Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
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THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and entered
into by and between COMMERCE PLANET, INC., a Utah corporation (hereafter
"Employer" or "Commerce"), and XXXXXXX XXXX (hereafter "Employee") and is
effective as of the date stated below. Employer and Employee may for
convenience of reference be collectively referred to as "Parties".
R E C I T A L S:
WHEREAS, Employer is a publicly traded media company offering media products,
lead generation services and marketing tools to its client partners; and
WHEREAS, Employee desires to become employed by Employer as its Chief
Executive Officer (the "CEO") under the following terms and the Parties desire
to confirm the terms of the employment of Employee by Employer as herein set
forth and hereby enter into this Agreement effective September 1, 2006
(hereafter the "Effective Date"), which Agreement shall supersede any and all
prior agreements between the Parties; and
NOW, THEREFORE, the Parties agree as follows:
1. EMPLOYMENT. Employer shall employ Employee as the CEO of Commerce in
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accordance with the terms and conditions herein set forth and in accordance with
Employer's policies, and consistent with the laws of the State of California.
Employee will work on a full-time basis (five days per week, eight hours a
day), in fulfilling the duties assigned to him hereunder and will continue to
spend as much time as needed to fulfill his duties in a successful manner.
Employee will work at the Santa Xxxxxxx Corporate Office.
2. JOB DUTIES. Employee's duties shall include, but are not limited to, the
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following:
The CEO will be responsible for the overall operation of Commerce. In
addition to the overall performance, the CEO will work directly with the board
of directors, investors and shareholders to promote Commerce and maximize
Commerce's public value. The CEO will respond to shareholder needs and work to
maximize their investments promoting Commerce and its operations. The CEO will
look for opportune corporate mergers, acquisitions and financially sound
investments.
2.1 EXEMPT STATUS. Employee shall perform such duties as are necessary to the
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administration and management of Employer's business and has control and
supervision of that business during his employment for Commerce. It is
understood that while Employee reports and shall be responsible to the Board of
Directors of Employer, or designee, Employee has discretion to perform such
functions as he deems reasonably necessary to the successful operation of
Employer's business. Accordingly, the Parties understand and agree that
Employee is "exempt" on both an executive and administrative basis under
applicable California wage and hour laws.
3. TERM AND TERMINATION.
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The initial term of Employee's employment under this Agreement will commence on
the Effective Date and end on the first anniversary of that date (such one-year
period is the "Initial Term"). The Initial Term, together with any extensions,
is referred to herein as the "Term."
This Agreement shall be subject to termination upon the occurrence of any of the
following events:
(a) At any time Employer and Employee mutually agree in writing to terminate
this Agreement.
(b) On the death or legal incapacity of Employee.
(c) If Employee is "disabled" as defined below and if Employee's disability
continues for a period of more than three (3) months, his employment hereunder
will automatically terminate with or without formal notice from Employer. For
purposes of this Agreement, "disability" shall be defined as an Employee's
inability through physical or mental illness or other cause to fully and capably
engage in the management of Employer's business operations and/or to perform
Employee's obligation herein set forth.
(d) Employer may terminate this Agreement and Employee's employment
hereunder, for "cause" as herein defined, upon sixty (60) days prior written
notice. For the purposes of this Agreement, "cause" shall be defined as any of
the following:
i) Employee's misappropriation of assets, properties, or funds of
Employer; or
ii) Employee's conviction of, or plea of guilty or nolo contendere to a
felony or misdemeanor involving moral turpitude.
iii) Any conduct that will reasonably tend to degrade Employee or bring
Employer into public hatred, contempt, or ridicule, or tend to offend the
community in which Employee represents Employer, or to prejudice Employer's
position in the community. Employee acknowledges and agrees that this
provision is necessary to protect the profitability of Employer's business.
(e) In the event that Employee voluntarily terminates his employment with
Employer, Employee shall be entitled to receive such salary, wages, and bonus
which have accrued through the effective date of termination.
3.1 AGREEMENT SURVIVES COMBINATION OR DISSOLUTION. This Agreement shall not be
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terminated by Employer's voluntary or involuntary dissolution or by any merger
in which Employer is not the surviving or resulting entity, or on any transfer
of all or substantially all of Employer's assets. In the event of any such
merger or transfer of assets, the provisions of this Agreement shall be binding
on and inure to the benefit of the surviving business entity or the business
entity to which such assets shall be transferred.
4. COMPENSATION.
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4.1 ANNUAL SALARY. Employer shall pay to Employee during the term of this
Agreement or any extension thereof, as consideration for Employee's full and
faithful performance of his duties hereunder, an annual salary of $350,000 per
annum for the Initial Term and for each Renewal Period thereafter. Payment
shall be made on a pro rata basis in accordance with Employer's then applicable
payroll procedures.
4.2 CASH BONUS. As additional compensation, Employee shall receive
a bonus equal to five (5%) of Commerce's adjusted net profits under the payment
terms below, for the duration of Employee's Term with Commerce.
i. ADJUSTED NET PROFITS - Calculated by taking Commerce's actual net income
and adding back the following expenses:
a. Investor Relations
b. Expenses associated with the conversion of Commerce's debentures.
c. All expenses associated with payment of the Executive Compensation Plan
including cash bonus and stock issuance.
ii. PAYMENT DUE DATE - Payment will be due upon the close of the second
quarter of the year and upon the fourth quarter of the year. All payments will
be made no later than five (5) business days after the filing of Commerce's"10Q"
or "10K" of the corresponding quarter. The effective start date for payment
eligibility will be the same date as execution of this Agreement by all parties.
iii. PAYMENT AMOUNT - Of the total amount due and payable upon the close of
the second quarter, fifty percent (50%) will be held in a reserve escrow
account. The balance of the reserve will be released to Employee no later than
five (5) business days after the filing of the 10K including the results of the
fourth quarter, assuming that the last two quarters adjusted net profits are not
thirty (30%) percent less than the first two quarters of the year. The reserved
funds will be returned to Commerce in the event that there is a negative
variation greater than thirty percent (30%) within the net profits.
In addition to the reserve amount being due, the bonus for the final two
quarters of the year will be due and payable in their full amount with no funds
held in reserve no later than five (5) business days after the filing of the 10K
which includes the results of the fourth quarter.
4.3 INITIAL OWNERSHIP BONUS - The terms of the Executive Compensation Plan
dated May 18, 2006 will remain in full force and effect.
4.4 INITIAL TERM SALARY DUE IF EMPLOYEE TERMINATED WITHOUT CAUSE - In
the event Employee is terminated without cause (as defined above) by Employer,
Employee shall be entitled to receive any and all of his annual salary (referred
to in Paragraph 4.1 above) which is still due and owing under this Agreement.
Said amount shall be calculated from the date of Employee's termination to the
end of the Initial Term of this Agreement and shall be paid no later than one
(1) month after Employee's termination date in a single lump-sum payment. In no
event is this amount to be less than six (6) months of his annual salary which
equals One Hundred Seventy-Five Thousand Dollars ($175,000) as a severance
payment.
4.5 SEVERANCE PAYMENT - In the event Employee is terminated with cause
(as defined above) by Employer, Employee shall be entitled to receive six (6)
months of his annual salary which equals One Hundred Seventy-Five Thousand
Dollars ($175,000) as a severance payment. Said amount shall be paid to
Employee no later than one (1) month after Employee's termination date in a
single lump-sum payment.
4.6 PAYMENT/ASSUMPTION OF LIABILITIES PREVIOUSLY INCURRED BY EMPLOYEE
- Employer acknowledges that Employee has previously entered into various
agreements, leases and other contractual obligations (the "Liabilities") on
behalf of and for the benefit of Employer that subject Employee to personal
financial liability. Said Liabilities are listed on Schedule "A" to this
Agreement. Employer agrees to immediately assume all Liabilities that Employee
has incurred on Employer's behalf as listed in Schedule "A." To the extent any
Liabilities cannot be immediately paid or satisfied in full by Employer,
Employer agrees to place an equal amount of funds in a reserve escrow account.
Upon the periodic payment and satisfaction of the Liabilities by Employer, the
reserve escrow account shall be reduced proportionately. In the event Employee
is terminated for any reason, with or without cause, Employee shall be entitled
to receive any and all funds held in the reserve escrow account as of the date
of Employee's termination. Said funds shall be paid and released to Employee no
later than thirty (30) days after Employee's date of termination in a single
lump-sum payment in exchange for a release of liabilities. At their discretion,
Employer may apply this reserve as a direct payment to the outstanding
liabilities and deliver a signed release from the vendor to Employee releasing
him of all financial and legal obligations. This provision will survive
termination of this Agreement.
5. VACATION. Employee shall be entitled to take up to four weeks
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(twenty working days) paid vacation/sick leave during each calendar year.
6. SICK. Employee shall be entitled to take up to two weeks (ten working
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days) of paid sick leave during each calendar year.
7. HEALTH INSURANCE. Employee and Employee's dependants shall be
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provided with health insurance coverage or reimbursement at no cost to Employee.
8. VEHICLE & RELATED EXPENSES. During the Term of this Agreement,
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Employer shall reimburse Employee's monthly car payment in an amount not to
exceed $1,100.00 per month. Employer will also pay for fuel and related
maintenances and repairs for Employee's vehicle. Employer acknowledges that
Employee primarily utilizes his vehicle for work-related purposes.
9. WORK-RELATED EXPENDITURES. Employee will be provided a credit card
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on behalf of Commerce to be utilized for work-related expenses incurred by
Employee in promoting the business of Employer, including expenditures for
entertainment, gifts, and travel. An expense report based upon adequate records
and other documentary evidence will be required to be submitted by Employee to
Commerce prior to reimbursement of Employee's expenditures. Employee will also
be entitled to reimbursement in the event he is required to utilize a
non-Employer issued credit card for work-related expenses.
10. OTHER BENEFITS. Employee will be entitled to participate in any
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other employee benefit plans which the Board of Directors of Employer may elect
to provide for other employees of Commerce or Commerce's affiliated companies
and/or divisions.
11. CONFIDENTIAL INFORMATION/EMPLOYER'S OWNERSHIP OF INTANGIBLES. Upon
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termination of his employment hereunder, Employee shall not be entitled to keep
or use any documents, files, property or information of any description acquired
by Employee pursuant to the performance of his duties herein and pertaining to
Employer's business, including, but not limited to, vendor information, accounts
receivable, customer lists, business and financial information, trade names,
trademarks, service marks, or related matters, including but not limited to the
name "Commerce".
Employee agrees that he will not, during or after the term of the Agreement,
furnish or make accessible to any person, firm, corporation or other entity any
financial information, receipts, business information, customer lists, vendor
information, or other proprietary or trade secret data (whether technical or
non-technical) acquired by him from Employer, from Employer's principals, or
from his co-employees, without the prior written consent of Employer, unless
such information is or shall have become public knowledge, other than by being
divulged or made accessible by Employee.
12. AMENDMENTS TO AGREEMENT. The terms of Employee's employment for
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Employer are described in full in this Agreement, and there are no other terms
not contained in this Agreement. Any changes in the terms of employment shall be
deemed valid only if they are in writing and signed by an authorized
representative of Commerce and by Employee.
13. NOTICES. In the event that any notices are sent by either of the
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parties to the other, such notices shall be in writing, and shall be sent by
registered or certified mail, return receipt requested, as follows:
If to Employer:
COMMERCE PLANET, INC.
C/O XXXXXXX XXXXXXXXX
DIRECTOR OF BOARD
00 X. Xx Xxxxxx Xxxx, Xxxxx 0
Xxxxxx, XX 00000
If to Employee:
XXXXXXX XXXX
000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
14. ASSIGNMENT. This Agreement shall inure to the benefit of and be
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binding upon the Employer, its successors and assigns, and upon Employee and his
heirs, executors, administrators, and legal representatives. Notwithstanding
the foregoing, this Agreement shall not be assignable by Employee or Employer
without the prior written consent of the other party hereto; provided, however,
that Employer may assign all of its rights and interests under this Agreement to
any of its affiliates.
15. GOVERNING LAW. This Agreement shall be governed in all respects by
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the laws of the State of California. Any and all litigation or arbitration will
occur in the State of California, County of Santa Xxxxxxx.
16. ARBITRATION - Any disputes arising from this Agreement will be
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subject to binding [JUDICIAL ARBITRATION] in the State of California, subject to
the provisions of the code of civil procedure section 1141.10 et.sec. Both
parties understand that by agreeing to this provision they waive their rights to
civil litigation and will submit to and be bound by the decision of the
arbitrating body.
17. ATTORNEYS FEES - The parties also hereby agree that the prevailing party
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in any
suit, action or proceeding arising out of or relating to this Agreement shall be
entitled to reimbursement of all fees, costs and expenses, including legal fees
and court costs from the non-prevailing party.
18. COMPLETE DOCUMENT - The terms of this Agreement written, verbal or
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otherwise are all reflected within the pages of this document. Any previous
understandings will be superseded by the terms of this Agreement. Both parties
understand and agree that this Agreement and the terms herein are the complete
and sole understandings between the two parties.
19. SEVERABILITY - If any of the terms or provisions within this
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Agreement are deemed to be invalid by a court of law or other governing body,
the other surviving provisions will remain in full force and effect. Standard
contracts law and industry business practices consistent with that of Employer,
will be implemented to replace and supplement any failed provisions or missing
bodies of law.
Signatures Appear on Following Page
EMPLOYER EMPLOYEE
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COMMERCE PLANET, INC.
BY /S/ XXXXXXX XXXXXXXXX BY /S/ XXXXXXX XXXX
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XXXXXXX XXXXXXXXX XXXXXXX XXXX
DIRECTOR OF BOARD CHIEF EXECUTIVE OFFICER
BY /S/ XXXX XXXXXX
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XXXX XXXXXX
DIRECTOR OF BOARD
