EMPLOYMENT AGREEMENT
Exhibit
10.2
THIS
EMPLOYMENT AGREEMENT is
made
effective as of the 7th day
of
June, 2006
(the
“Effective Date”).
AMONG:
NEW
ENGLAND COMMUNICATIONS SYSTEMS, INC.,
a
corporation formed pursuant to the laws of the State of Connecticut and having
an office for business located at 00 Xxxxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX
00000
("Employer"), and wholly owned subsidiary of WPCS
INTERNATIONAL INCORPORATED,
a
corporation formed pursuant to the laws of the State of Delaware
(“Parent”);
AND
XXXXX
XXXXXXX,
an
individual having an address at 00 Xxxxxxxxxx Xxxx Xxxxx, Xxxxxxxxxx, XX 00000
(“Employee”)
WHEREAS,
Parent
and Employer are parties to that certain Stock Purchase Agreement, executed
on
June 7,
2006
(the
“Purchase Agreement”), pursuant to which Employee has agreed to continue to
serve as President of Employer, and Employer has agreed to hire Employee as
such, pursuant to the terms and conditions of this Employment Agreement (the
“Agreement”).
NOW
THEREFORE THIS AGREEMENT WITNESSETH THAT in
consideration of the premises and the mutual covenants, agreements,
representations and warranties contained herein, the Purchase Agreement, 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, renews and extends the employment of Employee as President,
and
Employee hereby affirms, renews and 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, under the direction and supervision of the Board of Directors
of
Employer and shall use his best efforts to promote the interests and goodwill
of
Employer and any affiliates, successors, assigns, parent corporations,
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 Board of Directors of
Employer, as Employer may from time to time reasonably require of him, and
shall
devote all of his business time to the performance thereof.
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.
ARTICLE
4
COMPENSATION
Salary
4.1
Employer
shall pay to Employee an annual salary (the “Salary”) of One Hundred Thirty Five
Thousand Dollars ($135,000.00), payable 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. The Board of Directors of Employer shall review the Salary annually
to
consider any increase thereof.
Benefits
4.2
During
the Term, 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 Employer 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 the
Board of Directors or any administrative or other committee provided for in,
or
contemplated by, such plan.
Expense
Reimbursement
4.3
Employer
shall reimburse Employee 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.
2
Bonus
4.4
In
addition to the Salary, Employee shall be eligible to receive bonuses based
on
the performance of the Company, at the discretion of the Board of Directors
of
the Employer.
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.
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 director or member of a committee of any organization or corporation
involving no conflict of interest with the interests of Employer,
provided
that Employee must obtain the written consent of Employer not to
be
unreasonably withheld, delayed or
conditioned;
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(b)
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serving
as a consultant in his area of expertise (in areas other than in
connection with the business of Employer), to government, industrial,
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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provided
that such activities do not materially interfere with the regular performance
of
his duties and responsibilities under this Agreement.
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 in the wireless
communications industry 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
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 in the wireless communications industry, 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: (i) information obtained or which
became known to Employee other than through his employment by Employer; (ii)
information in the public domain at the time of the disclosure of such
information by Employee; (iii) information that Employee can document was
independently developed by Employee; (iv) information that is disclosed by
Employee with the prior written consent of Parent; and (v) information that
is
disclosed by Employee as required by law, governmental regulation or court
order.
3
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, uncopied, 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 conditioned 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, 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 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, writings, and other developments, 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 the Board of Directors of 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 (as
defined in Section 10.3) 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.
4
ARTICLE
7
COVENANT
NOT TO COMPETE
Except
as
expressly permitted in Article 5 above, during the Term of this Agreement,
Employee shall not engage in any of the following competitive activities: (a)
engaging directly or indirectly in any business or activity substantially
similar to any business or activity engaged in (or proposed to be engaged in)
by
Employer; (b) engaging directly or indirectly in any business or activity
competitive with any business or activity engaged in (or proposed to be engaged
in) by Employer; (c) soliciting or taking away any employee, agent,
representative, contractor, supplier, vendor, customer, franchisee, lender
or
investor of Employer, or attempting to so solicit or take away; (d) interfering
with any contractual or other relationship between Employer and any employee,
agent, representative, contractor, supplier, vendor, customer, franchisee,
lender or investor; or (e) using, for the benefit of any person or entity other
than Employer, any Confidential Information of Employer. The foregoing covenant
prohibiting competitive activities shall survive the termination of this
Agreement and shall extend, and shall remain enforceable against Employee,
for
the period of two (2) years following the date this Agreement is terminated.
In
addition, during the two-year period following such expiration or earlier
termination, neither Employee nor Employer shall make or permit the making
of
any negative statement of any kind concerning Employer or its affiliates, or
their directors, officers or agents or Employee.
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.
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 post bond) 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.
5
ARTICLE
10
TERMINATION
Termination
by Employee
10.1 Employee
may terminate this Agreement for Good Reason or for any reason (“Without 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 his then-current Salary; |
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(ii)
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any
material diminution in his title or duties or the assignment to him
of
duties not customarily associated with Employee’s
position;
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| (iii) | failure to pay or provide required compensation and benefits; |
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(iv)
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any
relocation of Employee’s office as assigned to him by Employer, to a
location more than 25 miles from Employer’s current office located in
Windsor, Connecticut;
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(v)
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Employer
will have materially breached its obligations to Employee under this
Agreement and such breach shall have continued for a period of at
least
thirty (30) days after the Company’s receipt of written notice from the
Employee describing such breach; or
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(vi)
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The
Company shall have materially reduced or modified the Employee’s duty
and/or authority such that the Employee reasonably believes that
he is no
longer performing his duties as set forth in Article 2 and/or an
assignment to a position from one which Employee reasonably believes
that
he is not qualified or one in the employee’s reasonable judgment is not an
executive position and/or to the extent the Employer assigns the
title,
duties and/or authority associated with the position of President
to
another employee or third party.
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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.
6
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 (a) a conviction of or plea of
guilty or nolo
contendere by
Employee to a felony, or any crime involving fraud or embezzlement; (b) the
refusal by Employee to perform his material duties and obligations hereunder;
(c) Employee’s willful and intentional misconduct in the performance of his
material duties and obligations; or (d) 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 Parent. The written
notice given hereunder by Employer to Employee shall specify in reasonable
detail the cause for termination. For purposes of this Agreement, “family” shall
mean Employee’s spouse and/or children. 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 fifteen (15) 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 total
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, together with a prorated amount any bonus
payable under Section 4.4.
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.
7
Termination
Upon Disability
10.6
If,
during the Term of this Agreement, Employee suffers and continues to suffer
from
a “Disability” (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 Disability, setting forth with specificity the nature
of such Disability and the determination of Disability by Employer. For the
purposes of this Agreement, “Disability” 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
disability for a continuous, uninterrupted period of sixty (60) calendar days
or
ninety (90) days during any twelve month period. Upon any such termination for
Disability, Employee shall be entitled to receive any earned but unpaid
compensation 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 Parent in its sole discretion.
During the Term hereof, Employee shall be entitled to vacation during each
year
of the Term at the rate of four (4) weeks per year. Within 30 days after the
end
of each year of the Term, Employer shall elect to (a) carry over and allow
Employee the right to use any accrued and unused vacation of Employee, or (ii)
pay Employee for such vacation in a lump sum in accordance with its standard
payroll practices. Employee shall take such vacation at a time approved in
advance by the Board of Directors of 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.
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 or
Parent as they now or shall exist while this Agreement is in
effect.
8
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 Connecticut, without regard to any conflict-of-laws principles.
Employer and Employee hereby consent to personal jurisdiction before all courts
in the State of Connecticut, and hereby acknowledge and agree that Connecticut
is and shall be the most proper forum to bring a complaint before a court of
law.
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
agreements 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 to be invalid by any competent court, this Agreement shall be interpreted
as if such invalid agreements or covenants were not contained
herein.
Headings
13.6 The
headings contained herein are for the convenience of reference and are not
to be
used in interpreting this Agreement.
9
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 warranties
to Employer that he has been so advised to obtain independent legal advice,
and
that prior to the execution of this Agreement he has so obtained independent
legal advice, or has, in his discretion, knowingly and willingly elected not
to
do so.
No
Assignment
13.8
Employee
may not assign, pledge or encumber his interest in this Agreement nor assign
any
of his rights or duties under this Agreement without the prior written consent
of Parent.
[intentionally
blank]
10
IN
WITNESS WHEREOF the
parties have executed this Agreement effective as of the day and year first
above written.
| NEW ENGLAND COMMUNICATIONS SYSTEMS, INC. | ||
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| By: | /s/ XXXXX XXXXXXX | |
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Name: Xxxxx Xxxxxxx |
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| Title: President | ||
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| By: | /s/ XXXXX XXXXXXX | |
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Xxxxx Xxxxxxx |
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