EXHIBIT 10.7
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of June 1, 1995, between YACOV PSHTISSKY
(hereinafter called "Pshtissky") and VICON INDUSTRIES, INC., a New York
corporation, having its principal place of business at 525 Broad Hollow Road,
Melville, New York 11747 (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.
2. Term. The term of this Agreement shall commence as of the date
of this Agreement and end on September 30, 1997.
3. Compensation.
A. The Company shall pay Pshtissky a base salary of $100,000 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. Beginning October 1, 1996 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 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,
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 to Pshtissky or provides a written release of this provision.
5. Severance Payment 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 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.
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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 prior written 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 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 (i) any
other entity shall directly or indirectly acquire 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.
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. Death or Disability. The Company may terminate this Agreement 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.
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
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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 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 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
Yacov Pshtissky Kenneth M. Darby
Vice President - Technology President
and Development Vicon Industries, Inc.
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