Edgar Filing: COMMAND SECURITY CORP

COMMAND SECURITY CORPORATION
Route 55, Lexington Park
Lagrangeville, New York 12540

Dear Shareholder:

You are cordially invited to attend the annual meeting of shareholders of
Command Security Corporation to be held on Friday, August 27, 2004 at 10 a.m.
at the Stamford Marriott, located at Two Stamford Forum, Stamford, Connecticut.
The business to be conducted at the meeting is set forth in the formal notice
that follows. In addition, at the meeting, we will review our operations and
discuss our plans for the future.

Your vote is important to us. Whether or not you plan to attend the
meeting, we ask that you complete, date, sign and return the enclosed proxy
card in the envelope provided. Please mail your proxy promptly, so it is
received by the Company no later than August 26, 2004. If you attend the
meeting, you may vote in person if you wish, even if you have previously
returned your proxy card.

Sincerely,

William C. Vassell, President
Chief Executive Officer and Chairman

COMMAND SECURITY CORPORATION
Route 55, Lexington Park
Lagrangeville, New York 12540

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held August 27, 2004
To the shareholders of Command Security Corporation:

The annual meeting of shareholders of Command Security Corporation will be
held at the Stamford Marriott, located at Two Stamford Forum, Stamford,
Connecticut on August 27, 2004 at 10:00 o'clock in the morning, Eastern
Standard Time, for the following purposes:

1. To elect four directors from eight nominees to hold office until the
second succeeding annual meeting of the shareholders and until their
successors have been elected and qualified.

2. To ratify the selection of auditors for the fiscal year ending March 31,
2005.

3. To transact such other business as may properly come before the meeting.

Only shareholders of record at the close of business on August 6, 2004, are
entitled to notice of and to vote at the meeting and at any adjournment
thereof. A complete list of shareholders entitled to vote will be available
for inspection by shareholders at the executive offices of the Company at
least ten days before the date of the meeting.

By order of the Board of Directors.
William C. Vassell, President

Dated: August 6, 2004
Lagrangeville, New York

IMPORTANT - Please sign the enclosed proxy and mail it promptly in the
postpaid return envelope provided, particularly if you do not expect to
attend the meeting in person. All proxies must be received by August 26, 2004
to be counted in the voting.

IT IS IMPORTANT THAT YOUR SHARES BE VOTED IN ORDER TO AVOID DELAYS AND THE
ADDITIONAL EXPENSE TO THE COMPANY OF FURTHER SOLICITATION. PLEASE MAIL YOUR
PROXY PROMPTLY.

COMMAND SECURITY CORPORATION
NOTICE OF ANNUAL MEETING OF SHARHOLDERS

TABLE OF CONTENTS

Page

Proxy Statement...........................................................4

Proposal 1 - Election of Directors........................................5

Proposal 2 - Selection of Auditors.......................................10

Committees and Meetings of the Board of Directors........................11

Report of the Audit Committee............................................12

Nominating Committee.....................................................13

Directors and Executive Officers.........................................14

Ownership of Securities..................................................16

Compensation of Directors and Executive Officers.........................20

Comparison of Five-Year Cumulative
Total Returns Performance...........................................22

Employment, Termination of Employment and
Change of Control Agreements........................................23

Compensation Committee Interlocks and Insider
Participation in Compensation Decisions.............................27

Section 16(a) Beneficial Ownership Reporting Compliance..................27

Certain Relationships and Related Transactions...........................28

Shareholder Proposals and Nominations for Directors for
the 2005 Annual Meeting of Shareholders.............................28

Communication to the Board of Directors..................................29

Financial Information and Other Matters..................................29

COMMAND SECURITY CORPORATION
Route 55, Lexington Park
Lagrangeville, New York 12540

PROXY STATEMENT
The date of this Proxy Statement is August 6, 2004

This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors to be used at the annual meeting of
shareholders of the Company to be held on August 27, 2004 at 10:00 o'clock in
the morning, eastern standard time, at the Stamford Marriott, located at Two
Stamford Forum, Stamford, Connecticut, for the purposes set forth in the
accompanying notice of annual meeting of shareholders.

At the annual meeting, the shareholders will be asked to consider and vote
upon the following matters:

1. To elect four directors from eight nominees to hold office until the
second succeeding annual meeting of the shareholders and until their
successors have been elected and qualified.

2. To ratify the selection of auditors for the fiscal year ending
March 31, 2005.

3. To transact such other business as may properly come before the
meeting.

If the enclosed form of proxy is executed and returned, it may nevertheless
be revoked at any time before it is exercised, either in person at the annual
meeting or by written notice or by a duly executed proxy, bearing a later
date, sent to the President of the Company.

The Company anticipates mailing this proxy statement and the accompanying
proxy to shareholders on or about August 6, 2004. In addition to the
solicitation of proxies by mail, the Company, through its directors, officers
and employees, may solicit proxies from shareholders personally or by
telephone or other forms of communication. The Company may also require the
assistance of certain broker-dealers and/or proxy solicitation agents in
obtaining completed proxies from shareholders. Such assistance would be in
the form of telephonic or written communication by employees of such
broker-dealers and/or proxy solicitation agents. No contract or compensation
is anticipated at this time in connection with any such solicitation. All
expenses of proxy solicitation on behalf of the Company will be borne by the
Company.

As of August 6, 2004, (the "Record Date") there were 7,519,878shares of the
Company's common stock issued and outstanding, held by approximately 1,000
beneficial owners and approximately 200 holders of record. Each share of
common stock is entitled to one vote. Only holders of record of common stock
at the close of business on August 6, 2004 will be entitled to vote at the
meeting.

Proxies will be received and tabulated by the Company's transfer agent. Votes
cast in person at the meeting will be tabulated by election inspectors
appointed by the Company. Abstentions and "broker non-votes" are included in
the determination of the number of shares present at the meeting. Abstentions
are counted in tabulations of the vote cast on proposals presented to the
shareholders, whereas broker non-votes are not counted in tabulations of the
votes cast. Neither are counted as votes cast "for" a proposal.

If fewer shares are voted in favor of the proposals than required for their
approval, the meeting may be adjourned for the purpose of allowing additional
time for obtaining additional proxies or votes. At any subsequent reconvening
of the meeting, all proxies will be voted on the matter(s) to be considered
at the reconvened meeting in the same manner as such proxies would have been
voted on the matter at the original convening of the meeting (except for any
proxies which have theretofore effectively been revoked or changed),
notwithstanding that they may have been effectively voted on the same or any
other matter at a previous meeting. Any such adjournment will require the
affirmative vote of a majority of the shares present at the session of the
meeting to be adjourned. A proxy granting authority to vote upon such other
business incidental to the conduct of the meeting as may properly come before
the meeting will constitute authority to vote in favor of one or more
adjournments of the meeting.

None of the Company's executive officers, directors or director nominees have
any substantial interest, direct or indirect in any matter to be voted on
other than election or appointment to office.

GCM Security Partners, LLC, and Bruce Galloway, one of GCM's principals,
collectively own or have the right to vote 47.2% of the Company's outstanding
shares of common stock and may, therefore, have the ability to control the
outcome of all matters submitted before the shareholders for a vote at the
annual meeting.

PROPOSAL 1
ELECTION OF DIRECTORS

The Company's bylaws provide for its Board of Directors (the "Board") to be
divided into two classes. Directors are elected by a plurality of the votes
of the shareholders. The Company's by-laws provide that there shall be not
more than twenty-one nor fewer than three directors of the Company, with the
exact number to be determined from time to time by the Board. The Board
currently consists of seven members. The members of each class of directors
are elected for two (2) year terms and until their respective successors are
duly elected and qualified. Proxies cannot be voted for a greater number of
persons than the number of Directors to be elected which is four (4).

There are four (4) directors to be elected and eight (8) nominees for those
four (4) positions on the Board. The nominees, listed in alphabetical order,
are:

Name Age Name Age
---------------- ----- ------- -------
Robert S. Ellin 39 Peter J. Nekos 76
Bruce R. Galloway 46 Gordon Robinett 68
Thomas P. Kikis 43 William C. Vassell 45
Gregory J. Miller 45 Martin R. Wade, III 55

The Board makes no recommendation to the shareholders as to the nominees.

The vote required for approval, a quorum being present, is the affirmative
vote of a plurality of the votes cast.

Each shareholder may vote for a maximum of four (4) directors and no more. If
a shareholder votes for more than (4) four directors, none of the votes will
be counted for the election of directors. If no voting instructions as to the
ratification of the auditors are given on the proxy, the proxy will be voted
"for" ratification of the selection of the auditors. If no voting
instructions are given and/or votes for more than four (4) directors are
indicated on the proxy, it will be counted for purposes of determining a
quorum. With respect to any other matters which may properly come before the
meeting, it will be voted as herein recommended by the Board of Directors.

It is not anticipated that any of the nominees will become unavailable for
any reason, but, if that should occur before the meeting, the Board reserves
the right, in the exercise of its sole discretion, to substitute another
person selected by the Company's Board of Directors as a nominee in place of
such nominee.

The Nominees

Robert S. Ellin was submitted to the Board as a nominee by GCM. He is a
Managing Member of Trinad Capital LP, a hedge fund dedicated to investing in
micro-cap public companies. Prior to joining Trinad Capital LP Mr. Ellin was
the founder and President of Atlantis Equities, Inc. a personal investment
company. Founded in 1990, Atlantis has actively managed an investment
portfolio of small capitalization public companies as well as select private
company investments. Mr. Ellin frequently played an active role in Atlantis
investee companies including Board representation, management selection,
corporate finance and other advisory services. Through Atlantis and related
companies Mr. Ellin spearheaded investments into ThQ, Inc., Grand Toys,
Forward Industries, Inc. and completed a leveraged buyout of S&S Industries,
Inc. where he also served as President from 1996 to 1998. Prior to founding
Atlantis Equities, Mr. Ellin worked in Institutional Sales at LF Rothschild
and prior to that he was Manager of Retail Operations at Lombard Securities.
Mr. Ellin has a BA from Pace University. His board memberships include Shells
Seafood, Inc.

Bruce R. Galloway was submitted to the Board as a nominee by GCM Security
Partners, LLC ("GCM"). He is currently a Managing Director in the Galloway
Division at Burnham Securities, Inc., an investment bank based in New York.
He has been employed there since 1993. Prior to joining Burnham, from 1991 to
1993, Mr. Galloway was a Senior Vice President at Oppenheimer & Company, a
New York based investment bank, an NASD broker/dealer. Mr. Galloway has a BA
in economics from Hobart College, an MBA in finance from the New York
University Stern Graduate School of Business. His board memberships include
Chairman of International Microcomputer Software, Inc. - 2001 to present,
Chairman of DataMetrics Corporation - 2000 to present, Director of Forward
Industries, Inc. - 2002 to present, Director of GVI Security Solutions, Inc.
- 2004 and Waiter.Com, Inc. - 1999 to present.

Thomas P. Kikis was submitted to the Board as a nominee by GCM. He is the
managing member of Arcadia Securities, LLC, a New York based registered
broker-dealer which he organized in 1998. He is also the President of Kikis
Asset Management, a New York based money management firm he started in 1991.
Prior to that, he was vice president in charge of trading and a Portfolio
Manager at Deltec Securities, the New York subsidiary of an international
investment bank. Previously he was an investor and a director of the Company
from October, 1997 to November, 2000. Mr. Kikis has a BA from Princeton
University and an Executive MBA in Finance from New York University Stern
School of Business.

Gregory James Miller has been a director of the Company since September 1992.
He has served on various Committees including as Chair of: Y2k, Independent
Directors' and Warrant Committee. He currently serves as a member of the
Audit, Warrant and Compensation Committees. He is a principal in Gold Line
Connector, Inc., a Connecticut based technology company, which in 2002 was
nominated for the Nozko Award (for excellence in Management) and the TEC
Award (for Outstanding Technical Achievement). He has a Bachelors Degree from
Kalamazoo College and a Juris Doctor Degree from New York Law School. He is
admitted to the Bar in New York and Connecticut, and was formerly with the
New York office of Benenson & Kates, where he represented clients in the
Security Industry.

Gordon Robinett was submitted to the Board as a nominee by William C.
Vassell. He was hired as of April 5, 2004 as the Company's interim CFO
following the voluntary resignation of former CFO Graeme Halder. From July
1999 until his April 2004 employment with the Company, Mr. Robinett was
retired and living in Arizona. Mr. Robinett formerly served the Company as
Vice Chairman of the Board of Directors and Treasurer until August 1, 1996
when Mr. Robinett and the Company agreed to mutually terminate his
employment. In August 1997, Mr. Robinett was engaged again by the Company as
Acting Treasurer until he resigned on July 1, 1999, in conjunction with the
Board's approval of a then-new Chief Financial Officer and Executive Vice
President. Prior to his initial service to the Company, Mr. Robinett was an
employee of Uniforce Temporary Personnel, Inc., a publicly held national
temporary personnel agency from 1968 to April 1989, initially as Controller
and thereafter as Vice President of Finance, Secretary and Treasurer. Mr.
Robinett is currently a director of Comforce Corporation which acquired
Uniforce in 1996.

Peter J. Nekos has been a director of the Company since March 1991. Mr. Nekos
is a certified public accountant and began his career with Arthur Andersen &
Co. in New York City. He has degrees in Economics and in Accounting from
Michigan State University. His corporate experience includes: Controller for
the East River Savings Bank, Controller for two divisions of Burns
International, Inc., and Vice President and Treasurer for Meyers Parking,
Inc. From July 1984 to June 1986 he was a partner of Nekos & Kilduff, an
accounting firm located in New Rochelle, New York. He operated his own
accounting firm in Mamaroneck, New York from July 1986 until September 1996.
He is Chair of the Company's Audit Committee.

William C. Vassell is the Company's President, Chief Executive Officer and
Chairman of the Board. Mr. Vassell had been Chairman of the Board, President
and Chief Executive Officer of the Company since 1983, when the Company
repurchased the remaining 50% of its then-outstanding common stock (he became
a 50% owner of the Company in 1980). In connection with the Company's
acquisition of United Security Group Inc. ("United"), Mr. Vassell resigned
from the offices of President and Chief Executive Officer on February 24,
1995, and retained his position as Chairman of the Board. He has been a
director of the Company since 1980, and has been a member of the Executive
Committee since March 1995. He was reappointed as President and Chief
Executive Officer on November 13, 2000. Mr. Vassell is active in various
industry and trade associations. He twice was Chairman of the Mid-Hudson
Chapter of the American Society for Industrial Security (the nationally
recognized security association), and he is a Certified Protection
Professional within the Society. He is also a director of the Associated
Licensed Detectives of New York State and a member of the Committee of
National Security Companies.

Martin R. Wade, III was submitted to the Board as a nominee by GCM. He has
been the Chief Executive Officer and a director of International
Microcomputer Software, Inc. since 2001. Prior to joining IMSI, Mr. Wade
served from 1998 to 2000 as a merger and acquisition banker at Prudential
Securities and from 1996 to 1998 as a managing director in mergers and
acquisitions at Salomon Brothers. From 1991 to 1996, Mr. Wade was National
Head of Investment Banking at C.J. Lawrence, Morgan Grenfell, where he was a
member of the Board of Directors. Prior to this, Mr. Wade was the National
Head of investment banking for Price Waterhouse. Mr. Wade also spent six
years in the mergers and acquisitions department at Bankers Trust and eight
years at Lehman Brothers Kuhn Loeb. Mr. Wade is credited with participating
in over 200 merger and acquisition transactions involving various clients
such as, Nike, Cornerstone National Gas Company, Handmark Graphics and Redken
Laboratories, Inc. Mr. Wade has a BS in business administration from West
Virginia University, an MBA in Finance from the University of Wyoming. His
board memberships include Director, and Member of the Audit Committee, DiMon,
Inc. - 1999 to the present, Director and Chairman of the Audit Committee of
NexMed, Inc. - 2003 to the present and Director and Chairman of the Audit
Committee of Energy Transfer Group - 1999 to the present.

Messrs. Galloway and Kikis and Trinad Capital LP (by Robert S. Ellin) have
each filed Forms 3 with the Securities & Exchange Commission indicating that
they are equity participants in GCM Security Partners, LLC ("GCM"). As
described in greater detail below, GCM engaged in a change of control
transaction in 2004.

On June 22, 2004 GCM submitted a demand on the Company's board of directors
for the nomination of specified designees to the Board. (The June 22, 2004
letter included GCM's June 8, 2004 memorandum to the Board, a copy of which
is annexed as Exhibit "A" to GCM's Schedule 13D, Amendment 3, dated June 8,
2004.) In response to the demands of GCM, the Board resolved to nominate
Messrs. Galloway, Ellin, Wade and Kikis. The Board also discussed the
nominations of Messrs. Vassell, Miller and Nekos and after consideration of
their rights as shareholders to nominate themselves as directors, the Board
approved them simultaneously with the GCM nominees. Mr. Robinett was
subsequently submitted to the Board as a nominee by Mr. Vassell.

Change of Control and Legal Proceedings

On May 21, 2004, GCM Securities Partners, LLC ("GCM") purchased from Reliance
Security Group, plc ("Reliance") the following securities: (i) 1,617,339
shares of the Company's common stock, (ii) 12,325.35 shares of the Company's
Series A Preferred Stock (which are convertible into 1,232,535 shares of the
Company's common stock, (iii) a warrant to acquire 150,000 shares of the
Company's common stock at an exercise price of $1.03125 per share and (iv) a
warrant to acquire 2,298,092 shares of the Company's common stock at an
exercise price of $1.25 per share.

GCM has presented the Series A Preferred Stock for conversion and has
received a judgment (described in more detail below) authorizing the
conversion of these shares. Consequently, GCM's common stock holdings
post-conversion total 2,849,874 shares or 37.9%. Assuming the exercise of the
warrants reference above, these securities represent approximately 53.1% of
the outstanding shares of common stock in Command.

None of the warrants have been presented for exercise to date.

As reported by GCM Managing Member Bruce Galloway in a 13D/A filed June 8,
2004, these securities were purchased for a total payment of $2,850,000 in
immediately available funds from working capital of GCM.

At the time of the purchase by GCM, Command President and CEO, William C.
Vassell, had already initiated legal action in the United States District
Court, Southern District of New York (Case No. 04 CIV. 2657 (CM) ECF CASE)
seeking a determination that Mr. Vassell's right of first refusal under the
Shareholders Agreement between Reliance, Mr. Vassell and Command (filed as
Exhibit 99.19 of the form 8-K filed September 2000 and incorporated herein by
reference) was violated by Reliance in its offering (and subsequent sale) of
the securities to GCM. On June 18, 2004, the United States District Court
Judge rejected all of Mr. Vassell's claims, awarded summary judgment
declaring GCM the lawful owner of the Command securities purchased from
Reliance and ordered that Mr. Vassell and Command be preliminarily and
permanently restrained from interfering with the registration of the
securities in GCM's name or the exercise by GCM of any rights as the new
owner of the securities. Mr. Vassell has filed an appeal in the
above-litigation matter and his counsel has informed the Company that it is
his belief that the appeal decision will be decided by mid-August 2004. In
the meantime, both Mr. Vassell and Command are required to honor the Court's
decision.

On June 25, 2004 GCM submitted the Preferred Stock for conversion into
1,232,535 shares of the Company's Common Stock. The Board determined, based
on the advice of independent outside counsel, that the better view was that
the conversion of the Preferred Stock into common should be construed as a
violation of Section 912 of the New York Business Corporation Law ("NY BCL
912").

Accordingly, Command's Board unanimously determined not to issue the common
upon the conversion of the Preferred. Shortly thereafter, GCM brought a
motion before the same United States District Court asking the court to
clarify, enforce or supplement the Court's prior order and direct the Company
to issue the common stock upon conversion of the Preferred. On July 29, 2004
the court issued an opinion finding that Command's own anti-takeover language
contained in Article Ninth of its Certificate of Incorporation constituted an
express election by Command not to be governed by NY BCL 912. The court did
not perform a thorough analysis as to whether NY BCL 912 applied to
conversions of preferred stock but assumed for the sake of argument that they
do.

This decision enjoins Command from preventing the issuance of the 1,232,535
common stock to GCM in conversion of the Series A Preferred Stock.
Accordingly, Command will direct the company's transfer agent to issue the
common shares on Command's books effective as of June 25, 2004. GCM will
therefore be the record owner of an additional 1,232,535 shares of common
stock by the record date for the upcoming annual meeting.

It is expected that Messrs. French, Simon and Halder will resign from the
Board at or shortly following the shareholders meeting. In accordance with
the Company's bylaws, the Board will vote for their replacements who will
serve the balance of their respective terms which expire at the shareholders
annual meeting in 2005. The selection of directors to fill the vacancies
created by such resignations is uncertain at this time.

PROPOSAL 2
SELECTION OF AUDITORS

D'Arcangelo & Co., LLP audited the financial statements of the Company for
the fiscal year ended March 31, 2004 and has been selected by the Board upon
recommendation of the Audit Committee to audit the Company's financial
statements for the fiscal year ending March 31, 2005. Representatives of
D'Arcangelo & Co., LLP are not expected to be present at the meeting and
therefore are not expected to be available to make a statement or to respond
to questions. At the meeting, the shareholders will be asked to ratify this
selection.

The Board recommends that the shareholders vote FOR this proposal.

Audit Fees

The aggregate fees billed for professional services rendered for the audit of
the Company's annual financial statements for the fiscal year ended March 31,
2004, were $95,000. The fees charged in connection with the reviews of the
interim statements for the periods ended June 30, 2003 through December 31,
2003 were $59,357.

Financial Information Systems Design and Implementation Fees

The Company's auditors did not provide any services in connection with and
were not paid any fees in connection with financial information systems
design and implementation.

Tax Fees

The aggregate fees paid to the Company's auditors for tax return preparation
was $16,872.

All Other Fees

The aggregate fees for services rendered by the Company's auditors other than
services referenced above, for the most recent fiscal year, totaled
$10,283.The Audit Committee has concluded that the services rendered by its
auditors are compatible with maintaining the principal accountant's
independence.

COMMITTEES AND MEETINGS
OF THE BOARD OF DIRECTORS
FOR THE YEAR ENDED MARCH 31, 2004

The Company's Board met seven times during the fiscal year ended March 31,
2004. In addition, the Board met informally, by telephone, on several
occasions.

The Company had the following standing committees during the fiscal year
ended March 31, 2004: Compensation, Stock Option and Audit. All committee
meetings were attended by at least 75% of the directors comprising each
committee.

Compensation Committee

The Compensation Committee is comprised of Messrs. Vassell, Miller and
French. Mr. French replaced Mr. Allison on this committee. Its purpose is to
advise the Board on compensation-related issues with respect to the Company's
executive officers. The Committee did not meet formally during the fiscal
year ended March 31, 2004. A report of the Compensation Committee has not
been provided. The committee took no action with respect to compensation. All
such action was considered by the entire board.

Stock Option Committee

The Stock Option Committee includes Messrs. Miller and Nekos. There is one
vacancy on the committee. The purpose of the committee is to administer the
Company's 2001 Stock Option Plan. The committee did not meet during the
fiscal year ended March 31, 2004 and no stock options were granted under the
plan.

Audit Committee

The Audit Committee was comprised of Messrs. French, Miller and Nekos as of
March 31, 2004. Messrs. French, Miller and Nekos are independent directors
(as defined in Rule 4200(a)(15) of the National Association of Securities
Dealers listing standards) and it is believed that Mr. Nekos' credentials
satisfy the requirements of a financial expert.

The Audit Committee oversees the fulfillment by management of its financial
reporting and disclosure responsibilities and its maintenance of an
appropriate internal control system. It recommends the selection of the
Company's independent auditors. An Audit Committee Charter was adopted by the
Committee on August 21, 2000. The Charter was amended on January 8, 2001, to
permit the Audit Committee to fulfill its oversight role, relying on data and
reports provided by the Company's independent auditors. The committee met
formally four times during the fiscal year ended March 31, 2004.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee has reviewed and discussed with management and the
independent accountants the Company's March 31, 2004 audited financial
statements, and the June, September and December 2003 quarterly reports. In
addition, the Committee has discussed with the independent accountants the
matters required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees".

The Audit Committee has received from the independent accountants written
disclosures and a letter concerning the independent accountant's independence
from the Company, as required by the Independent Standards Board Standard No.
1, "Independent Discussions with Audit Committees." These disclosures have
been reviewed by the Committee and discussed with the independent
accountants.

Based on its review and discussions, the Committee has recommended to the
Board that the Audited Financial statements be included in the Company's
Annual Report on Form 10-K for fiscal 2004 for filing with the Securities and
Exchange Commission.

The foregoing report is believed by the undersigned members of the Audit
Committee as of February 24, 2004 to fairly represent the prior Audit
Committee actions.

Peter J. Nekos, Gregory J. Miller, Neil French

NOMINATING COMMITTEE

The Company does not have a standing Nominating Committee of the Board of
Directors. The Board of Directors performs the functions of a nominating
committee. Until May of 2004, the Company's two largest shareholders, William
C. Vassell, President, Chief Executive Officer and Chairman of the Board, and
Reliance Security plc ("Reliance") each selected three nominees to the Board
in accordance with a Shareholder Agreement dated September 12, 2000. Reliance
and Mr. Vassell selected a seventh nominee to the Board. As of May of 2004,
it is believed that the Shareholder Agreement terminated as the result of
sale of Reliance's interests in the Company to GCM Security Partners, LLC
("GCM").

Following the transfer of Reliance's interest to GCM, GCM submitted the names
of four nominees to the Company's Board of Directors in connection with the
upcoming meeting. The Board determined to nominate the four (4) directors
proposed by GCM: Bruce R. Galloway, Robert S. Ellin, Martin R. Wade, III and
Thomas P. Kikis. The Board also nominated the three current directors whose
terms are expiring: William C. Vassell (President, Chief Executive Officer
and Chairman), Gregory J. Miller and Peter J. Nekos. At the written request
of Mr. Vassell, and in accordance with the Company's Bylaws, the Board agreed
to include Mr. Gordon Robinett as a nominee. Mr. Carl E. Painter is not
standing for reelection. The Board approved the nominations based on a review
of the respective nominees' business experience and/or financial interest in
the Company.

Since the Board does not have a Nominating Committee it has no Nominating
Charter.

Messrs. Nekos, Miller, French, Simon and Painter are independent directors
(as defined in Rule 4200(a)(15) of the National Association of Securities
Dealers Listing Standards). The Board reviews information concerning each
nominee as described in further detail below. Based on that information, it
considers the individual's business experience, areas of expertise and
ability to contribute to a well-rounded Board. The Board does not have a
policy with regard to the consideration of director candidates recommended by
security holders. The Board's view is that such a policy should be adopted in
the event it is presented with such nominations in the future. However, the
Company's Bylaws provide that a shareholder may make nominations in writing
provided they are received by the Corporation not less than one hundred
twenty (120) days and not more then one hundred fifty (150) days in advance
of the mailing of the Corporation's proxy statement in connection with the
previous year's annual meeting. The Bylaws further provide that if the date
of the current year's annual meeting is changed by more then thirty (30) days
from the date contemplated at the time of the previous year's proxy
statement, as is the case for the August 27th meeting, such proposal must be
received by the Corporation at a reasonable time before the Corporation
solicits proxies for the election of directors. Proposing shareholders are
also required to provide information with regard to the nominees including
their full names and residence and business addresses; business experience
for the most recent five years; the number of shares of the Corporation's
stock owned by the proposed nominees and a description of legal proceedings
during the past five years.

DIRECTORS AND EXECUTIVE OFFICERS

The Company's by-laws require that the Board of Directors be divided into two
classes. The first class consists of directors Neil French, Jeremy Simon and
Graeme R. Halder. The terms of the directors in this class will expire at the
annual meeting next succeeding the August 27, 2004 (upcoming) annual meeting
of the shareholders. As of April, 2004, Jeremy Simon replaced Mr. Kenneth
Allison as a member of the first class of directors following Mr. Allison's
voluntary resignation.

The second class consists of William C. Vassell (President, CEO and
Chairman), Gregory J. Miller, Peter J. Nekos and Carl E. Painter. Mr. Painter
has advised the Board that he does not intend to stand for reelection. The
terms of the directors in the second class will expire at the upcoming annual
meeting of shareholders. Each director's term is intended to run until the
second annual meeting of shareholders following election. A classified board
makes it more difficult for shareholders to change the majority of directors.
Depending on the number of people in each class it could take two (2) annual
meetings to replace a majority of the Board.

The following table provides information concerning each person who was an
executive officer or director of the Company as of August 6, 2004.

Name Age Title
------------------- -- -------------------------------------

Martin Blake 50 Vice President Aviation Services

Neil French 53 Director

Graeme R. Halder 41 Director

Gregory J. Miller 45 Director

Peter J. Nekos 76 Director

Carl E. Painter 58 Director

Gordon Robinett 68 Chief Financial Officer

Jeremy P. Simon 48 Director

William C. Vassell 45 Chairman of the Board, President and
Chief Executive Officer

The biographical information for Messrs. Vassell, Miller, Nekos and Robinett
is located herein at the Section entitled "The Nominees" at pages 8 and 9.

Martin C. Blake, Jr. has over twenty-eight years of experience in aviation
security services. Prior to joining the company in 1995, Mr. Blake retired as
a Major in the United States Air Force, where he served in a variety of
senior management positions. Mr. Blake's last assignment was as the Program
Manager for Electronic Security Systems, Electronic Systems Division. In this
capacity he managed a $20 million annual program responsible for global
marketing, procurement, and deployment of electronic security systems. He was
responsible for integrating security systems and programs at international
airports in Germany, Turkey, and the United Kingdom. Previously, Mr. Blake
was the Director of Security at the Department of Defense's largest
classified air flight facility, incorporating over 1,200 square miles of
restricted air space. Establishing aviation security programs for major
aircraft defense contractors was an integral responsibility of his position.
Mr. Blake also served as the Security Program Manager for Air Force space
programs, including security for the Space Shuttle and expendable space
launch vehicles. He also led the effort to integrate a shared automated entry
control system for use at Cape Canaveral, Kennedy Space Center, and the
Johnson Space Center.

Neil French was appointed as a director to replace and finish the term of
Geoffrey P. Haslehurst who voluntarily resigned in January 2003. Neil French
was appointed Group Finance Director of Reliance Security Group plc in April
2001. A graduate of Edinburgh University and a Chartered Accountant, he is an
experienced public company finance director having held that position with
Perry Group plc and APV plc. Prior to that, he held several senior finance
positions with Lex Service plc. He is a member of the Company's Audit
Committee.

Graeme R. Halder has been a director of the Company since January 2001 and
served as its Chief Financial Officer from January 2001 until April 2004 when
he voluntarily resigned from that office. Mr. Halder is qualified as a
Chartered Accountant in the United Kingdom and worked from 1987 to 1988 with
Touche Ross at their London office. In 1988, he moved to the corporate head
office of Granada Group plc where he worked for eight years culminating in a
position as Finance Director of Granada Hospitality which had $2 billion of
revenue and $3 billion in assets. Granada was involved in retail, hotels and
catering. His final role at Granada Group plc was to spearhead the
integration of the accounting systems of several companies following the $6
billion acquisition of Forte plc in 1996. He moved to Reliance Security Group
plc in 1996 as Finance Director of Reliance Security Services Limited before
moving to the United States to take up the position of Chief Financial
Officer of Command.

Carl E. Painter has been a director of the Company since April 2001. Mr.
Painter was most recently Chairman, President and Chief Executive Officer of
BICC Cables Corporation which was a leading manufacturer of electrical cables
in the United States and Canada with revenues in excess of $750 million. BICC
Cables was a subsidiary of the London based BICC Group. In 1984, Mr. Painter
was a co-founder of Cablec Corporation, a company formed to complete the
management buy-out of the power cable business of the Phelps Dodge Cable &
Wire Company. At the time of the MBO, revenues were $50 million. By 1989,
revenues had increased to over $500 million as a result of internal growth
and several acquisitions and the company was acquired by the BICC Group.
During his time with the company, Mr. Painter held positions in
manufacturing, sales, marketing and general management and led a number of
acquisitions and the integration process following the acquisitions. He
served as a director on the main board of the BICC Group and was a director
on the board of Phillips Cables, Ltd., a Canadian subsidiary. He was also a
director for the National Electrical Manufacturers Association, the trade
association for the U.S. electrical industry. Mr. Painter received a Bachelor
of Science degree in electrical engineering from Lehigh University in 1968
and an MBA degree from the Harvard Business School in 1975. He served four
years as a Flight Officer in the U.S. Navy.

Jeremy P. Simon was appointed as a director to replace and finish the term of
Kenneth Allison who voluntarily resigned in April 2004. Mr. Simon has been
Group Legal Counsel and Company Secretary of Reliance Security Group plc
since January 2002. Prior to his position with Reliance, Mr. Simon worked for
over 4 years as the Corporate Services Director and Company Secretary of
Prism Rail PLC, a UK publicly quoted provider of passenger railway services.
Mr. Simon has been a corporate attorney for nearly 25 years and for much of
his career was a partner in a substantial UK law firm where he specialized in
corporate finance and other business-related fields.

William Dunn voluntarily resigned as Secretary and General Counsel for
Command Security Corporation in August 2003. No replacement has been
identified for either position.

OWNERSHIP OF SECURITIES

The following table sets forth certain information regarding the number and
percentage of common stock (being the Company's only voting securities)
beneficially owned by (i) each person who owns of record (or is known by the
Company to own beneficially) 5% or more of the Company's common stock or as
to which he has the right to acquire within sixty (60) days of August 6,
2004, (ii) each director, nominee and executive officer and (iii) said
directors, nominees and executive officers, as a group, as of August 6, 2004.
Except as indicated below, the address for each director and executive
officer is the Company's principal office at Lexington Park, Route 55,
Lagrangeville, New York 12540.

Other than as set forth in the following table, the Company is not aware of
any person (including any "group" as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934) who owns more than 5% of the common
stock of the Company. It should be noted however, that action taken by the
Court of Appeals in the William Vassell litigation (see Item 3 - Legal
Proceedings) could alter the ownership of the stock identified below as being
owned by GCM Securities Partners LLC.

Amount and Nature
Of Beneficial
Name Ownership(1) Percent of Class(2)
----- ----------------- -------------------

Certain Beneficial Owners

GCM Security Partners LLC 5,297,966 (2),(9) 53.1% (2)
c/o Galloway Capital
Management, LLC
1325 Avenue of the Americas
26th Floor
New York, NY 10019

Trinad Capital LP 5,297,966 (2),(10) 53.1% (2)
153 East 53rd Street
48th Floor
New York, NY 10022

Management

Named Executive Officers

Martin C. Blake, Jr. 50,000 (8) (12)

Directors and Nominees

Robert S. Ellin 5,297,966 (13) 53.1% (13)
153 East 53rd Street
48th Floor
New York, NY 10022

Bruce Galloway 5,997,266 (2,9) 60.2%
c/o Galloway Capital
Management, LLC
1325 Avenue of the Americas
26th Floor
New York, NY 10019

Thomas P. Kikis 5,297,966 (13) 53.1% (14)
c/o Galloway Capital
Management, LLC
1325 Avenue of the Americas
26th Floor
New York, NY 10019

Gregory J. Miller 10,000 (5) (12)
c/o Goldine Connectors, Inc.
Box 500, 400 Great Pasture Road
West Redding, CT 06896

Peter J. Nekos 12,500 (4) (12)

Carl E. Painter 10,000(6) (12)

Gordon Robinett 100 (12)
c/o Command Security Corporation
Route 55, Lagrangeville,
NY 12540

William C. Vassell 1,020,785 (3) 13.2% (2)
c/o Command Security Corporation
Route 55, Lagrangeville,
NY 12540

Martin R. Wade III 0 0

All Officers and 7,100,651 (2-8, 11) 69.3% (11)
Directors (including
Nominees) as a Group (8 Persons)

(1) The Company has been advised that all individuals listed have the sole
power to vote and dispose of the number of shares set forth opposite their
names except as indicated.

(2) Percent of class for each shareholder is calculated as if all shares
underlying Preferred Stock, options and warrants included in the table for
such shareholder are outstanding. The number of outstanding shares of common
stock is currently 7,519,878. The percent of class for all executive officers
and directors as a group is calculated as if all shares underlying Preferred
Stock, options and warrants held by any shareholders included in the group
are outstanding.

(3) The shares included under the beneficial ownership of Mr. Vassell include
204,485 shares at an exercise price of $1.25 per share, covered by a warrant
that became exercisable November 12, 2001 but then only to the extent of the
exercise by GCM Security Partners, LLC of a warrant GCM holds. Mr. Vassell
also shares voting and dispository power over 16,300 shares with his wife.
Mr. Vassell previously held a warrant covering 1,012,159 shares at an
exercise price of $1.25 per share. It was exercisable only to the following
extent: (i) with respect to one-third of the warrant shares if the Company's
earnings had satisfied certain "Confidential Performance Targets" (defined
below under Item 11 "Employment Agreements and Warrants and Termination of
Employment and Change of Control Agreement - William C. Vassell") for the
fiscal year ended March 31, 2002; (ii) with respect to two-thirds of the
warrant shares if the Company's earnings were satisfied the Confidential
Performance Targets for the fiscal year ended March 31, 2003; and (iii) with
respect to all of the warrant shares if the Company's earnings had satisfied
the Confidential Performance Targets for the fiscal year ended March 31,
2004. These targets were not met and the warrant is now void.

(4) Includes 10,000 shares covered by a warrant issued March 1, 2002 that is
exercisable at $.82 per share and expires on February 28, 2005.

(5) Includes 10,000 shares covered by a warrant issued March 1, 2002 that is
exercisable at $.82 per share and expires on February 28, 2005.

(6) Includes 10,000 shares covered by a warrant issued March 1, 2002 that is
exercisable at $.82 per share and expires on February 28, 2005.

(7) Intentionally omitted.

(8) Includes 50,000 shares covered by a warrant issued pursuant to the
Company's 2000 Stock Option Plan that became exercisable May 1, 2004.

(9) Based upon information contained in the Schedule 13D Amendments number 2
and 6 filed by Mr. Galloway on May 26, 2004 and July 12, 2004 respectively.
Includes i) Mr. Galloway's beneficial ownership of 212,000 shares of Common
Stock pursuant to a Proxy, dated July 1, 2004, from Europa International Inc.
("Europa") pursuant to which Mr. Galloway was appointed the proxy of Europa,
with full power and sole discretion to vote the shares of Common Stock held
by Europa for a period of one year; ii) Mr. Galloway's beneficial ownership
of 239,500 shares of Common Stock pursuant to a Proxy, dated July 7, 2004,
from Sandra Pessin pursuant to which Mr. Galloway was appointed the proxy of
Ms. Pessin, with full power and sole discretion to vote the shares of Common
Stock held by Ms. Pessin for a period of one year; iii) Mr. Galloway's
beneficial ownership of 75,300 shares of Common Stock pursuant to a Proxy,
dated July 1, 2004, from Edwin and Carol Levy pursuant to which Mr. Galloway
was appointed the proxy of Mr. and Mrs. Levy, with full power and sole
discretion to vote the shares of Common Stock held by Mr. and Mrs. Levy for a
period of one year; (iv) 172,500 shares of Common Stock over which Mr.
Galloway has full dispositive power; and (v) the shares beneficially owned by
Mr. Galloway through GCM Security Partners, LLC, a limited liability company
of which Mr. Galloway is a managing Member (see, footnote 10 below).

(10) Based upon information contained in the Schedule 13D Amendments number 2
and 5 filed by Managing Member Bruce Galloway on May 26, 2004 and July 9,
2004 respectively. The shares included under the beneficial ownership for GCM
Security Partners, LLC include 2,849,874 shares of common stock, a currently
exercisable warrant for 150,000 shares at an exercise price of $1.03125 per
share and a warrant covering 2,298,092 shares, at an exercise price of $1.25
per share which became exercisable on November 12, 2001.

(11) The denominator for the group calculation is 10,252,455.

(12) Less than 1 percent of class.

(13) Based upon the information contained in the Form 3 filed by Trinad
Capital LP and signed by Robert Ellin on May 21, 2004. Mr. Ellin is the
managing member of Trinad according to the biographical information he has
provided to the Company. This number includes the shares beneficially owned
through GCM Security Partners, LLC (see, footnote 10 above).

(14) Based upon information contained in the Form 3 filed by Mr. Kikis on May
21, 2004. This number includes the shares beneficially owned by Mr. Kikis
through GCM Security Partners, LLC (see, footnote 10 above).

COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS

Board Report on Executive Compensation

The purpose of the Company's Compensation Committee is to advise the Board on
matters related to the compensation of executive officers and was, as of
March 31, 2004, comprised of William C. Vassell, Gregory J. Miller and Neil
French. The Company's policy for determining compensation for management
personnel is based on its understanding of the market rate for similar
positions in an effort to attract and retain qualified personnel. Raises are
granted based on performance which is measured in terms of a wide range of
factors including the Company's earnings, revenue, period to period
performance, cost savings, length of service, creativity and financing.

During the year ended March 31, 2004, the Committee reviewed recommendations
from Management as to a new employment agreement for Martin Blake, VP of
Aviation, an amendment to Mr. Blake's Employment Agreement, termination
benefits for Graeme Halder (formerly CFO) and an employment agreement for Mr.
Robinett (CFO). Pursuant to Corporate Policy, these matters were then
referred to the full Board for decisions as to Executive Compensation. In
making determinations with respect to compensation for its executive
officers, the Board generally reviewed the compensation paid to similarly
situated officers at other security guard companies with which the Board was
familiar. The base salary selected for Mr. Vassell was at the low to median
range of the comparison companies.

The foregoing report is believed by the undersigned members of the
Compensation Committee as of March 15, 2003, to fairly represent the prior
Compensation Committee's and Board of Director's actions.

William C. Vassell, Neil French and Gregory J. Miller

The following table sets forth for the fiscal year ended March 31, 2004, all
plan and non-plan compensation paid to, earned by, or awarded to William C.
Vassell, Chairman of the Board and Chief Executive Officer, Graeme R. Halder,
Chief Financial Officer (until his voluntary resignation on April 4, 2004)
and Martin C. Blake, Jr., Vice-President - Aviation. No other executive
officer of the Company received total annual salary and bonus in excess of
$100,000 for the fiscal year ended March 31, 2004 and, therefore,
compensation for such other executive officers is not disclosed.

SUMMARY COMPENSATION TABLE
FOR THE FISCAL YEAR ENDED MARCH 31, 2004

Annual Compensation Long-Term
Compensation

Shares
Fiscal Year Other Annual Underlying
Name and Principal Ended Salary Warrants
Position March 31 Annual Salary Compensation Bonus Granted
------------------ -------- ------------- ------------ ----- ----------

William C. Vassell 2004 $250,000 0 204,485
President, Chairman 2003 $193,268 $50,000
of the Board & Chief 2002 $146,280 $45,000
Executive Officer

Graeme R. Halder 2004 $275,574 $166,439 0
Chief Financial Officer 2003 $260,834 $77,533 $25,000
2002 $163,083 $120,320 0

Martin C. Blake, Jr. 2004 $150,000 $94,200 50,000
Vice President- 2003 $187,417 $150,000
- Aviation 2002 $119,678 $114,312

In November 2000, Mr. Vassell was granted two warrants covering
1,217,444 shares of the Company's common stock in connection with the
Reliance transaction. The first warrant issued to Mr. Vassell in
connection with the Reliance transaction covers 204,485 shares at an
exercise price of $1.25 per share. The shares became exercisable on
November 12, 2000, but cannot be exercised until after the exercise by
the holder of the warrant issued to Reliance and then only in the same
proportion as to which the Reliance warrant is then exercised. This
warrant expires on November 12, 2005. The second warrant issued to Mr.
Vassell in connection with the Reliance transaction covered 1,012,159
shares at an exercise price of $1.25 per share. It was exercisable only
to the following extent: (i) with respect to one-third of the warrant
shares if the Company's earnings had satisfied certain "Confidential
Performance Targets" (defined below under Item 11 - "Employment
Agreements and Warrants and Termination of Employment and Change of
Control Agreement - William C. Vassell") for the fiscal year ended March
31, 2002; (ii) with respect to two-thirds of the warrant shares if the
Company's earnings were satisfied the Confidential Performance Targets
for the fiscal year ended March 31, 2003; and (iii) with respect to all
of the warrant shares if the Company's earnings had satisfied the
Confidential Performance Targets for the fiscal year ended March 31,
2004. These targets were not met and the warrant is now void.

All perquisites and other personal benefits, securities or property do
not exceed either $50,000, or 10% of the total annual salary and bonus
of the executive officer. All perquisites and other personal benefits,
securities or property are properly indicated in the "Other Annual
Salary Compensation" column, as they all fit into the categories set
forth in Item 402 of Regulation S-K.

Mr. Halder's additional compensation is comprised of (i) $11,688 annual
vehicle reimbursement; (ii) $8,471 annual health insurance deduction
reimbursement; and (iii) $146,280 one-time payment for the buyout of Mr.
Halder's employment contract resulting from Mr. Halder's resignation in
April 2004. Also, as a result of this resignation, Mr. Halder's 75,000
warrants have become void.

Mr. Blake received a warrant in 2000 pursuant to the Company's Stock
Option Plan. This warrant is for 50,000 shares at an exercise price of
$.75 became exercisable on May 1, 2004.

Comparison of Five-Year Cumulative Total Returns Performance Graph for

COMMAND SECURITY CORP

Produced on 07/26/2004 including data to 03/31/2004

(GRAPH)

Legend

CRSP Total
Returns Index for 03/1999 03/2000 03/2001 03/2002 03/2003 03/2004

COMMAND SECURITY CORP 100.0 9.4 60.8 83.3 67.4 79.9

Nasdaq Stock Market
(US Companies) 100.0 185.8 74.4 75.0 55.0 81.2

NASDAQ Stocks
(SIC 7380 - 7389 US 100.0 147.5 28.3 34.4 38.8 64.5
Companies) Miscellaneous
Business Services

Notes:

A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.

B. The indexes are reweighted daily, using the market capitalization on the
previous trading day.

C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.

D. The index level for all series was set to $100 on 03/31/1999.

E. Data for Command Security Corporation from October 2000 to March 2004
provided by the client.

EMPLOYMENT, TERMINATION OF EMPLOYMENT
AND CHANGE OF CONTROL AGREEMENTS

William C. Vassell

The Company entered into an Employment Agreement with Mr. Vassell dated as of
September 12, 2000. The Agreement went into effect when the Reliance
transaction was consummated on November 13, 2000. The Employment Agreement
provides that Mr. Vassell be employed as the Company's Chairman of the Board
of Directors, Chief Executive Officer and President. The Employment Agreement
will end on the earlier of the third anniversary of the effective date or the
date on which Mr. Vassell's employment is terminated under the Employment
Agreement. Unless either party gives ninety (90) days notice to the other
party prior to an anniversary of the effective date, the three-year rolling
Employment Period shall be automatically extended for one (1) year on such
anniversary date. The Company served a non-renewal notice on July 23, 2004,
well in advance of the 90 days prior to the anniversary date of November 13,
2004. Mr. Vassell's base salary is currently $250,000 per annum. Pursuant to
the Reliance transaction and the Employment Agreement, the Compensation
Continuation Agreement entered into between the Company and Mr. Vassell was
terminated as of September 2000.

Mr. Vassell became eligible to receive incentive compensation commencing as
of the fiscal year ended March 31, 2002. Pursuant to this incentive
compensation, he was eligible to receive incentive compensation equal to 20%
of his base salary if the Company's earnings before taxes for a given year
equaled or exceeded certain Confidential Performance Targets. Said
Confidential Performance Targets were set forth in a confidential letter
agreement between Mr. Vassell and the Company, dated September 12, 2000. Said
Letter Agreement referenced the Company's confidential Business Plan dated
March 13, 2000 and was approved by the Company's Board of Directors in
November, 2000 following the Reliance Transaction. For each percentage
increase in earnings before taxes above the stated targets, the incentive
compensation would have been increased by three percentage points of the base
salary up to a maximum incentive compensation equal to 50% of base salary. As
of the end of fiscal year 2004 the Confidential Targets had not been met and
Mr. Vassell is no longer eligible to receive the foregoing incentive
compensation.

Mr. Vassell also received two warrants which are described in "Security
Ownership of Certain Beneficial Owners and Management" and in the annotations
to the table above. Mr. Vassell's employment may be terminated by the Board
with or without cause or by Mr. Vassell in the event of a material breach by
the Company or Reliance of the Shareholders' Agreement dated September 12,
2000, a material diminution in his duties and/or authority under the
Employment Agreement, or a relocation of the Company's headquarters more than
fifty (50) miles away from its his current location. Any such diminution,
relocation or other uncured breach is referred to as constructive discharge.
Mr. Vassell may also terminate his employment upon one hundred eighty (180)
days notice or under certain circumstances following a change in control. As
a result of the GCM purchase of Reliance's shares (see, Item 3 - Legal
Proceedings) a change of control might have occurred.

In the event Mr. Vassell is terminated for cause or he is terminated other
than for constructive discharge or following a change of control, death or
disability, the Company shall have no further obligation except to pay those
accrued obligations arising prior to the date of termination. In the event
the Company terminates Mr. Vassell without cause or Mr. Vassell terminates as
a result of constructive discharge, the Company will have no obligation to
Mr. Vassell other than to pay all accrued obligations such as salary and
benefits, the payment of the balance of his base salary for the remainder of
his Employment Period plus incentive compensation under certain
circumstances. Based on the advice of the Company's counsel, it is believed
that the Employment Period terminates November 12, 2006 and a termination of
Mr. Vassell in the near future could cause the Company to incur a charge of
approximately $600,000 (based on 28 months remaining in the Employment
Period). If, however, the Employment Period termination date was determined
to be November 12, 2005 the Company could incur a charge of approximately
$345,000.

The Employment Agreement provides that Mr. Vassell shall be subject to a
Confidentiality Agreement with respect to any confidential or proprietary
information, knowledge or data relating to the Company. In addition, for one
(1) year following termination of his employment for any reason, Mr. Vassell
shall not solicit for employment or employ any person who is a senior
executive or branch manager of the Company, solicit any customer of the
Company or provide to any customer of the Company services of the type
offered by the Company as of the date of such termination except under
certain circumstances.

The Employment Agreement goes on to provide Mr. Vassell with extensive
indemnification with respect to any action taken or omission occurring after
the effective date of the contract. Such indemnification provisions provide
for advancement of expenses and costs.

Graeme R. Halder

Mr. Halder voluntarily resigned from his position as Chief Financial Officer
of the Company on April 4, 2004 and accordingly, his Employment Agreement was
terminated without further obligation on the Company's part. During the
fiscal year covered by this report, Mr. Halder was employed pursuant to an
Employment Agreement effective from August 20, 2001. This superseded the
prior agreement that was effective from January 1, 2001. The Agreement
provided that Mr. Halder was to be employed as the Company's Chief Financial
Officer and was to report to Mr. Vassell. Under this Agreement, Mr. Halder's
base salary was $146,280 per annum, and in fiscal year 2004 he received other
compensation in the amount of $166,439 (see F3 to Item 11 - Executive
Compensation). The perquisites offered to Mr. Halder included a Tax
Equalization Agreement, an automobile, a $13,800 disturbance allowance per
annum, the reasonable costs of private education for his two eldest children
(which was not required for the 2003/2004 school year as they had returned to
the UK) and a $6,000 per annum air travel allowance. The Company also paid
him a mortgage allowance towards his US property which was offset by rental
income received on his property in the UK.

Martin C. Blake, Jr.

The Company has executed an Employment Agreement with Mr. Blake dated as of
March 1, 2003. The Agreement went into effect on March 1, 2003 and superseded
a prior Employment Agreement dated March 20, 2000 and as amended on March 20,
2002. The Agreement provides that Mr. Blake be employed as the Company's Vice
President and General Manager of the Company's Aviation Division. The
contract will end on the earlier of the third anniversary of the date of the
Agreement or the date on which Mr. Blake's employment is terminated under the
Agreement. Mr. Blake's base salary is $150,000 per annum. He is also eligible
to receive a performance-related bonus. The perquisites offered to Mr. Blake
include an automobile and reimbursement for all out-of-pocket business
expenses.

In the event Mr. Blake is terminated for cause, the Company shall have no
further obligation except to pay those accrued obligations arising prior to
the date of termination. In the event the Company terminates Mr. Blake's
employment without cause, the Company is obligated to provide twelve (12)
months of health insurance and pay a lump sum severance amount of $150,000.

The Agreement further provides that Mr. Blake will execute the Company's
standard form of Confidentiality and Non-Compete Agreement pursuant to which,
for one year following termination of his employment for any reason, he will
not engage in any employment or business in competition with the Company. For
one additional year he will not solicit any of the Company's aviation clients
or potential clients or hire or influence Company employees to leave the
Company.

Gordon Robinett

The Company has executed an Employment Agreement with Mr. Robinett commencing
April 5, 2004 and terminating on October 5, 2004. Mr. Robinett was hired as
the Company's interim CFO following the voluntary resignation of former CFO
Graeme Halder. Under the Agreement Mr. Robinett receives a salary of $125,000
per annum. The perquisites offered to Mr. Robinett under the Agreement
include use of an automobile with purchase option, a $750 monthly housing
allowance and reimbursement for all out-of-pocket business expenses. If the
Company terminates Mr. Robinett's employment for any reason other than death
the Company is obligated to pay Mr. Robinett 60% of the remaining salary due.
If Mr. Robinett dies during the term of the Agreement, the Company will be
obligated to pay his widow 50% of the remaining salary due.

The Agreement also contains a non-compete clause providing that, during the
term of his employment, Mr. Robinett will not engage in business with, be
employed by or serve as an officer or director of any other business or
enterprise (except for ComForce Corporation). The clause further provides
that during the term and for an additional two years thereafter, Mr. Robinett
will not solicit any of the Company's employees or hire or influence Company
employees to leave the Company.

William Dunn

William Dunn voluntarily resigned as Secretary and General Counsel for
Command Security Corporation on August 29, 2003. Mr. Dunn's warrants for
20,000 shares of common stock (issued in connection with his employment) were
cancelled pursuant to their terms.

Other Agreements

Other than pursuant to the Employment Agreement and the Compensation
Continuation Agreement for Mr. Vassell and the employment agreements with
Messrs. Robinett and Blake, there is no compensation plan or arrangement for
the benefit of any person named in the Summary Compensation Table that would
result from the resignation, retirement or other termination of such person's
employment.

Other than the compensation described above, there are no long-term incentive
plans for the persons named in the Summary Compensation Table. In November
1999, the Company adopted a qualified Retirement Plan which became effective
beginning calendar year 1999 and provided for elective employee deferrals and
discretionary employer contributions to non-highly compensated participants.
The Plan does not allow for employer matching of elective deferrals. For the
period ended March 31, 2003, no discretionary amounts have been accrued or
paid.

Board of Directors' Compensation

No executive officer receives any additional compensation for serving as a
director. Directors who are not employees of the Company or the Reliance
Security Group received a meeting fee of $2,500 for each meeting attended,
and all directors were reimbursed for expenses incurred in attending Board
meetings. Directors Gregory J. Miller and Peter J. Nekos receive $1,000 per
month in connection with services they provide to the Company in their
capacity as members of the audit committee. No other directors who are not
also executive officers received any plan or non-plan compensation from the
Company during the last three fiscal years. In recognition of their service
as Directors, Messrs. Nekos and Painter, and Miller were each granted a
warrant covering 10,000 shares of the Company's Common Stock exercisable at
$0.82 per share in February 2002. The warrants expire on February 28, 2005.

In July 2002, an Independent Committee of Directors was established to
consider various options available to the Company to maximize shareholder
value. The Committee comprised of Gregory J. Miller (Chair), Peter J. Nekos
and Carl E. Painter. Fees received for fulfilling their duties on this
Committee were $44,045, $9,000 and $2,779 for the fiscal year ended March 31,
2004, respectively. The Independent Committee has met extensively over
several months during the fiscal year ended March 31, 2004 due in large part
to the sale of Reliance's shareholding and the surrounding issues. The
Committee was disbanded in July 2004.

Limited Directors' Liability

Pursuant to the New York Business Corporation Law, the Company's Certificate
of Incorporation, as amended, eliminates to the fullest extent of such Law
the liability of the Company's Directors, acting in such capacity, for
monetary damages if they should fail through negligence or gross negligence
to satisfy their duty of exercising proper business judgment in discharging
their duties, but not for acts or omissions in bad faith, or involving
intentional misconduct or amounting to a knowing violation of law or under
other limited circumstances.

COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS

The Company's Compensation Committee is intended to make all recommendations
to the Board related to compensation issues with respect to executive
officers. For the fiscal year ended March 31, 2004, it was comprised of
William C. Vassell, Gregory J. Miller and Neil French (Mr. French replaced
Mr. Allison who initially served on the committee in fiscal year 2004). None
of the directors or executive officers serve on the Compensation Committee of
any other entity.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Each director and executive officer of the Company who is subject to Section
16 of the Securities Exchange Act of 1934, and each other person who
beneficially owns more than 10% of the Company's common stock, is required by
Section 16(a) of that Act to report to the Securities and Exchange Commission
by a specified date his or her ownership of and transactions in the Company's
common stock. Copies of such reports on Forms 3, 4, and 5 must also be
provided to the Company. Based on management's knowledge of the holdings and
transactions of reporting persons, a review of Forms 3, 4 and 5 and any
amendments thereto, and a review of written representations to the Company
with respect to the fiscal year ended March 31, 2004, the Company is not
aware of any person who, at any time during the fiscal year ended March 31,
2004, was a director, officer or beneficial owner of more than ten percent
(10%) of the Company's common stock and who failed to file reports required
by Section 16(a) of the Securities Exchange Act of 1934, as amended, during
the fiscal year ended March 31, 2004.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with Management and Others

In connection with the purchase of its interests in the Company on September
12, 2000, Reliance, William C. Vassell and the Company entered into a
Shareholder Agreement which provides in part that Reliance and Mr. Vassell
must vote in favor of each of the three directors chosen by the other party
and mutually agree to the selection of a seventh board member. It is believed
that this Agreement terminated upon the sale by Reliance of its interests in
the Company to GCM. However, in the event Mr. Vassell is successful with his
appeal as discussed in Item 3 - Legal Proceedings, it is believed that said
Agreement will be reinstated.

SHAREHOLDER PROPOSALS AND NOMINATIONS FOR DIRECTORS
FOR THE 2005 ANNUAL MEETING OF SHAREHOLDERS

Shareholders are entitled to submit proposals on matters appropriate for
shareholder action consistent with regulations of the Securities and Exchange
Commission and the Company's bylaws.

Should a shareholder intend to present a proposal at the annual meeting to be
held in 2005, under Securities and Exchange Commission Rules, it must be
received by the Secretary of the Corporation of the Company at Route 55,
Lexington Park, Lagrangeville, New York 12540, not less than 120 days in
advance of and not more than 150 days in advance of August 6, 2005, in order
to be included in the Company's proxy statement in form of proxy relating to
that meeting.

The Company's bylaws provide that in addition to any other applicable
requirements for business to be properly brought before the annual meeting by
a shareholder, the shareholder must give timely notice in writing to the
Secretary. Additionally, our bylaws provide that a shareholder of the Company
entitled to vote for the election of directors may make nominations of
persons for election to the board at a meeting of the shareholders by
complying with the required notice procedures. To be timely, notice must be
given in writing and must be delivered or mailed to the Secretary and
received at the Company's principle executive offices not less than 120 days
and no more than 150 days prior to August 6, which is the date on which the
Company's proxy statement was mailed to shareholders in connection with the
2004 annual meeting. In the event the 2005 annual meeting is called for a
date more than 30 days from October 1, 2005, such shareholder proposal must
be received by the Company at a reasonable time before the Company solicits
proxies for the election of the directors.

The bylaws further provide that your notice to the Secretary must set forth,
among other things, specified information as to the matters to be brought
before the meeting or as to the nominees, and specified information as to the
stockholder or shareholder making the nomination or proposal. The Company may
require any proposed nominee to furnish such information as may reasonably be
required to determine the eligibility of such nominee to serve as a director
of the Company.

COMMUNICATION TO THE BOARD OF DIRECTORS

The Board of Directors will consider communications sent to the Company's
main address, its investor relations consultant or to William C. Vassell,
President, CEO and Chairman of the Board. Given the relatively small volume
of such communications, the Board would expect all such communications to be
delivered to it by the recipient. Communications with the Board can be
accomplished by directing them to William C. Vassell, President, Chief
Executive Officer and Chairman of the Board, Command Security Corporation,
P.O. Box 340, Lagrangeville, New York 12540. All such communications will be
provided directly to Board members.

FINANCIAL INFORMATION AND OTHER MATTERS

The Company's financial statements, supplementary financial information,
management's discussion and analysis of financial condition and results of
operation and quantitative and qualitative disclosures about market risk are
incorporated herein by reference to the Company's Annual Report for its
fiscal year ended March 31, 2004 and to its quarterly reports, as amended,
for the quarter ended June 30, 2003, September 30, 2003 and December 31,
2003. The Company's Annual Report in the form of the 10-K filed with the
S.E.C. is being provided to you together with this proxy statement. Copies of
the quarterly reports or of any exhibit may be obtained without charge by
calling or writing to the Company at 845-454-3703 or Route 55, Lexington
Park, Lagrangeville, New York 12540. You may also view current and past
financial statements on the Company's website at
http://www.commandsecurity.com.

The Company holds its executive officers to the highest ethical standards.
Its Code of Ethics is published on the Company's website.

Management is not aware of any matters to be presented for action at the
meeting other than the matters mentioned above, and does not intend to bring
any other matters before the meeting. However, if any other matters should
come before the meeting, it is intended that the holders of the proxies will
vote them according to the discretion of the Company's Board of Directors.

By order of the Board of Directors,

/s/ William C. Vassell
William C. Vassell, President

Dated: August 6, 2004

PROXY COMMAND SECURITY CORPORATION
PROXY
PROXY FOR THE August 27, 2004 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS

KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned

Shareholder of Command Security Corporation, Lagrangeville, New York, do
hereby nominate, constitute and appoint David J. Pollitzer and Seth D.
Finkell (neither being an officer or employee of the Company) or either of
them (with full power to act alone) my true and lawful attorney(s) with full
power of substitution, for me and in my name, place and stead to vote all the
Common Stock of said Company, standing in my name on its books on August 6,
2004 at the Annual Meeting of its Shareholders to be held at the Stamford
Marriott located at Two Stamford Forum, Stamford, Connecticut at 10:00 a.m.
on August 27, 2004, or any adjournment thereof, with all the powers the
undersigned would possess if personally present, as follows:

1. To elect the four (4) directors indicated below with a check mark in the
space to the left of their names. Do not vote for more than four directors.
(You may vote for fewer than four directors if that is your choice. However,
four directors will be elected, based on plurality of votes received.)

Name Age Name Age
---------------- ----- ------- -------
___ Robert S. Ellin 39 ___ Peter J. Nekos 76

___ Bruce R. Galloway 46 ___ Gordon Robinett 68

___ Thomas P. Kikis 43 ___ William C. Vassell 45

___ Gregory J. Miller 45 ___ Martin R. Wade, III 55

2. To ratify the selection of D'Arcangelo & Co., LLP to serve as auditors for
fiscal year ending March 31, 2005.

_ FOR _ AGAINST _ WITHHELD

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED ABOVE. IN THE
ABSENCE OF ANY DIRECTION, THE SHARES REPRESENTED HEREBY SHALL NOT BE VOTED
FOR THE ELECTION OF DIRECTORS AND SHALL BE VOTED IN FAVOR OF RATIFICATION OF
THE AUDITORS. THE PROXIES ARE AUTHORIZED TO VOTE AT THE DIRECTION OF THE
BOARD OF DIRECTORS UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE SUCH
MEETING OR ANY ADJOURNMENT THEREOF.

THE BOARD OF DIRECTORS MAKES NO RECOMMENDATION AMONG THE NOMINIEES AS
DIRECTORS AND RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE AUDITORS. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND MAY BE REVOKED
PRIOR TO ITS EXERCISE BY DELIVERY OF NOTICE OF REVOCATION OR A LATER-DATED
PROXY TO WILLIAM C. VASSELL, PRESIDENT OF THE CORPORATION AT ROUTE 55,
LEXINGTON PARK, LAGRANGEVILLE, NEW YORK 12540.

DATED: ________________

___________________________________________(L.S.) Signature of Shareholder