the date of such Change
of Control, or (b) the Option shall terminate and the Company shall,
within 30 days, make a cash payment to the Optionee equal to the product of (i) the
number of Shares set forth in Section 1, multiplied by (ii) the
excess of the Fair Market Value of a Share of Common Stock immediately prior to
the Change of Control over the Option price. If the Company fails to make the
payment described in clause (b) of the immediately preceding sentence
within 30 days following the Change of Control, the Option shall automatically
become fully vested and exercisable as of the next day.

 

For
purposes of this Agreement, the term “Change of Control” shall mean (i) for
an Optionee who is a party to an employment agreement with the Company or an
Affiliate which agreement provides for a definition of “Change of Control”
therein, “Change of Control” shall have the same meaning as provided for
in such agreement, or (ii) for an Optionee who is not a party to such an
agreement, “Change of Control” shall mean the earliest of the following
to occur:

 

(a)                                  The public announcement by the Company or
any person (other than the Company, any subsidiary of the Company or any
employee benefit plan of the Company or of any subsidiary of the Company) (“Person”)
that such Person, who or which, together with all “affiliates” and “associates”
(within the meanings of such terms under Rule 12b-2 of the Exchange Act)
of such Person, shall be the beneficial owner of fifty percent (50%) or more of
the Company’s voting stock then outstanding;

 

(b)                                 The commencement of, or after the first
public announcement of any Person to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the beneficial owner
of the Company’s voting stock aggregating fifty  percent
(50%) or more of the Company’s then outstanding voting stock;

 

(c)                                  The announcement of any transaction
relating to the Company required to be described pursuant to the requirements
of Item 6(e) of Schedule 14A of Regulation 14A of the Securities and
Exchange Commission under the Exchange Act;

 

(d)                                 A proposed change in the constituency of
the Board such that, during any period of two (2) consecutive years,
individuals who at the beginning of such period constitute the Board cease for
any reason to constitute at least a majority thereof, unless the election or
nomination for election by the shareholders of the Company of each new director
was approved 

 

3

 

by a vote of at least two-thirds (2/3) of the directors then still in
office who were members of the Board at the beginning of the period;

 

(e)                                  The Company enters into an agreement of
merger, consolidation, share exchange or similar transaction with any other
corporation other than a transaction which would result in the Company’s voting
stock outstanding immediately prior to the consummation of such transaction
continuing to represent (either by remaining outstanding or by being converted
into voting stock of the surviving entity) at least two-thirds (2/3) of the
combined voting power of the Company’s or such surviving entity’s outstanding
voting stock immediately after such transaction;

 

(f)                                    The Board approves a plan of liquidation
or dissolution of the Company or an agreement for the sale or disposition by
the Company (in one transaction or a series of transactions) of all or
substantially all of the Company’s assets to a person or entity which is not an
affiliate of the Company; or

 

(g)                                 Any other event which shall be deemed by
a majority of the members of the Board to constitute a “Change of Control.”

 

Notwithstanding anything
to the contrary contained in this Section 10, the Board is hereby authorized
to make any modifications to the above “Change of Control” definition as it
determines in its sole discretion to be necessary for purposes of compliance
with Section 409A of the Code, to the extent applicable.

 

11.                                 Reservation of Shares.

 

With respect
to the Option, the Company hereby agrees to at all times reserve for issuance
and/or delivery upon payment by the Optionee of the Option price, such number
of Shares as shall be required for issuance and/or delivery upon such payment
pursuant to the Option.

 

12.                                 Delivery of Share Certificates.

 

Within
a reasonable time after the exercise of the Option the Company shall cause to
be delivered to the Optionee, his or her legal representative or his or her
beneficiary, a certificate for the Shares purchased pursuant to the exercise of
the Option.

 

13.                                 Withholding.

 

In the
event the Optionee elects to exercise the Option (or any part thereof) , if the
Company or an Affiliate shall be required to withhold any amounts by reason of
any federal, state or local tax rules or regulations in respect of the
issuance of Shares to the Optionee, the Company or Affiliate shall be entitled
to deduct and withhold such amounts.

 

14.                                 Amendment.

 

The
Committee may amend this Agreement at any time and from time to time; provided,
however, that no amendment of this Agreement that would materially and
adversely 

 

4

 

impair the Optionee’s rights or entitlements with
respect to the Option shall be effective without the prior written consent of
the Optionee (unless such amendment is required in order to cause the Award
hereunder to qualify as “performance-based” compensation within the meaning of Section 162
(m) of the Code and applicable interpretive authority thereunder).

 

15.                                 Plan Terms.

 

The
terms of the Plan are hereby incorporated herein by reference.

 

16.                                 Effective Date of Grant.

 

The
Option shall be effective as of the date first written above.

 

17.                                 Optionee Acknowledgment.

 

By
executing this Agreement, the Optionee hereby acknowledges that he or she has
received and read the Plan and this Agreement and that he or she agrees to be
bound by all of the terms of both the Plan and this Agreement.

 

	
  ATTEST:

  	
   

  	
  ARGYLE SECURITY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Donald F. Neville

  
	
   

  	
   

  	
   

  
	
  WITNESS:

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  , Optionee

  
	
   

  	
   

  	
  [Name]

  
					

 

 

5

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