**Exhibit 10.3**
**AMENDED AND RESTATED EMPLOYMENT AGREEMENT**
     This Amended and Restated Employment Agreement (the “Agreement”) is madeand entered into effective as of April 14, 2004, by and between MobilityElectronics, Inc., a Delaware corporation (“Employer”), and Tim Jeffries(“Employee”). This Agreement supersedes and replaces all other employmentagreements between Employer and Employee, including, without limitation, thePrior Agreement (as defined in Section 11 below).
**W I T N E S S E T H:**
     WHEREAS, Employee is currently an Executive Vice President and ChiefOperating Officer of Employer, and Employer desires to employ Employee asprovided herein, and Employee desires to accept such employment; and
     WHEREAS, Employee and Employer were parties to the Prior Agreement; and
     WHEREAS, Employee and Employer desire to replace the Prior Agreement withthis Agreement; and
     WHEREAS, Employee shall, as an employee of Employer, have access toconfidential information with respect to Employer and its affiliates;
     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 toelect and remove officers, Employee shall serve Employer as Executive VicePresident and Chief Operating Officer 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 Chief Executive Officer or Board of Directors (the “Board”) ofEmployer. Employee shall report directly to the Chief Executive Officer ofEmployer. Employee shall devote his full time, attention, energies andbusiness efforts to his duties hereunder and to the promotion of the businessand interests of Employer and its affiliates.
     3. Term. Unless earlier terminated pursuant to Section 6 below, the termof this Agreement shall commence as of the date hereof, and shall end on June1, 2005; provided, however, that the term shall automatically renew for anadditional one-year period at the end of the original two-year term and anyadditional one-year term, unless either party gives written notice to the otherparty, at least ninety (90) days prior to the end of the applicable term, ofsuch party’s termination of this Agreement at the end of the applicable term.As used herein, “Term” shall mean the original term and any additional renewalterm(s).
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     4. Compensation. As compensation for services rendered under thisAgreement, during the Term Employee shall be entitled to receive thecompensation as provided in Exhibit A attached hereto. In addition, Employershall reimburse Employee for all reasonable and necessary out-of-pocket travelexpenses, commute expenses and other expenses incurred by Employee in renderingservices required under this Agreement, on a regular basis upon submission ofdetailed statements and reasonable documentation. Employer shall alsoreimburse Employee for all reasonable and customary re-location expenses, asmutually agreed to by Employer and Employee (which mutual agreement shall notbe unreasonably withheld by Employer), net of associated taxes, upon submissionof detailed statements 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 is the property of Employer and its affiliates. Employee furtheracknowledges and understands that his disclosure of any Trade Secrets willresult 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, drawings, 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 thereafter to hold in strict confidenceand not to disclose or allow to be disclosed to any person, firm orcorporation, other than to persons engaged by Employer and its affiliates tofurther the business of Employer and its affiliates, and not to use except inthe pursuit of the business of Employer and its affiliates, the Trade Secrets,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 retain anydocuments or other information, or any reproduction or excerpt thereof,containing or pertaining to any Trade Secrets.
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          (d) Competition During Employment. Employee agrees that during the Term,neither he, nor any of his affiliates, will directly or indirectly: (i) competewith Employer or its affiliates in the portable or handheld computer power,docking, and connectivity business, which is defined as product lines orbusinesses that are competitive with products that are manufactured, marketedor sold by Employer and its affiliates during the Term or under developmentduring the Term (the “Business”); or (ii) act as an officer, director,employee, consultant, shareholder, lender, or agent of any entity which is incompetition with Employer; provided, however, that this Section 5(d) shall notprohibit Employee or any of his affiliates from purchasing or holding anaggregate equity interest of up to 1% in any publicly-traded company which isin competition with Employer. Furthermore, Employee agrees that during theTerm, he will undertake no planning for the organization of any businessactivity competitive with the Business and Employee will not combine orconspire with any other employees of Employer and its affiliates for thepurpose of the organization of any such competitive business activity.
          (e) Competition Following Employment. Employee agrees that for a periodof one-year after the termination or cessation of his employment for Employerfor any reason whatsoever, neither he, nor any of his affiliates, will directlyor indirectly: (i) compete with Employer or its affiliates in the Business;(ii) act as an officer, director, employee, consultant, shareholder, lender, oragent of any entity which is in competition with Employer; or (iii) undertakeor plan for the organization of any business activity in competition withEmployer and Employee will not combine or conspire with any other employees ofEmployer or its affiliates for the purpose of the organization of any suchcompetitive business activity; provided, however, that this Section 5(e) shallnot prohibit Employee or any of his affiliates from purchasing or holding anaggregate equity interest of up to 1% in any publicly-traded company which isin competition with Employer.
     6. 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;
          (b) The death of Employee;
          (c) The Excessive Absence (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
          (g) Written notice to Employer from Employee of termination forConstructive Termination.
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     In the event of the termination of Employee’s employment pursuant to (a),(b), (c), (d) or (f), then Employee shall be entitled to only the compensationearned by Employee as of, and payable for the period prior to, the date of suchTermination Event. In the event of the termination of Employee’s employmentpursuant to (e) or (g) above, Employee shall continue to receive the salaryprovided for in Exhibit A for a period equal to six (6) months following thedate of termination. Notwithstanding anything to the contrary in thisAgreement, the provisions of Section 5 above shall survive any termination, forwhatever reason, of Employee’s employment under this Agreement.
     For purposes of this Section 6 the following terms have the followingmeanings:
     “Constructive Termination” shall mean: (a) a material reduction inEmployee’s duties and responsibilities without Employee’s consent; (b) ifEmployee is terminated as the Chief Operating Officer of Employer; (c)any breach by Employer of any of the material terms of, or the failure toperform any material covenant contained in this Agreement and followingwritten notice thereof from Employee to Employer, Employer does not curesuch breach or failure within fifteen (15) days thereafter; provided,however, that Employer will not be entitled to cure any such breach orfailure more than one time in any consecutive three month period; (d) arequired relocation by Employee from the Phoenix, Arizona metroplex; or(e) a reduction in Employee’s Salary without Employee’s prior writtenconsent.
     “Excessive Absence” of Employee shall mean his inability, forwhatever reason, to perform his duties under this Agreement for acontinuous period of 60 days or for 120 days out of a continuous periodof 240 days, unless otherwise approved by the Board.
     “Just Cause” shall mean (a) conviction of a felony or commission ofany act of fraud, moral turpitude or dishonesty, (b) an intentional,material violation of a statutory or fiduciary duty not corrected withinten days after notice from Employer, (c) any material breach by Employeeof any of the terms or conditions of, or the failure to perform anymaterial covenant contained in, this Agreement and Employee does not curesuch breach or failure within ten days following notice from Employer;provided, however, that Employee will not be entitled to cure any breachor failure under this subclause (c) more than one time in any consecutivethree (3) month period, or (d) the violation by Employee of reasonableinstructions or policies established by Employer with respect to theoperation of its business and affairs or Employee’s failure to carry outthe reasonable instructions of the Chief Executive Officer, or Board andfollowing notice thereof from Employer to Employee, Employee does notcure any such violation or failure within ten days following notice fromEmployer; provided, however, that Employee will not be entitled to cureany breach or failure under this subclause (d) more than one time in anyconsecutive three (3) month period.
     7. Change in Control.
          (a) Termination Payment. Notwithstanding anything to the contrarycontained in Section 6 above, if Employee’s employment with Employer isterminated by: (i) Employer by reason of subpart (e) of the first paragraph ofSection 6 above; or (ii) Employee by
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reason of subpart (g) of the first paragraph of Section 6 above, and, ineither case, such termination occurred within two (2) years following a ChangeIn Control (as defined in subparagraph (b) below) (a “Triggering Event”), then,in either event, Employee shall be entitled to receive a lump-sum payment equalto: (y) Employee’s then current annual salary, plus (z) an amount equal toEmployee’s maximum bonus for the applicable year (assuming for such purposes,that 100% of the targets were achieved).
     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 automaticallyextended to the maximum term under the applicable stock option agreement (withany such extended stock option that is an incentive stock option being deemedto be 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:
(i) Any person within the meaning ofSection 13(d) and 14(d) of the Securities Exchange Actor 1934, as amended (the “Exchange Act”), other thanEmployer (including its subsidiaries, directors orexecutive officers) has become the beneficial owner,within the meaning of Rule 13d-3 under the Exchange Act,of 50 percent or more of the combined voting power ofEmployer’s then outstanding common stock or equivalentin voting power of any class or classes of Employer’soutstanding securities ordinarily entitled to vote inelections of directors (“voting securities”); (ii) Shares representing 50 percent ormore of the combined voting power of Employer’s votingsecurities are purchased pursuant to a tender offer orexchange offer (other than an offer by Employer or itssubsidiaries, directors or executive officers); (iii) As a result of, or in connectionwith, any tender offer or exchange offer, merger orother business combination, sale of assets or contestedelection, or any combination of the foregoingtransactions (a “Transaction”), the persons who weredirectors of
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  Employer before the Transaction shall cease toconstitute a majority of the Board or of any successorto Employer; (iv) Following the date hereof, Employeris merged or consolidated with another corporation andas a result of such merger or consolidation less than 50percent of the outstanding voting securities of thesurviving or resulting corporation shall then be ownedin the aggregate by the former stockholders of Employer,other than (1) any party to such merger orconsolidation, or (2) any affiliates of any such party;or (v) Employer transfers more than 50percent of its assets, or the last of a series oftransfers results in the transfer of more than 50percent of the assets of Employer, or Employer transfersa business unit and/or business division responsible formore than 35% of Employer’s revenue for the twelve-monthperiod preceding the month in which such transferoccurred, in either case, to another entity that is notwholly-owned by Employer. Any determination requiredabove in this subsection (v) shall be made by theCompensation Committee of the Board, as constitutedimmediately prior to the occurrence of such event.
     8. 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.
     9. Acknowledgments. Employee acknowledges and recognizes that theenforcement of any of the provisions set forth in Section 5 above by Employerand its affiliates will not interfere with Employee’s ability to pursue aproper livelihood. Employee recognizes and agrees that the enforcement of thisAgreement is necessary to ensure the preservation and continuity of thebusiness and good will of Employer and its affiliates.
     10. 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: Charles R. Mollo Fax: (480) 477-3639
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   with a copy to: Richard F. Dahlson, Esq. Jackson Walker L.L.P. 2435 N. Central Expressway, Suite 600 Richardson, Texas 75080 Fax: (972) 744-2990   If to Employee: Tim Jeffries c/o Mobility Electronics, Inc. 17800 N. Perimeter Drive, Suite 200 Scottsdale, Arizona 85255 Attn: Charles R. Mollo 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.
     11. Entire Agreement. This Agreement contains the entire agreement of theparties hereto with respect to the subject matter hereof and supersedes allprior agreements and understandings, oral or written between the parties heretowith respect to the subject matter hereof (including, without limitation, thatcertain Employment Agreement, dated as of June 1, 2003, by and between Employerand Employee (the “Prior Agreement”)). No modification or amendment of any ofthe terms, conditions or provisions herein may be made otherwise than bywritten agreement signed by the parties hereto.
     12. 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 ARIZONA, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.
     13. 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 Agreement to anyaffiliate or to its successors or assigns. The terms “successors” and“assigns” shall include any person, corporation, partnership or other entitythat buys all or substantially all of Employer’s assets or all of its stock, orwith which Employer merges or consolidates. The rights, duties or benefits toEmployee hereunder are personal to him, and no such right or benefit may beassigned by him. The parties hereto acknowledge and agree that Employer’saffiliates are third-party beneficiaries of the covenants and agreements ofEmployee set forth in Section 5 above.
     14. 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.
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     15. 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.
     16. 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.
     17. Captions. The captions in this Agreement are for convenience ofreference only and shall not limit or otherwise affect any of the terms orprovisions hereof.
     18. Costs. If any action at law or in equity is necessary to enforce orinterpret the terms of this Agreement, the prevailing party shall be entitledto reasonable attorneys’ fees, costs and necessary disbursements in addition toany other relief to which he or it may be entitled.
     19. Affiliate. An “affiliate” of any party hereto shall mean any personcontrolling, controlled by or under common control with such party.
     20. 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:                Charles R. Mollo,            Chief Executive Officer               Tim Jeffries
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**EXHIBIT A**
1. Annual Salary: Annual Salary will be at the rate of $225,000 per year,subject to periodic increase at the discretion of the Board. 2. Bonuses: Employee shall be eligible to receive an annual calendar yearbonus (which shall have a minimum targeted bonus of at least fifty percent(50%) of Employee’s then applicable annual Salary, subject to periodicreview for increases by the Board), if earned, pursuant to Employer’sExecutive Bonus Plan, as the same may be in force and effect from time totime. 3. Benefits: Employee shall be entitled to receive such group benefits asEmployer may provide to its other employees at comparable salaries andresponsibilities to those of Employee, which shall specifically includefour weeks of paid vacation per calendar year (pro rated for partialyears). 4. Duke MBA Program. Employer agrees to reimburse Employee for up to$99,000 of Employee’s tuition and education costs for the Duke GlobalExecutive MBA Program which Employee is currently enrolled, and which MBAprogram will conclude with Employee’s graduation on the projected date ofDecember 12, 2003, with such reimbursement coming in eight (8) equalquarterly installments, commencing on April 15, 2003, and payable on thefifteenth day of each subsequent calendar quarter; provided, however that:(i) if Employee does not remain an employee of Employer through January 1,2005, then at such time as Employee ceases to be an employee of Employer,all such reimbursements shall cease and Employee shall immediately payback to Employer all amounts previously paid by Employer to Employee inreimbursement of such expenses; and (ii) in the event of a Change inControl of Employer, all of such installments shall immediately beaccelerated and paid, and the payback obligation described in (i) aboveshall terminate. 5. Stock Options: Employee shall be entitled to receive grants of stockoptions as may be determined by the Board from time to time.
A-1