EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
February 1, 2004 by and between WPCS INTERNATIONAL INCORPORATED, a Delaware
corporation, with an office located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 00,
Xxxxx, XX 00000 (the " Company") an Xxxxxx Xxxxxxx, an individual and resident
of 000 Xxxxxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 ("Xxxxxxx").
WHEREAS, the Company is in the business of providing wireless and landline
products and services; and
WHEREAS, Xxxxxxx has had experience in the operations of businesses providing
wireless and landline products and services; and
WHEREAS, the Company desires to retain the services of Xxxxxxx; and
WHEREAS, Xxxxxxx is willing to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
1. Employment. Xxxxxxx is hereby employed and engaged to serve the Company as
the Chairman, President and Chief Executive Officer of the Company, or such
additional titles as the Company shall specify from time to time, and Xxxxxxx
does hereby accept, and Xxxxxxx hereby agrees to such engagement and employment.
At all times during the term of Xxxxxxx'x employment, he shall remain a member
of the Board of Directors of the Company.
2. Duties. Xxxxxxx shall be responsible for the overall development, operations
and corporate governance of the Company. In addition, Xxxxxxx'x duties shall be
such duties and responsibilities as the Company shall specify from time to time,
and shall entail those duties customarily performed by the Chairman, President
and Chief Executive Officer of a company with a sales volume and number of
employees commensurate with those of the Company. Xxxxxxx shall have such
authority, discretion, power and responsibility, and shall be entitled to
office, secretarial and other facilities and conditions of employment, as are
customary or appropriate to his position. Xxxxxxx shall diligently and
faithfully execute and perform such duties and responsibilities, subject to the
general supervision and control of the Company's board of directors. Xxxxxxx
shall be responsible and report only to the Company's board of directors. The
Company's board of directors, in its sole and absolute discretion, shall
determine Xxxxxxx'x duties and responsibilities and may assign or reassign
Xxxxxxx to such duties and responsibilities as it deems in the Company's best
interest. Xxxxxxx shall devote his full-time attention, energy, and skill during
normal business hours to the business and affairs of the Company and shall not,
during the Employment Term, as that term is defined below, be actively engaged
in any other business activity, except with the prior written consent of the
Company's board of directors.
Nothing in this Agreement shall preclude Xxxxxxx from devoting reasonable
periods required for:
(a) serving as a director or member of a committee of any organization or
corporation involving no conflict of interest with the interests of
the Company;
(b) serving as a consultant in his area of expertise (in areas other than
in connection with the business of the Company), to government,
industrial, and academic panels where it does not conflict with the
interests of the Company; and
(c) managing his personal investments or engaging in any other
non-competing business; provided that such activities do not
materially interfere with the regular performance of his duties and
responsibilities under this Agreement as determined by the Company.
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3. Best Efforts of Xxxxxxx. During his employment hereunder, Xxxxxxx
shall, subject to the direction and supervision of the Company's board
of directors, devote his full business time, best efforts, business
judgment, skill, and knowledge to the advancement of the Company's
interests and to the discharge of his duties and responsibilities
hereunder. Notwithstanding the foregoing, nothing herein shall be
construed as preventing Xxxxxxx from investing his assets in any
business.
4. Employment Term. This Agreement shall have a term of three (3) years
beginning February 1, 2004 (the "Employment Term"). Upon each one (1)
year anniversary of Xxxxxxx'x employment under this Agreement, the
Agreement will automatically renew for another three (3) years from
the anniversary date unless terminated by either party pursuant to
Section 12.
5. Compensation of Xxxxxxx. As compensation for the services provided by
Xxxxxxx under this Paragraph, the Company shall pay Xxxxxxx an annual
salary of One Hundred, Sixty-Eight Thousand Dollars ($168,000), to be
paid in accordance with the Company's usual payroll procedures. In
addition to the above base compensation, Xxxxxxx shall be eligible to
receive bonuses based on the performance of the Company.
6. Benefits. Xxxxxxx shall also be entitled to participate in any and all
Company benefit plans, from time to time, in effect for employees of
the Company. Such participation shall be subject to the terms of the
applicable plan documents and generally applicable Company policies.
7. Vacation, Sick Leave and Holidays. Xxxxxxx shall be entitled to two
(2) weeks of paid vacation, with such vacation to be scheduled and
taken in accordance with the Company's standard vacation policies. In
addition, Xxxxxxx shall be entitled to such sick leave and holidays at
full pay in accordance with the Company's policies established and in
effect from time to time.
8. Business Expenses. The Company shall promptly reimburse Xxxxxxx for
all reasonable out-of-pocket business expenses incurred in performing
Xxxxxxx'x duties and responsibilities hereunder in accordance with the
Company's policies, provided Xxxxxxx promptly furnishes to the Company
adequate records of each such business expense.
9. Location of Xxxxxxx'x Activities. Xxxxxxx'x principal place of
business in the performance of his duties and obligations under this
Agreement shall be in the Exton, Pennsylvania area. Notwithstanding
the preceding sentence, Xxxxxxx will engage in such travel and spend
such time in other places as may be necessary or appropriate in
furtherance of his duties hereunder.
10. Confidentiality. Xxxxxxx recognizes that the Company has and will have
business affairs, products, future plans, trade secrets, customer
lists, and other vital information (collectively "Confidential
Information") that are valuable assets of the Company. Xxxxxxx agrees
that he shall not at any time or in any manner, either directly or
indirectly, divulge, disclose, or communicate in any manner any
Confidential Information to any third party without the prior written
consent of the Company's board of directors. Xxxxxxx will protect the
Confidential Information and treat it as strictly confidential.
11. Non-Competition. Xxxxxxx acknowledges that he has gained, and will
gain extensive knowledge in the business conducted by the Company and
has had, and will have, extensive contacts with customers of the
Company. Accordingly, Xxxxxxx agrees that he shall not compete
directly or indirectly with the Company, either during the Employment
Term or during the one (1) year period immediately after the
termination of Xxxxxxx'x employment under Section 12 and shall not,
during such period, make public statements in derogation of the
Company. For the purposes of this Section 11, competing directly or
indirectly with the Company shall mean engaging, directly or
indirectly, as principle owner, officer, partner, consultant, advisor,
or otherwise, either alone or in association with others, in the
operation of any entity engaged in a business similar to that of the
Company's.
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12. Termination. Notwithstanding any other provisions hereof to the
contrary, Xxxxxxx'x employment hereunder shall terminate under the
following circumstances:
(a) Voluntary Termination by Xxxxxxx. Xxxxxxx shall have the right to
voluntarily terminate this Agreement and his employment hereunder
at any time during the Employment Term.
(b) Voluntary Termination by Company. The Company shall have the
right to voluntarily terminate this Agreement and Xxxxxxx'x
employment hereunder at any time during the Employment Term.
(c) Termination for Cause. The Company shall have the right to
terminate this Agreement and Xxxxxxx'x employment hereunder at
any time for cause. As used in this Agreement, "cause" shall mean
refusal by Xxxxxxx to implement or adhere to lawful policies or
directives of the Company's board of directors, breach of this
Agreement, Xxxxxxx'x conviction of a felony, other conduct of a
criminal nature that may have a material adverse impact on the
Company's reputation, breach of fiduciary duty or the criminal
misappropriation by Xxxxxxx of funds from or resources of the
Company. Cause shall not be deemed to exist unless the Company
shall have first given Xxxxxxx a written notice thereof
specifying in reasonable detail the facts and circumstances
alleged to constitute "cause" and thirty (30) days after such
notice such conduct has, or such circumstances have, as the case
may be, not entirely ceased and not been entirely remedied.
(d) Termination Upon Death or for Disability. This Agreement and
Xxxxxxx'x employment hereunder, shall automatically terminate
upon Xxxxxxx'x death or upon written notice to Xxxxxxx and
certification of Xxxxxxx'x disability by a qualified physician or
a panel of qualified physicians if Xxxxxxx becomes disabled
beyond a period of twelve (12) months and is unable to perform
the duties contain in this Agreement.
(e) Effect of Termination In the event that this Agreement and
Xxxxxxx'x employment is voluntarily terminated by Xxxxxxx
pursuant to Section 12(a) or for cause pursuant to Section 12(c),
all obligations of the Company and all duties, responsibilities
and obligations of Xxxxxxx under this Agreement shall cease. Upon
such termination, Xxxxxxx shall be entitled to receive only the
compensation, benefits, and reimbursement earned by or accrued to
Xxxxxxx under the terms of this Agreement prior to the date of
termination, but shall not be entitled to any further
compensation, benefits, or reimbursement after such date. In the
event the Company voluntarily terminates this Agreement pursuant
to Section 12(b) or upon death or disability of Xxxxxxx pursuant
to Section 12(d), Xxxxxxx shall be entitled to all compensation
pursuant to Section 5 for the period between the effective
termination date to the end of the Employment Term pursuant to
Section 4. Payment will be made to Xxxxxxx or Xxxxxxx'x appointed
trustee. Other than as set forth above, Xxxxxxx shall not be
entitled to any further compensation, benefits, or reimbursement
after the date of his termination. In the event of a merger,
consolidation, sale, or change of control, the Company's rights
hereunder shall be assigned to the surviving or resulting
company, which company shall then honor this Agreement with
Xxxxxxx.
13. Resignation as Officer. In the event that Xxxxxxx'x employment with
the Company is terminated for any reason whatsoever, Xxxxxxx agrees to
immediately resign as an Officer and/or Director of the Company and
any related entities. For the purposes of this Section 13, the term
the "Company" shall be deemed to include subsidiaries, parents, and
affiliates of the Company.
14. Governing Law, Jurisdiction and Venue. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Pennsylvania without giving effect to any applicable conflicts of law
provisions.
15. Business Opportunities. During the Employment Term Xxxxxxx agrees to
bring to the attention of the Company's board of directors all written
business proposals that come to Xxxxxxx'x attention and all business
or investment opportunities of whatever nature that are created or
devised by Xxxxxxx and that relate to areas in which the Company
conducts business and might reasonably be expected to be of interest
to the Company or any of its subsidiaries.
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16. Employee's Representations and Warranties. Xxxxxxx hereby represents
and warrants that he is not under any contractual obligation to any
other company, entity or individual that would prohibit or impede
Xxxxxxx from performing his duties and responsibilities under this
Agreement and that he is free to enter into and perform the duties and
responsibilities required by this Agreement. Xxxxxxx hereby agrees to
indemnify and hold the Company and its officers, directors, employees,
shareholders and agents harmless in connection with the
representations and warranties made by Xxxxxxx in this Section 16.
17. Indemnification.
17.1
The Company agrees that if Xxxxxxx is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact
that he is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Proceeding is Xxxxxxx'x alleged
action in an official capacity while serving as a director, officer,
member, employee or agent, Xxxxxxx shall be indemnified and held harmless
by the Company to the fullest extent permitted or authorized by the
Company's certificate of incorporation or bylaws or, if greater, by the
laws of the State of Pennsylvania, against all cost, expense, liability and
loss (including, without limitation, attorney's fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement) reasonably incurred or suffered by Xxxxxxx in connection
therewith, and such indemnification shall continue as to Xxxxxxx even if he
has ceased to be a director, member, employee or agent of the Company or
other entity and shall inure to the benefit of Xxxxxxx'x heirs, executors
and administrators. The Company shall advance to Xxxxxxx to the extent
permitted by law all reasonable costs and expenses incurred by him in
connection with a Proceeding within 20 days after receipt by the Company of
a written request, with appropriate documentation, for such advance. Such
request shall include an undertaking by Xxxxxxx to repay the amount of such
advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.
17.2
Neither the failure of the Company (including its board of directors,
independent legal counsel or stockholders) to have made a determination
prior to the commencement of any proceeding concerning payment of amounts
claimed by Xxxxxxx that indemnification of Xxxxxxx is proper because he has
met the applicable standard of conduct, nor a determination by the Company
(including its board of directors, independent legal counsel or
stockholders) that Xxxxxxx has not met such applicable standard of conduct,
shall create a presumption that Xxxxxxx has not met the applicable standard
of conduct.
17.3
The Company agrees to continue and maintain a directors' and officers'
liability insurance policy covering Xxxxxxx to the extent the Company
provides such coverage for its other executive officers.
17.4
Promptly after receipt by Xxxxxxx of notice of any claim or the
commencement of any action or proceeding with respect to which Xxxxxxx is
entitled to indemnity hereunder, Xxxxxxx shall notify the Company in
writing of such claim or the commencement of such action or proceeding, and
the Company shall (i) assume the defense of such action or proceeding, (ii)
employ counsel reasonably satisfactory to Xxxxxxx, and (iii) pay the
reasonable fees and expenses of such counsel. Notwithstanding the preceding
sentence, Xxxxxxx shall be entitled to employ counsel separate from counsel
for the Company and from any other party in such action if Xxxxxxx
reasonably determines that a conflict of interest exists which makes
representation by counsel chosen by the Company not advisable. In such
event, the reasonable fees and disbursements of such separate counsel for
Xxxxxxx shall be paid by the Company to the extent permitted by law.
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17.5
After the termination of this Agreement and upon the request of Xxxxxxx,
the Company agrees to reimburse Xxxxxxx for all reasonable travel, legal
and other out-of-pocket expenses related to assisting the Company to
prepare for or defend against any action, suit, proceeding or claim brought
or threatened to be brought against the Company or to prepare for or
institute any action, suit, proceeding or claim to be brought or threatened
to be brought against a third party arising out of or based upon the
transactions contemplated herein and in providing evidence, producing
documents or otherwise participating in any such action, suit, proceeding
or claim. In the event Xxxxxxx is required to appear after termination of
this Agreement at a judicial or regulatory hearing in connection with
Xxxxxxx'x employment hereunder, or Xxxxxxx'x role in connection therewith,
the Company agrees to pay Xxxxxxx a sum, to be mutually agreed upon by
Xxxxxxx and the Company, per diem for each day of his appearance and each
day of preparation therefor.
18. Notices. All demands, notices, and other communications to be given
hereunder, if any, shall be in writing and shall be sufficient for all
purposes if personally delivered, sent by facsimile or sent by United
States mail to the address below or such other address or addresses as such
party may hereafter designate in writing to the other party as herein
provided.
Company: Xxxxxxx:
WPCS International Incorporated 000 Xxxxxxxxx Xxxxx
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 00 Xxxxxxxxxxx, XX 00000
Xxxxx, XX 00000
19. Entire Agreement. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other
agreement, whether oral or written. This Agreement supersedes any prior
written or oral agreements between the parties. This Agreement may be
modified or amended, if the amendment is made in writing and is signed by
both parties. This Agreement is for the unique personal services of Xxxxxxx
and is not assignable or delegable, in whole or in part, by Xxxxxxx. This
Agreement may be assigned or delegated, in whole or in part, by the Company
and, in such case, shall be assumed by and become binding upon the person,
firm, company, corporation or business organization or entity to which this
Agreement is assigned. The headings contained in this Agreement are for
reference only and shall not in any way affect the meaning or
interpretation of this Agreement. If any provision of this Agreement shall
be held to be invalid or unenforceable for any reason, the remaining
provisions shall continue to be valid and enforceable. The failure of
either party to enforce any provision of this Agreement shall not be
construed as a waiver or limitation of that party's right to subsequently
enforce and compel strict compliance with every provision of this
Agreement. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument and, in pleading or proving any
provision of this Agreement, it shall not be necessary to produce more than
one of such counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
WPCS INTERNATIONAL INCORPORATED: XXXXXXX:
By: /s/ Xxxxxx Xxxxxxx /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx Xxxxxx Xxxxxxx
Title: Chairman, President & CEO
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