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                                                                   EXHIBIT 10.40

                              EMPLOYMENT AGREEMENT


         This Employment Agreement (this "Agreement") is made and entered into
as of the 20th day of March, 2000, by and between Mobility Electronics, Inc., a
Delaware corporation ("Employer"), and Don Johnson ("Employee").

                              W I T N E S S E T H:


         WHEREAS, Employer desires to employ Employee as provided herein, and
Employee desires to accept such employment; 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
(the "Board") to elect and remove officers, Employee shall serve Employer as
Executive Vice President, Worldwide Sales, Marketing and Operations 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 Board, the Chief Executive Officer or the
President of Employer. As such, Employee shall report directly to the President
of Employer. Employee shall be based in Scottsdale, Arizona, but shall have
duties and responsibilities at and/or with respect to each location at which
Employer or any of its subsidiaries conducts the Business (as hereinafter
defined) and shall travel as reasonably required by his duties under this
Agreement. 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 subsidiaries as is customary for an Executive Vice
President of a company of like-size in a comparable business.

         3. Term. The term of this Agreement shall commence as of April 1, 2000,
and shall continue, unless earlier terminated pursuant to Section 7 below, for a
period of three (3) years thereafter (the "Initial Term"); provided, however,
that the term of this Agreement shall thereafter be renewed on a year-to-year
basis thereafter (each, a "Renewal Term"), unless either party gives written
notice to the other party, at least ninety (90) days prior to the end of the
then current term, of such party's desire to terminate this Agreement at the end
of the then current term. The Initial Term and any Renewal Term(s) are sometimes
collectively referred to herein as the "Term".

         4. Compensation. As compensation for his services rendered under this
Agreement, during the Term Employee shall be entitled to receive the following:



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                  (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 provided in Exhibit A.

                  (c) Stock Options. As of the date hereof, Employer shall
         execute and deliver to Employee a Stock Option Agreement, the form of
         which is attached hereto as Exhibit B.

                  (d) Benefits. Employee shall also be entitled to receive such
         group benefits as Employer may provide to its other employees at
         comparable salaries and responsibilities to those of Employee.

                  (e) Expenses. Employer shall reimburse Employee for the
         expenses identified on Exhibit A and for all reasonable out-of-pocket
         travel and other expenses incurred by Employee in rendering services
         required under this Agreement upon submission of a detailed statement
         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
         are the property of Employer and its affiliates. Employee further
         acknowledges and understands that his disclosure of any Trade Secrets
         may 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,
         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 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 for a period of five (5) years thereafter to hold in
         strict confidence and not to intentionally disclose (except for such
         disclosures as are required by law, in which case, Employee agrees to
         give Employer notice thereof prior to making any such disclosure) or
         allow to be disclosed to any person, firm or corporation, other than to



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         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 take any documents or other information, of whatever type and in
         whatever form, or any reproduction or excerpt thereof, containing or
         pertaining to any Trade Secrets.

                  (d) Competition During and After Employment. Employee agrees
         that during the Term and for a period of one year thereafter, neither
         Employee, nor any of his 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 which is in competition with the business
         conducted by Employer and its subsidiaries during the Term (the
         "Business") within the World; provided, however, that: (i) this Section
         5(d) shall not prohibit Employee or any of his affiliates from
         purchasing or holding an aggregate equity interest of not more than 1%
         in any business in competition with the Business being conducted by
         Employer and its subsidiaries; (ii) this Section 5(d) shall not apply
         if a termination occurs pursuant to subpart (e) of the first paragraph
         of Section 7 below; (iii) this Section 5(d) shall not apply if a
         termination of Employee's employment occurs and the conditions of
         Section 8(a) below have been satisfied; or (iv) following any
         termination of this Agreement, Employee may work with any personal
         computer company in a capacity which is not competitive with the
         Business.

         6. Prohibition on Disparaging Remarks. Employee shall, from the date of
this Agreement forward, refrain from making disparaging, negative or other
similar remarks concerning Employer or any of its affiliates to any third party.
Similarly, Employer and its affiliates shall from the date of this Agreement
forward, refrain from making disparaging, negative or other similar remarks
concerning Employee to any third party.

         7. 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 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);



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                  (e) Written notice to Employee from Employer of termination
         for any reason other than Just Cause;

                  (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.

         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 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, then Employee shall be entitled to
continue to receive the Salary for a period of six (6) months following the date
of termination. Notwithstanding anything to the contrary in this Agreement, the
provisions of Sections 5 and 6 above shall survive any termination, for whatever
reason, of Employee's employment under this Agreement.

         For purposes of this Section 7 the following terms of 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 Executive Vice President,
         Worldwide Sales, Marketing and Operations 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.

                  "Disability" of Employee shall mean his inability, because of
         mental or physical illness or incapacity, to perform his duties under
         this Agreement for a continuous period of 90 consecutive days or for
         any 120 days out of a 360-day period. In the event of any disagreement
         between Employer and Employee regarding the existence or non-existence
         of any such disability, upon written request from either party to the
         other, Employer and Employee or his legal guardian or duly authorized
         attorney-in-fact (if he is not legally competent) shall each designate
         one Arizona licensed physician and the two physicians so designated
         shall designate a third. All three physicians so appointed shall
         personally examine Employee, and the decision of a majority of such
         panel of physicians shall determine whether such disability exists.
         Employee hereby authorizes the disclosure and release to Employer of
         such determination and all supporting medical records, and both parties
         hereby agree to be bound by such determination.

                  "Just Cause" shall mean: (a) the commission by Employee of any
         act involving moral turpitude or the commission by Employee of any act
         or the suffering by Employee of any occurrence or state of facts, which
         renders Employee incapable of performing his



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         duties under this Agreement (other than Disability), or adversely
         affects or could be expected to adversely affect Employer's business
         reputation; (b) Employee's being convicted of a felony; (c) any breach
         by Employee 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 Employer to Employee, Employee does not
         cure such breach or failure within fifteen (15) days thereafter;
         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 six month period; (d) the violation by Employee of
         reasonable and appropriate instructions or policies established by
         Employer or the Chief Executive Officer or President of Employer which
         have been communicated to Employee with respect to the operation of
         Employer's businesses and affairs or Employee's failure to carry out
         the reasonable instructions of the Board or the Chief Executive Officer
         or President of Employer and following written notice thereof to
         Employee, Employee does not cure any such violation or failure within
         fifteen (15) days thereafter; provided, however, that Employee will not
         be entitled to cure any violation or failure under this subclause (d)
         more than one time in any consecutive six month period; or (e) the
         commission by Employee of any act or the existence of any state of
         facts which would legally justify an employer in terminating a contract
         of employment.

         8. Change in Control.

                  (a) Termination Payment. Notwithstanding anything to the
         contrary contained in Section 7 above, if Employee's employment with
         Employer is terminated by: (i) Employer by reason of subpart (e) of the
         first paragraph of Section 7 above; or (ii) Employee by reason of
         subpart (g) of the first paragraph of Section 7 above, and, in either
         case, such termination occurred within two (2) years following a Change
         In Control (as defined in subparagraph (b) below), then, in either
         event, Employee shall be entitled to receive a lump-sum payment equal
         to the Employee's then current Salary for the remainder of the then
         applicable Term.

                  (b) Change In Control. A "Change In Control" will be deemed to
         have occurred for purposes hereof: (i) upon the consolidation or merger
         of Employer with or into another corporation or business entity
         pursuant to which immediately following such merger or consolidation,
         Employer's stockholders fail to hold at least a majority of the voting
         stock of the surviving entity or its ultimate parent corporation; (ii)
         upon the sale or other transfer in a single transaction or a series of
         related transactions of all or substantially all of the assets of
         Employer, except to a subsidiary of Employer; or (iii) upon the
         acquisition of beneficial ownership, directly or indirectly, by any
         person (as such term is used in Sections 13(d) and 14(d)(2) of the
         Securities Exchange Act of 1934, as amended) of securities of Employer
         representing more than fifty percent (50%) of the combined voting power
         of Employer's then outstanding voting securities.

         9. 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



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remedies and rights at law, in equity or provided herein, and such rights and
remedies shall be cumulative.

         10. Acknowledgments. Employee acknowledges and recognizes that the
enforcement of any of the provisions set forth in Section 5 and 6 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.

         11. 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.
                                       7955 East Redfield Road
                                       Scottsdale, Arizona 85260
                                       Attn: President
                                       Fax: 602/596-0349



          If to Employee:              Don Johnson

                                       --------------------------

                                       --------------------------


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.

         12. Entire Agreement. This Agreement, including the Exhibits attached
hereto, 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 hereto. 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.

         13. 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 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 AGREEMENTS
IN ANY WAY SHALL BE BROUGHT IN A COURT LOCATED IN PHOENIX, ARIZONA, AND NEITHER
PARTY HERETO SHALL BE HEARD TO ASSERT THE DEFENSE OF INCONVENIENT FORUM IN ANY
SUCH ACTION.



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         14. 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, duty 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 Sections 5 and 6 above.

         15. Arbitration. Any dispute or claim arising under or with respect to
this Agreement shall be settled by arbitration in Phoenix, Arizona, pursuant to
the rules and guidelines of the American Arbitration Association - Commercial
Division. The decision of the arbitrators shall be final and binding upon
Employer and Employee, and any decision or award rendered by the arbitrators may
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
to be owed, to Employee pursuant to Section 4 above, then such sums, as they
become due, shall be paid to Employee's estate.

         17. 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.

         18. 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.

         19. 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.

         20. Costs. If any action at law or in equity, or by reason of Section
14 above, 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.

         21. Other Obligations. Employee represents and warrants that he is not
subject to any agreement which would be violated or breached as a direct or
indirect result of Employee executing this Agreement or Employee becoming an
employee of Employer.

         22. Affiliate; Subsidiary. An "affiliate" of any party hereto shall
mean any person controlling, controlled by or under common control with such
party. A "subsidiary" of Employer is any partnership, corporation, limited
liability company or other entity in which Employer owns an equity interest. For
purposes of this Agreement, the term "control", when



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used with respect to any specified person or entity means the power to direct or
cause the direction of the management and policies of such person or entity,
directly or indirectly, whether through the ownership of voting securities of
ten percent (10%) or more, by contract, or otherwise, and the term "controlled"
has the meaning correlative to the foregoing.

         23. 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: /s/ CHARLES R. MOLLO
                                          --------------------------------------
                                       Title:  President
                                             -----------------------------------



                                       /s/ DON JOHNSON
                                       -----------------------------------------
                                             Don Johnson



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                                    EXHIBIT A


A.       Base Salary:            Employee shall receive an annual Salary of
                                 $220,000, payable bi-weekly in arrears, which
                                 annual Salary shall be subject to increase from
                                 time to time as may be determined by the Board.

B.       Bonus Compensation:     Employee shall be eligible to receive an annual
                                 cash bonus, targeted at 40% of base salary, as
                                 determined under a bonus plan of Employer to be
                                 developed by the Board for Employer's executive
                                 officers.

C.       Additional Benefits:    Employee shall have four (4) weeks paid
                                 vacation.

D.       Additional Expenses:    Employee shall receive a relocation
                                 reimbursement to move to Scottsdale as mutually
                                 agreed up to a maximum of $100,000.

E.       Annual Raise:           Employee shall be eligible for and receive an
                                 annual raise as determined by the board of
                                 directors.



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