Free Commission Agreement Template

PARTIES

This Commission Agreement ("Agreement") is entered into as of April 1, 2026 by and between:

Pinnacle Sales Corp., with its principal place of business at 500 Commerce Drive, Suite 200, Dallas, TX 75201 ("Company"), represented by John Mitchell, Vice President of Sales, and

Sarah Johnson, residing at 1824 Oak Lane, Plano, TX 75024 ("Sales Representative" or "Representative").

Company and Sales Representative may be referred to individually as a "Party" and collectively as the "Parties." The Parties intend that this writing shall constitute the written contract of employment required, where applicable, under Cal. Labor Code §§2751–2752, and shall satisfy analogous state statutes governing sales representative agreements (e.g., Ill. 820 ILCS 120 §§0/1 et seq.; Mass. G.L. c. 104 §7; Md. Com. Law §12-202; N.J. Stat. §2A:61A-1; Tex. Bus. and Com. Code ch. 54).

ENGAGEMENT AND RELATIONSHIP

Company hereby engages the Sales Representative as an independent contractor to promote, market, and sell the Company's products and/or services (the "Products") in accordance with the terms and conditions set forth in this Agreement.

The Sales Representative is an independent contractor and is not an employee, partner, agent, or joint venturer of the Company. The Representative shall not be entitled to any employee benefits, including but not limited to health insurance, retirement plans, workers' compensation, or unemployment insurance. The Representative shall be solely responsible for all federal, state, and local taxes arising from compensation received under this Agreement, including self-employment taxes, Social Security, and Medicare contributions. Compensation paid under this Agreement shall be reported by the Company on IRS Form 1099-NEC in accordance with IRC §6041A where reporting thresholds are met.

The Representative retains full control over the manner and means of performing sales activities, including setting their own schedule, determining sales methods, and choosing which prospects to contact, provided that the Representative complies with Company policies regarding product representation and brand guidelines. The Parties acknowledge the Restatement (Third) of Agency §8.14 principles governing the fiduciary duty of an agent to its principal and intend that worker classification under this Agreement be evaluated consistent with the economic-reality test articulated in 29 C.F.R. Part 795 (2024) and applicable state analogs.

TERRITORY

The Company grants the Sales Representative the right to sell and promote the Products within the following geographic territory ("Territory"): Texas, Oklahoma, Arkansas, Louisiana.

The Representative shall focus their sales efforts within the designated Territory. Unless otherwise agreed in writing, the Company reserves the right to appoint additional representatives or to sell directly within the same Territory. The Representative shall not actively solicit customers outside the designated Territory without prior written consent from the Company.

The Company reserves the right to modify the Territory upon thirty (30) days' written notice to the Representative, provided that any modification shall not affect commissions earned on sales already completed or in progress within the original Territory.

COMMISSION STRUCTURE

In consideration for the sales services provided under this Agreement, the Company shall pay the Sales Representative a commission of 10% calculated on gross sales generated by the Representative ("Base Commission Rate").

Commission Calculation: Commissions shall be calculated based on the total gross sales amount invoiced to customers, before any deductions for returns, allowances, discounts, or credits.

Qualifying Sales: A sale shall be deemed "qualifying" for commission purposes when the following conditions are met: (a) the sale was directly generated or facilitated by the Representative (consistent with the "procuring cause" doctrine recognized in, e.g., Reed v. Kurdziel, 352 Mich. 287 (1958)); (b) the customer's order has been accepted by the Company; and (c) full payment has been received from the customer. Commissions on partial payments shall be prorated accordingly. Where the Representative is the procuring cause of a sale consummated after termination, post-termination commission obligations set forth below shall apply notwithstanding the general rule above.

Minimum Sales Quota: The Representative shall use commercially reasonable efforts to achieve a minimum sales quota of 75,000.00 USD per calendar quarter. Failure to meet the minimum quota for two (2) consecutive quarters may, at the Company's sole discretion, result in termination of this Agreement, reduction of Territory, or modification of commission terms upon thirty (30) days' written notice.

Draw Against Commission: Unless otherwise agreed in writing, no draw against future commissions shall be provided. If the Company agrees to provide a draw, the terms shall be documented in a separate written addendum to this Agreement.

PAYMENT TERMS

Payment Schedule: Commissions shall be calculated and paid on a monthly basis. Commission statements shall be provided to the Representative with each payment, detailing the sales transactions, commission amounts, and any adjustments or deductions.

Payment Method: Commission payments shall be made via direct deposit, company check, or electronic funds transfer to the account designated by the Representative. The Company shall provide commission statements no later than five (5) business days after each payment period closes, and payment shall be issued within ten (10) business days thereafter. Timing of commission payments shall also comply with any applicable state statute, including N.J. Stat. §2A:61A-1 et seq. (authorizing treble damages and attorneys' fees for commissions wrongfully withheld), Ill. 820 ILCS 120/2, Md. Com. Law §12-202, Mass. G.L. c. 104 §7, and Tex. Bus. and Com. Code ch. 54.

Disputed Commissions: If the Representative disputes any commission calculation, the Representative must submit a written objection to the Company within thirty (30) days of receiving the commission statement. The Company shall review and respond to the objection within fifteen (15) business days. During the dispute resolution period, undisputed portions of the commission shall be paid as scheduled.

Chargebacks and Adjustments: If a customer cancels an order, returns Products, or fails to pay for Products sold by the Representative, the Company may deduct the corresponding commission from future commission payments. Such adjustments shall be itemized on the Representative's commission statement.

REPRESENTATIVE OBLIGATIONS

The Sales Representative agrees to the following obligations during the term of this Agreement:

• Represent the Company's Products honestly and accurately, and refrain from making any false, misleading, or unauthorized representations regarding the Products, pricing, warranties, or Company policies.
• Comply with all applicable federal, state, and local laws and regulations governing the sale and marketing of the Products, including consumer protection laws, anti-bribery statutes, and trade regulations.
• Maintain regular communication with the Company regarding sales activities, customer feedback, and market conditions within the designated Territory.
• Submit sales reports in the format and frequency specified by the Company, including pipeline status, customer contact logs, and forecast projections.
• Protect and maintain the confidentiality of all Company proprietary information, customer data, pricing strategies, and trade secrets.
• Not engage in any activity that would bring the Company or its Products into disrepute or that would create a conflict of interest with the Representative's obligations under this Agreement.
• Return all Company materials, samples, equipment, and proprietary information upon termination of this Agreement.

COMPANY OBLIGATIONS

The Company agrees to the following obligations during the term of this Agreement:

• Provide the Sales Representative with adequate product information, sales materials, pricing schedules, and training necessary to effectively promote and sell the Products.
• Process customer orders in a timely manner and fulfill orders within the Company's standard delivery timelines.
• Notify the Representative promptly of any material changes to product offerings, pricing, availability, or terms and conditions that may affect the Representative's sales activities.
• Maintain accurate records of all sales transactions attributable to the Representative and provide transparent commission statements in accordance with the payment schedule.
• Handle all customer service inquiries, warranty claims, returns, and post-sale support, unless otherwise agreed in writing.

TIERED COMMISSION SCHEDULE

In addition to the Base Commission Rate, the Company shall apply the following tiered commission structure based on cumulative sales volume within each calendar quarter:

• Tier 1: Up to 25,000.00 USD — 8% commission rate
• Tier 2: 25,000.00 USD to 75,000.00 USD — 12% commission rate
• Tier 3: Above 150,000.00 USD — 15% commission rate

Tiered rates shall apply to the incremental sales within each tier bracket. Tier thresholds reset at the beginning of each calendar quarter unless otherwise specified.

SIGNING BONUS

Upon execution of this Agreement, the Company shall pay the Sales Representative a one-time signing bonus of 5,000.00 USD. The signing bonus shall be paid within fifteen (15) business days of the Effective Date.

If the Representative voluntarily terminates this Agreement or is terminated for cause within the first six (6) months of the Effective Date, the Representative shall repay the signing bonus in full within thirty (30) days of the termination date.

PERFORMANCE BONUS

In addition to the commission structure described above, the Sales Representative shall be eligible for an annual performance bonus based on the following criteria:

5% annual bonus on total sales exceeding $500,000. Additional 2% bonus for achieving 120% or more of annual quota.

Performance bonuses shall be calculated at the end of each calendar year and paid within thirty (30) days of the calculation date. The Company reserves the right to modify the bonus criteria for subsequent years upon sixty (60) days' written notice to the Representative.

CLAWBACK PROVISION

The Company reserves the right to recover ("clawback") commissions previously paid to the Sales Representative under the following circumstances:

• Customer Cancellation: If a customer cancels an order or terminates a contract within sixty (60) days of the original sale date, the Company may recover the commission paid on that sale in full.
• Customer Non-Payment: If a customer fails to make full payment within ninety (90) days of the invoice date, the Company may recover the commission attributable to the unpaid portion.
• Product Returns: If Products are returned within the applicable return period, the commission on the returned items shall be deducted from future commission payments.
• Fraudulent Sales: If a sale is determined to have been procured through fraud, misrepresentation, or violation of Company policies, the full commission on that sale shall be immediately recoverable, without regard to the clawback period.

Clawback amounts shall be deducted from future commission payments. If the Representative's future commissions are insufficient to cover the clawback amount, the Representative shall reimburse the Company within thirty (30) days of written demand. The clawback period for standard transactions is sixty (60) days from the date of the original sale.

TERM AND TERMINATION

Term: This Agreement shall commence on April 1, 2026 and shall continue for one (1) year. This Agreement shall automatically renew for successive periods of equal duration unless either Party provides written notice of non-renewal at least thirty (30) days' prior to the end of the then-current term.

Termination Without Cause: Either Party may terminate this Agreement at any time by providing thirty (30) days' written notice to the other Party.

Termination for Cause: Either Party may terminate this Agreement immediately upon written notice if the other Party: (a) materially breaches any provision of this Agreement and fails to cure such breach within fifteen (15) days of receiving written notice; (b) becomes insolvent, files for bankruptcy, or has a receiver appointed for its assets; (c) engages in fraud, dishonesty, or illegal activity in connection with this Agreement; or (d) violates the Company's code of conduct or ethics policies in a material way.

Effect of Termination: Upon termination, the Representative shall immediately cease all sales activities on behalf of the Company, return all Company materials, samples, proprietary information, and customer data, and cooperate with the Company to ensure an orderly transition of customer relationships.

POST-TERMINATION COMMISSIONS

Following the termination of this Agreement for any reason, the Sales Representative shall be entitled to receive commissions on qualifying sales that meet all of the following criteria:

• The sale was initiated and substantially negotiated by the Representative prior to the termination date.
• The customer's order is received by the Company within thirty (30) days following the effective date of termination (the "Tail Period").
• The customer makes full payment for the Products within the Company's standard payment terms.

After the expiration of the Tail Period, no further commissions shall be owed to the Representative. Commission payments for post-termination sales shall be made in accordance with the regular payment schedule set forth in this Agreement.

NON-COMPETE

During the term of this Agreement, the Sales Representative agrees not to directly or indirectly engage in the sale, promotion, or marketing of products or services that are substantially similar to or competitive with the Company's Products within the designated Territory. This restriction applies whether the Representative acts on their own behalf, as an employee, consultant, or agent of another entity, or through any business in which the Representative has an ownership interest.

The Representative acknowledges that this non-compete restriction is reasonable in scope, duration, and geographic area, and is necessary to protect the Company's legitimate business interests, including its customer relationships, trade secrets, and proprietary information. The Parties acknowledge that enforceability of non-competition covenants varies by state; this provision shall not apply to the extent prohibited by applicable law (including, e.g., Cal. Bus. and Prof. Code §16600; N.D. Cent. Code §9-08-06; Okla. Stat. tit. 15 §219A; Minn. Stat. §181.988). If any court of competent jurisdiction determines that this provision is unreasonable in any respect, the court is authorized to modify (blue-pencil) such provision to the minimum extent necessary to make it enforceable.

NON-SOLICITATION

For a period of twelve (12) months following the termination of this Agreement, the Sales Representative agrees not to, directly or indirectly:

• Solicit, contact, or attempt to do business with any customer or prospective customer of the Company with whom the Representative had contact or about whom the Representative obtained confidential information during the term of this Agreement.
• Recruit, solicit, or induce any employee, contractor, or other sales representative of the Company to terminate their relationship with the Company.
• Interfere with or attempt to disrupt the Company's business relationships with its customers, suppliers, or business partners.

The Representative acknowledges that this non-solicitation restriction is reasonable and necessary to protect the Company's customer relationships and business goodwill.

DISPUTE RESOLUTION

Any dispute, controversy, or claim arising out of or relating to this Agreement, including disputes regarding commission calculations, shall be resolved as follows:

Binding Arbitration: Any dispute that cannot be resolved through good-faith negotiation within thirty (30) days shall be submitted to binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules. The arbitration shall be conducted in the State of Texas. The arbitrator's decision shall be final and binding, and judgment upon the award may be entered in any court of competent jurisdiction. Each Party shall bear its own costs of arbitration, and the Parties shall equally share the arbitrator's fees.

CONFIDENTIALITY

The Sales Representative acknowledges that during the term of this Agreement, the Representative will have access to and become acquainted with confidential and proprietary information belonging to the Company, including but not limited to: customer lists and contact information, pricing strategies and discount structures, sales data and revenue figures, marketing plans and product development roadmaps, trade secrets and business methods, and supplier and vendor relationships ("Confidential Information"). Trade-secret obligations hereunder are enforceable under the federal Defend Trade Secrets Act, 18 U.S.C. §1836 et seq., and applicable state trade-secret law.

The Representative agrees to: (a) hold all Confidential Information in strict confidence and not disclose it to any third party without the prior written consent of the Company; (b) use Confidential Information solely for the purpose of performing their obligations under this Agreement; (c) take all reasonable precautions to prevent unauthorized disclosure or use of Confidential Information; and (d) promptly notify the Company of any unauthorized disclosure or use of Confidential Information that comes to the Representative's attention.

DTSA Whistleblower Notice (18 U.S.C. §1833(b)): An individual shall not be held criminally or civilly liable under any federal or state trade-secret law for disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

This confidentiality obligation shall survive the termination of this Agreement for a period of two (2) years following the date of termination. Upon termination, the Representative shall return or destroy all materials containing Confidential Information and certify in writing that all such materials have been returned or destroyed.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of Texas, without regard to its conflict of laws principles. Any legal action or proceeding arising under this Agreement shall be brought exclusively in the courts located in the State of Texas, and the Parties hereby consent to personal jurisdiction and venue therein.

ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written. No amendment or modification of this Agreement shall be valid unless made in writing and signed by both Parties.

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it enforceable, and the remaining provisions shall continue in full force and effect. The waiver by either Party of any breach of this Agreement shall not constitute a waiver of any subsequent breach.

This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart by electronic means shall be as effective as delivery of an original executed counterpart.