EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") executed on July 1, 2004,
by and between CirTran Corporation, a Nevada corporation, (the "Company"), and
Xxxxx X. Xxxxxxxx ("Executive"). The Company and Executive desire to terminate
Executive's current Employment Agreement, dated November, 1993, assigned to the
Company on July 1, 2000 (the "1993 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 1993 Agreement. The Company and Executive hereby
terminate the 1993 Agreement effective the date of this Agreement.
2. Employment. The Company hereby engages the services of Executive as
Chief Executive Officer and President 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 five 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 $225,000.00 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 of 5% of the Company's
earnings before interest, taxes, depreciation and amortization ("EBITDA"),
payable quarterly, in addition to such other bonuses as the Board, in its
discretion, may determine.
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(c) 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.
The Company will not reduce Executive's benefits without the consent of
Executive.
6. Expenses. The Company will reimburse Executive for expenses 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:
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(i) willful misfeasance or gross negligence in the
performance of his duties hereunder after 30 days notice and
after a 60 day period to cure such defect;
(ii) willful 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.
(d) Notwithstanding anything herein to the contrary, in the
event of a termination by the Company without cause or a termination by the
Company of the Executive within two years following a "Change of Control" (as
defined below), Executive shall be entitled to a severance package following the
effective date of termination. The severance package shall consist of (i) the
equivalent of five full years of Executive's base salary paid out half upon
termination and half 12 months thereafter; and (ii) continuation of any health,
life (other than key man life) and disability insurance being paid by the
Company at the time of the termination for [five] years following termination.
No severance shall be paid with respect to a voluntary termination by the
Executive of his employment.
For purposes of the foregoing, the term "Change of Control" shall mean
the occurrence of any one of the following: (i) the Company enters into an
agreement of reorganization, merger or consolidation pursuant to which the
Company or a subsidiary is not the surviving corporation (other than mergers
solely to effect a change in domicile or similar transactions not involving any
change in beneficial ownership of Executive in the Company's business), (ii) the
Company sells substantially all its assets to a purchaser other than a
subsidiary, or (iii) shares of stock of the Company representing in excess of
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50% of the total combined voting power of all outstanding classes of stock of
the Company are acquired, in one transaction or a series of related
transactions, by a single purchaser or group of related purchasers unless
Executive has sold all of his shares to such purchasers. Notwithstanding the
above, the transactions described in the preceding sentence shall not constitute
a Change of Control if (a) Executive is a party to the plan of reorganization,
asset sale agreement, stock sale agreement or other agreement creating the
transaction, or (b) Executive votes in favor of the transaction in his capacity
as a director of the Company.
8. 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.
9. Complete Agreement. This Agreement supersedes in its entirety the
1993 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.
10. 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.
11. 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.
12. 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.
13. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
14. 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.
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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/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Director
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, XX 00000
EXECUTIVE:
/s/ Xxxxx Xxxxxxxx
Xxxxx X. Xxxxxxxx
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, XX 00000
