EXHIBIT 10.5
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1998, between XXXX 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, Xxxxxx has previously been employed by the Company, and
WHEREAS, the Company and Xxxxxx mutually desire to assure the
continuation of Xxxxxx'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 Xxxxxx as its Vice
President of North American Sales throughout the term of this Agreement, and
Xxxxxx 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, 2000.
3. Compensation.
A. The Company shall pay Xxxxxx a base salary
of $130,000 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 bonus,
profit sharing, life insurance, medical, dental, hospital, disability, 401(k) or
other benefit plans as may from time to time be available to officers of the
Company, subject to the general eligibility requirements of such plans.
4. Covenant not to Compete. Xxxxxx agrees that during the term
of this Agreement and for a period of two 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 CCTV security 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 to
Xxxxxx a written release of this provision.
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5. Severance Payment on Certain Terminations.
A. If either this Agreement expires, or the Company terminates
Xxxxxx'x employment under this Agreement for reasons other than "Gross
Misconduct", then Xxxxxx, at his option, may elect to receive severance payments
except in the case of disability under paragraph 7, without reduction for any
offset or mitigation, in an amount equal to (a) one-twelfth Xxxxxx'x annual base
salary at the time of such termination multiplied by (b) the number of full
years of Xxxxxx'x employment by the Company which shall be no less than three
years and up to a maximum of 6 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.
Xxxxxx'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 Xxxxxx 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.
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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.
A. Notwithstanding any other provision of this
Agreement, if a "Change of Control" occurs without the prior
written 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 or
extended payments over three years as Xxxxxx shall elect.
B. A "Change of Control" shall be deemed to have occurred if
(i) any entity shall directly or indirectly acquire beneficial ownership of 20%
or more 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. 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 Change of
Control.
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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.
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 or Board of Directors may determine
to provide or make available to Xxxxxx.
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.
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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
Xxxx Xxxxxx Xxxxxxx X. Xxxxx
Vice President - President
North American Sales Vicon Industries, Inc.
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