Exhibit 10.3
EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of October 1, 2001, between XXXXX XXXX
(hereinafter called "Horn") and VICON INDUSTRIES, INC., a New York corporation,
having its principal place of business at 00 Xxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx
00000 (hereinafter called the "Company").
WHEREAS, Horn has previously been employed by the Company, and
WHEREAS, the Company and Horn mutually desire to assure the
continuation of Horn's services to the Company,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties covenant and agree as follows:
1. Employment. The Company shall employ Horn as its Vice
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President of Operations throughout the term of this Agreement, and Horn
hereby accepts such employment.
2. Term. The term of this Agreement shall commence as of the
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date of this Agreement and end on September 30, 2004, unless terminated
earlier by the Company for cause.
3. Compensation.
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A. The Company shall pay Horn a base salary of $140,000 per
annum, subject to periodic adjustment as determined by the CEO of the Company
with Board of Directors approval, but in any event shall not be less than the
base salary so indicated. Beginning October 1, 2002 to the end of this
agreement, the base salary shall be adjusted upward by an amount at least equal
to the Consumer Price Index - All Urban Consumers factor for the previous twelve
months.
X. Xxxx'x base salary shall be payable monthly or bi-weekly.
X. Xxxx shall also be entitled to participate in any life
insurance, medical, dental, hospital, disability or other benefit plans as may
from time to time be made available to non-executive officers of the Company,
subject to the general eligibility requirements of such plans.
4. Covenant not to Compete. Horn agrees that during the term of
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this Agreement and for a period thereafter equal to the length of severance as
calculated in paragraph 5A, he shall not directly or indirectly within the
United States or Europe engage in, or enter the employment of or render any
services to any other entity engaged in, any business of a similar nature to or
in competition with the Company's business of designing, manufacturing, and
selling security equipment and protection devices anywhere in the United States
and Europe. Horn further acknowledges that the services to be rendered under
this Agreement by him are special, unique, and of extraordinary character and
that a material breach by him of this section will cause the Company to suffer
irreparable damage; and Horn agrees that in addition to any other remedy, this
section shall be enforceable by negative or affirmative preliminary or permanent
injunction in any Court of competent jurisdiction. Horn acknowledges that he may
only be released from this covenant if the Company materially breech's this
agreement or provides a written release of this provision.
5. Severance Payment on Certain Terminations.
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A. If either this Agreement expires, or the Company terminates
Horn's employment under this Agreement for reasons other than "Gross
Misconduct", then Horn, at his option, may elect to receive severance payments,
without reduction for any offset or mitigation, in an amount equal to (a)
one-twelfth Horn's annual base salary at the time of such termination multiplied
by (b) the number of full years of Horn's employment by the Company up to a
maximum of 24 years.
B. "Gross Misconduct" shall mean (a) a wilful, substantial and
unjustifiable refusal or inability, due to drug or alcohol, impairment to
perform substantially the duties and services required of his position; (b)
fraud, misappropriation or embezzlement involving the Company or its assets; or
(c) conviction of a felony involving moral turpitude.
X. Xxxx'x option to elect to receive severance payments may be
exercised only by written notice delivered to the Company within 90 days
following the date on which Horn's receives actual notice of termination or this
Agreement expires, as the case may be.
In the event of an election under this section, payment of such
severance shall be in lieu of any other obligation of the Company for severance
payment or other post-termination compensation under this Agreement if any.
The severance amount shall be paid in equal monthly payments over a
12 month period.
6. Termination Payment on Change of Control.
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A. Notwithstanding any other provision of this Agreement, if a
"Change of Control" occurs without the consent of the Board of Directors, Horn,
at his option, may elect to terminate his obligations under this Agreement and
to receive a termination payment, without reduction for any offset or
mitigation, in an amount equal to three times his average annual base salary for
the five years preceding the Change of Control, in either lump sum or extended
payments over three years as Horn shall elect.
B. A "Change of Control" shall be deemed to have occurred if any
entity shall directly or indirectly acquire beneficial ownership of 50% or more
of the outstanding shares of capital stock of the Company. X. Xxxx'x option to
elect to terminate his obligations and to receive a termination payment and to
elect to receive a lump sum or extended payments may be exercised only by
written notice delivered to the Company within 90 days following the date on
which Horn receives actual notice of Change of Control.
7. Deferred Compensation.
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A. 2,637 shares of the Company's common stock now held by the
Company as treasury shares (the "Deferred Compensation Shares") shall be set
aside and held by the Company for future distribution
B. As deferred compensation, and in addition to all other
compensation payable to Horn, the Deferred Compensation Shares shall become the
property of Horn, and the Company shall deliver the certificates for the
Deferred Compensation Shares to Horn (or his executor of administrator), on the
Transfer Date, registered in Horn's name, within 10 days thereafter. The
Transfer Date shall be the earliest of (i) the date of Pshtissky's death; (ii)
the date as of which Horn's employment by the Company involuntarily terminates;
(iii) the date Horn reaches age 60; or (iv) the occurrence of a change of
Control as defined in paragraph
C. Notwithstanding any other provision of this paragraph, Horn shall not
be entitled to any Deferred Compensation Shares if the Company terminates this
Agreement for Gross Misconduct as defined in paragraph 5.
D. Prior to the Transfer Date, Horn's rights to the Deferred
Compensation Shares shall not be transferrable and the Treasury Shares shall
be the property of the Company.
X. Xxxx represents that he will be acquiring the
Deferred Compensation Shares for investment only and without a view to the
distribution thereof and that the Deferred Compensation Shares, when delivered
to him, may constitute restricted stock under the Securities Act of 1933, and
the regulations thereunder, and that the certificates therefore shall bear such
legend relating to this subparagraph as the Company shall reasonably require.
to Horn under this paragraph.
8. Death or Disability. The Company may terminate this Agreement at its
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sole option and determination if during the term of this Agreement (a) Horn dies
or (b) Horn becomes so disabled for a period of six months that he is
substantially unable to perform his duties under this Agreement for such period.
The Company shall be the sole judge of whether Horn is disabled or not.
9. Arbitration. Any controversy or claim arising out of, or relating to
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this Agreement, or the breach thereof, shall be settled by arbitration in the
City of New York in accordance with the rules of the American Arbitration then
in effect, and judgement upon the award rendered be entered and enforced in any
court having jurisdiction thereof.
10. Miscellaneous.
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A. Except for stock options previously granted, this Agreement
contains the entire agreement between the parties and supersedes all prior
agreements by the parties relating to payments by the Company upon involuntary
employment termination with or without cause, however, it does not restrict or
limit such other benefits as the President may determine to provide or make
available to Horn.
B. This agreement may not be waived, changed, modified or discharged
orally, but only by agreement in writing, signed by the party against whom
enforcement of any waiver, change, modification, or discharge is sought.
C. This Agreement shall be governed by the laws of New York State
applicable to contracts between New York State residents and made and to be
entirely performed in New York State.
D. If any part of this Agreement is held to be unenforceable by any
court of competent jurisdiction, the remaining provisions of this Agreement
shall continue in full force and effect.
E. This Agreement shall inure to the benefit of, and be binding
upon, the Company, its successor, and assigns.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.
VICON INDUSTRIES, INC.
By:___________________ By:_________________
Xxxxx Xxxx Xxxxxxx X. Xxxxx
Vice President - Operations President
Vicon Industries, Inc.
Date: Date:______________
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