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EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into as of November 5, 2007 by and between
COMMERCE PLANET, INC., a Utah corporation (the
“Company”), and Anthony Roth, residing at the
address set forth on the signature page hereto (the
"Executive") and shall be effective upon signing.
R E C I T A L S:
A. The
Company desires to employ the Executive on the terms and
conditions set forth in this Agreement and the Executive
desires to accept such employment on the terms and conditions
set forth herein.
B. The
Executive acknowledges that his covenants and the
Company’s remedies set forth in Sections 7 through 11
are reasonable and necessary to protect the Company’s
business interests and goodwill.
NOW,
THEREFORE, the parties agree as follows:
1.
Employment . The Company hereby employs the
Executive in the capacity of Chief Executive Officer and
President, and the Executive hereby accepts the employment, on
the terms and conditions hereinafter set
forth. Executive shall also serve on the Board of
Directors of the Company for no additional compensation other
than that set forth herein.
2.
Duties .
(a) Primary Duties
. During the Term (as defined below), the
Executive’s principal duties and responsibilities shall
include, but are not limited to, the following: being
responsible for the day to day operations of the Company;
working with the board of directors to define long-term
strategic initiatives; insuring that directives from the
Board of Directors are implemented to achieve maximum
profitability of the Company’s operations, maximize
shareholder value; and overseeing the operations of the
Company and its wholly owned subsidiaries. The
Executive’s duties shall be similar to those
customarily performed by comparable officers of similar
companies.
(b)
Other Activities . The Executive agrees to
perform Executive’s duties and responsibilities and to
devote his full business time, energies, and best efforts to
the performance thereof, except for (i) service on boards of
directors and advisory boards of companies that do not compete
with the Company and that are disclosed in writing to the
Company's Board of Directors (the "Board") (any such board
positions held as of the date of this Agreement are set forth
on Exhibit A to this Agreement) and (ii) any other activities,
in each case, as the Board may consent in writing and as do
not materially interfere with Executive's conduct of his
duties under this Agreement. This paragraph shall
not be construed as preventing the Executive from making
financial investments, as long as such investments do not
interfere with the Executive’s conduct of his duties
under this Agreement.
(c)
Additional Capacities . During the Term, the
Executive shall serve in any additional offices or positions
of the Company and/or its subsidiaries and/or affiliates under
common control with the Company (such subsidiaries and
affiliates which are in the same business as the Company are
referred to herein as the "Company Related Entities"), to
which he may be elected or appointed by appropriate action of
the Company or any Company Related Entity. The
Executive shall serve in any such additional capacities
without separate compensation for so serving, unless otherwise
authorized in writing by the Board.
3.
Location of Service . During the Term, the
Executive shall perform Executive's duties at the offices of
the Company located in Goleta, California, or as otherwise
determined by the Company. Executive currently
resides in Orange County, California but shall either
relocate to home within 50 miles of Goleta, California within
ten (10) months of the signing of this Agreement or reach a
mutual agreement with the Board based upon Executive’s
performance and required presence at the Company’s
headquarters. Executive acknowledges that
relocation may become a requirement for maintaining the
position, and such review will be included in the
Executive’s performance measures. Executive’s
failure to relocate to Goleta, California within the time
specified in this provision shall be deemed a material breach
of this Agreement pursuant to Section 14(a)(4)(iv)
below.
4.
Nature of Employment . The Executive’s
employment with the Company is "at will" and is for no
specific period of time. As a result, either the Executive or
the Company may terminate the employment relationship at any
time for any reason, with or without
cause. Termination of employment will not affect
the rights and obligations which this Agreement expressly
contemplates will be performed following such
termination. The period commencing on the date of
this Agreement and ending on the date of the Executive’s
termination is the "Term."
5.
Salary and Other Benefits . During the
Term, as compensation for the services to be rendered by the
Executive to the Company pursuant to this Agreement, the
Executive shall be paid the following compensation and other
benefits:
(a)
Salary . The Company will pay the Executive
a base salary at the annual rate of $350,000, payable in
accordance with the Company’s regular payroll
policies. The Executive’s base salary level
will be reviewed annually by the Board, but shall not be
adjusted downward during the term of the contract in excess of
10% in any twelve (12) month period without
cause.
(b) Cash Bonus
. As additional compensation, Executive shall be
eligible to receive a bonus equal to two and one-half percent
(2.5%) of the Company’s net profits under the payment
terms below, for the duration of Executive’s term with
The Company.
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i.
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Bonus 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 for all bonuses earned prior to such closing
period. All payments will be made no later than five (5)
business days after the filing of The
Company’s“10Q” or “10K” of the
corresponding quarter. The effective start date for
payment eligibility will be January 1, 2008.
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ii.
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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 Executive 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 twenty (20%) percent less than the first two quarters of
the year. The reserved funds will be returned to the
Company in the event that there is a negative variation greater
than twenty percent (20%) within the net profits.
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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. |
(c)
Nonstatutory Stock Option . As additional
compensation, the Company hereby grants Executive an option
expiring in 5 years to purchase two and one-half percent
(2.5%) of restricted Rule 144 common stock (see attached Stock
Option Agreement) of the Company’s then outstanding
common stock based upon a fully diluted calculation as at the
date of hire. The purchase price shall be the price
of the share on the date of execution of this
Agreement. The shares shall vest to Executive on a
pro rata quarterly basis over the course of the original three
year Term of this Agreement. In the event
Executive’s employment is severed prior to completion of
the original term (3 years) all rights to unvested options
will immediately be terminated. The number of shares subject
to this option shall be proportionately adjusted for any
change in the stock structure of the Company because of share
dividends, recapitalizations, reorganizations, mergers, or
otherwise. The option is not assignable and may
only be exercised by Executive during the Term of this
Agreement or, once vested, prior to expiration
thereof.
(d)
Market Capitalization Stock Option Bonus
. As additional compensation, the Company hereby
grants Executive the option to purchase one million
(1,000,000) shares of the Company’s restricted shares of
Company common stock if and when the Company’s market
capitalization reaches the following levels:
(1) 100
Million market capitalization - Grant of option for 250,000
shares; once achieved, this bonus provision is
terminated.
(2) 133
Million market capitalization - Grant of option for 250,000
shares; once achieved, this bonus provision is
terminated.
(3) 167
Million market capitalization - Grant of option for 250,000
shares; once achieved, this bonus provision is
terminated.
(4)
200 Million market capitalization - Grant of option for
250,000 shares; once achieved, this bonus provision is
terminated.
Executive
agrees and acknowledges that if and when each of the four
market capitalization goals listed in this Section 5(d) is
achieved, that particular grant is automatically
terminated. Executive shall exercise the option on
or before the first anniversary of the first instance a market
capitalization goal is achieved. The purchase price shall be
the price of the share on the date of execution of this
Agreement.
(e)
Housing Allowance . The Company shall pay
Executive a housing allowance of up to Three Thousand Five
Hundred Dollars ($3,500) per month for the first ten (10)
months of the Term or until Executive relocates to corporate
head quarters, whichever occurs first. The Company
shall pay moving expenses submitted in advance for approval
with a minimum of three qualified bids not to exceed
$15,000.
(f)
Vacation and Sick Leave . Executive shall be
entitled to take up to three weeks (fifteen working days) paid
vacation during the first year and four weeks for each
subsequent year therafter. To the extent possible, vacation
leave shall be scheduled at such times as will not interfere
with the performance of the Executive’s duties under
this Agreement. Accrued unused vacation shall carry over from
year to year in accordance with the then corporate employment
guidelines. Executive shall be entitled to up to
five (5) working days paid sick leave during each calendar
year. Unused sick days will not accrue and the Company shall
not be obligated to compensate Executive for any unused sick
days at any time.
(g) Expenses
. The Company will pay or reimburse the Executive
for all reasonable business expenses in accordance with the
Company’s policy as in effect from time to time,
including mobile telephone, email, laptop, and other standard
tools and expenses as needed to perform duties.
6.
Definition of Confidential Information .
(a)
Definition . For the purposes of this
Agreement, "Confidential Information" means any information,
whether or not reduced to writing, (i) that is not generally
known in the Company’s trade or industry, (ii) that the
Company and/or any Company Related Entity treats, or is
obligated to treat, as confidential and (iii) that the
Executive may create or have access to in connection with the
Executive’s employment with the Company; provided, that
Confidential Information does not include information that
becomes publicly and generally known (other than through any
unauthorized act of the Executive).
(b) Duty to
Inquire . If the Executive has some question
as to whether certain information falls within the scope of
Confidential Information as defined herein, the Executive
agrees to treat such information as Confidential Information
until informed otherwise in writing by the
Company.
7.
Obligations Respecting Confidential Information
.
(a)
Non-disclosure and Use . During the term of
the Executive’s employment and thereafter, the Executive
agrees (i) not to disclose the Confidential Information except
as required in the course of the Executive’s employment,
(ii) not to copy or use the Confidential Information except as
required for the performance of the Executive’s duties
hereunder, and (iii) to comply with any procedures that the
Company may adopt to preserve the confidentiality of the
Confidential Information.
(b) Ownership
. The Executive acknowledges that the Company owns
all right, title and interest in and to the Confidential
Information and that the Executive acquires no right, title
or interest in any Confidential Information by virtue of the
Executive’s employment by the Company or access to or
creation of Confidential Information.
(c) Return
. Upon termination of the Executive’s
employment with the Company for any reason, the Executive
agrees to deliver to the Company all copies of any
data, records, documents and other materials, including files
stored on electronic or other media, in the Executive’s
possession that contain any Confidential
Information. The Executive understands that he may
not retain copies of any Confidential Information and must
delete files containing any Confidential Information stored
on any computer that the Executive owns. The
Executive agrees, if requested by the Company, to confirm in
writing that the Executive has complied with the foregoing
obligations and to attend a termination interview with a
representative of the Company to discuss any questions that
the Executive may have about his continuing obligations under
this Agreement.
8.
Inventions .
(a)
Inventions Defined . For the purposes of
this Agreement, "Inventions" mean any concepts, ideas,
processes, designs, specifications, improvements, trade
secrets, discoveries or other developments, whether or not
reduced to practice or patentable, that the Executive
conceives or creates, in whole or in part, alone or jointly
with others, during his employment by the Company, whether
during normal work hours or otherwise, which (i) directly
relate to the Company’s business (including without
limitation the Company’s present or contemplated
products, services and research) or to tasks assigned to the
Executive by or on behalf of the Company or (ii) are written
or developed using any of the Company’s equipment,
facilities, materials, trade secrets, labor, money, time or
other resources.
(b) Disclosure
and Assignment of Inventions . The Executive
agrees that he will promptly disclose to the Company all
Inventions and that all Inventions shall be the sole and
exclusive property of the Company. The Executive
hereby assigns to the Company all of his right, title and
interest in all Inventions.
(c) Patents
. During the period of his employment and at any
time thereafter, the Executive shall, upon the
Company’s request, execute U.S. and foreign copyright
registrations and patent applications and/or any other legal
documents necessary to transfer all right, title and interest
in and to the Inventions to the Company and assist, at the
Company’s request and expense, in any proper manner in
obtaining and enforcing such copyrights and
patents. In the event that the Company is unable,
after reasonable effort, to secure the Executive’s
signature on any such registrations, application and other
legal documents for any of the aforesaid purposes, the
Executive hereby irrevocably designates and appoints the
Company and its duly authorized directors, officers and
agents as his agent and attorney-in-fact, to do all lawfully
permitted acts (including but not limited to the execution,
verification and filing of applicable documents) with the
same legal force and effect as if performed by the
Executive.
(d) Preexisting
Inventions . The Executive has identified on
Exhibit B to this Agreement, by title and dates of documents
describing them, all inventions in which the Executive has
any right, title or interest and/or which the Executive
conceived or created at any time prior to the start of his
employment by the Company. Any right, title or
interest in any preexisting invention relating to the
business of the Company that, at any time, was held by
another entity has been properly assigned to the Company and
no other entity has any right, title or interest in any such
invention. 9. Written Materials
.
(e)
Ownership . The Executive acknowledges and
agrees that all writings and works of authorship, including
without limitation, analyses, memoranda, proposals, reports,
speeches, studies, software, logic diagrams, flow charts,
decision charts, drawings, procedural diagrams, documentation
manuals of any kind produced by him related to or in the
course of his work for the Company ("Works") are works made
for hire and the property of the Company, including, without
limitation, any copyrights in those Works. To the
extent any such Works may not, by operation of law or
otherwise, be a work made for hire, the Executive hereby
assigns to the Company the ownership of and all copyrights in
and to such Works, whether published or unpublished, and the
right to secure renewals of such copyrights. The
Executive further agrees upon request to execute such specific
assignments or instruments and take any action necessary to
enable the Company to secure all copyright rights in such
Works and/or extensions or renewals thereof.
(f) Moral Rights
Waiver . The Executive understands that the
term "moral rights" means any rights of paternity or
integrity, including any right to claim authorship of a
copyrightable work, to object to a modification of such
copyrightable work, and any similar right existing under the
judicial or statutory law of any country in the world or
under any treaty, regardless of whether or not such right is
denominated or generally referred to as a "moral right,"
including, without limitation, the rights of attribution and
integrity in works of visual art pursuant to 17 U.S.C. §
106A. The E
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