COMPUTERIZED THERMAL IMAGING INC
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<TYPE>EX-10.5
<SEQUENCE>3
<FILENAME>cti_10kex10-5.txt
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EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT, effective as of September 18, 2000, between
Computerized Thermal Imaging, Inc., a Nevada corporation (the "Company"), and
Richard V. Secord, an individual residing in Fort Walton Beach, Florida (the
"Employee") (hereinafter collectively, the "Parties").

                              W I T N E S S E T H:

         1. Employment. The Company hereby employs the Employee, and Employee
accepts such employment by the Company, upon all the terms and conditions
hereinafter stated, and as subject to termination as provided in Section 4
hereof. Employee is employed as Chief Executive Officer of the Company, and in
such capacity will report to the Board of Directors of the Company in the
performance of his duties hereunder.

         2. Extent of Service. The Employee shall devote his full time,
attention and energy to the business of the Company, and, except as may be
specifically permitted by the Board, shall not be engaged in any other business
activity during the term of this Agreement. The foregoing shall not be construed
as preventing the Employee from making passive investments in other businesses
or enterprises, if (i) such investments will not require services on the part of
the Employee which would in any way impair the performance of his duties under
this Agreement, (ii) such other businesses or enterprises are not engaged in any
business competitive with the business of the Company, and (iii) the Employee
has complied with Section 8 of this Agreement with respect to such passive
investment.

         3. Compensation.

                  (a) Salary. (1) As payment for the services to be rendered
during the term of this Agreement, Employee shall be entitled to receive a base
salary of Two Hundred Ten Thousand and No/100 Dollars ($210,000.00) per year,
payable in accordance with the payroll policies of the Company in effect from
time to time. The base salary shall be adjusted at the end of each year of
employment at the discretion of the Board of Directors.

                  (b) Benefits. During the term of this Agreement, the Employee
shall be entitled to participate in all employee benefit and insurance plans
maintained from time to time by the Company for the benefit of its employees, in
accordance with the policies of the Company in effect from time to time. The
Employee shall be entitled a minimum of four weeks annual vacation time as of
the date of this agreement and to any additional annual vacation time as
determined in accordance with the vacation policies of the Company in effect
from time to time. The employee shall also receive a car allowance of $700 per
month. All such benefit plans are subject to change or termination from time to
time by Company in its sole and absolute discretion. In addition, Employee will
receive reimbursement of the premium for a $1M life Insurance Policy.

                  (b) Options. Employee shall receive, in addition to the
salary, employee benefits, and bonus specified in Section 3(a) above, an option
to purchase common stock of the Company, as more fully described and subject to:
(i) the conditions set forth in Exhibit A attached hereto and incorporated by
reference herein and (ii) that certain 1997 Incentive Stock Plan (the "Plan") of
the Company attached hereto as Exhibit B.

                  (c) Registration Rights. All stock in the Company which
Employee obtains from the exercise of options granted to Employee in paragraph
(b) of this Section 3 will be subject to the following "piggy-back" registration
rights:

         If the Company at any time proposes to file, or does file, any
registration statement covering the class of securities of the Company which you
then hold, whether that registration is for securities to be issued by the
Company or then held by another party, you will have the right to have any part
or all of the securities of the Company you then hold to be registered under
such proposed registration statement. If you wish to have any securities you
then hold to be so registered, you will notify the Company in writing of your
desire within thirty (30) days after the date you receive your notice of
proposed registration from the Company. Upon receipt of your timely request for

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registration under this paragraph, the Company will add the securities you
requested be registered to the proposed registration statement; provided, that
if after you make a request for registration the Company decides not to register
or delay such registration, for any reason, the Company will give you written
notice of its decision. However, no such determination will prejudice your
rights to other and further registrations made by the Company or with respect to
Company securities from time to time. The Company will bear all costs and
expenses of each and all such registrations incurred in connection with the
exercise of rights by you under this paragraph.

         4. Term; Termination.

                  (a) The term of this Employment Agreement shall commence on
the first date when Employee reports for work for the Company after the date
hereof (the "Effective Date") and shall continue thereafter for a period of
three (3) years, subject to the terms and conditions herein stated; provided
that Employee may terminate this Agreement at any time hereafter by giving the
Company at least fourteen (14) days' prior written notice. If Employee
voluntarily terminates this Agreement, Company shall have no further financial
liability to Employee beyond the effective date of such termination.

                  (b) If during the term of this Agreement Employee is prevented
for a continuous period of ninety (90) days from performing his duties hereunder
by reason of physical or mental disability ("Disability"), then the Company, on
seven days' prior written notice to the Employee, may terminate this Agreement.
In the event of a termination pursuant to this paragraph 4(b), the Company shall
be relieved of all of its obligations under this Agreement, except that: (i) the
Company shall pay to the Employee that portion of the Employee's wages earned
and accrued by Employee prior to Employee's termination, and (ii) to the extent
provided in the Plan, to exercise the Options described in Paragraph 3(c)
hereof.

                  (c) The Company may at any time discharge the Employee for
Cause (as hereinafter defined) and terminate this Agreement without any further
liability hereunder to the Employee or his spouse or estate, except for the
obligation of the Company to pay the Employee's wages earned to the date of
discharge. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Employee's employment upon (i) the gross negligence of the
Employee in performing his duties hereunder (other than any such failure
resulting from the Employee's incapacity due to physical or mental illness),
(ii) the willful engaging by the Employee in conduct amounting to fraud or
embezzlement or any other act by Employee which is negligently or willfully
performed which has the effect of damaging the reputation of the Company or its
business, (iii) breach of fiduciary duty as an officer and/or director of the
Company, (iv) the violation by the Employee of any material provision of this
Agreement, including but not limited to the provisions of Sections 5, 6, 7, 8 or
10 hereof. Except for voluntary termination by the Employee, the Company agrees
that if the Employee is terminated for any other reason (other than those
reasons defined above), the Employee shall be provided with a severance package
consisting of a minimum payout of the remaining amounts payable under this
Agreement including 18 months paid medical/dental insurance, or two years
salary, whichever is greater, at the time of termination.

         5. Business Opportunities. Subject to the provisions of Paragraph 2(b),
for as long as the Employee shall be employed by the Company, the Employee
agrees that with respect to any new and future business opportunity or other new
and future business proposal which is offered to, or comes to the attention of,
the Employee during employment and which is in any way related to, or connected
with, the business of the Company or its affiliates, the Company shall have the
right to take advantage of such business opportunity or other business proposal
for its own benefit. The Employee agrees to promptly deliver notice to the board
of directors of the Company in writing (the "Notice of Opportunity") of the
existence of such opportunity or proposal and the Employee may take advantage of
such opportunity only if the Company does not elect to exercise its right to
take advantage of such opportunity within thirty (30) days after receipt of the
Notice of Opportunity. Thereafter, the Company shall be deemed to have waived
its rights to such opportunity and the Employee shall have the right to pursue
such opportunity upon the terms and conditions set forth in this Agreement,
specifically subject to the terms of Section 2 of this Agreement.

         6. Intellectual Property. Employee hereby assigns to the Company all
inventions, processes, discoveries and improvements (whether or not patentable)
which are conceived, made or learned by Employee alone or jointly with others in
the course of his employment with the Company that pertain to the business
interests of the Company or relating to areas which may be reasonably
anticipated to be encompassed by such business interests of the Company at the
time of conception. Employee at any time during or after his employment will
promptly disclose to the Company all such processes, inventions, discoveries or
improvements assigned hereby. Employee will also at the Company's expense
cooperate in all lawful acts which may be necessary or desirable in the judgment
of the Company to protect or vest title to such inventions, processes,

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discoveries or improvements in the Company or its nominee including, without
limitation, applying for, obtaining, maintaining, and enforcing patents thereon
in all countries of the world, and including execution of papers appropriate
thereto.

         7. Confidential Information. The Employee acknowledges that he will
receive or come in contact with, among other things, trade secrets (both
technical and non-technical), know-how, lists of customers, suppliers,
contractors, customers, employee records and other confidential and proprietary
information about the business of the Company (hereinafter collectively referred
to as "information"), all of which the Company considers highly confidential,
giving the Company significant advantage over competitors, and which the Company
desires to protect. The Employee understands that such information is the sole
property of the Company, and that the information is confidential, and he agrees
that both during and after his employment with the Company he will not at any
time use or reveal such information to anyone except as permitted by the Company
or required by Employee's employment duties with the Company. The employee shall
have no obligation under this Agreement with respect to Confidential Information
which is or becomes publicly available without breach of this Agreement by
Employee. Upon termination of employment hereunder, the Employee agrees to
surrender to the Company all papers, documents, writings and other property
produced by him or coming into his possession by or through his employment
hereunder, and the Employee agrees that all such materials and information will
at all times remain the property of the Company.

         8. Restrictive Covenant. In consideration of $10.00 and other good and
valuable separate consideration given by Company to Employee, Employee agrees
that during the period of time that the Employee is employed by the Company and
for a period of two (2) year(s) following the termination of this Agreement for
any reason, the Employee shall not, except as expressly approved in writing by
the Board of Directors of the Company, directly or indirectly:

         (a)      (i)      cause or be instrumental in the formation of, or

                  (ii)     within any state in which the Company then conducts
                           business engage in, whether as principal, agent,
                           trustee, member or employee or through the agency of
                           any corporation, partnership, association, agent or
                           agency,

         any business competitive with the business then conducted by the
         Company or its subsidiaries or affiliates (a "Competing Business");

         (b)      be the owner of more than one percent (1%) of the equity
                  (whether capital stock, membership or partnership interests)
                  of any entity (except for stock publicly traded on any
                  recognized stock exchange) which is engaged, directly or
                  indirectly, in a Competing Business; or

         (c)      through any person, firm, association or corporation with
                  which he is now or may hereafter become associated, cause or
                  induce any present or future employee of the Company to leave
                  the employ of the Company or to accept employment with the
                  Employee or with any Competing Business.

         The foregoing agreement not to compete shall not be held invalid or
unenforceable because of the scope of the territory or actions subject thereto
or restricted thereby, or the period of time within which such agreement is
operative, but any judgment of a court of competent jurisdiction may define the
maximum territory and actions subject to and restricted by this Section 8 and
the period of time during which such agreement is enforceable. In the event the
Company shall cease to do business, this Section 8 shall not apply.

         9. Specific Performance; Survival. The Employee acknowledges that a
remedy at law for any breach or attempted breach of Sections 5, 6, 7 or 8 of
this Agreement will be inadequate, agrees that the Company shall be entitled to
specific performance and injunctive and other equitable relief in case of any
such breach of attempted breach, and further agrees to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any such
injunctive or any other equitable relief. The Parties hereto acknowledge that
the covenants contained in Sections 5, 6, 7, 8 and 9 shall survive the
termination of this Agreement, by either party, for any reason.

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         10. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such provision or invalidity only, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

         11. Binding Effect. This Agreement shall be binding on the parties
hereto when executed by Employee and the Chief Executive Officer of Company.
Employee acknowledges and agrees that no representative of Company other than
the Chief Executive Officer has any authority to enter into any employment
contract or bind Company unless authorized in writing by the Chief Executive
Officer of Company to do so.

         12. Utah Law to Apply; Arbitration. This Agreement shall be governed by
and construed pursuant to the laws of the State of Utah, notwithstanding
conflicts of laws principles thereof. Company and Employee hereby submit to the
jurisdiction of the courts, mediations and arbitral panels located in, and agree
that venue shall lie for all purposes in Davis, County, Utah. EXCEPT FOR ACTIONS
INVOLVING REQUESTS BY COMPANY FOR RELIEF UNDER PARAGRAPH 9 HEREOF, EMPLOYEE AND
COMPANY HEREBY KNOWINGLY AND VOLUNTARILY AGREE THAT ANY DISPUTES OR CONFLICTS IN
ANY WAY ARISING OUT OF OR RELATING TO THE EMPLOYMENT RELATION BETWEEN EMPLOYEE
AND COMPANY CREATED BY THIS AGREEMENT SHALL BE MEDIATED OR ARBITRATED, AT THE
WRITTEN ELECTION OF EITHER PARTY HERETO. IF EITHER EMPLOYEE OR COMPANY MAKE A
PROPER ELECTION TO MEDIATE UNDER THIS PARAGRAPH 12, BUT SUCH MEDIATION EFFORTS
FAIL TO RESOLVE THE SUBJECT DISPUTE(S) BETWEEN THE PARTIES, THE PARTIES SHALL BE
BOUND TO RESOLVE THE SUBJECT DISPUTE(S) BY BINDING ARBITRATION. WHERE THE
SUBJECT DISPUTE(S) ARE ULTIMATELY RESOLVED BY ARBITRATION, THE PARTIES HERETO
IRREVOCABLY AGREE TO BE BOUND BY ALL FINDINGS OF FACT AND CONCLUSIONS OF LAW OF
THE ARBITRATOR(S) SELECTED. Either party may elect under this paragraph 12 to
proceed either to mediation or arbitration by delivery of written notice to the
opposing Party and to the Judicial Arbitration and Mediation Services office
where such proceeding is to be held. Each mediation or arbitration proceeding
hereunder will be conducted in accordance with the rules of the Judicial
Arbitration and Mediation Services (the "JAMS Rules"), including selection of
mediator(s) or arbitrator(s). The mediation or arbitration will be held in
Layton, Utah, unless both parties agree to another location. All federal and
state laws applicable to this agreement relating to arbitration or mediation of
conflicts shall be fully complied with by the parties.

         13. Notices. Any notices required by this Agreement shall be
effectively given if given in writing by personal delivery or by depositing same
in the United States mail, registered or certified, postage prepaid, return
receipt requested. For purposes of this provision, Company's address shall be
476 Heritage Park Blvd, suite 210, Layton, Utah 84041, or at such other place as
may be designated by Company from time to time. Employee's address shall be
employees home address or at such other place as may be designated by Employee
from time to time.

         14. Assignment. This Agreement may not be assigned by the Employee.
Neither the Employee, his spouse nor their estates shall have any right to
commute, encumber or dispose of any right to receive payments hereunder, it
being that such payments and the right thereto are nonassignable and
nontransferable.

         15. Entire Agreement. This Agreement, together with all exhibits and
attachments hereto and all documents and instruments executed and delivered in
connection herewith, constitutes the entire agreement of the parties hereto, and
supersedes all prior understandings with respect to the subject matter hereof.

         16. Acknowledgment. Employee acknowledges that he has read and
understands this Agreement, and that he has received a fully executed copy of
same.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the Effective Date.


THE COMPANY:

COMPUTERIZED THERMAL IMAGING, INC.


By: /s/ Brent M. Pratley
-------------------------------------------------
Brent M. Pratley, Compensation Committee Chairman


THE EMPLOYEE:

By: /s/ Richard V. Secord
-------------------------------------------------
Richard V. Secord


Exhibits A - CTI Stock Option (Attached)
         B - 1997 Incentive Stock Plan (Not attached hereto)


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                                   EXHIBIT "A"


                       Computerized Thermal Imaging, Inc.
                         Employee Stock Option Agreement


Pursuant to that certain Employment Agreement (the "Employment Agreement")
effective as of September 18, 2000 between Computerized Thermal Imaging, Inc.
(the "Company") and Richard V. Secord (the "Employee"), the Company hereby
grants to Employee, subject to all terms and conditions of the Employment
Agreement, this Option Agreement, and that certain Computerized Thermal Imaging,
Inc. 1997 Stock Option Plan (the "Plan") of the Company, a copy of which is
attached hereto and incorporated by reference herein for all purposes, the
option to purchase Seven Hundred Fifty Thousand (750,000) shares (the "Shares")
of the Company's Common Stock, $0.001 par value per share, at a price per share
equal to $1.50.

Subject to forfeiture as hereafter provided, this Option becomes vested to the
extent hereafter provided and may be exercised by Employee, as follows: (i) this
Option may be exercised as to 187,500 shares (the "Initial Shares"), and this
Option becomes fully vested with respect to the Initial Shares, at the date of
signing this agreement, and (ii) this Option may be exercised as to the next
187,500 shares (the "First Additional Shares"), and this Option becomes fully
vested with respect to the First Additional Shares, from and after September 18,
2001, and (iii) this Option may be exercised as to the 187,500 shares (the
"Second Additional Shares"), and this Option becomes fully vested with respect
to the Second Additional Shares, from and after September 18, 2002, and (iv)
this Option may be exercised as to the 187,500 shares (the "Third Additional
Shares"), and this Option becomes fully vested with respect to the Third
Additional Shares, from and after September 18, 2003. Notwithstanding the
foregoing vesting schedule, the vesting of all options shall be accelerated to
that date on which the Company's common stock price (after taking into
consideration all adjustments required to be accounted for as a result from
changes to the Company's stock, i.e., splits, reverse splits, mergers, etc.)
achieves and sustains a price of $12 or greater for 20 consecutive trading days.
The rights granted under this Option must be exercised, if at all, on or before
the expiration of ten (10) years from the date hereof.

The Option shall be forfeited with respect to all shares for which the Option
has not vested in accordance with the immediately preceding paragraph if, as,
and when Employee's employment with the Company is terminated by the Company for
Cause (as defined in the Employment Agreement) or is voluntarily terminated by
the Employee.

If, as, and when Employee desires to exercise this Option, he may do so by
delivering written notice of such exercise to the Company at its offices in
Layton, Utah, together with appropriate payment for the number of shares covered
by such notice.

The Employee hereby accepts and agrees to be bound by all the terms and
conditions of the Plan, to which this Option and the Shares are subject.

Computerized Thermal Imaging, Inc.

By: /s/ Brent M. Pratley
-------------------------------------------------
Brent M. Pratley, Compensation Committee Chairman


THE EMPLOYEE:

By: /s/ Richard V. Secord
-------------------------------------------------
Richard V. Secord, Employee


Exhibit B - CTI 1997 Stock Option Plan (Not attached hereto)

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