EMPLOYMENT AGREEMENT
Exhibit
10.3
THIS
EMPLOYMENT AGREEMENT is made effective as of the …………………2007 (the
“Effective Date”).
BETWEEN:
WPCS
Australia Pty Ltd ACN 128 426 602, having its registered office care of
Gilshenan & Luton Legal Group, Xxxxx 00, 000 Xxxxx Xxxxxx, Xxxxxxxx Xxx
0000 (“Employer”)
AND
Xxxxxx
Xxxxx Xxxxx, an individual having an address at 000 Xxxxxx Xxxx,
Xxxxxxxxx in the State of Queensland(“Employee”)
WHEREAS,
Employee has accepted Employer’s offer of employment with Employer, and
Employer has agreed to employ Employee as such pursuant to the terms and
conditions of this employment agreement (“this Agreement”).
NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the
premises and the mutual covenants, agreements, representations and warranties
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Employee and Employer hereby
agree
as follows:
ARTICLE
1
EMPLOYMENT
Employer
hereby affirms the offer of employment to Employee as Executive Vice President,
and Employee hereby accepts such employment by Employer for the “Term” (as
defined in Article 3 below), upon the terms and conditions set forth
herein.
ARTICLE
2
DUTIES
During
the Term, Employee shall serve Employer faithfully, diligently and to the best
of his ability and shall use his best efforts to promote the interests and
goodwill of Employer and any affiliates, successors, assigns, subsidiaries,
and/or future purchasers of Employer. Employee shall render such services during
the Term at Employer’s principal place of business or at such other place of
business as may be determined by the Employer, as Employer may from time to
time
reasonably require of him, and shall devote all of his business time to the
performance thereof. Employee shall have those duties and powers as generally
pertain to each of the offices of which he holds, as the case may be, subject
to
the control of Employer.
ARTICLE
3
TERM
The
“Term” of this Agreement shall commence on the Effective Date and continue
thereafter for a term of two (2) years, as may be extended or earlier terminated
pursuant to the terms and conditions of this Agreement. The Term of this
Agreement shall automatically renew for successive one (1) year periods unless,
prior to the 30th calendar
day
preceding the expiration of the then existing Term, either Employer or Employee
provides written notice to the other that it elects not to renew the Term.
Upon
delivery of such notice, this Agreement shall continue until expiration of
the
Term, whereupon this Agreement shall terminate and neither party shall have
any
further obligation thereafter arising under this Agreement, except as explicitly
set forth herein to the contrary.
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ARTICLE
4
REMUNERATION
Salary
4.1
Employer
shall pay to Employee through Xxxxx Design Pty Ltd ACN 010 768 359 (“Xxxxx
Design”) an annual salary (“the Salary”) of One Hundred and Thirty Thousand
Dollars $130,000.00 US, exclusive of Employer’s compulsory superannuation
contributions, to be paid in Australian dollars and cents using the AUD/USD
spot
exchange rate published by the Reserve Bank of Australia at midday on 30
November 2007, in equal installments at the end of such regular payroll
accounting periods as are established by Employer, or in such other installments
upon which the parties hereto shall mutually agree, and in accordance with
Employer’s usual payroll procedures, but no less frequently than
monthly.
Benefits
including statutory entitlements
4.2
During
the Term and in addition to Employee’s minimum entitlements under statute to
Employer’s compulsory superannuation contributions, parental leave,
personal/carer’s leave (including sick leave), annual leave and long service
leave (the latter where applicable), Employee shall be entitled to participate
in all medical and other employee benefit plans, including vacation, sick leave,
retirement accounts and other employee benefits provided by Xxxxx
Design to similarly situated employees on terms and conditions no less favorable
than those offered to such employees. Such participation shall be subject to
the
terms of the applicable plan documents, Employer’s generally applicable
policies, and the discretion of Employer or any administrative or other
committee provided for in, or contemplated by, such plan. The compulsory
superannuation contributions will be remitted by Employer into the fund chosen
by Employee of which Employee is to inform Employer at the time of signing
this
Agreement. If Employee does not choose such a fund, Employer will make
contributions into any complying fund nominated by it. The amount of any
contributions of superannuation will form part of Employee’s remuneration
together with the Salary and the Bonus.
Expense
Reimbursement
4.3
Employer
shall reimburse Employee through Xxxxx Design for reasonable and necessary
expenses incurred by him on behalf of Employer in the performance of his duties
hereunder during the Term in accordance with Employer's then customary policies,
provided that such expenses are adequately documented.
Automobile
4.4
Employer
shall pay to Employee an automobile allowance of AUD$1000 per calendar month
in
accordance with Employer’s usual payroll procedures.
Bonus
4.5
In
addition to the Salary and superannuation contributions, Employee
shall be entitled to receive through Xxxxx Design an annual bonus equal to
3%
(the "Bonus") of the consolidated annual operating income, before the deduction
of interest and taxes of designated subsidiaries as assigned by
Employer. The amount of the Bonus shall be determined based upon the
operating income reported in the financial statements of each designated
subsidiary, as calculated based on US generally accepted accounting principles
and as audited by the Employer’s accounting firm at year end. Any Bonus amount
will be payable within thirty (30) days from completion of the audit. The bonus
shall be paid in AUD. Employee shall have the right to review and
independently verify the conclusions of any audit by delivering notice in
writing to Employer within 30 days after receipt of such audit indicating that
Employee wishes to exercise his right of review and verification. Within 10
business days after receipt of any such notice, Employer shall make available
to
Employee and his representatives, at reasonable times during normal business
hours, the books and records of Employer which are reasonably necessary to
conduct such review and verification. Employee shall cause such review to be
conducted and concluded as quickly as reasonably practicable and in such a
manner so as not to unreasonably interfere with the business and operations
of
Employer. Any representatives conducting such review shall, prior to being
given
access to such books and records, be required to enter into confidentiality
and
non-disclosure agreements with Employer on terms and conditions satisfactory
to
Employer, acting reasonably. If Employee disputes the results of the audit,
he
shall, within 20 days after notice is delivered by Employee to Employer that
there exist a dispute, be submitted to arbitration as set forth
below.
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Arbitration
4.6
Any
unresolved disputes in regards to the Bonus due from Employer to Employee will
be subject to arbitration by an independent chartered accountant mutually chosen
by Employer and Employee at an expense equally borne by both parties. The
parties shall, within 20 days after appointment of the Arbitrator present their
written position and related evidence with respect to the unresolved
disputes. The Arbitrator shall review evidence accordingly and submit
a written decision which shall be final and binding on the parties within 20
days after submission of such evidence.. The Arbitrator shall comply, and the
arbitration shall be conducted in accordance with the Commercial Arbitration
Xxx
0000 (Qld).
ARTICLE
5
OTHER
EMPLOYMENT
During
the Term of this Agreement, Employee shall devote substantially all of his
business and professional time and effort, attention, knowledge, and skill
to
the management, supervision and direction of Employer’s business and affairs as
Employee’s highest professional priority. Except as provided below, Employer
shall be entitled to all benefits, profits or other issues arising from or
incidental to all work, services and advice performed or provided by Employee.
Provided that the activities listed below do not materially interfere with
the
duties and responsibilities under this Agreement, nothing in this Agreement
shall preclude Employee from devoting reasonable periods required
for:
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(a)
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Serving
as a member of any organization involving no conflict of interest
with
Employer, provided that Employee must obtain the written consent
of
Employer;
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(b)
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Serving
as a consultant in his area of expertise to government, commercial
and
academic panels where it does not conflict with the interests of
Employer;
and
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(c)
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Managing
his personal investments or engaging in any other non-competing
business.
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ARTICLE
6
CONFIDENTIAL
INFORMATION/INVENTIONS
Confidential
Information
6.1
Employee
shall not, in any manner, for any reasons, either directly or indirectly,
divulge or communicate to any person, firm or corporation, any confidential
information concerning any matters not generally known or otherwise made public
by Employer which affects or relates to Employer’s business, finances, marketing
and/or operations, research, development, inventions, products, designs, plans,
procedures, or other data (collectively, “Confidential Information”) except in
the ordinary course of Employer’s business or as required by applicable law.
Without regard to whether any item of Confidential Information is deemed or
considered confidential, material, or important, the parties hereto stipulate
that as between them, to the extent such item is not generally known, such
item
is important, material, and confidential and affects the successful conduct
of
Employer’s business and goodwill, and that any breach of the terms of this
Section 6.1 shall be a material and incurable breach of this Agreement.
Confidential Information shall not include information in the public domain
at
the time of the disclosure of such information by Employee or information that
is disclosed by Employee with the prior consent of Employer. This provision
in
so far as it requires Employee to not, in any manner, for any reasons, either
directly or indirectly divulge or communicate the Confidential Information
to
any person, firm or corporation except in the ordinary course of Employer’s
business or as required by applicable law, shall survive the termination of
this
Agreement.
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Documents
6.2
Employee
further agrees that all documents and materials furnished to Employee by
Employer and relating to the Employer’s business or prospective business are and
shall remain the exclusive property of Employer. Employee shall deliver all
such
documents and materials, not copied, to Employer upon demand therefore and
in
any event upon expiration or earlier termination of this Agreement. Any payment
of sums due and owing to Employee by Employer upon such expiration or earlier
termination shall be conditional upon returning all such documents and
materials, and Employee expressly authorizes Employer to withhold any payments
due and owing pending return of such documents and materials.
Inventions
6.3
All
ideas, inventions, intellectual property, works, writings and other developments
or improvements conceived or reduced to practice by Employee, alone or with
others, during the Term of this Agreement, whether or not during working hours,
that are within the scope of the business of Employer or are created by Employee
during or arising out of Employee’s employment with Employer, or that relate to
or result from any of Employer’s work or projects or the services provided by
Employee to Employer pursuant to this Agreement, shall be the exclusive property
of Employer. Employee agrees to assist Employer, at Employer’s expense, to
obtain patents and copyrights on any such ideas, inventions, intellectual
property, works, writings, and other developments or improvements, and agrees
to
execute all documents necessary to obtain such patents and copyrights in the
name of Employer.
Disclosure
6.4
During
the Term, Employee will promptly disclose to Employer full
information concerning any interest, direct or indirect, of Employee (as owner,
shareholder, partner, lender or other investor, director, officer, employee,
consultant or otherwise) or any member of his immediate family in any business
that is reasonably known to Employee to purchase or otherwise obtain services
or
products from, or to sell or otherwise provide services or products to, Employer
or to any of its suppliers or customers.
ARTICLE
7
COVENANT
NOT TO COMPETE AND POST EMPLOYMENT RESTRAINT
7.1
Except
as
expressly permitted in Article 5 above, during the Term of this
Agreement:
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(a)
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Employee
shall not engage, directly or indirectly, in any business or activity
competitive to any business or activity engaged in by Employer, or
proposed to be engaged in by Employer
or,
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(b)
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soliciting
or taking away or interfering with any contractual relationship of
any
employee, client, agent, representative, contractor, supplier, vendor,
customer, franchisee, lender or investor of Employer, or using, for
the
benefit of any person or entity other than Employer, any Confidential
Information of Employer.
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7.2
Further,
Employee acknowledges that during the Term of this Agreement Employer will
not
only have access to Employer’s Confidential Information but also will develop
professional and business relationships, knowledge and understanding that are
assisted by the Employee’s employment with the Employer and which will upon
termination of this Agreement potentially put Employee in a position to cause
harm to Employer’s business and to Employer’s legitimate business interests and
that an award or payment of damages on their own would not be a
sufficient remedy for breach by Employee of any of the restraints and covenants
contained in this Agreement. Employee further acknowledges that Employer can
seek orders restraining Employee, in addition to any orders that a court,
tribunal or commission might make for any other remedy which might include
but
which is not limited to payment of costs, interest and damages.
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7.3.
Accordingly
as at the termination of this Agreement for any reason at all Employee will
not
throughout the State of Queensland in any capacity:
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(a)
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solicit,
pursue or approach for the purpose of obtaining business or instructions
to any person, organization or entity who or which is a client, agent,
representative, contractor, supplier, vendor, customer, franchisee,
lender
or investor of Employer or who or which is or has been a client,
agent,
representative, contractor, supplier, vendor, customer, franchisee,
lender
or investor Employer at any time during the Term of this Agreement
and
with whom or with which Employee has business dealings during the
Term of
this Agreement or with regard to whom or with which Employee has
obtained
Confidential Information and with whom or with which Employer had
a
reasonable expectation of engaging in further business at the time
of the
termination of this Agreement, and
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(b)
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for
any reason or purpose which competes, directly or indirectly, whatsoever
with Employer’s business, solicit away from Employer any employee of
Employer’s with whom Employee have had dealings on the Employer’s behalf
and/or in respect of whom Employee obtained any confidential or personal
information as a result of Employee’s employment with Employer, for the
purposes of offering that person work either as an independent contractor,
an employee or otherwise.
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7.4
The
restrictions contained herein will continue for a maximum enforceable period
of
six (6) months from the date of the termination of this Agreement.
ARTICLE
8
SURVIVAL
Employee
agrees that the provisions of Articles 6, 7 and 9 shall survive expiration
or
earlier termination of this Agreement for any reasons, whether voluntary or
involuntary, with or without cause, and shall remain in full force and effect
thereafter. Notwithstanding the foregoing, if this Agreement is
terminated upon the dissolution of Employer, the filing of a winding up
application by Employer or upon an assignment for the benefit of creditors
of
the assets of Employer, Articles 6, 7 and 9 shall be of no further force or
effect.
ARTICLE
9
INJUNCTIVE
RELIEF
Employee
acknowledges and agrees that the covenants and obligations of Employee set
forth
in Articles 6 and 7 with respect to non-competition, non-solicitation,
confidentiality and Employer’s property relate to special, unique and
extraordinary matters and that a violation of any of the terms of such covenants
and obligations will cause Employer irreparable injury for which adequate
remedies are not available at law. Therefore, Employee agrees that Employer
shall be entitled to an injunction, restraining order or such other equitable
relief (without the requirement to lodge any security) as a court of competent
jurisdiction may deem necessary or appropriate to restrain Employee from
committing any violation of the covenants and obligations referred to in this
Article 9. These injunctive remedies are cumulative and in addition to any
other
rights and remedies Employer may have at law or in equity.
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ARTICLE
10
TERMINATION
Termination
by Employee
10.1
Employee
may terminate this Agreement for Good Reason at any time upon 30 days written
notice to Employer, provided the Good Reason has not been cured within such
period of time.
Good
Reason
10.2
In
this
Agreement, “Good Reason” means, without Employee’s prior written consent, the
occurrence of any of the following events, unless Employer shall have fully
cured all grounds for such termination within thirty (30) days after Employee
gives notice thereof:
(i) any
reduction in Employee’s then current Salary;
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(ii)
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any
material failure to timely grant, or timely honor, any equity or
long-term
incentive award;
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(iii)
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failure
to pay statutory entitlements and/or to provide required remuneration
and/or benefits;
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(iv)
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the
removal of Employee from Employee’s position or any changes in the
reporting structure so that Employee reports to someone other than
the
President of Employer;
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(v)
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any
material diminution in Employee’s title or duties or the assignment to
Employee of duties not customarily associated with Employee’s position as
Executive Vice President of
Employer;
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(vi)
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any
relocation of Employee’s office as assigned to Employee by Employer, to a
location more than 25 miles from the assigned
location;
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(vii)
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the
failure of Employer to obtain the assumption in writing of its obligation
to perform this Agreement by any successor to all or substantially
all of
the assets of Employer or upon a merger, consolidation, sale or similar
transaction of Employer or;
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(viii)
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the
voluntary or involuntary dissolution of Employer, the filing of a
winding
up application by Employer or upon an assignment for the benefit
of
creditors of the assets of
Employer.
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The
written notice given hereunder by Employee to Employer shall specify in
reasonable detail the cause for termination, and such termination notice shall
not be effective until thirty (30) days after Employer’s receipt of such notice,
during which time Employer shall have the right to respond to Employee’s notice
and cure the breach or other event giving rise to the termination.
Termination
by Employer
10.3
Employer
may terminate its employment of Employee under this Agreement for cause at
any
time by written notice to Employee. For purposes of this Agreement, the term
“cause” for termination by Employer shall be:
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(a)
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a
conviction of or plea of guilty, or a consent to an order without
an
admission of liability, by Employee, to a felony, or any crime involving
fraud or embezzlement;
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(b)
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the
refusal by Employee to perform his material duties and obligations
hereunder;
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(c)
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Employee’s
willful and intentional misconduct in the performance of his material
duties and obligations; or,
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(d)
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if
Employee or any member of his family makes any personal profit arising
out
of or in connection with a transaction to which Employer is a party
or
with which it is associated without making disclosure to and obtaining
the
prior written consent of Employer.
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The
written notice given hereunder by Employer to Employee shall specify in
reasonable detail the cause for termination. In the case of a termination for
the causes described in (a) and (d) above, such termination shall be effective
upon receipt of the written notice. In the case of the causes described in
(b)
and (c) above, such termination notice shall not be effective until thirty
(30)
days after Employee’s receipt of such notice, during which time Employee shall
have the right to respond to Employer’s notice and cure the breach or other
event giving rise to the termination.
Severance
10.4
Upon
a
termination of this Agreement without Good Reason by Employee or with cause
by
Employer, Employer shall pay to Employee all accrued and unpaid compensation
as
of the date of such termination, subject to the provision of Section 6.2. Upon
a
termination of this Agreement with Good Reason by Employee or without cause
by
Employer, Employer shall pay to Employee all accrued and unpaid compensation
and
expense reimbursement as of the date of such termination and the “Severance
Payment.” The Severance Payment shall be payable in a lump sum,
subject to Employer’s statutory and customary withholdings. If the
termination of Employee hereunder is by Employee with Good Reason, the Severance
Payment shall be paid by Employer within five (5) business days of the
expiration of any applicable cure period. If the termination of Employee
hereunder is by Employer without cause, the Severance Payment shall be paid
by
Employer within five (5) business days of termination. The “Severance
Payment” shall equal the amount of the Salary payable to Employee under Section
4.1 of this Agreement from the date of such termination until the end of the
Term of this Agreement (prorated for any partial month).
Termination
Upon Death
10.5
If
Employee dies during the Term of this Agreement, this Agreement shall terminate,
except that Employee’s legal representatives shall be entitled to receive any
earned but unpaid compensation or expense reimbursement due hereunder through
the date of death.
Termination
Upon Incapacity
10.6
If
during
the Term of this Agreement Employee suffers and continues to suffer from an
“Incapacity”(as defined below), then Employer may terminate this Agreement by
delivering to Employee thirty (30) calendar days prior written notice of
termination based on such Incapacity, setting forth with specificity the nature
of such Incapacity and the determination of Incapacity by Employer. For the
purposes of this Agreement “Incapacity” means Employee’s inability, with
reasonable accommodation, to substantially perform Employee’s duties, services
and obligations under this Agreement due to physical or mental illness or other
incapacity for a continuous, uninterrupted period of sixty (60) calendar days
of
unpaid sick leave (exclusive of any Employee’s absences which are subject to
workers’ compensation coverage and payment) or ninety (90) days of unpaid sick
leave (exclusive of any Employee’s absences which are subject to workers’
compensation coverage and payment) during any twelve month
period. Upon any such termination for Incapacity, Employee shall be
entitled to be paid any accrued statutory entitlements and any earned but unpaid
remuneration or expense reimbursement due hereunder through the date of
termination.
ARTICLE
11
PERSONNEL
POLICIES, CONDITIONS, AND BENEFITS
Except
as
otherwise provided herein, Employee’s employment shall be subject to the
personnel policies and benefit plans which apply generally to Employer’s
employees as the same may be interpreted, adopted, revised or deleted from
time
to time, during the Term of this Agreement, by Employer in its sole discretion.
During the Term hereof, Employee shall be entitled to annual leave during each
year of the Term at the rate of four (4) weeks per year. Employee shall take
such vacation at a time approved in advance by Employer, which approval will
not
be unreasonably withheld but will take into account the staffing requirements
of
Employer and the need for the timely performance of Employee's
responsibilities.
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ARTICLE
12
BENEFICIARIES
OF AGREEMENT
This
Agreement shall inure to the benefit of Employer and any affiliates, successors,
assigns, parent corporations, subsidiaries, and/or purchasers of Employer as
they now or shall exist while this Agreement is in effect.
ARTICLE
13
GENERAL
PROVISIONS
No
Waiver
13.1
No
failure by either party to declare a default based on any breach by the other
party of any obligation under this Agreement, nor failure of such party to
act
quickly with regard thereto, shall be considered to be a waiver of any such
obligation, or of any future breach.
Modification
13.2
No
waiver
or modification of this Agreement or of any covenant, condition, or limitation
herein contained shall be valid unless in writing and duly executed by the
parties to be charged therewith.
Choice
of Law/Jurisdiction
13.3
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Queensland and Employee and Employer agree to submit to the
non-exclusive jurisdiction of the Queensland courts.
Entire
Agreement
13.4
This
Agreement embodies the whole agreement between the parties hereto regarding
the
subject matter hereof and there are no inducements, promises, terms, conditions,
or obligations made or entered into by Employer or Employee other than contained
herein.
Severability
13.5
All
provisions and covenants contained herein are severable, and in the event any
of
them, with the exception of those contained in Articles 1 and 4 hereof, shall
be
held or declared to be invalid, unenforceable, illegal or contrary to public
policy by any competent court, this Agreement shall be interpreted as if such
invalidity, unenforceability, illegality or finding of being contrary to public
policy will vitiate that provision or covenant only and that provision or
covenant will be deemed deleted or modified to the extent necessary to render
the remainder of the provisions and covenants of this Agreement either valid
or
enforceable or legal , and will not in any way vitiate any other provision
or
covenant of this Agreement.
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Headings
13.6
The
headings contained herein are for the convenience of reference and are not
to be
used in interpreting this Agreement.
Independent
Legal Advice
13.7
Employer
has obtained legal advice concerning this Agreement and has requested that
Employee obtain independent legal advice with respect to same before executing
this Agreement. Employee in executing this Agreement represents and
warrants to Employer that Employee has been so advised to obtain independent
legal advice and that prior to the execution of this Agreement Employee has
so
obtained independent legal advice, or has, in Employee’s discretion, knowingly
and willingly elected not to do so.
No
Assignment
13.8
Employee
may not assign, pledge or encumber Employee’s interest in this Agreement nor
assign any of Employee’s rights or duties under this Agreement without the prior
written consent of Employer.
IN
WITNESS WHEREOF the parties have executed this Agreement effective as
of the day and year first above written.
Employer:
By: ______________________
Employee:
By: ______________________
Xxxxxx
Xxxxx Xxxxx
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