EMPLOYMENT CONTRACT
AN AGREEMENT made on March 1, 1998, between XXXXXX XXXXX residing in
Placitas, NM, herein referred to as "XXXXX" and CYCLO3PSS CORPORATION, a
Delaware Corporation, with business offices located at 0000 Xxxx 0000 Xxxxx,
Xxxx Xxxx Xxxx, Xxxx, herein referred to as "CYCLO3PSS".
In consideration of the mutual covenants and promises of the parties
hereto, CYCLO3PSS and XXXXXXXX agree as follows:
SECTION ONE - EMPLOYMENT:CYCLO3PSS employs XXXXX to act as Vice President
- Research & Development for CYCLO3PSS Corporation, and XXXXX accepts such
employment with CYCLO3PSS, subject to the terms and conditions of this
agreement.
SECTION TWO - TERM OF EMPLOYMENT: The effective term of this agreement and
the employment hereunder shall commence on March 23, 1998, and continue until
March 22, 2001.
SECTION THREE - DUTIES OF XXXXX: XXXXX will serve CYCLO3PSS to the best of
his ability under the direction of the board of directors of CYCLO3PSS.XXXXX
shall devote such of his time and energy as is necessary to timely complete the
services and duties contemplated under this agreement.
SECTION FOUR - REGULAR COMPENSATION: XXXXX' S salary shall be at the rate
of One Hundred and Twenty Thousand ($ 120,000.00) dollars per calendar year,
payable semi-monthly, during the life of this agreement.
SECTION FIVE - INCENTIVE STOCK OPTION: In addition to the compensation as
described above, and as a further incentive for XXXXX to continue his employment
throughout the period defined above, CYCLO3PSS agrees to, and hereby grants to
XXXXX, options for the purchase of THREE HUNDRED AND FIFTY THOUSAND SHA.RES
(350,000) of newly issued restricted common stock in concert with the execution
of this Contract. The options are granted at the beginning of each employment
year and and are exercisable at the end of each calender year and are
conditioned only by section twelve of this Contract. These options are
exercisable at a rate of ONE HUNDRED AND FIFTY THOUSAND SHARES (l50,000) first
year, ONE HUNDRED THOUSAND SHARES (l00,000) second year, ONE HUNDRED THOUSAND
SHARES (l00,000) third year. The options are non-transferable other than by will
or the law of descent and distribution, and expire upon the FIVE YEAR (5yr)
anniversary of the date on which they become exercisable.
SECTION SIX - PRICE AND VALUATION OF THE OPTIONED SHARES: The optioned
shares are deemed granted upon the execution of this Employment Contract. The
options are granted at the current fair market value of the Companys common
stock, which has been determined by Board of Directors of the Company to be
$1.61 (One Dollar and Sixty One Cents) per share. Said exercise price is the
average closing bid for such said stock during the last five days prior to
today, February 17, 1998.
24
SECTION SEVEN - HEALTH CARE INSURANCE BENEFITS: It is the intent of
CYCLO3PSS to provide XXXXX and his dependants with health insurance coverage on
a plan specific to key executive personnel. CYCLO3PSS shall have complete
discretion in choosing the type of health insurance plan provided XXXXX and in
choosing the insurance carrier and extent of insurance coverage, provided that
such health insurance plan will include hospital, maternity, major medical, and
dental coverage for XXXXX and his dependants. In the event it is determined that
establishing such an executive plan is inconsistent with federal or state
statutes. CYCLO3PSS will provide the same health insurance benefits to XXXXX
that are provided to other employees.
SECTION EIGHT - MOVING EXPENSES: In the event XXXXX is required by
CYCLO3PSS to move his residence outside of the State of New Mexico,XXXXX shall
receive towards any moving expenses the amount actually spent for moving vans,
storage of goods in transit, any sales commission on the sale of XXXXX' S
present residence, and all motel and hotel room expense.
SECTION NINE - REIMBURSEMENT FOR EXPENSES:XXXXX shall be
authorized to incur reasonable expenses on behalf of CYCLO3PSS including, but
not limited to, expenses for entertainment, travel, management seminars, related
travel and related use of the telephone. CYCLO3PSS shall reimburse XXXXX for
reasonable out-of pocket expenses which XXXXX may incur in connection with his
services for CYCLO3PSS contemplated herein, provided that XXXXX presents
appropriate vouchers evidencing any such expenses to CYCLO3PSS.
SECTION TEN - XXXXX'X SERVICE AS DIRECTOR: XXXXX hereby consents to
serve, if duly elected, as a director of CYCLO3PSS or any subsidiary or
corporation affiliated with CYCLO3PSS. However,XXXXX' S employment during the
employment period as defined above is not conditioned by, nor contingent upon
XXXXX'X participation as a member of the Board of Directors.
SECTION ELEVEN - INDEMNIFICATION OF XXXXX: CYCLO3PSS shall
indemnify XXXXX to the full extent permitted by law against all expenses,
attorney's fees, judgments, fines and amounts paid in settlement, actually and
reasonably incurred by XXXXX in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, incurred by XXXXX in connection with any act or omission by XXXXX
occasioned under this agreement, provided that he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interest of
CYCLO3PSS and provided, with respect to any criminal action, that he did not
have reasonable cause to believe his conduct was unlawful.
SECTION TWELVE -TERMINATION: This agreement may be terminated by CYCLO3PSS
for cause only. Cause shall be defined as fraud, misappropriation or intentional
material damage to the property or business of CYCLO3PSS, or by board
determination of inadequate performance. XXXXX may cancel this agreement on
Sixty (60) days written notice for any reason. If CYCLO3PSS terminates this
agreement without cause, CYCLO3PSS shall pay to XXXXX, an amount equal to the
remaining compensation set forth in Section Four and Five
25
hereof from the date of termination to the expiration date of this agreement. If
XXXXX terminates this agreement, or if CYCLO3PSS terminates this Contract for
cause,XXXXX will receive only that compensation earned by him up to the point of
his termination including stock options and bonuses then due as set forth in
sections Four and Five, with the non-competition and non- disclosure provisions
of Section Thirteen remaining in effect notwithstanding the termination of this
agreement.
SECTION THIRTEEN - NON-COMPETITION AFTER TERMINATION: XXXXX
agrees that in addition to any other limitation, for a period of 24 months after
the termination of his employment hereunder, and unless otherwise specified
herein, he will not directly or indirectly engage in, or in any manner be
connected with or employed by any person, firm or corporation in competition
with CYCLO3PSS or any of its subsidiaries, or engaged in providing similar
products and services as CYCLO3PSS or any of its subsidiaries, within the
territorial limits of the United States of America.
SECTION FOURTEEN - USE OF CONFIDENTIAL INFORMATION: XXXXX
recognizes and acknowledges that he will have access to certain confidential
information of CYCLO3PSS or other division or subsidiary of CYCLO3PSS and that
such information constitutes valuable, special and unique property of CYCLO3PSS
and such other entities. XXXXX agrees that in addition to any other limitation,
regardless of the circumstances of the termination of employment, he will not
communicate to any person, firm, or corporation any such confidential
information relating to any product, patent, patent pending, FDA Certification,
license, certificate, design, customer lists, prices, secrets, advertising, or
any confidential knowledge or secrets which he might from time to time acquire
with respect to the business of CYCLO3PSS or any of its subsidiaries, for a
period of five years after termination or whenever information becomes available
to the public, whichever comes first.
SECTION FIFTEEN - COMMUNICATIONS TO CYCLO3PSS: From the time this
agreement commences until the termination thereof, XXXXX shall communicate and
channel to CYCLO3PSS all knowledge, business and customer contracts and any
other matters of information which could concern or be in any way beneficial to
the business of CYCLO3PSS, whether acquired by XXXXX before or during the terms
of this agreement, provided, however, that nothing hereunder shall be construed
as requiring such communications where the information is lawfully protected
from disclosure as a trade secret of a third party. Any such information
communicated to CYCLO3PSS as aforesaid shall be and remain the property of
CYCLO3PSS, notwithstanding the subsequent termination of this agreement.
SECTION SIXTEEN - BINDING EFFECT: This agreement shall be binding on and
shall insure to the benefit of CYCLO3PSS, or any successor (s) of CYCLO3PSS, and
the personal representatives of XXXXX. CYCLO3PSS may assign all of its interest
in this agreement, subject to all the obligations of CYCLO3PSS, to any
third-party interested in taking over the capital stock and property of
CYCLO3PSS, and XXXXX will fulfill for such corporation any and all obligations
required under this agreement. In the event any such third-party taking over the
capital stock and/or property of CYCLO3PSS terminates this employment agreement
for any reason other than cause as defined in Section Twelve hereof, XXXXXXXX
shall be entitled to his full compensation hereunder remaining under the THREE
(3) year terms of this employment
26
agreement, including all bene~ts and/or rights set forth in Sections Four, Five,
Seven, Eight and Nine hereof.
SECTION SEVENTEEN - LAW TO GOVERN CONTRACT: This agreement shall
be governed by the law of the State of Utah.
SECTION EIGHTEN - MISCELLANEOUS: In the event a provision of this
agreement shall be construed invalid or unenforceable by a court of competent
jurisdiction, this agreement shall be construed as if such invalid or
unenforceable provisions were omitted.
In Witness Whereof, the parties have executed this agreement the day and
year first above written.
/s/ Xxxxxx X. Xxxxx
XXXXXX XXXXX
CYCLO3PSS CORPORATION
Under Authority of the Board of Directors;
By: /s/ Xxxxx Xxxxxx, Jr.
Member of the Board and of
The Executive Compensation
Committee
Attest:
______________________
27
AMENDMENT NO. 1 TO
EMPLOYMENT CONTRACT
The undersigned agree that Section Six of the Employment Contract is
hereby amended to reduce the exercise price of the option shares from $1.61 (One
Dollar and Sixty One Cents) per share to $.10 (Ten Cents) per share.
Dated: 4/23/99
/s/ Xxxxxx X. Xxxxx
XXXXXX XXXXX
CYCLO3PSS CORPORATION
Under Authority of the Board of Directors
By: /s/ Xxxxx Xxxxxx, Jr.
Member of the Board and of
The Executive Compensation
Committee
28
