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Exhibit 99.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") executed on April 16, 2007,
by and between CirTran Online Corporation, a Utah corporation (the "Company"),
and a wholly-owned subsidiary of CirTran Corporation, a Nevada corporation
("CirTran"), and Sovatphone Xxx ("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 Senior Vice President directly responsible for the online and web sales
and marketing division of the Company to perform those duties reasonably
delegated by the Board of Directors of the Company (the "Board") and all other
reasonable 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 or CirTran as may be specified by the Board,
provided that such duties are reasonable and consistent with his title.
Executive shall perform his obligations to the Company pursuant to this
Agreement under the direction of the Company; provided, however, that the
Company acknowledges that Executive is also the CEO of Global Marketing
Alliance, LLC and its group of companies ("GMA"), which is providing services to
the Company and generating and distributing to the Company certain of GMA's
revenues pursuant to an Assignment and Exclusive Services Agreement dated
effective January 1, 2007 (the "GMA Agreement"), and Executive will allocate his
time between the Company and GMA as determined in his sole reasonable
discretion. Furthermore, the Company acknowledges that Executive is currently
engaged in business activities other than those involving COC, CirTran and GMA
including those relating to mortgages or other financial services, and agrees
that Executive may continue to be involved in such other business activities
during the term of this Agreement, provided that such activities do not violate
any provision of this Agreement or interfere with the provision of services to
the Company or GMA.
2. Term. This Agreement shall be effective as of January 1, 2007 (the
"Effective Date") and shall continue until December 31, 2009, unless sooner
terminated as provided in Section 6 hereof. Thereafter, this Agreement shall
renew for successive terms of two (2) years each unless, at least 30 days prior
to the end of the current term, any party hereto notifies the other parties of
the intent not to renew, or unless sooner terminated as provided in Section 6
hereof.
3. Compensation.
(a) For services rendered pursuant to this Agreement, Executive
shall receive, commencing on the date of this Agreement, the following
compensation on the following terms:
(i) The Company shall cause CirTran to issue Executive options
to purchase a total of 3,000,000 shares of CirTran's common stock. These options
will be issued
pursuant to CirTran's new Stock Plan which will be filed and registered with the
SEC within 60 days from this Agreement's execution date. Such options shall be
exercisable at $.02 per share and expire five years after the date of grant. The
options will contain customary provisions for adjustments to the securities
issuable on exercise and the exercise price as a result of stock splits, stock
dividends, recapitalizations and similar events. The options will vest 100% on
the date of grant, which shall be the date of this Agreement. Such terms shall
be set forth in a stock option contract and shall be subject to such other terms
and conditions as may be determined by the board of directors of CirTran, or a
committee thereof.
(ii) During the first week of each year beginning in 2008,
Executive shall be granted additional options to purchase 3,000,000 shares of
CirTran's common stock, as adjusted for subsequent stock splits and
recapitalizations, with an exercise price equal to the fair market value of
CirTran's common stock on the date of grant, and with terms determined in
accordance with CirTran's Stock Option Plan by CirTtran's board of directors or
the committee established pursuant to CirTran's Stock Option Plan. Executive may
be granted additional options to purchase shares of CirTran's common stock as
determined from time to time by CirTran's board of directors or such committee.
All options shall be subject to such other terms and conditions as may be
determined by CirTran's board of directors or the committee when such options
are granted, and are subject to continued employment by the Company of
Executive.
(iii) For purposes of this Agreement, "New Business" shall
mean new business opportunities generated for the Company or CirTran through the
efforts or contacts of Executive, such as product manufacturing agreements,
product endorsement agreements and other opportunities agreed to by the Company
in writing. To qualify as New Business, Executive must notify the Company or
CirTran prior to the Company or CirTran entering into any binding commitments
that the proposed transaction is intended to be New Business, and the Board and
the Company and CirTran must expressly accept the proposed transaction as New
Business. Executive shall receive 5% of the gross margin actually received by
the Company or CirTran from such New Business, net of discounts and returns, as
applicable (the "New Business Payments"). The New Business Payments will
continue to be paid to Executive during the entire period that the Company or
CirTran maintains a positive gross margin from the New Business, except as
otherwise provided herein. Due to the potential variety of transactions which
may constitute New Business, gross margin will be determined on a transaction by
transaction basis by the Board in its reasonable determination. If Executive has
so requested in his notice of potential New Business, and subject to compliance
with applicable securities laws, the Company shall cause CirTran to provide up
to 50% of the New Business Payments due Executive under this paragraph 3(a)(iii)
to be payable in the form of restricted common stock of CirTran valued at the
trading price of CirTran's common stock on its principal market. New Business
Payments not payable in stock will be paid by the 15th of each month with
respect to gross margin received in the prior calendar month.
(iv) All options and shares of common stock shall be subject
to such other terms and conditions as may be determined by the board of
directors of CirTran or a committee thereof when and if such options or shares
of common stock are issued to Executive.
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(v) Executive shall also receive 5% of all gross investments
made into the Company that are directly generated and arranged by Executive if
the following conditions are satisfied: (i) Executive's sole involvement in the
process of obtaining the investment is the introduction of the Company to the
potential investors and the Executive does not participate in the
recommendation, structuring, negotiation, documentation or selling of the
investment, and (ii) neither the Company nor the investor are required to pay
any commissions, finders fees or similar compensation to any agent, broker,
dealer, underwriter or finder in connection with the investment, and (iii) the
Board, in its sole discretion, determines that the investment qualifies for this
bonus and that the bonus may be paid with respect to the investment. Executive
may request that the Board make its determination pursuant to clause (iii) of
the preceding sentence prior to introducing the Company and the investor.
4. Employment Benefits. Except as otherwise set forth in this
Agreement, the Company shall not provide Executive employee benefits, it being
understood that he will receive benefits through GMA.
5. Expenses. The Company will reimburse Executive for reasonable
expenses pre approved in writing by the Company's CEO and incurred in connection
with the Company's business in accordance with policies established by the
Company.
6. Termination. Executive's employment by Company and this Agreement
will terminate prior to the termination or expiration of this Agreement upon the
first to occur of the following:
(a) Termination by the Company for "cause," as reasonably
determined by the Board. For the purposes of this Section 6(a), "cause" shall
mean:
(i) failure to reasonably perform his duties hereunder after
written notice, a reasonable opportunity to cure (except in the case of
intentional misfeasance), and the opportunity to discuss such matters before the
Board;
(ii) engagement by Executive in dishonest or illegal conduct;
or
(iii) conviction of a felony.
(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
reasonable 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 (i) New Business
Payments, as they come due, with respect to New Business for which the Company
had contractual rights at the time of termination, and (ii) any other
compensation due under this Agreement through the date of termination. Except
for
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the survival of the New Business Payments as set forth in the preceding
sentence, the Company will have no further obligation under this Agreement at
that time.
(c) Executive's Death. In the event of Executive's death,
Executive's estate shall be entitled to continue to receive New Business
Payments, as they come due, with respect to New Business for which the Company
had contractual rights at the time of Executive's death. Executive's estate
shall receive any other compensation due under this Agreement through the date
of death. All of Company's other obligations under this Agreement shall
terminate immediately.
(d) Termination of GMA Agreement. This Agreement shall terminate
upon the termination of the GMA Agreement dated effective January 1, 2007.
Executive's right to continue to receive New Business Payments shall also
terminate unless the GMA Agreement was terminated (i) upon expiration of its
stated term, or (ii) by GMA for cause as provided therein.
(e) Survival of New Business Payments. Executive's right to
continue to receive New Business Payments shall terminate upon a termination of
this Agreement (i) by the Company for cause as described in Section 6(a), or
(ii) by the Executive, unless Executive terminates due to the Company's material
breach and after giving the Company notice of such breach and a reasonable
opportunity to cure.
7. Notice of Termination. Any termination of Executive's employment
under this Agreement shall be communicated by a written Notice of Termination
(the "Notice") to the other party hereto, which Notice shall specify, to the
extent not already set forth in a notice of default with opportunity to cure,
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.
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; provided,
however, that this Section 8 shall not apply to customers of contracts assigned
to the Company under the GMA Agreement following the termination or expiration
of the GMA Agreement.
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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
(iii) give to any person not authorized by the Company to
receive it any information that is not generally known outside of the Company or
that is designated by the Company as limited, private, or confidential.
(b) The Company and Executive agree that the obligations of
confidentiality and non-disclosure set forth in Section 9(a) above shall not
apply to any information that is (i) in the public domain at the time of
disclosure to Executive or comes into the public domain after such disclosure
through no violation of this Agreement, (ii) lawfully available to Executive
prior to any disclosure by the Company, including but not limited to information
developed or owned by GMA or any affiliate, (iii) independently developed by
Executive or GMA or any affiliate, (iv) made available by the Company to a third
party on an unrestricted basis, or (v) released pursuant to the binding order of
a government agency or a court.
(c) 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 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. Complete Agreement. This Agreement and the GMA Agreement embody
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.
11. Amendments; Waivers. This Agreement may not be amended except by a
writing signed by each of the Company, CirTran 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.
12. 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
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assigns, except that Executive may not assign any of his obligations hereunder
without the prior written consent of the Company.
13. 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. Furthermore, Executive agrees that any
right to receive New Business Payments following termination of this Agreement
is conditioned on Executive's compliance with Sections 8 and 9, and upon any
material breach thereof by Executive, the Company shall be entitled to cease all
further payment of New Business Payments.
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.
15. Governing Law, Dispute Resolution. This Agreement shall be
governed by and construed by the laws of the State of Utah, disregarding the
conflicts of laws provisions thereof. Any claim, dispute or controversy arising
out of, or relating to any section of this Agreement or the making, performance,
or interpretation of the rights and obligations explicitly set forth in this
Agreement shall, upon the election by written notice of any party hereto, be
settled on an expedited basis by binding arbitration in Salt Lake City, Utah
before a single arbitrator mutually agreeable to the parties, or if no agreement
is reached, before a single arbitrator from the American Arbitration Association
selected in accordance with its rules then in effect, which arbitration shall be
conducted in accordance with such rules, and judgment on the arbitration award
may be entered in any court having jurisdiction over the subject matter of
controversy.
16. Attorneys' Fees. In the event of any litigation concerning any
controversy, claim or dispute among the parties hereto, arising out of or
relating to this Agreement or the breach hereof, or the interpretation hereof,
the prevailing party shall be entitled to recover from the losing party
reasonable expenses, attorneys' fees, and costs incurred therein or in the
enforcement or collection of any judgment or award rendered therein.
[Remainder of Page Intentionally Left Blank; Signature Page to Follow]
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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 ONLINE CORPORATION
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: CEO
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, Xxxx 00000
CIRTRAN CORPORATION
By: /s/ Xxxxx Xxxxxxxx
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Name: Xxxxx Xxxxxxxx
Title: CEO
Address: 0000 Xxxxx 0000 Xxxx
Xxxx Xxxxxx Xxxx, Xxxx 00000
EXECUTIVE:
By: /s/ Sovatphone Xxx
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Sovatphone Xxx
Address: c/o Global Marketing Alliance
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
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