ex1001.htm


    Exhibit
10.01

    


    EMPLOYMENT
AGREEMENT

    


    THIS EMPLOYMENT AGREEMENT is
made effective as of the 1st day of February 2010 (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 Uwchlan Avenue, Exton, PA
19341 ("Employer");

    


    AND

    


    ANDREW HIDALGO, an individual
having an address at 608 Perimeter Drive, Downingtown, PA 19335
(“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
Chief Executive Officer of the Employer 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 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 from 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 of February 1,
2010 and continue for five (5) years. Upon each one (1) year anniversary of
Employee’s employment under this Agreement, the Agreement will automatically
renew for another five (5) years from the anniversary date unless terminated by
either party pursuant to Article 10 of this Agreement.

    


    


    
      
        
        

      

      
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    ARTICLE
4

    COMPENSATION

    Salary

    


    4.1

    Employer
shall pay to Employee an annual salary (the “Salary”) of Three Hundred,
Twenty-Five Thousand Dollars ($325,000.00), 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. In addition to the Salary, Employee will be entitled to
a discretionary annual bonus as determined by Employer.

    


    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 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.

    
 

    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 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

            


    

    


    


    


    


    
      
        
        

      

      
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    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 information in 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 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 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.

    


     

    
      
        
        

      

      
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    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, 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 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.  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.

     

    
      
        
        

      

      
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    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)

              

            	
              
                failure
      to pay or provide required compensation and
  benefits;

              

            


    

    


    
      	
              
                (iii) 

              

            	
              
                any
      failure to appoint, elect or reelect him to the position of President and
      Chief Executive Officer of the Employer or the removal of him from such
      position;

              

            


    

    


    
      	
              
                (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
      and Chief Executive Officer of the
  Employer;

              

            


    

    


    
      	
              
                (v)

              

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

              

            


    

    


    
      	
              
                (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, and 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. 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 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) as stated in Article 3.

    


     

    
      
        
        

      

      
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    Termination
Upon Death

    


    10.5

    If
Employee dies during the Term of this Agreement, Employer shall pay Employee’s
estate, within fifteen (15) business days all compensation pursuant to Section
4.1 of this Agreement from the date of such death until the end of the Term of
this Agreement (prorated for any partial month) as stated in Article
3.

    


    Termination
Upon Disability

    


    10.6

    If,
during the Term of this Agreement, Employee suffers and continues to suffer from
a “Disability” then Employer may terminate this Agreement by delivering to
Employee thirty (30) 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 for a continuous, uninterrupted
period of ninety (90) calendar days or one hundred twenty (120) days during any
twelve month period.  Upon any such termination for Disability,
Employer shall pay Employee or Employee’s estate, within fifteen (15) business
days, all compensation pursuant to Section 4.1 of this Agreement from the date
of such termination for disability until the end of the Term of this Agreement
(prorated for any partial month) as stated in Article 3.

    


    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
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.

    


    Indemnification

    


    12.2

    Employer
agrees that if Employee is made a party to any action, suit or proceeding by
reason of the fact that he is or was a director or officer of the Employer,
Employee shall be indemnified and held harmless by Employer to the fullest
extent permitted and will be reimbursed by Employer for any expenses and legal
fees associated with defending such action, suit or proceeding.

    


    Modification

    


    12.3

    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.

     

    
      
        
        

      

      
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    Choice
of Jurisdiction

    


    12.4

    This
Agreement shall be governed by and construed in accordance with the laws of the
state and country where the Employee maintains a permanent address, without
regard to any conflict-of-laws principles. Employer and Employee hereby consent
to personal jurisdiction before all courts in such state and country, and hereby
acknowledge and agree that to be the most proper forum to bring a complaint
before a court of law.

     

    Entire
Agreement

    


    12.5

    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

    


    12.6

    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. The
headings contained herein 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

    


    12.7

    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:	 
	
                By:
      /s/ANDREW
      HIDALGO                                                                                    

              	 	 	
                By:
      /s/ ANDREW HIDALGO 

              	 
	
                Andrew
      Hidalgo

              	 	 	
                Andrew
      Hidalgo 

              	 
	
                Chairman
      of the Board of Directors 

                  WPCS
      International Incorporated

                

              	 	 	
                Title

              	 


      

    

    


    
      
        	 	 	 	 	 
	
                By:
      /s/ MICHAEL A.
      DOYLE

              	 	 	
              	 
	
                Michael
      A. Doyle

              	 	 	
                 

              	 
	
                Executive
      Committee Chairman 

                  Board
      of Directors

                  WPCS
      International Incorporated

                

              	 	 	
                 

              	 


      



                                                                                        


     

     

     

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