EXHIBIT 10.35
2002
INCENTIVE STOCK OPTION PLAN
of
VICON INDUSTRIES, INC.
1. Purpose of the Plan
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This Incentive Stock Option Plan (hereinafter called the "Plan"), is
intended to encourage ownership of stock of VICON INDUSTRIES, INC. (hereinafter
called the "Company"), by officers and other employees of the Company, and its
subsidiaries, and to provide additional incentive for them to promote the
success of the business.
2. Stock Subject to the Plan
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Subject to the provisions of Paragraph "6", the total number of shares of
stock which may be optioned under the Plan is 200,000 shares of Common Stock
(par value of $.01 per share) of the Company, which shall be either authorized
and unissued stock or reacquired stock.
3. Administration of the Plan
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The Plan shall be administered by the Compensation Committee of the Board
of Directors of the Company (the "Committee") who may, from time to time, amend
and rescind rules and regulations for carrying out the provisions and purposes
of the Plan. All awards of options by the Committee are subject to approval by
the Board of Directors. the interpretation, construction and application of the
Plan and any provision thereof made by the Committee shall be final and
conclusive. No director shall be liable for any action taken or determination
made in good faith. The Committee shall consist of at least three members of the
Board of Directors, all of whom shall be non-employee directors. The members of
the Committee shall be designated by two-thirds vote of the entire Board of
Directors of the Company and shall serve for a term of one year and thereafter
until their successors are designated.
4. Participants
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Participants will be selected by the Committee, in its sole discretion,
from among the officers and other employees of the Company, and its
subsidiaries, including subsidiaries which become such after adoption of the
Plan, to accomplish the purposes of this Plan.
5. Award of Incentive Stock Options
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The Committee may, from time to time and subject to the provisions of the
Plan and such other terms and conditions as the Committee may prescribe, grant
to any participant in the Plan one or more stock options (intended to qualify as
incentive stock options under the provisions of section 422 of the Internal
Revenue Code of 1986, as amended (the "Code") to purchase for cash or shares the
number of shares of Common Stock allotted by the Committee. The date an option
is granted shall mean the dated selected by the Committee as of which the
Committee allots a specific number of shares to a participant pursuant to the
Plan.
6. Changes to Capital Structure
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In the event that the outstanding shares of common stock of the Company are
hereafter increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company or of another
corporation, by reason or reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares, or
dividend payable in capital stock, appropriate adjustment shall be made by the
Board of Directors in the number and kind of shares as to which outstanding
options, or portions thereof then unexercised, shall be exercisable to the end
that the optionee's proportionate interest shall be maintained as before the
occurrence of such events; such adjustment in outstanding options shall be made
without change in the total price applicable to the unexercised portion of the
option and with a corresponding adjustment of the option price per share;
provided, however, that each such adjustment in the number and kind of shares
subject to outstanding options, including any adjustment in the option price,
shall be made in such manner as not to constitute a "modification" as defined in
Section 424 of the Code. Any such adjustment made by the Board of Directors
shall be conclusive.
7. Terms and Conditions of Options
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The grant of an option shall be evidenced by a written Incentive Stock
Option Agreement, executed by the Company and the holder of an option (the
"optionee"), stating the number of shares of Common Stock subject to the option
evidenced thereby, and in such form as the Committee may from time to time
determine.
a) Option Price - The option price per share of Common Stock deliverable
upon the exercise of an option shall be 100% of the fair market value
of a share of Common Stock on the date the option is granted; however,
an optionee who is the record and beneficial owner of more than 10% of
the Company's issued and outstanding common stock shall be awarded
options at a price equivalent to 110% of the fair market value at the
date of grant.
b) Method of Exercise - Stock purchased under the options shall, at the
time of purchase, be paid for in full. To the extent that the right to
purchase shares has accrued thereunder, options may be exercised from
time to time by written notice by the optionee to the Company stating
the number of shares with respect to which the option is being
exercised, and the time of the delivery thereof, which time shall be
at least 15 days after the giving of such notice unless an earlier
date shall have been mutually agreed upon. At the time specified in
such notice, the Company shall deliver, without transfer or issue tax
to the optionee (or other person entitled to exercise the option), at
the main office of the Company, or such other places as shall be
mutually acceptable, a certificate or certificates for such shares or
reacquired shares of its Common Stock, as the Company may elect,
against payment of the option price in full for the number of shares
to be delivered by (i) certified check or the equivalent thereof
acceptable to the Company; or (ii) the delivery to the Company of
issued and outstanding Common Stock of Vicon Industries, Inc. which
has been owned by the optionee for at least six month, the total fair
market value of which on such delivery date is equal to the total
exercise price of options being exercised; provided, however, that the
time of such delivery may be postponed by the Company for such period
as may be required for it with reasonable diligence to comply with any
applicable listing requirements of any national securities exchange,
if the stock is so listed. If the optionee (or other person entitled
to exercise the option) fails to accept delivery of and pay for all or
any part of the number of shares specified in such notice upon
termination of delivery thereof, his right to exercise the option with
respect to such undelivered shares may be terminated by the Option
Committee of the Board of Directors without any formal notice to the
optionee. Anything herein to the contrary notwithstanding, if any law
or any regulation of the Securities and Exchange Commission or of any
other body having jurisdiction shall require the Company or a
participant to take any action in connection with the shares specified
in a notice of election before such shares can be delivered to such
participant, then the date stated therein for the delivery of the
shares shall be postponed until the fifth business day next following
the completion of such action.
c) Option Term - No option will be exercisable prior to the date of
shareholder approval of the plan, or any time after expiration of six
years from the date the option is granted (the "Grant Date").
d) Maximum Amount of Incentive Stock Option Grant - The aggregate fair
market value (determined on the date the option is granted) of Common
Stock subject to an incentive stock option granted to an optionee
(pursuant to any plan) by the Committee and exercisable for the first
time in any calendar year shall not exceed $100,000.
e) Exercise of Options - As to any option issued under the Plan: it may
be exercised up to 30% of the total number of shares covered thereby
after two years from the date of grant, it may be exercised up to an
additional 30% of the total number of shares covered thereby after
three years from date of grant; and the remaining 40% after four years
from the date of grant, and thereafter, the option may be exercised at
any time from time to time within its terms, in whole or in part, but
it shall not be exercisable after the expiration of six years from the
Grant Date. Notwithstanding the foregoing, all options granted under
this Plan may be exercised in the entirety should a "Change in
Control" occur. A "Change in Control" shall be deemed to have occurred
if (i) any other entity shall directly or indirectly 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 or merger or assignment of assets or otherwise, shall be
persons other than Directors on the date this Plan became effective
(May 7, 2002).
f) Non-Assignability of Option Rights - No option shall be assignable or
transferable by the optionee except by will or the by laws or descent
and distribution. During the life of an optionee, the option shall be
exercisable only the optionee.
g) Effect of Termination of Employment or Death - In the event an
optionee ceases to be an employee of the Company for any reason other
than retirement or death, any exercisable portion of any option as of
the date such optionee ceased to perform services to the Company must
be exercised within three months after the date on which the optionee
ceases to perform services. In the event of the retirement of an
optionee, any option or unexercised portion thereof granted to him
shall be exercisable within not more than three months from the date
on which the optionee retires. In the event of the death of an
optionee while such optionee is an employee of the Company, or any
subsidiary of the Company, or within three months from the date of
such optionee's retirement, the option or unexercised portion thereof
granted to such optionee may be exercised by such optionee's personal
representative, or a person who acquired the right to exercise such
option by bequest or inheritance at any time prior to the expiration
of one year from the date of death of the optionee. The foregoing
provisions with respect to retirement or death of any optionee shall,
in no event, be deemed to extend the date of expiration of the term
provided in any option held by any such optionee.
h) Restriction on Issuance of Shares - On the date stated in the notice
of election for the payment and delivery of the shares specified in
such notice, the participant shall certify to the Company in such form
as it shall require that such participant will receive and hold such
shares for investment and not with a view to resale or distribution
thereof to the public, unless the issuance of such shares shall have
been registered under the Securities Act of 1933, as amended, and the
Rules and Regulations promulgated thereunder, or counsel to the
Company shall have advised the Company that for any other reason such
certification is unnecessary.
i) Rights as a Stockholder - The optionee shall have no rights as a
Stockholder with respect to any shares covered by such optionee's
option until the date of issuance of a stock certificate to such
optionee for such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date such stock
certificate is issued.
j) Successive Options - Options may be exercised in any order.
k) Termination of Options Upon Consent - The Option Committee may
terminate any outstanding option with the consent of the holder
thereof.
8. Effective Date and Term of Plan
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a) The Plan, which was adopted by the Board of Directors on November 15,
2001, is subject to the condition that the Stockholders approve the
Plan prior to July 1, 2002. The Plan shall become effective upon
approval by the Company's Stockholders.
b) The Plan shall terminate on May 7, 2012, provided, however, that the
Plan and all awards made under the Plan prior to such date shall
remain in effect until such awards have been satisfied or terminated
in accordance with the Plan and the terms of such awards.
9. Definitions
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In this Plan the following definitions shall apply:
a) "subsidiary" means any corporation or which, at any applicable time,
more than 50% of the shares entitled to vote generally in an election of
directors are owned directly or indirectly by Vicon Industries, Inc., or
any subsidiary thereof.
b) "fair market value" as of any date and in respect of any share of
Common Stock means the closing price on such date or on the next
business day, if such date is not a business day, of a share of Common
Stock reflected in the consolidated trading tables of The Wall Street
Journal (presently the AMEX-Composite Transactions) or any other
publication selected by the Committee, provided that, if shares of
Common Stock shall not have been traded on the American Stock Exchange
for more than 10 days immediately preceding such date or if deemed
appropriate by the Committee for any other reason, the fair market
value of shares of Common Stock shall be as determined by the
Committee in such other manner as it may deem appropriate. In no event
shall the fair market value of any share of Common Stock be less than
its par value.
10. Amendment of Plan
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The Board of Directors may at any time amend the Plan, provided that
without approval of Stockholders there shall be, except by operation of the
provisions of paragraph "6" above, no increase in the total number of shares
covered by the Plan; there shall be no change in the class of persons eligible
to receive options granted under the Plan; there shall be no change in the
limitations on the option price; and there shall be no extension of the latest
date upon which options may be exercised. Neither the Board of Directors nor the
Stockholders by amendment to this Plan can affect options granted and
outstanding under any prior stock option plan of the Company or its
subsidiaries.
11. Use of Proceeds
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The proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
12. Governing Law
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Options granted under this Plan shall be construed and shall take effect in
accordance with the laws of the State of New York.
13. Liquidation
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Upon the complete liquidation of the Company, any unexercised options
heretofore granted under this Plan shall be deemed canceled. In the event of the
complete liquidation of any employer corporation (other than the Company)
employing the participant or in event such corporation ceases to be an employer
corporation, any unexercised part of any option granted hereunder shall be
deemed canceled unless the participant shall become employed by another employer
corporation (including the Company) concurrently with such event.