Unassociated Document


    Exhibit
      10.4

    


    EMPLOYMENT
      AGREEMENT

    


    THIS
      EMPLOYMENT AGREEMENT is made effective as of the 1stday
      of August, 2007
      (the “Effective Date”).

    


    AMONG:

    


    MAJOR
      ELECTRIC, INC., a corporation formed pursuant to the laws of the State
      of Washington and having an office for business located at 18538 142nd Avenue
      NE,
      Woodinville, Washington 98072 ("Employer") and wholly owned subsidiary of
WPCS INTERNATIONAL INCORPORATED, a corporation formed pursuant
      to the laws of the State of Delaware (“Parent”);

    


    AND

    


    FRANK
      MAUGER, an individual having an address at 14263 90th
      Avenue NE,
      Bothell, Washington 98011 (“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 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, subsidiaries, and/or future
      purchasers of Employer. Employee shall render such services during the Term
      at
      Employer’s principal place of business in Woodinville, Washington or at such
      other place of business within a 25 mile radius of Woodinville, Washington
      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 one (1) year, 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 Fifty
      Thousand Dollars ($150,000.00), 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.   If this Agreement is extended for additional periods,
      the Salary increases will be determined by the Employer’s Board of
      Directors.

    


    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 a $500 per month automobile allowance.  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 financial 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;

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               

            	
              (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)
      information disclosed 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 therefor 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.

    


    NOTICE
      PURSUANT TO RCW 49.44.140(3):

    


    This
      Section 6.3 shall not apply to an invention for which no equipment, supplies,
      facility, or trade secret information of the Employer was used and which was
      developed entirely on the Employee’s own time, unless (a) the invention relates
      (i) directly to the business of the Employer, or (ii) to the Employer’s actual
      or demonstrably anticipated research or development, or (b) the invention
      results from any work performed by the Employee for the Employer.

    


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    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 and
      for a period of two (2) years after the later of the Effective Date or the
      termination of the Employee’s employment by the Employer, 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 scheduled to be engaged) by the Employer or the Parent
      in any areas where the Employer or the Parent engage in business; (b) engaging
      directly or indirectly in any business or activity competitive with any business
      or activity engaged in (or scheduled to be engaged) by the Employer or the
      Parent in any areas where the Employer or the Parent engage in business; (c)
      soliciting or taking away any employee, agent, representative, contractor,
      supplier, vendor, customer, franchisee, lender or investor of the Employer
      or
      the Parent, or attempting to so solicit or take away; (d) interfering with
      any
      contractual or other relationship between the Employer or the Parent 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 the Employer, any Confidential Information of the Employer
      or
      the Parent.  In addition, during the two-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 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, 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

        
          

        

      

      
         

      

    

    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;

            


    

    


    
      	
               

            	
              (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 President of
                Employer;

            


    

    


    
      	
               

            	
              (v)

            	
              any
                relocation of Employee’s office as assigned to him by Employer, to a
                location more than 25 miles from Woodinville,
                Washington;

            


    

    


    
      	
               

            	
              (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.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    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.

    


    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    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 Washington, without regard to any conflict-of-laws principles. Employer
      and Employee hereby consent to personal jurisdiction before all courts in the
      State of Washington, and hereby acknowledge and agree that the State of
      Washington 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
      warrants 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.

    


    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    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:

            


    

    


    Major
      Electric, Inc.

    18538
      142nd Avenue
      NE

    Woodinville,
      WA  98072

    Attn:  James
      Jordan

    Phone:  (425)
      483-2677

    Facsimile:  (425)
      402-9708

    


    
      	
              (b)  

            	
              Employee:

            


    

    


    Frank
      Mauger

    14263
      90th Avenue
      NE

    Bothell,
      WA  98011

    Phone:  (425)
      821-0611 (Home)

    


    


    [intentionally
      blank]

    


    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    


    


    IN
      WITNESS WHEREOF the parties have executed this Employment Agreement
      effective as of the day and year first above written.

    


    Employer:

    
 

    
      	 	MAJOR ELECTRIC,
              INC.	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ JAMES
              JORDAN	 
	 	 	
              James
                Jordan

              Vice
                President

            	 
	 	 	 	 
	 	 	 	 


    

    
Employee:

     

    
      	 	
            	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ FRANK
              MAUGER	 
	 	 	
              Frank
                Mauger