EMPLOYMENT AGREEMENT
AGREEMENT, dated as of March 13, 2000, between Xxxxx X. Xxxxxx
(hereinafter called "XXXXXX") 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, the Company wishes to retain and XXXXXX desires to offer his
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 XXXXXX as its Executive
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Vice President throughout the term of this Agreement, and XXXXXX 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 March 12, 2002 unless terminated earlier by
the Company for cause.
3. Compensation.
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A. The Company shall pay XXXXXX a base salary of $200,000 per
annum, subject to periodic adjustment as determined by the President of the
Company with Board of Directors approval, but in any event shall not be less
than the base salary so indicated.
X. XXXXXX'x base salary shall be payable monthly or bi-weekly.
X. XXXXXX shall also be entitled to participate in any life
insurance, medical, dental, hospital, disability, 401(k) or other benefit plans
as may from time to time be made available to the officers of the Company,
subject to the general eligibility requirements of such plans. Subject to plan
availability and approval by the Board of Directors, the President will
recommend an annual stock option grant to XXXXXX based on his contribution to
the Company's performance.
4. Covenant not to Compete.
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XXXXXX agrees that during the term of this Agreement and for a period of 12
months thereafter, 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 video
security and surveillance equipment and protection devices anywhere in the
United States and Europe. XXXXXX 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 XXXXXX 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.
XXXXXX acknowledges that he may only be released from this covenant if the
Company materially breach's this agreement or provides a written release of this
provision.
5. Severance Payment on Certain Terminations or Events.
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A. If either this Agreement expires, or the Company terminates XXXXXX'x
employment under this Agreement for reasons other than "Misconduct"; or his
title and responsibilities are materially diminished, then XXXXXX, at his
option, may elect to receive severance payments or the balance of the amount
owing under this agreement, whichever is greater, except in the case of
disability under paragraph 7, without reduction for any offset or mitigation.
The severance amount shall be equal to three months annual base salary at the
time of such termination plus one additional month for each full year of service
completed up to a maximum of twelve months.
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B. "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. XXXXXX'x option to elect to receive severance payments may be exercised
only by written notice delivered to the Company within 30 days following the
date on which XXXXXX receives actual notice of termination, this Agreement
expires or his title and responsibilities are materially diminished, as the case
may be.
D. 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.
E. The severance amount determined in 5A above shall be paid in equal
monthly payments over the number of full years of XXXXXX'x employment.
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,
XXXXXX, 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 or shorter period of actual
employment, in either lump sum present valued or extended payments over three
years as XXXXXX shall elect.
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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 then outstanding shares of capital stock of the Company.
X. XXXXXX'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 XXXXXX receives actual notice of a Change of
Control. In selecting this option the Company has no obligation to XXXXXX for
any severance payments under paragraph 5.
7. Death or Disability. The Company may terminate this Agreement at its
sole option and determination without liability for severance payments under
paragraph 5 if during the term of this Agreement (a) XXXXXX dies or (b) XXXXXX
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 such disability.
8. Arbitration. Any controversy or claim arising out of, or relating to
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.
9. Miscellaneous.
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A. 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 XXXXXX.
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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:------------------------
Xxxxx X.Xxxxxx Xxxxxxx X. Xxxxx
CEO
Vicon Industries, Inc.
