EMPLOYMENT AGREEMENT
Exhibit
10.5
THIS
EMPLOYMENT AGREEMENT is
made
effective as of the 1st day
of
April, 2007
(the
“Effective Date”).
AMONG:
VOACOLO
ELECTRIC INCORPORATED, a
corporation formed pursuant to the laws of the State of New Jersey and having
an
office for business located at 00 Xxxxxxxxx Xxxxxx, Xxxxxxx 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 Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxxxx 00000
(“Employee”)
WHEREAS,
Employee
has agreed to continue to serve as an Employee 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 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 Vice 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 President of Employer
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 in Trenton, New Jersey or at such other place of
business within 25 mile radius of Trenton, New Jersey as may be determined
by
the President 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 (i) during the first
year of the Term One Hundred Twenty-Six Thousand Dollars ($126,000.00) and
(ii)
during the second year of the Term One Hundred Thirty Thousand Four Hundred
Dollars ($130,400), 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.
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.
Automobile
4.4
Employee
shall be entitled to the full-time use of an automobile owned or leased by
Employer. In addition, Employer shall reimburse Employee for all maintenance
and
gasoline expenses associated with the automobile, provided that such expenses
are adequately documented.
Bonus
| 4.5 |
In
addition to the Salary, Employee shall be eligible to receive bonuses, based
on
the performance of the Employer, at the discretion of the Board of Directors
of
the Employer or Parent.
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:
|
(a)
|
Serving
as a member of any organization involving no conflict of interest
with
Employer, provided that Employee must obtain the written consent
of
Employer;
|
|
(b)
|
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
|
|
(c)
|
Managing
his personal investments or engaging in any other non-competing
business
|
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 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 (i) information in the public domain
at the time of the disclosure of such information by Employee, (ii) information
that is disclosed by Employee with the prior consent of Employer, or (iii)
in
connection with a legal or governmental proceeding provided that Employee has
delivered prior written notice thereof to Employer and has reasonably cooperated
(at Employer’s expense) with any efforts by Employer to prevent such
disclosure.
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 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 in
any
business that is actually 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
Except
as
expressly permitted in Article 5 above, during the Term of this Agreement,
(a)
Employee shall not engage, directly or indirectly, in any business or activity
competitive to any business or activity engaged in, or proposed to be engaged
in, by Employer or (b) soliciting or taking away or interfering with any
contractual relationship of any employee, 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. The foregoing covenant prohibiting
competitive activities shall survive the termination of this Agreement and
shall
extend, and shall remain enforceable against Employee, with respect to any
business or activity that Employer is engaging in as of the termination date
of
this Agreement and the territory for such business or activity, for the period
of one (1) year following the date this Agreement is terminated. In addition,
during the one-year period following such expiration or earlier termination,
neither Employee nor Employer or Parent shall make or, to the extent within
its
control, permit the making of any negative statement of any kind concerning
Employer or its affiliates, or their directors, officers or agents or Employee,
except in connection with any legal or governmental proceedings or actions.
Nothing in this Article 7 shall be deemed, however, to prevent Employee from
owning securities of any publicly-owned corporation engaged in any such
business, provided that the total amount of securities of each class owned
by
Employee in such publicly-owned corporation (other than Parent) does not exceed
two percent (2%) of the outstanding securities of such class.
ARTICLE
8
SURVIVAL
Employee
agrees that the provisions of Articles 6, 7 and 9, and Employer agrees that
the
last sentence of Article 7, 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 petition in bankruptcy 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 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.
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 his then-current Salary;
|
(ii)
|
any
material failure to timely grant, or timely honor, any equity or
long-term
incentive award;
|
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(iii)
|
failure
to pay or provide required compensation and
benefits;
|
|
(iv)
|
any
material diminution in his title or duties or the assignment to him
of
duties not customarily associated with Employee’s position as Vice
President of Employer;
|
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(v)
|
any
relocation of Employee’s office as assigned to him by Employer, to a
location more than 25 miles from the assigned
location;
|
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(vi)
|
the
failure of Employer to obtain the assumption in writing of its obligation
to perform the Employment 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;
|
(vii) the
voluntary or involuntary dissolution of Employer, the filing of a petition
in
bankruptcy by Employer or upon an assignment for the benefit of creditors of
the
assets of Employer.
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 (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 Employer. 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
and
expense reimbursement 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, including any pro-rated bonus, 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, including any pro-rated
bonus, due hereunder through the date of death.
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, including any pro-rated bonus, 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 vacation during each
year
of the Term at the rate of three (3) 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.
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 New Jersey, without regard to any conflict-of-laws principles. Employer
and Employee hereby consent to personal jurisdiction before all courts in the
State of New Jersey, and hereby acknowledge and agree that New Jersey 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.
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 Employer.
Notices
13.9
All
notices and other communications under this Agreement shall be in writing and
shall be deemed given when delivered personally, mailed by certified mail,
return receipt requested, or via recognized overnight courier service with
all
charges prepaid or billed to the account of the sender to the parties (and
shall
also be transmitted by facsimile to the Persons receiving copies
thereof) at the following addresses (or to such other address as a party may
have specified by notice given to the other party pursuant to this
provision):
| (a) |
Company:
|
Voacolo
Electric Incorporated
00
Xxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxxx
Phone:
(000) 000-0000
Facsimile:
(609)
| (b) |
Employee:
|
Xxxxx
Xxxxxxx
00
Xxxxxxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxxx
Phone:
(000) 000-0000
Facsimile:
(609)
IN
WITNESS WHEREOF the
parties have executed this Employment Agreement effective as of the day and
year
first above written.
Employer:
| By: /s/ XXXXXXX XXXXXXX | |||
| Xxxxxxx Xxxxxxx | |||
| President | |||
| Voacolo Electric Incorporated |
Employee:
| By: /s/ XXXXX XXXXXXX | |||
| Xxxxx Xxxxxxx | |||
