EXHIBIT 10.7
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of October 1, 1998, between YACOV PSHTISSKY
(hereinafter called "Pshtissky") and VICON INDUSTRIES, INC., a New York
corporation, having its principal place of business at 89 Arkay Drive,
Hauppauge, New York 11788 (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, 2000.
3. Compensation.
A. The Company shall pay Pshtissky a base salary
of $125,000 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, 1998
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.
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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 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.
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.
The severance amount shall be paid in equal monthly payments
over a 12 month period.
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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 the 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 entity shall directly or indirectly acquire beneficial ownership 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 at its
sole option and determination 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.
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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 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.
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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.
Date:
Date:
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