EXHIBIT 10.4
EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of October 1, 2001, between XXXXX XXXXXXXXX
(hereinafter called "Pshtissky") 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, Pshtissky has previously been employed by the Company, and
WHEREAS, the Company and Pshtissky mutually desire to assure the
continuation of Pshtissky'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 Pshtissky as its Vice
President of Technology and Development throughout the term of this Agreement,
and Pshtissky hereby accepts such employment. Pshtissky shall report to the CEO
or his designee. If Pshtissky chooses not to report to someone other than the
CEO and as a result resigns from the Company, then he shall be free from the
restrictions of Paragraph 4 and the Company shall have no obligation to him for
severance under Paragraph 5.
2. Term. The term of this Agreement shall commence as of the date of
this Agreement and end on September 30, 2004, unless terminated earlier by the
Company for cause.
3. Compensation.
A. The Company shall pay Pshtissky 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 and 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.
B. Pshtissky's base salary shall be payable monthly or bi-weekly.
C. Pshtissky 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. Pshtissky agrees that during the term of
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, 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 in the United States and Europe.
Pshtissky 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 Pshtissky 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. Pshtissky
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 Payments on Certain Terminations.
A. If either this Agreement expires, or the Company terminates
Pshtissky's employment under this Agreement for reasons other than "Gross
Misconduct", then Pshtissky, at his option, may elect to receive severance
payments, without reduction for any offset or mitigation, in an amount equal to
(a) one twelfth Pshtissky's annual base salary at the time of such termination
multiplied by (b) the number of full years of Pshtissky'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.
Pshtissky's option to elect to receive a severance payment may
be exercised only by written notice delivered to the Company within 90 days
following the date on which Pshtissky 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.
A. Notwithstanding any other provision of this Agreement, if a
"Change of Control" occurs without the consent of the Board of Directors,
Pshtissky, 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 Pshtissky 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.
C. Pshtissky's 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 Pshtissky receives actual
notice of Change of Control.
7. Deferred Compensation.
A. 9,809 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 to Pshtissky under
this paragraph.
B. As deferred compensation, and in addition to all
other compensation payable to Pshtissky, the Deferred Compensation Shares shall
become the property of Pshtissky, and the Company shall deliver the certificates
for the Deferred Compensation Shares to Pshtissky (or his executor of
administrator), on the Transfer Date, registered in Pshtissky'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 Pshtissky's employment by the
Company involuntarily terminates; (iii) the date Pshtissky reaches age 60; or
(iv) the occurrence of a change of Control as defined in paragraph 6.
C. Notwithstanding any other provision of this paragraph, Pshtissky
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, Pshtissky's rights to the Deferred
Compensation Shares shall not be transferrable and the Treasury Shares shall be
the property of the Company.
E. Pshtissky 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 therefor shall bear such
legend relating to this subparagraph as the Company shall reasonably require.
8. Death or Disability. The Company may terminate this Agreement at its
sole option and determination if during the term of this Agreement (a) Pshtissky
dies or (b) Pshtissky 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 Pshtissky is disabled or not.
9. 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.
10. Miscellaneous.
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 Pshtissky.
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: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxxx Xxxxxxxxx Xxxxxxx X. Xxxxx
Vice President - New Technology CEO
and Development Vicon Industries, Inc.
Date: Date:
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