This SGI EXECUTIVE EMPLOYMENT AGREEMENT ("Agreement") is effective as of the
13th day of January 1998 (the "Effective Date"), by and between SGI
International, a Utah Corporation ("SGI"), and Dr. Ronald J. Lukasiewicz, an
individual ("Employee").

In consideration of the mutual agreements and the promises herein contained, the
parties hereto agree as follows:

1. Employment. SGI hereby employs Employee and Employee hereby accepts
employment with employment to begin on March 1, 1998, and salary to be paid
based on a prorated basis for hours worked from the Effective Date to March 1,
1998, with SGI on the terms and conditions set forth in this Agreement.

2. Term of Employment. The term of this Agreement shall commence on the
Effective Date and terminate on December 31, 1998, provided notice of
termination by Employer is given in writing Ninety (90) days prior to the
initial termination or any extended termination date, and provided further, that
the Agreement has not already been terminated earlier pursuant to Section 5. If
the Agreement is not so terminated at the end of the original term or any
succeeding term, and the Agreement has not been terminated pursuant to Section
5, then it shall be automatically extended for an additional one year period.
Notwithstanding the above, in the event that SGI is acquired, merged into
another corporation, or there is a change of management control at SGI brought
about by a change in the composition of the board of directors, then this
Agreement shall be extended on the date of such change of management control for
an additional one (1) year term, with salary, position and location to remain
the same, subject to termination and renewal as described above.

3. Duties. Employee shall devote his full productive time to the duties assigned
to him. "full productive time" is hereby defined as that time reasonably
necessary to perform his required duties in a timely manner, but not less than
forty (40) hours per week, for fifty-two (52) weeks per year, less holidays,
sick leave, and vacation time in accordance with the then-prevailing policies of
SGI as set forth in the SGI Employee Handbook, which is hereby incorporated
herein by this reference. Employee's performance shall be reviewed at least
annually by SGI.

4. Compensation. As full compensation for Employee's services hereunder, SGI
agrees to pay Employee the following:

(a) Employee shall receive a salary in the amount set forth in Exhibit A,
attached hereto and incorporated herein, for the first year of this Agreement,
payable on the fifteenth and last day of each month. Employee shall also be
covered by SGI's group medical insurance, and such other group benefits granted
to employees pursuant to the then prevailing policies of SGI.

(b) As incentive compensation, SGI Warrants in an amount to be decided in the
sole discretion of SGI's Board of Directors.

(c) As further incentive compensation, such bonuses and benefits as SGI's Board
of Directors, in its sole discretion, shall determine.

(d) Compensation shall be reviewed by SGI and Employee at least annually.

(e) Reimbursement for reasonable expenses of relocating to San Diego, including
all reasonable expenses for
insuring, packing, crating, shipping and unpacking household furnishings and
personal effects, including in-transit storage charges for up to 30 days, if
necessary, not to exceed $10,000.00. In lieu of direct reimbursement for costs
associated to the sale of your current residence and purchase of a new residence
in San Diego and other costs of relocation, you will be given warrants for
30,000 shares of SGI restricted common stock, which will be registered at the
next S-8 registration of employee stock. The filing for this stock will be
executed in January of 1998.

5. Involuntary Termination. This Agreement shall be deemed terminated and the
employment relationship between SGI and Employee severed upon the occurrence of
any of the following:

(a) Employee dies.

(b) Employee fails or refuses to faithfully and diligently perform the usual
customary duties of his employment or adhere to the reasonable policies,
standards, and regulations of SGI, which from time to time may be established.

(c) Employee is discharged by SGI for cause.


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6. Voluntary Termination. Employee may voluntarily terminate at any time by
giving Employer two weeks written notice of termination.

7. Rights Upon Termination. In the event this Agreement is terminated, any
amount due to Employee shall be prorated as of the date of termination and paid
to the Employee, or to his estate, as appropriate.

8. General Relationship. Employee shall be considered an employee of SGI within
the meaning of all federal, state, and local laws and regulations including, but
not limited to, laws and regulations governing unemployment insurance, workmen's
compensation, industrial accident, labor and taxes.

9. Assignment. This Agreement can not be assigned by either party.

10. Severability. In the event that any of the provisions of this Agreement are
deemed to be invalid or unenforceable, the same shall be deemed severable from
and shall not cause the invalidity of the remainder of this Agreement.

11. Prior Agreements. This Agreement contains the sole and entire agreement
between the parties with respect to the entire subject matter hereof, and any
and all prior discussions, negotiations, commitments, understandings and
agreements relating thereto are hereby superseded and terminated as of the
Effective Date. No representations, whether written or oral, express or implied,
other than those contained herein, have been made by any party hereto.

12. Notices. All notices, requests, demands and other communications required or
permitted by this Agreement shall be in writing and shall be deemed to have been
duly delivered upon: (i) personal delivery to the party to whom such notice is
to be given; or (ii) five (5) business days after deposit in the United States
mail, first class postage prepaid and properly addressed to such party.

13. Miscellaneous.

(a) The failure of either party at any time to require performance in accordance
with the strict terms of this
Agreement shall in no way effect the other such party's rights thereafter to
enforce the same, nor shall the waiver of any breach of any provision hereof be
held to be a waiver of any succeeding breach of any provision or a waiver of the
provision itself.

(b) This Agreement cannot be modified except by a writing signed by the parties.

(c) This Agreement shall be interpreted in accordance with the laws of the State
of California.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
at San Diego, California.


SGI International, a Utah Corporation Employee



By: /s/ Joseph A. Savoca                     /s/ Ronald J. Lukasiewicz
- -----------------------------                ----------------------------
Joseph A. Savoca, Chairman/CEO               Dr. Ronald J. Lukasiewicz


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