**Exhibit 10.1**
**AMENDED AND RESTATED EMPLOYMENT AGREEMENT**
     This Amended and Restated Employment Agreement (this “Agreement”) is madeand entered into as of April 14, 2004, by and between Mobility Electronics,Inc., a Delaware corporation (“Employer”), and Charles R. Mollo (“Employee”).This Agreement supersedes and replaces all other employment agreements betweenEmployer and Employee, including, without limitation, the Prior Agreements (asdefined in Section 12 below)
**W I T N E S S E T H:**
     WHEREAS, Employee is currently the Chief Executive Officer and Presidentof Employer, and Employee and Employer were parties to the Prior Agreements;and
     WHEREAS, Employer desires to replace the Prior Agreements with thisAgreement;
     NOW THEREFORE, for and in consideration of the mutual covenants andagreements contained herein, and for other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, the parties heretoagree as follows:
     1. Employment. Employer hereby employs Employee and Employee herebyaccepts employment with Employer upon the terms and conditions hereinafter setforth.
     2. Duties. Subject to the power of the Board of Directors of Employer(the “Board”) to elect and remove officers, Employee shall serve Employer asChief Executive Officer and President of Employer, and shall perform,faithfully and diligently, the services and functions relating to such officeor otherwise reasonably incident to such office as may be designated from timeto time by the Board. As such, Employee shall report directly to the Board.Employee shall be based in Scottsdale, Arizona, but shall have duties andresponsibilities at and/or with respect to each location at which Employer orany of its subsidiaries conducts the Business (as hereinafter defined) andshall travel as reasonably required by his duties under this Agreement.Employee shall devote his full time, attention, energies and business effortsto his duties hereunder and to the promotion of the business and interests ofEmployer and its subsidiaries as is customary for a Chief Executive Officer andPresident of a company of like-size in a comparable business; provided,however, that Employee may participate in other business ventures as long asuch participation does not interfere with Employee’s duties hereunder(including those contained in this sentence).
     3. Term. The term of this Agreement shall commence as of the date hereofand shall continue, unless earlier terminated pursuant to Section 7 below,until June 1, 2005 (the “Initial Term”); provided, however, that the term ofthis Agreement shall thereafter be renewed on a year-to-year basis thereafter(each, a “Renewal Term”), unless either party gives written notice to the otherparty, at least ninety (90) days prior to the end of the then current term, ofsuch party’s desire to terminate this Agreement at the end of the then currentterm. The Initial Term and any Renewal Term(s) are sometimes collectivelyreferred to herein as the “Term”.
1

 

     4. Compensation. As compensation for his services rendered under thisAgreement, during the Term Employee shall be entitled to receive the following:
          (a) Salary. Employee shall be paid a salary as provided in Exhibit A (the“Salary”).
          (b) Bonus. Employee shall also be entitled to receive bonuses as providedin Exhibit A.
          (c) Stock Options. Employee shall also be entitled to receive grants ofstock options as may be determined by the Board from time to time.
          (d) Benefits. Employee shall also be entitled to receive such groupbenefits as Employer may provide to its other employees at comparable salariesand responsibilities to those of Employee. In addition, Employee shall beentitled to receive the benefits set forth on Exhibit A.
          (e) Expenses. Employer shall reimburse Employee for the expensesidentified on Exhibit A and for all reasonable out-of-pocket travel and otherexpenses incurred by Employee in rendering services required under thisAgreement upon submission of a detailed statement and reasonable documentation.
     5. Confidentiality.
          (a) Acknowledgment of Proprietary Interest. Employee recognizes theproprietary interest of Employer and its affiliates in any Trade Secrets (ashereinafter defined) of Employer and its affiliates. Employee acknowledges andagrees that any and all Trade Secrets currently known by Employee or learned byEmployee during the course of his engagement by Employer or otherwise, whetherdeveloped by Employee alone or in conjunction with others or otherwise, shallbe and are the property of Employer and its affiliates. Employee furtheracknowledges and understands that his disclosure of any Trade Secrets mayresult in irreparable injury and damage to Employer and its affiliates. Asused herein, “Trade Secrets” means all confidential and proprietary informationof Employer and its affiliates, now owned or hereafter acquired, including,without limitation, information derived from reports, investigations,experiments, research, work in progress, drawing, designs, plans, proposals,codes, marketing and sales programs, client lists, client mailing lists,financial projections, cost summaries, pricing formula, and all other concepts,ideas, materials, or information prepared or performed for or by Employer orits affiliates and information related to the business, products or sales ofEmployer or its affiliates, or any of their respective customers, other thaninformation which is otherwise publicly available.
          (b) Covenant Not-to-Divulge Trade Secrets. Employee acknowledges andagrees that Employer and its affiliates are entitled to prevent the disclosureof Trade Secrets. As a portion of the consideration for the employment ofEmployee and for the compensation being paid to Employee by Employer, Employeeagrees at all times during the Term and for a period of five (5) yearsthereafter to hold in strict confidence and not to intentionally disclose(except for such disclosures as are required by law, in which case, Employeeagrees to give Employer notice thereof prior to making any such disclosure) orallow to be disclosed to any person, firm or
2

 

corporation, other than to persons engaged by Employer and its affiliatesto further the business of Employer and its affiliates, and not to use exceptin the pursuit of the business of Employer and its affiliates, the TradeSecrets, without the prior written consent of Employer, including Trade Secretsdeveloped by Employee.
          (c) Return of Materials at Termination. In the event of any terminationor cessation of his employment with Employer for any reason whatsoever,Employee will promptly deliver to Employer all documents, data and otherinformation pertaining to Trade Secrets. Employee shall not take any documentsor other information, of whatever type and in whatever form, or anyreproduction or excerpt thereof, containing or pertaining to any Trade Secrets.
          (d) Competition During and After Employment. Employee agrees that duringthe Term and for a period of one year thereafter, neither Employee, nor any ofhis affiliates, will directly or indirectly act as an investor, principal,member, partner, officer, director, employee, consultant, shareholder, lender,or agent of any entity which is engaged in any business of the same nature as,or in competition with, the business conducted by Employer and its subsidiariesduring the Term (the “Business”) within the World; provided, however, that: (i)this Section 5(d) shall not prohibit Employee or any of his affiliates frompurchasing or holding an aggregate equity interest of not more than 1% in anybusiness in competition with the Business being conducted by Employer and itssubsidiaries; (ii) this Section 5(d) shall not apply if a termination occurspursuant to subpart (e) of the first paragraph of Section 7 below; or (iii)this Section 5(d) shall not apply if a termination of Employee’s employmentoccurs and the conditions of Section 8(a) below have been satisfied.
     6. Prohibition on Disparaging Remarks. Employee shall, from the date ofthis Agreement forward, refrain from making disparaging, negative or othersimilar remarks concerning Employer or any of its affiliates to any thirdparty. Similarly, Employer and its affiliates shall from the date of thisAgreement forward, refrain from making disparaging, negative or other similarremarks concerning Employee to any third party.
     7. Termination. This Agreement and the employment relationship createdhereby shall terminate upon the occurrence of any of the following events(each, a “Termination Event”):
          (a) The expiration of the Term as set forth in Section 3 above;
          (b) The death of Employee;
          (c) The Disability (as hereinafter defined) of Employee;
          (d) Written notice to Employee from Employer of termination for Just Cause(as hereinafter defined);
          (e) Written notice to Employee from Employer of termination for any reasonother than subparts (a), (b), (c) or (d) above;
          (f) Written notice to Employer from Employee of termination for any reasonother than Constructive Termination (as hereinafter defined); or
3

 

          (g) Written notice to Employer from Employee of termination forConstructive Termination.
     In the event of the termination of Employee’s employment pursuant to (a),(b), (c), (d) or (f) above, then Employee shall be entitled to only thecompensation earned by Employee as of, and payable for the period prior to, thedate of such Termination Event. In the event of the termination of Employee’semployment pursuant to (e) or (g) above, then Employee shall be entitled tocontinue to receive the Salary for a period of six (6) months following thedate of termination. Notwithstanding anything to the contrary in thisAgreement, the provisions of Sections 5 and 6 above shall survive anytermination, for whatever reason, of Employee’s employment under thisAgreement.
     For purposes of this Section 7 the following terms of the followingmeanings:
     “Constructive Termination” shall mean: (a) a materialreduction in Employee’s duties and responsibilities withoutEmployee’s consent; (b) if Employee is terminated as the ChiefExecutive Officer of Employer; (c) any breach by Employer of anyof the material terms of, or the failure to perform any materialcovenant contained in this Agreement and following written noticethereof from Employee to Employer, Employer does not cure suchbreach or failure within fifteen (15) days thereafter; provided,however, that Employer will not be entitled to cure any suchbreach or failure more than one time in any consecutive threemonth period; (d) a required relocation by Employee from thePhoenix, Arizona metroplex; or (e) a reduction in Employee’sSalary without Employee’s prior written consent.
     “Disability” of Employee shall mean his inability, because ofmental or physical illness or incapacity, to perform his dutiesunder this Agreement for a continuous period of 90 consecutivedays or for any 120 days out of a 360-day period. In the event ofany disagreement between Employer and Employee regarding theexistence or non-existence of any such disability, upon writtenrequest from either party to the other, Employer and Employee orhis legal guardian or duly authorized attorney-in-fact (if he isnot legally competent) shall each designate one Arizona licensedphysician and the two physicians so designated shall designate athird. All three physicians so appointed shall personally examineEmployee, and the decision of a majority of such panel ofphysicians shall determine whether such disability exists.Employee hereby authorizes the disclosure and release to Employerof such determination and all supporting medical records, and bothparties hereby agree to be bound by such determination.
     “Just Cause” shall mean: (a) the commission by Employee ofany act involving moral turpitude or the commission by Employee ofany act or the suffering by Employee of any occurrence or state offacts, which renders Employee incapable of performing his dutiesunder this Agreement (other than Disability), or adversely affectsor could be expected to adversely affect Employer’s businessreputation; (b) Employee’s being convicted of a felony; (c)
4

 

any breach by Employee of any of the material terms of, orthe failure to perform any material covenant contained in, thisAgreement and following written notice thereof from Employer toEmployee, Employee does not cure such breach or failure withinfifteen (15) days thereafter; provided, however, that Employeewill not be entitled to cure any breach or failure under thissubclause (c) more than one time in any consecutive six monthperiod; or (d) the violation by Employee of reasonable andappropriate instructions or policies established by Employer whichhave been communicated to Employee with respect to the operationof their businesses and affairs or Employee’s failure to carry outthe reasonable instructions of the Board and following writtennotice thereof from Employer to Employee, Employee does not cureany such violation or failure within fifteen (15) days thereafter;provided, however, that Employee will not be entitled to cure anyviolation or failure under this subclause (d) more than one timein any consecutive six month period.
     8. Change in Control.
          (a) Termination Payment. Notwithstanding anything to the contrarycontained in Section 7 above, if Employee’s employment with Employer isterminated by: (i) Employer by reason of subpart (e) of the first paragraph ofSection 7 above; or (ii) Employee by reason of subpart (g) of the firstparagraph of Section 7 above, and, in either case, such termination occurredwithin two (2) years following a Change In Control (as defined in subparagraph(b) below) (a “Triggering Event”), then, in either event, Employee shall beentitled to receive a lump-sum payment equal to: (y) Employee’s then currentannual salary, plus (z) an amount equal to Employee’s maximum bonus for theapplicable year (assuming for such purposes, that 100% of the targets wereachieved).
     In addition, following the occurrence of a Triggering Event, Employershall continue to provide coverage to Employee under the health plans that theCompany has in effect following the Triggering Event to the same extent as suchcoverage is provided to other executive officers of Employer (provided,however, if Employer’s health insurance plan excludes the continuedparticipation of Employee or any of his dependents or beneficiaries, thenEmployer shall arrange to provide to Employee or such eligible dependents orbeneficiaries substantially similar benefits) until the later of: (y)Employee’s employment with another company which provides health insurancegenerally to its employees; or (z) the fifth anniversary of the date of theTriggering Event.
     In addition, immediately upon a Change In Control, all stock options heldby Employee shall become immediately and fully vested and exercisable and allshares of restricted stock issued to Employee under any benefit plan shallbecome immediately and fully vested and not subject to restriction, and theterm of any stock option, at the option of Employee, shall be extended to themaximum term under the applicable stock option agreement (with any suchextended stock option that is an incentive stock option being deemed to beautomatically changed to a non-qualified stock option).
          (b) Change In Control. A “Change in Control” means the occurrence of oneor more of the following events:
5

 

     (i) Any person within the meaning of Section 13(d) and 14(d)of the Securities Exchange Act or 1934, as amended (the “ExchangeAct”), other than Employer (including its subsidiaries, directorsor executive officers) has become the beneficial owner, within themeaning of Rule 13d-3 under the Exchange Act, of 50 percent or moreof the combined voting power of Employer’s then outstanding commonstock or equivalent in voting power of any class or classes ofEmployer’s outstanding securities ordinarily entitled to vote inelections of directors (“voting securities”);
     (ii) Shares representing 50 percent or more of the combinedvoting power of Employer’s voting securities are purchased pursuantto a tender offer or exchange offer (other than an offer byEmployer or its subsidiaries, directors or executive officers);
     (iii) As a result of, or in connection with, any tender offeror exchange offer, merger or other business combination, sale ofassets or contested election, or any combination of the foregoingtransactions (a “Transaction”), the persons who were directors ofEmployer before the Transaction shall cease to constitute amajority of the Board or of any successor to Employer;
     (iv) Following the date hereof, Employer is merged orconsolidated with another corporation and as a result of suchmerger or consolidation less than 50 percent of the outstandingvoting securities of the surviving or resulting corporation shallthen be owned in the aggregate by the former stockholders ofEmployer, other than (1) any party to such merger or consolidation,or (2) any affiliates of any such party; or
     (v) Employer transfers more than 50 percent of its assets, orthe last of a series of transfers results in the transfer of morethan 50 percent of the assets of Employer, or Employer transfers abusiness unit and/or business division responsible for more than35% of Employer’s revenue for the twelve-month period preceding themonth in which such transfer occurred, in either case, to anotherentity that is not wholly-owned by Employer. Any determinationrequired above in this subsection (v) shall be made by theCompensation Committee of the Board, as constituted immediatelyprior to the occurrence of such event.
     9. Remedies. Employee recognizes and acknowledges that in the event ofany default in, or breach of any of, the terms, conditions or provisions ofthis Agreement (either actual or threatened) by Employee, Employer’s and itsaffiliates remedies at law shall be inadequate. Accordingly, Employee agreesthat in such event, Employer and its affiliates shall have the right ofspecific performance and/or injunctive relief in addition to any and all otherremedies and rights at law, in equity or provided herein, and such rights andremedies shall be cumulative.
     10. Acknowledgments. Employee acknowledges and recognizes that theenforcement of any of the provisions set forth in Section 5 and 6 above byEmployer and its affiliates will not
6

 

interfere with Employee’s ability to pursue a proper livelihood. Employeerecognizes and agrees that the enforcement of this Agreement is necessary toensure the preservation and continuity of the business and good will ofEmployer and its affiliates.
     11. Notices. Any notices, consents, demands, requests, approvals andother communications to be given under this Agreement by either party to theother shall be deemed to have been duly given if given in writing andpersonally delivered or sent by facsimile transmission, courier service,overnight delivery service or by mail, registered or certified, postage prepaidwith return receipt requested, as follows:   If to Employer: Mobility Electronics, Inc. 17800 N. Perimeter Drive, Suite 200 Scottsdale, Arizona 85255 Attn: Chief Financial Officer Fax: 480/477-3639   If to Employee: Charles R. Mollo 17800 N. Perimeter Drive, Suite 200 Scottsdale, Arizona 85255 Fax: 480/477-3639
Notices delivered personally or by facsimile transmission, courier service orovernight delivery shall be deemed communicated as of actual receipt; mailednotices shall be deemed communicated as of three days after the date ofmailing.
     12. Entire Agreement. This Agreement, including the Exhibits attachedhereto, contains the entire agreement of the parties hereto with respect to thesubject matter hereof and supersedes all prior agreements and understandings,oral or written between the parties (including, without limitation, thosecertain Employment Agreements, dated as of December 1, 1999 and June 1, 2003,by and between Employer and Employee (the “Prior Agreements”)). Nomodification or amendment of any of the terms, conditions or provisions hereinmay be made otherwise than by written agreement signed by the parties hereto.
     13. Governing Law and Venue. THE RIGHTS AND OBLIGATIONS OF THE PARTIESHEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THELAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.ANY ACTION BROUGHT BY EITHER PARTY HERETO INVOLVING ENFORCEMENT, TERMINATION,INTERPRETATION, OR MODIFICATION HEREOF, OR OTHERWISE RELATED TO THIS AGREEMENTSIN ANY WAY SHALL BE BROUGHT IN A COURT LOCATED IN PHOENIX, ARIZONA, AND NEITHERPARTY HERETO SHALL BE HEARD TO ASSERT THE DEFENSE OF INCONVENIENT FORUM IN ANYSUCH ACTION.
     14. Parties Bound. This Agreement and the rights and obligationshereunder shall be binding upon and inure to the benefit of Employer andEmployee, and their respective heirs, personal representatives, successors andassigns. Employer shall have the right to assign this
7

 

Agreement to any affiliate or to its successors or assigns. The terms“successors” and “assigns” shall include any person, corporation, partnershipor other entity that buys all or substantially all of Employer’s assets or allof its stock, or with which Employer merges or consolidates. The rights,duties or benefits to Employee hereunder are personal to him, and no suchright, duty or benefit may be assigned by him. The parties hereto acknowledgeand agree that Employer’s affiliates are third-party beneficiaries of thecovenants and agreements of Employee set forth in Sections 5 and 6 above.
     15. Arbitration. Any dispute or claim arising under or with respect tothis Agreement shall be settled by arbitration in Phoenix, Arizona, pursuant tothe rules and guidelines of the American Arbitration Association — CommercialDivision. The decision of the arbitrators shall be final and binding uponEmployer and Employee, and any decision or award rendered by the arbitratorsmay be entered as a judgment or order in any court having jurisdiction.
     16. Estate. If Employee dies prior to the payment of all sums owed, or tobe owed, to Employee pursuant to Section 4 above, then such sums, as theybecome due, shall be paid to Employee’s estate.
     17. Enforceability. If, for any reason, any provision contained in thisAgreement should be held invalid in part by a court of competent jurisdiction,then it is the intent of each of the parties hereto that the balance of thisAgreement be enforced to the fullest extent permitted by applicable law.Accordingly, should a court of competent jurisdiction determine that the scopeof any covenant is too broad to be enforced as written, it is the intent ofeach of the parties that the court should reform such covenant to such narrowerscope as it determines enforceable.
     18. Waiver of Breach. The waiver by any party hereto of a breach of anyprovision of this Agreement shall not operate or be construed as a waiver ofany subsequent breach by any party.
     19. Captions. The captions in this Agreement are for convenience ofreference only and shall not limit or otherwise affect any of the terms orprovisions hereof.
     20. Costs. If any action at law or in equity, or by reason of Section 14above, is necessary to enforce or interpret the terms of this Agreement, theprevailing party shall be entitled to reasonable attorneys’ fees, costs andnecessary disbursements in addition to any other relief to which he or it maybe entitled.
     21. Affiliate; Subsidiary. An “affiliate” of any party hereto shall meanany person controlling, controlled by or under common control with such party.A “subsidiary” of Employer is any partnership, corporation, limited liabilitycompany or other entity in which Employer owns an equity interest. Forpurposes of this Agreement, the term “control”, when used with respect to anyspecified person or entity means the power to direct or cause the direction ofthe management and policies of such person or entity, directly or indirectly,whether through the ownership of voting securities of ten percent (10%) ormore, by contract, or otherwise, and the term “controlled” has the meaningcorrelative to the foregoing.
8

 

     22. Counterparts. This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original and all of which shallconstitute one and the same instrument, but only one of which need be produced.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreementas of the day and year first above written.    MOBILITY ELECTRONICS, INC.     By:     Title:                Charles R. Mollo
9

 

**EXHIBIT A**   A. Base Salary: Employee shall receive an annual Salary of $327,000,payable bi-weekly in arrears, which annual Salary shall be subject toincrease from time to time as may be determined by the Board.   B. Bonus  Compensation: Employee shall be entitled to receive an annual calendar yearbonus (which shall have a minimum targeted bonus of at least seventypercent (70%) of Employee’s then applicable annual salary), if earned,pursuant to Employer’s Executive Bonus Plan, as the same may be in forceand effect from time to time   C. Additional  Benefits: Employee shall have four (4) weeks paid vacation for each 12-monthperiod during the Term.
A-1