EMPLOYMENT CONTRACT
AN AGREEMENT made on August 31, 1997, between XXXXXXX X. XXXXXXXX residing
in Salt Lake City, Utah, herein referred to as "XXXXXXXX" 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 XXXXXXXX to act as President,
Chief Executive Officer and Chairman of the board for CYCLO3PSS and its
subsidiary corporations, and XXXXXXXX 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 September l, 1997, and continue until
August 31, 2000.
SECTION THREE - DUTIES OF XXXXXXXX: XXXXXXXX will serve
CYCLO3PSS to the best of his ability under the direction of the board of
directors of CYCLO3PSS. XXXXXXXX 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: XXXXXXXX' S salary shall be
at the rate of One Hundred and Fifty Thousand ($ 150,000.00) 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 XXXXXXXX to continue his
employment throughout the period defined above, CYCLO3PSS agrees to, and hereby
grants to STODDA.RD, options for the purchase of FOUR HUNDRED AND FIFTY THOUSAND
SHA.RES (450,000) of newly issued restricted common stock in concert with the
execution of this Contract. These options are exercisable at a rate of ONE
HUNDRED AND FIFTY THOUSAND SHARES (l 50,000) per year, for each year of the
THREE YEAR (3yr) period of employment as defined in the Contract. The options
are considered earned monthly and are exercisable at the end of each employment
year and are conditioned only by section twelve of this Contract. 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 90
cents ($0.90) per share. Said
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excercise price is the average closing bid for such said stock during the last
five days of August, 1997.
SECTION SEVEN - HEALTH CARE INSURANCE BENEFITS: It is the intent of
CYCLO3PSS to provide XXXXXXXX and his dependants with health insurance coverage
on a plan specific to key executive personnel. CYCLO3PSS shall have complete
descretion in choosing the type of health insurance plan provided STODDA.RD 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 XXXXXXXX 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
XXXXXXXX that are provided to other employees.
SECTION EIGHT - MOVING EXPENSES: In the event XXXXXXXX is required by
CYCLO3PSS to move his residence outside of the State of Utah, XXXXXXXX shall
receive towards any moving expenses the amount actually spent for moving vans,
storage of goods in transit, any sales commission on the sa.le of XXXXXXXX' S
present residence, and all motel and hotel room expense.
SECTION NINE - REIMBURSEMENT FOR EXPENSES: XXXXXXXX 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 XXXXXXXX for
reasonable out-of pocket expenses which XXXXXXXX may incur in connection with
his services for CYCLO3PSS contemplated herein, provided that XXXXXXXX presents
appropriate vouchers evidencing any such expenses to CYCLO3PSS.
SECTION TEN - XXXXXXXX'X SERVICE AS DIRECTOR: XXXXXXXX hereby
consents to serve, if duly elected, as a director of CYCLO3PSS or any subsidiary
or corporation affiliated with CYCLO3PSS. However, XXXXXXXX' S employment during
the employment period as defined above is not conditioned by, nor contingent
upon XXXXXXXX'X participation as a member of the Board of Directors.
SECTION ELEVEN - INDEMNIFICATION OF XXXXXXXX: CYCLO3PSS shall
indemnify XXXXXXXX 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 XXXXXXXX in connection with any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, incurred by XXXXXXXX in connection with any act or omission by
XXXXXXXX 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
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inadequate performance. XXXXXXXX may cancel this agreement on Sixty (60) days
written notice for any reason. If CYCLO3PSS terminates this agreement without
cause, CYCLO3PSS shall pay to XXXXXXXX, an amount equal to the remaining
compensation set forth in Section Four and Five hereof from the date of
termination to the expiration date of this agreement. If XXXXXXXX terminates
this agreement, or if CYCLO3PSS terminates this Contract for cause, XXXXXXXX
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:
XXXXXXXX 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:
XXXXXXXX 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. XXXXXXXX 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, XXXXXXXX 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 XXXXXXXX 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 STODDA.RD. 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 XXXXXXXX will fulfill for such corporation any and all
obligations required under this agreement. In the event any such third-party
taking
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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 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/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
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:
___________________
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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: 4/22/99
/s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
CYCLO3PSS CORPORATION
Under Authority of the Board of Directors
By: /s/ Xxxxx Xxxxxx, Jr.
Member of the Board and of
The Executive Compensation
Committee
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