Exhibit 10.20
 
 
 
 
 
EMPLOYMENT AGREEMENT
 
THIS EMPLOYMENT AGREEMENT is made effective as of the 1st day of November 2009
(the "Effective Date"), AMONG:
 
WPCS INTERNATIONAL INCORPORATED, a corporation formed pursuant to the laws of
the State of Delaware and having an office for business located at One East
Uwohlan Avenue, Exton, PA 19341 ("Employer");
 
AND
 
GARY WALKER, an individual having an address at 521 Railroad Avenue, Suisun
City, CA 94585 ("Employee")
 
WHEREAS, Employee has agreed to continue to servo as an Employee of Employer,
and Employer has agreed to hire Employee as such, pursuant to the (011115 and
conditions of this Employment Agreement (the "Agreement").
 
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the promises
and the mutual covenants, agreements, representations and warranties contained
herein and other good and valuable consideration, the receipt and sufficiency of
which arc hereby acknowledged, Employee and Employer hereby agree as follows:
 
ARTICLE I
EMPLOYMENT
 
 
Employer hereby affirms, renews and extends the employment of Employee as
Executive 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, udder the direction and supervision of Employer as defined
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 Employer, as Employer may fl'om 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 three (3) 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 304' 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.
 
 
 
1

--------------------------------------------------------------------------------

 
 

 
 
ARTICLE 4
COMPENSATION
Salary
 
4.1
Employer shall pay to Employee through a subsidiary an annual salary (tho
"Salary") of One Hundred Seventy Thousand Dollars ($170,000.00), 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.
 
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 the subsidiary to similarly
situated employees on terms and conditions no loss 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 through a subsidiary 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 dill-time use of an automobile owned or teased
by Employer. In addition, Employer shall reimburse Employee through a subsidiary
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 entitled to receive through a
subsidiary an annual bonus equal to 2% (the "Bonus") of the consolidated annual
operating income, before the deduction of interest and taxes of a designated
subsidiary or subsidiaries as assigned by Employer. The amount of the Bonus
shall be determined based upon the operating income reported in the financial
statements of the designated subsidiary or subsidiaries, as calculated based on
U.S. generally accepted accounting principles and as audited by the Employees
accounting firm at year end, Any Bonus amount will be payable within thirty (30)
days from completion of the audit, 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 exists a dispute, be submitted to arbitration as set forth below. Employer
can assign subsidiaries at its sole discretion.
 
 
 
 
2

--------------------------------------------------------------------------------

 

 
 
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 panics. The
parties shall, within 20 days after appointment of the Arbitrator present their
written position and related evidence with Tweet 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 Rules of American
Arbitration Association then in force.
 
ARTICLE S
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 dilution 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 or owner 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 hem 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 hi 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.
 
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 ail
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.
 
 
 
3

--------------------------------------------------------------------------------

 

 
 
Inventions
 
6.3
All ideas, inventions, and other developments or improvements conceived or
reduced to practice by Employee, atone 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 Nil information concerning any interest, direct or indirect, of
Employee (as owner, shareholder, partner, tender 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
 
 
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, franchiser, 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, 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 no 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 fill 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.
 
 
 
 
4

--------------------------------------------------------------------------------

 

 
 
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 dale 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 shalt 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 Disability
 
10.6
It 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, BENEFITS, BENEFICIARIES
 
Except as otherwise provided herein, Employee's employment shall be subject to
the personnel policies, benefit plans and vacation 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, 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 12
GENERAL PROVISIONS
 
No Waiver
 
12.1
No failure by either party to declare a default based on any breach by the other
patty 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
 
12.2
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.
 
 
 
 
 
 
 
5

--------------------------------------------------------------------------------

 
 
 
Choice of Jurisdiction
 
12.3
This Agreement shall be governed by and construed In accordance with the laws of
the State of California, without regard to any conflict-of-Jaws principles.
Employer and Employee hereby consent to personal jurisdiction before all courts
in Rio State of California, and hereby acknowledge and agree that California is
and shall be the most proper forum to bring a complaint before a court of law.
 
Entire Agreement
 
12.4
This Agreement embodies the whole agreement between the parties hereto regarding
the subject matter hereof and supersedes any agreement prior to the Effective
Date first above written. The parties agree that there are no inducements,
promises, terms, conditions, or obligations made or entered Into by Employer or
Employee other than contained herein.
 
Severability, Headings and Assignment
 
12.5
AU agreements and covenants contained herein are severable, and in the event any
of thorn, with the exception of those contained in Articles I 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. The headings contained heroin are for the convenience of reference and
are not to be used in interpreting this Agreement. 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.
 
Independent Legal Advice
 
12.6
Employer has obtained legal advice concerning this Agreement and has requested
that Employee obtain independent legal advice.
 
 
 
 
 
IN WITNESS WHEREOF the parties have executed this Agreement as of the Effective
Date first above written.
 
 
 
 
 

Employer:     Employee:                                
/s/ Andrew Hidalgo
   
/s/ Gary Walker
 
Andrew Hidalgo CEO
   
Gary Walker
 
WPCS International Incorporated
   
 
 

 
 
 
 
6