EMPLOYMENT AGREEMENT EXHIBIT 10.5
AGREEMENT, dated as of October 1, 1996, between XXXXXXX X. XXXXX
(hereinafter called "Xxxxx"), and VICON INDUSTRIES, INC., a New York
corporation, having its principal place of business at 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000 (hereinafter called
the "Company").
WHEREAS, Xxxxx has previously been employed by the
Company, and
WHEREAS, the Company and Xxxxx mutually desire to assure
the continuation of Xxxxx'x 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 Xxxxx as its
Chief Executive Officer and President throughout the term of this
Agreement, and Xxxxx hereby accepts such employment.
2. Term. The term of this Agreement shall commence as
of the date of this Agreement and end on September 30, 2001.
3. Compensation.
A. The Company shall pay Xxxxx a base salary
of $225,000 per annum, subject to adjustment as provided in
subsection B.
B. Prior to September 15 of each succeeding year, Xxxxx'x base
salary shall be reviewed by the Compensation Committee of the Board of Directors
and shall be fixed for the year commencing October 1 of such year by agreement
between Xxxxx and the Board of Directors, but in any event shall not be less
than the
base salary for the one year period then ending.
X. Xxxxx'x base salary shall be payable monthly or
bi-weekly.
X. Xxxxx shall also be entitled to participate in any pension,
profit sharing, life insurance, medical, dental, hospital, disability or other
benefit plans as may from time to time be available to officers of the Company.
24. Extent and Places of Services; Vacation
X. Xxxxx shall establish operating policy and
direct, supervise and oversee the operations of the Company. He shall advise and
report to the Board of Directors. Xxxxx shall also assume and perform such
additional reasonable responsibilities and duties as the Board of Directors and
he may from time to time agree upon.
X. Xxxxx shall devote his full time, attention,
and energies to the business of the Company.
X. Xxxxx shall not be required to perform his services outside
the Melville, New York area or such other area on Long Island, New York as shall
contain the location of the Company's headquarters.
D. The Company shall provide Xxxxx with office
space, secretary, telephones and other office facilities
appropriate to his duties.
X. Xxxxx shall be entitled to one month's vacation
per annum.
5. Covenant not to Compete. Xxxxx agrees that during
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the term of this Agreement and for a period of three years 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 security equipment and
protection devices within the United States or Europe. Xxxxx 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
Xxxxx 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.
6. Termination Payment on Change of Control.
A. Notwithstanding any provision of this
Agreement, if a "Change of Control" occurs without the prior written consent of
the Board of Directors, Xxxxx, 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 five years preceding the Change of Control, in
either lump sum or extended payments over three years as Xxxxx shall elect.
B. A "Change of Control" shall be deemed to have
occurred if (i) any other entity shall directly or indirectly
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acquire a beneficial ownership of 20%, or any further amount in excess of 20%,
of the outstanding shares of capital stock of the Company or (ii) a majority of
the members of the Board of Directors of the Company or any successor by merger
or assignment of assets or otherwise, shall be persons other than Directors on
the date of this Agreement.
X. Xxxxx'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 Xxxxx receives actual notice of Change of
Control.
D. If Xxxxx elects to receive lump sum payment, such payment
shall be made within 30 days of the Company's receipt of Xxxxx'x notice of
election.
7. Severance Payment on Certain Terminations.
A. If either (i) this Agreement expires, or (ii)
the Company terminates Xxxxx'x employment under this Agreement for reasons other
than "Gross Misconduct" or (iii) with the consent of the Board of Directors a
Change of Control as defined in paragraph 6 B. shall occur, or (iv) the Company
executes a "Company Sale Agreement" then Xxxxx, at his option, may elect to
receive a severance payment, without reduction for any offset or mitigation, in
an amount equal to (a) one-twelfth his annual base salary at the time of such
termination multiplied by (b) the number of full years of his employment to the
end of this Agreement by the Company up to
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a maximum of 24 years, payable in either lump sum or extended payments as Xxxxx
shall elect.
B. "Company Sale Agreement" means an agreement to which the
Company is a party that contemplates that more than half of the assets of the
Company are transferred to another entity or that upon consummation of the
transactions contemplated by such agreement, a Change of Control as defined in
paragraph 6 shall occur or have occurred.
C. In the event of an election under paragraph 7, payment of
such severance payment shall be in lieu of any obligation of the Company for
termination payment or other posttermination compensation under this Agreement,
if any.
D. "Gross Misconduct" shall mean (a) a wilful, substantial and
unjustifiable refusal to perform substantially the services required by this
Agreement to be performed; (b) fraud, misappropriation or embezzlement involving
the Company or its assets; or (c) conviction of a felony involving moral
turpitude.
X. Xxxxx'x option to elect to receive a severance payment and to
elect to receive lump sum or extended payments may be exercised only by written
notice delivered to the Company within 90 days following the date on which this
Agreement expires or on which Xxxxx receives actual notice of the existence of
any other condition referred to in paragraph 7A, except that, in the case of the
Company's execution of a Company Sale Agreement, Xxxxx'x option may be exercised
at any time prior to the closing under such agreement and such termination shall
be effective as of such closing.
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F. If Xxxxx elects to receive lump sum payment, such payment
shall be made within 30 days of the Company's receipt of Xxxxx'x notice of such
election, except that, in the case of the Company's execution of a Company Sale
Agreement, the payment shall be made no later than the time of closing under
such agreement.
G. Payment of termination or severance payment shall not affect
the Company's obligations under any other agreement with Xxxxx.
8. Death or Disability. The Company may terminate this
Agreement if during the term of this Agreement (a) Xxxxx dies or
(b) Xxxxx becomes so disabled for a period of six months that he is
substantially unable to perform his duties under this Agreement for
such period. Such a termination shall not release the Company from
any liability to Xxxxx for compensation earned, or for termination
or severance payment elected, prior to such termination; nor shall it be deemed
a termination of employment for Gross Misconduct.
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 any deferred compensation agreement, retirement
plan or stock options previously granted, this Agreement contains the entire
agreement between the parties and supersedes
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all prior agreements by the parties relating to the term of Xxxxx'x employment
by the Company, however, it does not restrict or limit such other benefits as
the Board of Directors may determine to provide or make available to Xxxxx.
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
applicable to contracts between New York residents and made and to be entirely
performed in New York.
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
Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxxx
Chairman
Date: 10-01-96 Compensation Committee
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