EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
August 1, 2002 by and between WPCS INTERNATIONAL INCORPORATED, a Delaware
corporation, with an office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the " Company") an ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual and resident
of ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("▇▇▇▇▇▇▇").
WHEREAS, the Company is in the business of providing wireless and landline
products and services; and
WHEREAS, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇; and
WHEREAS, ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇
does hereby accept, and ▇▇▇▇▇▇▇ hereby agrees to such engagement and employment.
At all times during the term of ▇▇▇▇▇▇▇'▇ employment, he shall remain a member
of the Board of Directors of the Company.
2. Duties. ▇▇▇▇▇▇▇ shall be responsible for the overall development, operations
and corporate governance of the Company. In addition, ▇▇▇▇▇▇▇'▇ 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. ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇'▇ duties and responsibilities and may assign or reassign
▇▇▇▇▇▇▇ to such duties and responsibilities as it deems in the Company's best
interest. ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇. During his employment hereunder, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ from investing his
assets in any business.
4. Employment Term. This Agreement shall have a term of three (3) years,
beginning the first day of August 2002 (the "Employment Term"). Upon each one
(1) year anniversary of ▇▇▇▇▇▇▇'▇ 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 ▇▇▇▇▇▇▇. As compensation for the services provided by ▇▇▇▇▇▇▇
under this Paragraph, the Company shall pay ▇▇▇▇▇▇▇ an annual salary of One
Hundred, Fifty Thousand Dollars ($150,000), to be paid in accordance with the
Company's usual payroll procedures. In addition to the above base compensation,
▇▇▇▇▇▇▇ shall be eligible to receive an annual bonus determined by the Board of
Directors based on the performance of the Company.
6. Benefits. ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ 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, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ for all
reasonable out-of-pocket business expenses incurred in performing ▇▇▇▇▇▇▇'▇
duties and responsibilities hereunder in accordance with the Company's policies,
provided ▇▇▇▇▇▇▇ promptly furnishes to the Company adequate records of each such
business expense.
9. Location of ▇▇▇▇▇▇▇'▇ Activities. ▇▇▇▇▇▇▇'▇ 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, ▇▇▇▇▇▇▇
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. ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ will protect the
Confidential Information and treat it as strictly confidential.
11. Non-Competition. ▇▇▇▇▇▇▇ 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,
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇'▇ 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,
▇▇▇▇▇▇▇'▇ employment hereunder shall terminate under the following
circumstances:
(a) Voluntary Termination by ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇'▇
employment hereunder at any time during the Employment Term.
(c) Termination for Cause. The Company shall have the right to
terminate this Agreement and ▇▇▇▇▇▇▇'▇ employment hereunder at
any time for cause. As used in this Agreement, "cause" shall mean
refusal by ▇▇▇▇▇▇▇ to implement or adhere to lawful policies or
directives of the Company's board of directors, breach of this
Agreement, ▇▇▇▇▇▇▇'▇ 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 ▇▇▇▇▇▇▇ of funds from or resources of the
Company. Cause shall not be deemed to exist unless the Company
shall have first given ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇'▇ employment hereunder, shall automatically terminate
upon ▇▇▇▇▇▇▇'▇ death or upon written notice to ▇▇▇▇▇▇▇ and
certification of ▇▇▇▇▇▇▇'▇ disability by a qualified physician or
a panel of qualified physicians if ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇'▇ employment is voluntarily terminated by ▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇ under this Agreement shall cease. Upon
such termination, ▇▇▇▇▇▇▇ shall be entitled to receive only the
compensation, benefits, and reimbursement earned by or accrued to
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ pursuant
to Section 12(d), ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇▇'▇ appointed
trustee. Other than as set forth above, ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇.
13. Resignation as Officer. In the event that ▇▇▇▇▇▇▇'▇ employment with the
Company is terminated for any reason whatsoever, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ agrees to bring
to the attention of the Company's board of directors all written business
proposals that come to ▇▇▇▇▇▇▇'▇ attention and all business or investment
opportunities of whatever nature that are created or devised by ▇▇▇▇▇▇▇ 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. ▇▇▇▇▇▇▇ hereby represents and
warrants that he is not under any contractual obligation to any other company,
entity or individual that would prohibit or impede ▇▇▇▇▇▇▇ 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.
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ in this Section 16.
17. Indemnification.
17.1
The Company agrees that if ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇'▇ alleged action in an official capacity
while serving as a director, officer, member, employee or agent, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ in connection therewith,
and such indemnification shall continue as to ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇'▇ heirs, executors and administrators. The
Company shall advance to ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ that indemnification of ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇
has not met such applicable standard of conduct, shall create a presumption that
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ to the extent the Company provides such
coverage for its other executive officers.
17.4
Promptly after receipt by ▇▇▇▇▇▇▇ of notice of any claim or the commencement of
any action or proceeding with respect to which ▇▇▇▇▇▇▇ is entitled to indemnity
hereunder, ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇, and (iii) pay the reasonable fees and expenses of such
counsel. Notwithstanding the preceding sentence, ▇▇▇▇▇▇▇ shall be entitled to
employ counsel separate from counsel for the Company and from any other party in
such action if ▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇, the
Company agrees to reimburse ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ is required to appear
after termination of this Agreement at a judicial or regulatory hearing in
connection with ▇▇▇▇▇▇▇'▇ employment hereunder, or ▇▇▇▇▇▇▇'▇ role in connection
therewith, the Company agrees to pay ▇▇▇▇▇▇▇ a sum, to be mutually agreed upon
by ▇▇▇▇▇▇▇ 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: ▇▇▇▇▇▇▇:
WPCS International Incorporated ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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 ▇▇▇▇▇▇▇ and is not assignable or
delegable, in whole or in part, by ▇▇▇▇▇▇▇. 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: ▇▇▇▇▇▇▇:
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------ ------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman, President & CEO
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