EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") executed on July 1, 2004,
by and between CirTran Corporation, a Nevada corporation, (the "Company"), and
Xxxxxx Xxxxxx ("Executive"). The Company and Executive desire to terminate
Executive's current Sales Representative Agreement, dated June 15, 2003, (the
"2003 Agreement") and the Company desires to employ the services of Executive on
the terms and subject to the conditions of this Agreement, and Executive desires
to accept such employment.
In consideration of the terms and mutual covenants contained in this
Agreement, the Company and Executive agree as follows.
1. Termination of 2003 Agreement. The Company and Executive hereby
terminate the 2003 Agreement effective the date of this Agreement.
2. Employment. The Company hereby engages the services of Executive as
Executive Vice President of Sales and Marketing of the Company to perform those
duties delegated by the Board of Directors of the Company (the "Board") and all
other duties consistent with such description, and Executive hereby accepts such
employment. During the term of this Agreement, Executive shall perform such
additional or different duties and accept appointment to such additional or
different positions of the Company as may be specified by the Board, provided
that such duties are consistent with his title. Executive shall perform his
obligations to the Company pursuant to this Agreement under the direction of the
Company, and Executive shall devote his full time and reasonable efforts to such
performance.
3. Term. This Agreement shall be effective as of June 26, 2004 (the
"Effective Date") and shall continue for three years thereafter, unless sooner
terminated by either party as provided in Section 7 hereof. Thereafter, this
Agreement shall be automatically renewed on a year-to-year basis after the
expiration of the initial or any subsequent term of this Agreement unless
terminated by either party as provided in Section 7 hereof.
4. Compensation.
(a) For services rendered pursuant to this Agreement,
Executive shall receive, commencing on the Effective Date, a base salary ("Base
Salary") of $120,000.00 per year. The base salary shall be reviewed by the Board
annually and may be increased as determined by the Board. The Board's
determination of salary will be based primarily on Executive's ability to meet,
and to cause the Company to meet, annually established goals.
(b) Executive shall be granted a bonus, in addition to such
other bonuses as the Board, in its discretion, may determine, of the following:
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(i) 1% of the Company's gross sales generated directly
by the Executive, payable quarterly (it being understood
that the Board in its sole discretion shall determine which
sales qualify for the bonus);
(ii) 5% of all gross investments made into the Company
that are directly generated and arranged by Executive (it
being understood that the Board in its sole discretion shall
determine which investments qualify for the bonus); and
(iii) 1% of the net purchase price of any acquisitions
completed by the Company that are directly generated and
arranged by Executive (it being understood that the Board in
its sole discretion shall determine which acquisitions
qualify for the bonus).
(c) The bonus paid in (iii) above shall be paid in common
stock of the Company issued at the fair market price on the day of grant which
shall be the average of the 30 days price of the Company's stock immediately
preceding the public announcement of the acquisition.
(d) Executive may be granted options to purchase shares of the
Company's common stock as determined from time to time by the Board or the
Committee established pursuant to the Company's Stock Option Plan. Such options
shall be subject to such other terms and conditions as may be determined by the
Board or the Committee when and if such options are granted.
5. Employment Benefits. The Company shall provide Executive vacation
time, standard U.S. holidays, sick leave and fringe benefits, including but not
limited to, participation in any educational seminars, pension, medical
reimbursement and employee benefit plans that may be maintained by the Company
from time to time as are made generally available to other senior management
employees of the Company in accordance with Company policies. In addition,
Executive shall receive the following:
(a) A car allowance of $250 per month to cover fuel and repairs of an
automobile.
(b) A cellular telephone and account that shall be held in the
Company's name.
(c) 100% of all medical expenses including but not limited to dental,
and vision, for Executive and his spouse and children up to the age of 22,
which shall include insurance premiums and deductible amounts.
(d) Life insurance of $100,000 and disability insurance.
(e) The Company shall obtain and maintain officer and director
insurance as the Board determines.
(f) The Company shall grant to Executive any and all standard and
customary de minimis benefits granted to Company's salaried employees in
general.
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The Company will not reduce Executive's benefits without the consent of
Executive.
6. Expenses. The Company will reimburse Executive for expenses pre
approved in writing which are incurred in connection with its business,
including expenses for travel, lodging, meals, beverages, entertainment and
other items on Executive's periodic presentation of an account of such expenses
in accordance with policies established by the Company.
7. Termination. Executive's employment will terminate upon the first to
occur of the following:
(a) Termination by the Company for "cause," as determined by
the Board. For the purposes of this Section 6(a), "cause" shall mean:
(i) misfeasance or negligence in the performance of
his duties hereunder after 30
days notice and after a 60 day period to cure such defect;
(ii) engagement by Executive in dishonest or illegal
conduct that is demonstrably
injurious to the Company; or
(iii) conviction of a felony.
Executive shall receive no notice of employment
termination for cause in the case of
(ii) and (iii) above. Immediately upon termination under Section 7(a), the
Company shall have no further obligations to Executive under this Agreement.
(b) Termination by the Company in the event of Executive's
disability. "Disability" will be deemed to exist if Executive has substantially
failed to perform the essential functions of his duties hereunder for 180
consecutive days (notwithstanding reasonable accommodation by the Company) for
reasons of mental or physical health, or if a physician selected in good faith
by the Company examines Executive (and Executive hereby agrees to permit such
examinations at the Company's expense) and advises the Company that Executive
will not be able to perform the essential functions of his duties hereunder for
the following 180 consecutive days. If the Company terminates Executive's
employment for Disability, Executive shall receive the compensation due under
Section 4 of this Agreement and Executive's benefits due under Section 5 or 6 of
this Agreement through the date of termination and the Company will have no
further obligation under this Agreement at that time
(c) Executive's death. In the event of Executive's death, all
of Company's obligations under this Agreement shall terminate immediately.
Executive's estate shall receive compensation due under Section 4 of this
Agreement and Executive's benefits due under Section 5 or 6 of this Agreement
through the date of death plus any additional insurance benefit provided by the
benefits plan.
8. Agreement Not to Compete. In the event that this Agreement
expires in accordance with its terms or is terminated for any reason, Executive
covenants and agrees that, for a period of one year after his employment under
this Agreement expires or is so terminated, he will not directly or indirectly
(whether as employee, director, owner, 5% or greater shareholder, consultant,
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partner (limited or general) or otherwise) engage in or have any interest in,
any business, that competes with the business of the Company in the United
States. If Executive is terminated without cause Executive shall receive one
years salary.
9. Agreement Not to Solicit Employees, Customers, or Others.
Executive covenants and agrees that, for a period of two years after this
Agreement is terminated, he will not, directly or indirectly, (i) solicit,
induce or hire away, or assist any third party in soliciting, diverting or
hiring away, any employee of the Company, whether or not the employee's
employment is pursuant to a written agreement and whether or not such employment
is for a specified term or is at will, or (ii) induce or attempt to induce any
customer, supplier, dealer, lender, licensee, consultant or other business
relation of the Company to cease doing business with the Company.
10. Ownership, Non-Disclosure and Non-Use of Confidential or
Proprietary Information.
(a) Executive covenants and agrees that while he is
employed by the Company and
after the termination of his employment he will not, directly or indirectly,
(i) give to any person not authorized by the Company to
receive it or use it, except for the sole benefit of the
Company, any of the Company's proprietary data or
information whether relating to products, ideas, designs,
processes, research, marketing, customers, management
know-how, or otherwise; or
(ii) give to any person not authorized by the Company
to receive it any specifications, reports, or technical
information or the like owned by the Company; or
(iii) give to any person not authorized by the Company
to receive it any information that is not generally known
outside the Company or that is designated by the Company as
limited, private, or confidential.
(b) Executive covenants and agrees that he will keep
himself informed of the
Company's policies and procedures for safeguarding the Company property
including proprietary data and information and will strictly comply therewith at
all times. Executive will not, except when authorized by the Company, remove any
Company property from the Company's premises. Executive will return to the
Company immediately upon termination of his employment all Company property in
his possession or control.
10. Notice of Termination. Any termination of Executive's employment
under this Agreement, except for termination for "cause" under Paragraph
7(a)(ii) and (iii) of this Agreement, shall be communicated by a written Notice
of Termination (the "Notice") to the other party hereto, which Notice shall
specify the particular termination provision in this Agreement relied upon by
the terminating party and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination under such provision.
Any such Notice to the Company shall be delivered to the Company's president or
personnel director at its principal place of business. Any such Notice to
Executive shall be delivered personally to Executive or delivered to his
residence address listed in the Company's personnel records.
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11. Complete Agreement. This Agreement supersedes in its entirety the
2002 Agreement between the parties. This Agreement embodies the complete
agreement and understanding between the parties and supersedes any prior
understandings, agreements or representations by or among the parties, whether
written or oral, concerning the subject matter hereof in any way.
12. Amendments; Waivers. This Agreement may not be amended except by a
writing signed by both the Company and Executive. Any waiver by a party hereof
of any right hereunder shall be effective only if evidenced by a signed writing,
and only to the extent set forth in such writing.
13. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of, and be enforceable by the parties hereto and their
respective successors, heirs and assigns, except that Executive may not assign
any of his obligations hereunder without the prior written consent of the
Company.
14. Remedies. Each of the parties to this Agreement will be entitled to
specifically enforce its rights under this Agreement, to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights to which it may be entitled.
15. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
16. Notices. Any notice to be given hereunder shall be in writing and
shall be effective when personally delivered or sent to the other party by
registered or certified mail, return receipt requested, or overnight courier,
postage prepaid, or otherwise when received by the other party, at the address
set forth at the end of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first set forth above to be effective as of the Effective Date.
CIRTRAN CORPORATION
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: President
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, XX 00000
EXECUTIVE:
/s/ Xxxxxx Xxxxxx
Xxxxxx X. Xxxxxx
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, XX 00000
