exv10w3



 





Exhibit 10.3


AMENDED AND RESTATED EMPLOYMENT AGREEMENT




     This Amended and Restated Employment Agreement (the “Agreement”) is made
and entered into effective as of April 14, 2004, by and between Mobility
Electronics, Inc., a Delaware corporation (“Employer”), and Tim Jeffries
(“Employee”). This Agreement supersedes and replaces all other employment
agreements between Employer and Employee, including, without limitation, the
Prior 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 Chief
Operating Officer of Employer, and Employer desires to employ Employee as
provided 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 with
this Agreement; and



     WHEREAS, Employee shall, as an employee of Employer, have access to
confidential information with respect to Employer and its affiliates;



     NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:



     1. Employment. Employer hereby employs Employee and Employee hereby
accepts employment with Employer upon the terms and conditions hereinafter set
forth.



     2. Duties. Subject to the power of the Board of Directors of Employer to
elect and remove officers, Employee shall serve Employer as Executive Vice
President and Chief Operating Officer of Employer, and shall perform,
faithfully and diligently, the services and functions relating to such office
or otherwise reasonably incident to such office as may be designated from time
to time by the Chief Executive Officer or Board of Directors (the “Board”) of
Employer. Employee shall report directly to the Chief Executive Officer of
Employer. Employee shall devote his full time, attention, energies and
business efforts to his duties hereunder and to the promotion of the business
and interests of Employer and its affiliates.



     3. Term. Unless earlier terminated pursuant to Section 6 below, the term
of this Agreement shall commence as of the date hereof, and shall end on June
1, 2005; provided, however, that the term shall automatically renew for an
additional one-year period at the end of the original two-year term and any
additional one-year term, unless either party gives written notice to the other
party, at least ninety (90) days prior to the end of the applicable term, of
such 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 renewal
term(s).



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     4. Compensation. As compensation for services rendered under this
Agreement, during the Term Employee shall be entitled to receive the
compensation as provided in Exhibit A attached hereto. In addition, Employer
shall reimburse Employee for all reasonable and necessary out-of-pocket travel
expenses, commute expenses and other expenses incurred by Employee in rendering
services required under this Agreement, on a regular basis upon submission of
detailed statements and reasonable documentation. Employer shall also
reimburse Employee for all reasonable and customary re-location expenses, as
mutually agreed to by Employer and Employee (which mutual agreement shall not
be unreasonably withheld by Employer), net of associated taxes, upon submission
of detailed statements and reasonable documentation.



     5. Confidentiality.



          
(a) Acknowledgment of Proprietary Interest. Employee recognizes the
proprietary interest of Employer and its affiliates in any Trade Secrets (as
hereinafter defined) of Employer and its affiliates. Employee acknowledges and
agrees that any and all Trade Secrets currently known by Employee or learned by
Employee during the course of his engagement by Employer or otherwise, whether
developed by Employee alone or in conjunction with others or otherwise, shall
be and is the property of Employer and its affiliates. Employee further
acknowledges and understands that his disclosure of any Trade Secrets will
result in irreparable injury and damage to Employer and its affiliates. As
used herein, “Trade Secrets” means all confidential and proprietary information
of 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 or
its affiliates and information related to the business, products or sales of
Employer or its affiliates, or any of their respective customers, other than
information which is otherwise publicly available.



          
(b) Covenant Not-to-Divulge Trade Secrets. Employee acknowledges and
agrees that Employer and its affiliates are entitled to prevent the disclosure
of Trade Secrets. As a portion of the consideration for the employment of
Employee and for the compensation being paid to Employee by Employer, Employee
agrees at all times during the Term and thereafter to hold in strict confidence
and not to disclose or allow to be disclosed to any person, firm or
corporation, other than to persons engaged by Employer and its affiliates to
further the business of Employer and its affiliates, and not to use except in
the pursuit of the business of Employer and its affiliates, the Trade Secrets,
without the prior written consent of Employer, including Trade Secrets
developed by Employee.



          
(c) Return of Materials at Termination. In the event of any termination
or cessation of his employment with Employer for any reason whatsoever,
Employee will promptly deliver to Employer all documents, data and other
information pertaining to Trade Secrets. Employee shall not retain any
documents 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) compete
with Employer or its affiliates in the portable or handheld computer power,
docking, and connectivity business, which is defined as product lines or
businesses that are competitive with products that are manufactured, marketed
or sold by Employer and its affiliates during the Term or under development
during the Term (the “Business”); or (ii) act as an officer, director,
employee, consultant, shareholder, lender, or agent of any entity which is in
competition with Employer; provided, however, that this Section 5(d) shall not
prohibit Employee or any of his affiliates from purchasing or holding an
aggregate equity interest of up to 1% in any publicly-traded company which is
in competition with Employer. Furthermore, Employee agrees that during the
Term, he will undertake no planning for the organization of any business
activity competitive with the Business and Employee will not combine or
conspire with any other employees of Employer and its affiliates for the
purpose of the organization of any such competitive business activity.



          
(e) Competition Following Employment. Employee agrees that for a period
of one-year after the termination or cessation of his employment for Employer
for any reason whatsoever, neither he, nor any of his affiliates, will directly
or indirectly: (i) compete with Employer or its affiliates in the Business;
(ii) act as an officer, director, employee, consultant, shareholder, lender, or
agent of any entity which is in competition with Employer; or (iii) undertake
or plan for the organization of any business activity in competition with
Employer and Employee will not combine or conspire with any other employees of
Employer or its affiliates for the purpose of the organization of any such
competitive business activity; provided, however, that this Section 5(e) shall
not prohibit Employee or any of his affiliates from purchasing or holding an
aggregate equity interest of up to 1% in any publicly-traded company which is
in competition with Employer.



     6. Termination. This Agreement and the employment relationship created
hereby 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 reason
other than subparts (a), (b), (c) or (d) above;



          
(f) Written notice to Employer from Employee of termination for any reason
other than Constructive Termination (as hereinafter defined); or



          
(g) Written notice to Employer from Employee of termination for
Constructive 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 compensation
earned by Employee as of, and payable for the period prior to, the date of such
Termination Event. In the event of the termination of Employee’s employment
pursuant to (e) or (g) above, Employee shall continue to receive the salary
provided for in Exhibit A for a period equal to six (6) months following the
date of termination. Notwithstanding anything to the contrary in this
Agreement, the provisions of Section 5 above shall survive any termination, for
whatever reason, of Employee’s employment under this Agreement.



     For purposes of this Section 6 the following terms have the following
meanings:




     “Constructive Termination” shall mean: (a) a material reduction in
Employee’s duties and responsibilities without Employee’s consent; (b) if
Employee is terminated as the Chief Operating Officer of Employer; (c)
any breach by Employer of any of the material terms of, or the failure to
perform any material covenant contained in this Agreement and following
written notice thereof from Employee to Employer, Employer does not cure
such breach or failure within fifteen (15) days thereafter; provided,
however, that Employer will not be entitled to cure any such breach or
failure more than one time in any consecutive three month period; (d) a
required relocation by Employee from the Phoenix, Arizona metroplex; or
(e) a reduction in Employee’s Salary without Employee’s prior written
consent.




     “Excessive Absence” of Employee shall mean his inability, for
whatever reason, to perform his duties under this Agreement for a
continuous period of 60 days or for 120 days out of a continuous period
of 240 days, unless otherwise approved by the Board.




     “Just Cause” shall mean (a) conviction of a felony or commission of
any act of fraud, moral turpitude or dishonesty, (b) an intentional,
material violation of a statutory or fiduciary duty not corrected within
ten days after notice from Employer, (c) any material breach by Employee
of any of the terms or conditions of, or the failure to perform any
material covenant contained in, this Agreement and Employee does not cure
such breach or failure within ten days following notice from Employer;
provided, however, that Employee will not be entitled to cure any breach
or failure under this subclause (c) more than one time in any consecutive
three (3) month period, or (d) the violation by Employee of reasonable
instructions or policies established by Employer with respect to the
operation of its business and affairs or Employee’s failure to carry out
the reasonable instructions of the Chief Executive Officer, or Board and
following notice thereof from Employer to Employee, Employee does not
cure any such violation or failure within ten days following notice from
Employer; provided, however, that Employee will not be entitled to cure
any breach or failure under this subclause (d) more than one time in any
consecutive three (3) month period.



     7. Change in Control.



          
(a) Termination Payment. Notwithstanding anything to the contrary
contained in Section 6 above, if Employee’s employment with Employer is
terminated by: (i) Employer by reason of subpart (e) of the first paragraph of
Section 6 above; or (ii) Employee by



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reason of subpart (g) of the first paragraph of Section 6 above, and, in
either case, such termination occurred within two (2) years following a Change
In Control (as defined in subparagraph (b) below) (a “Triggering Event”), then,
in either event, Employee shall be entitled to receive a lump-sum payment equal
to: (y) Employee’s then current annual salary, plus (z) an amount equal to
Employee’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, Employer
shall continue to provide coverage to Employee under the health plans that the
Company has in effect following the Triggering Event to the same extent as such
coverage is provided to other executive officers of Employer (provided,
however, if Employer’s health insurance plan excludes the continued
participation of Employee or any of his dependents or beneficiaries, then
Employer shall arrange to provide to Employee or such eligible dependents or
beneficiaries substantially similar benefits) until the later of: (y)
Employee’s employment with another company which provides health insurance
generally to its employees; or (z) the fifth anniversary of the date of the
Triggering Event.



     In addition, immediately upon a Change In Control, all stock options held
by Employee shall become immediately and fully vested and exercisable and all
shares of restricted stock issued to Employee under any benefit plan shall
become immediately and fully vested and not subject to restriction, and the
term of any stock option, at the option of Employee, shall be automatically
extended to the maximum term under the applicable stock option agreement (with
any such extended stock option that is an incentive stock option being deemed
to be changed to a non-qualified stock option).



          
(b) Change In Control. A “Change in Control” means the occurrence of one
or more of the following events:




	(i)	 	Any person within the meaning of
Section 13(d) and 14(d) of the Securities Exchange Act
or 1934, as amended (the “Exchange Act”), other than
Employer (including its subsidiaries, directors or
executive 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 of
Employer’s then outstanding common stock or equivalent
in voting power of any class or classes of Employer’s
outstanding securities ordinarily entitled to vote in
elections of directors (“voting securities”);
	 
	(ii)	 	Shares representing 50 percent or
more of the combined voting power of Employer’s voting
securities are purchased pursuant to a tender offer or
exchange offer (other than an offer by Employer or its
subsidiaries, directors or executive officers);
	 
	(iii)	 	As a result of, or in connection
with, any tender offer or exchange offer, merger or
other business combination, sale of assets or contested
election, or any combination of the foregoing
transactions (a “Transaction”), the persons who were
directors of




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	 	 	Employer before the Transaction shall cease to
constitute a majority of the Board or of any successor
to Employer;
	 
	(iv)	 	Following the date hereof, Employer
is merged or consolidated with another corporation and
as a result of such merger or consolidation less than 50
percent of the outstanding voting securities of the
surviving or resulting corporation shall then be owned
in the aggregate by the former stockholders of Employer,
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, or the last of a series of
transfers results in the transfer of more than 50
percent of the assets of Employer, or Employer transfers
a business unit and/or business division responsible for
more than 35% of Employer’s revenue for the twelve-month
period preceding the month in which such transfer
occurred, in either case, to another entity that is not
wholly-owned by Employer. Any determination required
above in this subsection (v) shall be made by the
Compensation Committee of the Board, as constituted
immediately prior to the occurrence of such event.





     8. Remedies. Employee recognizes and acknowledges that in the event of
any default in, or breach of any of, the terms, conditions or provisions of
this Agreement (either actual or threatened) by Employee, Employer’s and its
affiliates remedies at law shall be inadequate. Accordingly, Employee agrees
that in such event, Employer and its affiliates shall have the right of
specific performance and/or injunctive relief in addition to any and all other
remedies and rights at law, in equity or provided herein, and such rights and
remedies shall be cumulative.



     9. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 5 above by Employer
and its affiliates will not interfere with Employee’s ability to pursue a
proper livelihood. Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation and continuity of the
business and good will of Employer and its affiliates.



     10. Notices. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other shall be deemed to have been duly given if given in writing and
personally delivered or sent by facsimile transmission, courier service,
overnight delivery service or by mail, registered or certified, postage prepaid
with 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 or
overnight delivery shall be deemed communicated as of actual receipt; mailed
notices shall be deemed communicated as of three days after the date of
mailing.



     11. Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written between the parties hereto
with respect to the subject matter hereof (including, without limitation, that
certain Employment Agreement, dated as of June 1, 2003, by and between Employer
and Employee (the “Prior Agreement”)). No modification or amendment of any of
the terms, conditions or provisions herein may be made otherwise than by
written agreement signed by the parties hereto.



     12. Governing Law and Venue. THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF ARIZONA, WITHOUT REGARD TO ITS CHOICE OF LAW PRINCIPLES.



     13. Parties Bound. This Agreement and the rights and obligations
hereunder shall be binding upon and inure to the benefit of Employer and
Employee, and their respective heirs, personal representatives, successors and
assigns. Employer shall have the right to assign this Agreement to any
affiliate or to its successors or assigns. The terms “successors” and
“assigns” shall include any person, corporation, partnership or other entity
that buys all or substantially all of Employer’s assets or all of its stock, or
with which Employer merges or consolidates. The rights, duties or benefits to
Employee hereunder are personal to him, and no such right or benefit may be
assigned by him. The parties hereto acknowledge and agree that Employer’s
affiliates are third-party beneficiaries of the covenants and agreements of
Employee set forth in Section 5 above.



     14. Estate. If Employee dies prior to the payment of all sums owed, or to
be owed, to Employee pursuant to Section 4 above, then such sums, as they
become due, shall be paid to Employee’s estate.



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     15. Enforceability. If, for any reason, any provision contained in this
Agreement 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 this
Agreement be enforced to the fullest extent permitted by applicable law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any covenant is too broad to be enforced as written, it is the intent of
each of the parties that the court should reform such covenant to such narrower
scope as it determines enforceable.



     16. Waiver of Breach. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by any party.



     17. Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.



     18. Costs. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which he or it may be entitled.



     19. Affiliate. An “affiliate” of any party hereto shall mean any person
controlling, controlled by or under common control with such party.



     20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same instrument, but only one of which need be produced.



     IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as 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 year
bonus (which shall have a minimum targeted bonus of at least fifty percent
(50%) of Employee’s then applicable annual Salary, subject to periodic
review for increases by the Board), if earned, pursuant to Employer’s
Executive Bonus Plan, as the same may be in force and effect from time to
time.
	 
	3.	 	Benefits: Employee shall be entitled to receive such group benefits as
Employer may provide to its other employees at comparable salaries and
responsibilities to those of Employee, which shall specifically include
four weeks of paid vacation per calendar year (pro rated for partial
years).
	 
	4.	 	Duke MBA Program. Employer agrees to reimburse Employee for up to
$99,000 of Employee’s tuition and education costs for the Duke Global
Executive MBA Program which Employee is currently enrolled, and which MBA
program will conclude with Employee’s graduation on the projected date of
December 12, 2003, with such reimbursement coming in eight (8) equal
quarterly installments, commencing on April 15, 2003, and payable on the
fifteenth 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 pay
back to Employer all amounts previously paid by Employer to Employee in
reimbursement of such expenses; and (ii) in the event of a Change in
Control of Employer, all of such installments shall immediately be
accelerated and paid, and the payback obligation described in (i) above
shall terminate.
	 
	5.	 	Stock Options: Employee shall be entitled to receive grants of stock
options as may be determined by the Board from time to time.






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