EXHIBIT 10.1
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EMPLOYMENT AND DEFERRED COMPENSATION AGREEMENT
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AGREEMENT, dated as of January 1, 2006, between Xxxx X. Xxxxx (hereinafter
called "XXXXX") 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 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 Senior Vice
President/Finance and Chief Financial Officer 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 December 31, 2007 unless terminated earlier by the Company
for "Misconduct".
3. Compensation.
A. The Company shall pay XXXXX a base salary of $175,000 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.
X. XXXXX'x base salary shall be payable monthly or bi-weekly.
X. XXXXX shall also be entitled to participate, if a full time
employee, 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.
4. Covenant not to Compete. XXXXX agrees that during the term of this
Agreement or any replacement Agreement and for a period of 24 months thereafter,
or at anytime XXXXX is receiving Severance or Retirement payments under Section
5 herein, 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. 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. XXXXX 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. This clause shall
survive the expiration or termination of this Agreement.
5. Severance/Retirement Payment on Certain Terminations or Events.
A. If either XXXXX retires (anytime after attaining the minimum
retirement age of 60) or the Company terminates XXXXX'x employment with the
Company for reasons other than "Misconduct"; or dies while still a full
time employee, or is terminated under paragraph 7 herein, then XXXXX, or
his survivor shall be entitled to receive severance or retirement payments
as the case may be, without reduction for any offset or mitigation, in an
amount equal to $350,000. This Section 5 shall survive the expiration of
this Agreement. If this Agreement expires and XXXXX is required to perform
his services outside of Long Island or is required to take any salary,
benefits, or perquisites (customarily provided) reduction, then XXXXX'x
employment shall be deemed to have been effectively terminated under this
Section 5.
B. "Misconduct" shall mean (a) a willful, substantial and
unjustifiable refusal or inability, due to drug or alcohol impairment, to
perform substantially the duties and services required of his position; (b)
misappropriation or embezzlement involving the Company or its assets; (c)
conviction of a felony involving moral turpitude; or (d) conviction of
fraud in a court of law.
C. In the event of payment of severance under this section 5, such
payments shall be in lieu of any other obligation by the Company for
accrued compensation benefit of any kind at the time of termination. Post
termination stock option exercises in accordance with Plan provisions are
excepted.
D. The severance amount shall be paid in equal monthly payments over a
24-month period. Should XXXXX be in violation of Paragraph 4, severance
payments shall cease at that time.
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, XXXXX, at
his option, may elect to terminate his rights and 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
present value lump sum or extended payments over three years as XXXXX shall
elect.
B. A "Change of Control" shall be deemed to have occurred if any
entity or person shall directly or indirectly acquire beneficial ownership
of 50% or more of the then outstanding shares of capital stock of the
Company.
X. XXXXX'x option to elect to terminate his obligations and to receive
a termination payment as either a present value 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
a Change of Control. In selecting this option the Company shall have no
obligation to XXXXX for any severance payments under paragraph 5.
7. Death or Disability. The Company may terminate this Agreement and all
salary due thereunder, (excluding liability under Section 5) at its sole option
and determination 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. The Company
shall be the sole judge of such disability.
8. Deferred Compensation.
A. 6,561 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 XXXXX under this
paragraph.
B. As deferred compensation, and in addition to all other compensation
payable to XXXXX, the Deferred Compensation Shares shall become the
property of XXXXX, and the Company shall deliver the certificates for the
Deferred Compensation Shares to XXXXX (or his executor of administrator),
on the Transfer Date, registered in XXXXX'x name, within 10 days
thereafter. The Transfer Date shall be the earliest of (i) the date of
XXXXX'x death; (ii) the date as of which XXXXX'x employment by the Company
involuntarily terminates; (iii) the date XXXXX 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, XXXXX shall
not be entitled to any Deferred Compensation Shares if the Company
terminates this Agreement for Misconduct as defined in paragraph 5.
D. Prior to the Transfer Date, XXXXX'x rights to the Deferred
Compensation Shares shall not be transferrable and the Treasury Shares
shall be the property of the Company.
X. XXXXX 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, will 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.
F. This clause shall survive the expiration of this Agreement.
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. 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 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 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.
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxx X. Xxxxx Xxxxxxx X. Xxxxx
CEO
Vicon Industries, Inc.
