EX-10.1 3 ex101.txt EXHIBIT 10.1 Exhibit 10.1 EXECUTIVE EMPLOYMENT AGREEMENT ------------------------------ 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 MICHAEL HILL (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 ---------- 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 Barbara Corporate Office. 2. JOB DUTIES. Employee's duties shall include, but are not limited to, the ---------- 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 ------------- 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. ---------------------- 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 --------------------------------------------- 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. ------------ 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 -------- (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 ----- days) of paid sick leave during each calendar year. 7. HEALTH INSURANCE. Employee and Employee's dependants shall be ----------------- provided with health insurance coverage or reimbursement at no cost to Employee. 8. VEHICLE & RELATED EXPENSES. During the Term of this Agreement, ----------------------------- 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 -------------------------- 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 --------------- 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 ------------------------------------------------------------ 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 ------------------------- 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 ------- 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 CHARLIE GUGLIUZZA DIRECTOR OF BOARD 30 S. La Patera Lane, Suite 7 Goleta, CA 93117 If to Employee: MICHAEL HILL 304 Sherwood Drive Santa Barbara, CA 93110 14. ASSIGNMENT. This Agreement shall inure to the benefit of and be ---------- 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 ------------- the laws of the State of California. Any and all litigation or arbitration will occur in the State of California, County of Santa Barbara. 16. ARBITRATION - Any disputes arising from this Agreement will be ----------- 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 -------------- 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 ------------------ 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 ------------ 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 -------- -------- COMMERCE PLANET, INC. BY /S/ CHARLIE GUGLIUZZA BY /S/ MICHAEL HILL ----------------------- ------------------ CHARLIE GUGLIUZZA MICHAEL HILL DIRECTOR OF BOARD CHIEF EXECUTIVE OFFICER BY /S/ DAVE FOUCAR --------------------- DAVE FOUCAR DIRECTOR OF BOARD