EXECUTIVE EMPLOYMENT AGREEMENT
EXHIBIT
10.4
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 Xxxxxxx Xxxx, 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.
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(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.
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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.
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(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 Executive
irrevocably waives and agrees never to assert any moral rights that he may
have
in any Works, even after any termination of his employment with the
Company.
(g) Exclusions. Notwithstanding
anything in this Section 9 to the contrary, "Works" as used herein shall
not include articles authored by the Executive for publication in academic
or
trade journals. No assignments in this Agreement shall extend to
Inventions or Works, the assignment of which Executive proves would be
prohibited by Section 2870 of the California Labor Code (a copy of which is
attached hereto as Exhibit C).
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10. Incorporation
of Preexisting Materials. Unless the Company otherwise agrees in
writing in each instance, the Executive agrees not to include or otherwise
incorporate into any Inventions or Works any preexisting materials, except
for
preexisting materials owned by the Executive. To the extent that any
preexisting materials owned by the Executive are contained or embedded in any
Inventions or Works or are necessary to the proper operation or use thereof
and
in the absence of a written agreement with the Company to the contrary, the
Executive hereby grants to the Company an irrevocable, perpetual, worldwide,
fully-paid, royalty-free, nonexclusive license to use such preexisting materials
in any manner and prepare derivative works thereof in connection with the use,
operation, modification, transfer or disposition of such Invention or
Works. The Executive hereby agrees to indemnify and hold the Company
harmless from any claim that the Company’s use of any preexisting materials that
he includes or otherwise incorporates into any Invention or Works is
infringing.
11. Post
Employment Restrictions.
(a) Covenant
Not-to-Solicit Customers. During the Executive’s employment with
the Company and for a period of one (1) year after the Date of Termination
(as
defined in Section 14(b)(2)), the Executive shall not directly or indirectly,
individually or on behalf of any other person or entity, whether as principal,
agent, stockholder, employee, consultant, representative or in any other
capacity, contact any person or entity, which:
(1) is
a customer or client of the Company and/or any Company Related Entity as of
the
Date of Termination,
(2) has
been a customer or client
of the Company and/or any Company Related Entity at any time within one (1)
year
prior to the Date of Termination, or
(3) is
a prospective customer or
client that the Company and/or any Company Related Entity is actively soliciting
as of the date the Executive’s employment terminates, for the purpose of selling
products or services similar to any of the products and services offered for
sale to such customers or prospective customers by the Company and/or any
Company Related Entity as of the Date of Termination, provided such customer
or
client becomes an actual customer or client within three (3) months of the
date
of termination.
(b) Covenant
Not-to-Solicit Executives or Consultants. During the Executive’s
employment with the Company and for a period of one (1) year after the Date
of
Termination, the Executive shall not directly or indirectly, individually or
on
behalf of any other person or entity, whether as principal, agent, stockholder,
employee, consultant, representative or in any other
capacity: recruit or solicit any person to leave the employ of the
Company and/or any Company Related Entity.
(c) Severability
of
Restrictions. In the event that any of the provisions of this
Section 11 shall be held to be invalid or unenforceable, the remaining
provisions thereof shall nevertheless continue to be valid and enforceable
as
though the invalid or unenforceable parts had not been included
therein. In the event that any provision of this Section 11 relating
to the time period and/or the areas of restriction and/or related aspects shall
be declared by a court of competent jurisdiction to exceed the maximum
restrictiveness such court deems reasonable and enforceable, the time period
and/or areas of restriction and/or related aspects deemed reasonable and
enforceable by the court shall become and thereafter be the maximum restriction
in such regard, and the restriction shall remain enforceable to the fullest
extent deemed reasonable by such court.
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12. Remedies. The
Executive understands and agrees that the Company and the Company Related
Entities will suffer irreparable harm in the event that the Executive fails
to
comply with the Executive’s obligations under Sections 7, 8,
9, 10 and 11 of this Agreement and that monetary
damages
will be inadequate to compensate the Company for such breach. The
Executive agrees that the Company and the Company Related Entities shall, in
addition to any other remedies available to them, be entitled to preliminary
and
permanent injunctive relief against any breach by the Executive of the covenants
and agreements contained in Sections 7, 8, 9, 10 and
11 hereof without having to post bond. The parties submit to
the exclusive jurisdiction of the state or federal courts located in the State
of California in connection with any dispute, controversy or claim between
the
parties arising out of or related to any term or condition of Sections 7,
8, 9, 10 and 11. In addition to
Executive's other remedies at law or under this Agreement (including enforcement
of the Severance Payments), if the Company shall fail to timely make any
payments due Executive hereunder, the provisions of Section 12 shall immediately
cease to apply.
13. No
Prior Employment Restrictions. The Executive warrants that the
Executive is not restricted by any restrictive covenant or confidentiality
agreement of any type or nature from any prior employment from performing any
of
the duties required by this Agreement. The Executive agrees that he
will not improperly use or disclose confidential information or trade secrets
of
any prior employer or third person or bring onto the Company’s premises any
confidential information or trade secrets belonging to any prior employer or
third person unless the Executive has received the prior written consent of
such
prior employer or third party. Should a prior employer or third party
assert that the Executive is restricted from performing any of the duties
required by this Agreement or has improperly used any confidential information
or trade secrets belonging to such prior employer or third person, the Executive
shall indemnify, defend, and hold harmless the Company from any attorneys’ fees
and costs incurred in defending these claims, along with paying any and all
damages that may be assessed against the Company.
14. Term
and Termination.
(a)
Events of Termination. The initial term (the "Term") of
Executive's employment shall be for a period of three (3) years from the
Effective Date unless terminated earlier pursuant to the terms
hereof. Employment of the Executive under this Agreement will be
terminated:
(1)
By the
Executive’s death.
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(2) As
a result of the
Executive’s Total Disability. For the purposes of this Agreement,
"Total Disability" means that the Executive (i) has been declared legally
incompetent (the date of such declaration being deemed to be the date on which
the disability occurred), (ii) is unable to substantially perform the
Executive’s duties for 180 days in any twelve-month period as a result of a
physical or mental illness or injury, as determined by the Board, or (iii)
has
been found to be disabled pursuant to a Disability Determination (as defined
herein).
(3) By
mutual agreement of the Executive and the Company.
(4)
By the Company for
Cause. For purposes of this Agreement "Cause" shall mean only the
following:
(i) a
conviction of or a plea of guilty or nolo contendre by the Executive to (x)
any
felony, or a misdemeanor involving fraud, embezzlement, theft, moral turpitude,
or dishonesty or other criminal conduct against the Company or any third party,
or (y) any intentional misdemeanor involving physical harm or bodily
injury;
(ii) any
intentional or grossly negligent act or omission by the Executive which
reasonably could cause material harm to the Company or materially prejudice
the
Company's position in the business
community;
(iii) habitual
alcohol or substance abuse;
(iv)
the
failure of the Executive to comply with a proper directive of the Company and/or
any Company Related Entity or to observe the policies of the Company and/or
any
Company Related Entity generally applicable to executives of the Company with
respect to state or federal law relating to the workplace environment
(including, without limitation, laws relating to sexual harassment or age,
sex
or other prohibited discrimination);
(v) Executive's
misappropriation of assets, properties, or funds of the
Company; or
(vi)
the
Executive materially breaches any of the covenants, agreements or obligations
of
this Agreement or any of the Equity Documents.
(5) By
the Company without Cause upon seven (30) days’ advance written notice to the
Executive; provided, that the Company may provide continued base salary payments
for all or a portion of such 30-day period in lieu of notice.
(6) By
the Executive upon thirty
days (30) days’ advance written notice to the Company.
(7) Upon
expiration of the Term.
(b) Definitions.
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(1) Disability
Determination. For the purposes of this Agreement, a "Disability
Determination" shall mean a good faith finding by the Board that the Executive,
because of a medically determinable disease, injury, or other mental or physical
disability, is unable to perform substantially all of his regular duties to
the
Company and that such disability is determined or reasonably expected to last
at
least twelve (12) months. In conjunction with a Disability
Determination, the Executive hereby consents to any required medical examination
and agrees to furnish any medical information requested by any examining
physician and to waive any applicable physician-patient privilege that may
arise
because of such examination.
(2) Date
of Termination. For the purposes of this Agreement, "Date of
Termination" shall mean the effective date of the Executive’s termination
pursuant to Section 14(a).
(c) Effect
of Termination. Notwithstanding the Term of this Agreement, in
the event of the termination of the Executive’s employment for any reason, all
obligations of the Executive pursuant to Section 2 hereof and of the
Company pursuant to Section 5 hereof shall terminate, except (i) for any
earned but unpaid base salary and any unreimbursed expenses and other unpaid
benefits owed as of the date of termination and (ii) as set forth in Section
15. For purposes of clarification, notwithstanding anything to
the contrary contained in this Agreement, the provisions of Sections
7, 8, 9, 10, 11, 12, 14,
15, 16,
17 and,
as necessary to construe and
enforce the foregoing provisions, 18 shall survive such
termination. The Executive agrees to cooperate with the Company in
order to ensure an orderly transition of the Executive’s duties and
responsibilities upon termination of employment.
15. Severance.
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(a)
Without Cause. The Executive will have a sixty (60) day
probationary period in which he may be terminated for any reason and at
anytime. Executive will not be entitled to severance should his
employment be terminated within this probationary period. Notwithstanding the
Term of this Agreement, in the event that the Executive’s employment is
terminated sixty (60) days subsequent to the date of this Agreement by the
Company without Cause, the Company shall pay to the Executive continued payments
(the "Severance Payments") of one hundred percent
(100%) of the Executive’s then current monthly base salary
for a length of time equal to six months (the "Severance
Period") any rights to bonuses under this Agreement immediately cease upon
termination. The Company's obligation to make any applicable
Severance Payments under this Section 15(a) is conditioned upon Executive
entering into a general release of the Company and its officers, directors,
employees, agents, affiliates, representatives, successors, assigns and
shareholders in a form satisfactory to the Company (a "Release") provided,
however that such Release shall exclude accrued and unpaid salary, accrued
and
unpaid other benefits, un-reimbursed expenses, severance payments and severance
benefits, each as set forth in this Agreement and rights of indemnification
under the Company's Certificate of Incorporation, Bylaws, this Agreement or
any
other written agreement between the Company and Executive (other than with
respect to matters relating to Executive's termination of
employment). The Company may terminate the continued payment of the
applicable Severance Payments in the event that Executive breaches any terms
of
such Release or any of his post-employment obligations to the Company set forth
in this Agreement. Applicable Severance Payments shall be made in
accordance with the Company’s payroll practices as in effect on the date of
termination. This severance provision and the financial remuneration
associated with it is the maximum liability that Company will be obligated
to
pay Executive with or without cause for termination.
Upon
a Change in Control. If within twelve
months following a Change of Control, as hereinafter defined, the Employee’s
employment is modified or terminated for a reason (or no reason) other than
for
disability, death or for cause, the termination shall be deemed a “Change of
Control Termination” and this Article shall determine Executive’s severance
package to accelerate with regard to all stock option vesting..
“Change
of Control” shall be defined as follows:
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consummation
of a merger or consolidation or sale or other disposition of all
or
substantially all of the assets of the Company (a "Corporate
Transaction"); or
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(b) Sole
Payment
Obligation. Notwithstanding the Term of this Agreement, in the
event of termination of Executive's employment, the Company shall be required
to
pay to Executive only the amounts expressly set forth in the applicable
provisions of this Section 15. Any rights to bonuses under this
Agreement immediately cease upon termination. The Company's
obligation to make any Severance Payments under this Section 15 is conditioned
upon Executive entering into a Release. The Company may terminate the
continued payment of the applicable Severance Payments in the event that
Executive breaches any terms of such Release or any of his post-employment
obligations to the Company set forth in this Agreement. References to
the word Company in the second sentence of this paragraph shall include Commerce
Planet, Inc. (or any other direct or indirect parent entity of the
Company).
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16. Arbitration.
(a)
Agreement
to
Arbitrate. Any controversy or claim arising out of or relating to
the Agreement, or the breach hereof, and claims referenced in subsection (b)
below, shall be settled by arbitration administered by the American Arbitration
Association under its National Rules for the Resolution of Employment Disputes,
and judgment upon the award rendered by the arbitrator(s) may be entered by
any
court having jurisdiction thereof. The Executive understands that his
assent to mandatory arbitration is a condition of employment and continued
employment and that claims covered by this Agreement, will be settled by
arbitration in Santa Barbara, California. The arbitration shall be
conducted by one neutral arbitrator selected by the parties. The
arbitrator shall apply the substantive and procedural laws of the State of
California to all such arbitrations. The Company will pay all
expenses unique to arbitration. The arbitrator shall have the
authority to order such discovery, by way of deposition, interrogatory, document
production, or otherwise, as the arbitrator considers necessary to a full and
fair exploration of the issues in dispute, consistent with the expedited nature
of arbitration. The arbitrator is authorized to award any remedy or
relief that the arbitrator deems just and equitable, including any remedy or
relief that would have been available to the parties had the matter been heard
in court. The arbitrator shall have the authority to provide for the
award of attorney's fees and costs in accordance with applicable law. The
arbitrator may award to the prevailing party in any dispute reasonable and
actual attorney's fees consistent with applicable law. Executive and
Company agree that this Agreement to arbitrate is subject to and enforceable
under the provisions of the Federal Arbitration Act (the "FAA"), 9 U.S.C. §§ 1,
et seq., and to the extent it does not interfere with the enforceability of
this
Agreement, the California Arbitration Act (the "CAA"), Cal. Code Civ. Proc.
("C.C.P.") §§ 1280, et seq. The decision of the arbitrator shall be
in writing and shall provide the reasons for the award unless the parties agree
otherwise. Proceedings to enforce, confirm, modify, set aside or
vacate an award or decision rendered by the arbitrator will be controlled by
and
conducted in conformity with the Federal Arbitration Act, 9 U.S.C. Sec 1 et.
seq. or applicable state law. This Agreement shall survive the
termination of Executive's employment with Company and shall apply to any claim,
dispute, and/or controversy that arises during or after the termination of
Executive's employment. This Agreement shall be mutually binding on
Executive and Company.
(b) Covered
Claims. Except as otherwise provided in this Agreement, the
Executive and the Company hereby consent to the resolution by arbitration of
all
claims or controversies for which a court otherwise would be authorized by
law
to grant relief, in any way arising out of, relating to, or associated with
the
Executive’s employment with the Company or its termination ("Claims") that the
Company may have against the Executive or that the Executive may have against
the Company or against its officers, directors, employees, or agents, in their
capacity as such or otherwise. The Claims covered by this Agreement
include, but are not limited to: claims for coercion, for
discrimination based on race, sex, religion, national origin, age, marital
status, handicap, disability, or medical condition; claims for benefits, except
as excluded in the following paragraph, and claims for violation of any federal,
state, or other governmental constitution, statute, ordinance, or regulation
(including but not limited to claims arising under Title VII of the Civil Rights
Act, the Americans with Disabilities Act, the Age Discrimination in Employment
Act, the Family Medical Leave Act, the Fair Labor Standards Act, and the
Executive Retirement Income Security Act). Additionally, any and all
issues of arbitrability (whether a claim is covered by this Agreement) will
be
decided by the arbitrator(s) and not a court.
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(c) Claims
not
Covered. This agreement to arbitrate does not apply to or cover
potential claims that may be brought by either Executive or Company under the
Equity Documents. This agreement to arbitrate also does not apply to
claims that are already subject to an existing arbitration provision between
the
parties, or claims that may not be arbitrated under applicable law.
(d) Waiver. THE
PARTIES HEREBY WAIVE THEIR RIGHT TO HAVE ANY DISPUTE, CLAIM OR CONTROVERSY
DECIDED BY A JUDGE OR JURY IN A COURT.
17. Withholding
of Taxes. The Company may withhold from any compensation,
benefits or other amount payable under this Agreement all federal, state, city
and other taxes as shall be required pursuant to any law or governmental
regulation or ruling.
18. Miscellaneous.
(a) Waiver. A
party’s failure to insist on compliance with or enforcement of any provision of
this Agreement, shall not affect the validity or enforceability or constitute
a
waiver of future enforcement of that provision or of any other provision of
this
Agreement by that party or any other party.
(b) Governing
Law. This Agreement shall in all respects be subject to, and
governed by, the laws of the State of California without regard to the
principles of conflict of laws.
(c) Severability. The
invalidity or unenforceability of any provision in this Agreement (including
without limitation any provision regarding arbitration) shall not in any way
affect the validity or enforceability of any other provision and this Agreement
shall be construed in all respects as if such invalid or unenforceable provision
had never been in the Agreement.
(d) Notice. Notices
provided for herein shall be in writing and shall be deemed to have been duly
given when delivered personally or by overnight courier with a receipt obtained
therefore or when mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed, to the Company to its Board
of
Directors and to the Executive at the address set forth below on the signature
page to this Agreement or such other address as he may provide the Company
in
accordance with the provision.
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(e) Amendments. This
Agreement may be amended at any time by mutual consent of the parties hereto,
with any such amendment to be invalid unless in writing, signed by the Company
and the Executive. To the extent that this Agreement or any part
thereof is deemed to be a nonqualified deferred compensation plan subject to
Section 409A of the Code, then (i) this Agreement shall be interpreted in a
manner to comply in good faith with Code Section 409A and the guidance
promulgated thereunder; and (ii) the parties agree to amend this Agreement
as
soon as practicable, as may be necessary (if at all) so as to avoid application
of any tax or interest pursuant to Code Section 409A as interpreted by proposed
regulations issued on September 29, 2005, and such additional guidance as may
be
issued before December 31, 2005; and again to make any such further amendment
as
may be so required on or before December 31, 2007, based on such further
guidance as may have been issued (in each case preserving to the extent feasible
the parties' respective economic interests and legal rights and obligations
hereunder).
(f) Burden
and
Benefit. This Agreement, together with any amendments hereto,
shall be binding upon and shall inure to the benefit of the parties hereto
and
their respective successors, assigns, heirs and personal representatives, except
that the rights and benefits of the Executive under this Agreement may not
be
assigned without the prior written consent of the Company.
(g) References
to Gender and
Number Terms. In construing this Agreement, feminine or number
pronouns shall be substituted for those masculine in form and vice versa, and
plural terms shall be substituted for singular and singular for plural in any
place in which the context so requires.
(h) Headings. The
various headings in this Agreement are inserted for convenience only and are
not
part of the Agreement.
(i) Entire
Agreement. This Agreement and the Equity Documents contain the
entire agreement and understanding by and between the Executive and the Company
with respect to the employment of the Executive, supersedes any prior agreements
and no representations, promises, agreement, or understanding, written or oral,
relating to the employment of the Executive by the Company not contained herein
or therein shall be of any force or effect.
-14-
IN
WITNESS
WHEREOF, the parties hereto have duly executed this Agreement as of the day
and
year first hereinabove written.
| EXECUTIVE: | ||
| Xxxxxxx Xxxx | ||
| Address: | 00 Xxxxxx, Xxxxxx Xxxxxx, XX 00000 | |
| COMPANY: | ||
| Commerce Planet, Inc. | ||
| By: | /s/ Xxxxxxx Xxxx | ||
| Name: | Xxxxxxx Xxxx | ||
| Title: | Chief Executive Officer | ||
| Address: |
00
Xxxxx Xx Xxxxxx Xxxx, Xxxxx 0
|
||
| Xxxxxx, Xxxxxxxxxx 00000 | |||
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EXHIBIT
A
TO
OF
XXXXXXX
XXXX
The
following is a list of board positions held by the Executive as of the date
of
this Agreement:
Utix
Group, Inc. – Telephonic attendance of conference calls / meetings, not to
exceed 8 hours a month.
Genutec
Business Solutions, Inc. – To exit position by end of the year.
Xxxx
Financial Group, Inc. – Personal management of existing family assets and wealth
estimates.
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EXHIBIT
B
TO
OF
XXXXXXX
XXXX
The
following is a list of Inventions and inventions conceived or created by the
Executive prior to the start of employment. If there are no
Inventions or inventions conceived or created by the Executive prior to the
start of employment, insert "None" and sign below.
U.S.
Patents # 7066383 & #7156294 regarding Systems for Marketing Prepaid Leisure
and Entertainment Experiences as a variable rate redemption process in the
electronic payment networks.
| Xxxxxxx Xxxx | Date | ||
| Acknowledgment of the Company | Date | ||
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EXHIBIT C
TO
OF
XXXXXXX
XXXX
California
Labor Code
Section
2870. Application of provision providing that employee shall assign
or offer to assign rights in invention to employer.
(a)
Any provision in an employment
agreement which provides that an employee shall assign, or offer to assign,
any
of his or her rights in an invention to his or her employer shall not apply
to
an invention that the employee developed entirely on his or her own time without
using the employer’s equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(1)
Relate at the time of conception
or reduction to practice of the invention to the employer’s business, or actual
or demonstrably anticipated research or development of the
employer.
(2) Result
from any work
performed by the employee for the employer.
(b)
To the extent a provision in an
employment agreement purports to require an employee to assign an invention
otherwise excluded from being required to be assigned under subdivision (a),
the
provision is against the public policy of this state and is
unenforceable.
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