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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") executed on May 15, 2006,
by and between CirTran Corporation, a Nevada corporation, (the "Company"), and
Richard T. Ferrone ("Executive"). 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. Employment. The Company hereby engages the services of Executive
as the Chief Financial Officer of the Company to perform those duties delegated
by the Board of Directors of the Company (the "Board") and the President of the
company (the "President") 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 President or 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.
2. Term. This Agreement shall be effective as of May 15, 2006 (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.
3. 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 also receive a bonus of $30,000 per year,
payable quarterly.
(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.
4. 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 cellular telephone and account that shall be held in the
Company's name.
(b) 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.
(c) Life insurance of $100,000 and disability insurance.
(d) The Company shall obtain and maintain officer and director
insurance as the Board determines.
(e) 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.
5. 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.
6. 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) 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.
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(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.
7. 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,
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 the Executive is terminated without cause, Executive shall receive
one year's salary.
8. 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.
9. 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
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(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.
11. Complete Agreement. 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.
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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/ Iehab J. Hawatmeh
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Name: Iehab J. Hawatmeh
Title: President & CEO
Address: 4125 South 6000 West
West Valley City, UT 84128
EXECUTIVE:
By: /s/ Richard T. Ferrone
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Name: Richard T. Ferrone
Address: 2153 E. DeBeers Dr.
Sandy, Utah 84093
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