EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of this ____ day
of October, 1999 between iPARTY CORP., a Delaware corporation having its
principal offices at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and ▇▇▇ ▇▇▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Perisano").
W I T N E S S E T H :
WHEREAS, the Company desires to employ Perisano and Perisano desires
to be employed by the Company as its Chief Executive Officer upon the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company hereby
employs Perisano and Perisano agrees to serve the Company as its Chief Executive
Officer upon the terms and conditions contained herein, for a term commencing
retroactively as of March 30, 1999 and continuing until the close of business on
March 30, 2002 (unless terminated sooner pursuant to the provisions hereof, the
"Employment Term"). So long as Perisano is Chief Executive Officer of the
Company, he shall be nominated to serve as a Director of the Company.
2. Duties and Powers as Employee. During the Employment Term,
Perisano shall be employed by the Company as its Chief Executive Officer.
Perisano agrees to devote substantially
all his full working time, energy and efforts to the business of the Company,
provided, however, that Perisano may continue fulfill his duties and obligations
to The Big Party Corporation as a consultant and a member of its board of
directors. As Chief Executive Officer of the Company, Perisano shall be in
charge of all business operations of the Company including but not limited to
directing and supervising all day-to-day operations of the Company, and managing
and supervising its employees. All employees shall report to Perisano. Perisano
shall be based in New York City and shall be available to travel as the needs of
the Company require.
3. Compensation.
(a) As compensation for his services hereunder, during the
Employment Term, the Company shall pay Perisano a base salary (the "Base
Salary"), payable in equal semi-monthly installments in arrears, at the initial
annual rate of One Hundred Fifty Thousand Dollars ($150,000); commencing January
1, 2000, the Base Salary payable to Perisano by the Company shall be increased
to the annual rate of Two Hundred Fifty Thousand Dollar ($250,000).
Additionally, Perisano shall be entitled to participate in the present or future
employee benefit plans of the Company provided that he meets the eligibility
requirements therefor.
(b) In addition to the Base Salary provided herein, Perisano
may be entitled to receive an annual performance bonus payment as determined in
the sole discretion of the Compensation Committee of the Board of Directors of
the Company.
(c) On March 30, 1999, Perisano was granted stock options (the
"Initial Options") for an aggregate of 337,500 shares of common stock of the
Company pursuant to the iParty Stock Option Plan (the "Plan") which Initial
Options vest as follows: provided Perisano remains continuously employed by the
Company through March 30, 2000, options for 112,500 shares shall vest on March
30, 2000; provided Perisano remains continuously
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employed by the Company through March 30, 2001, options for an additional
112,500 shares shall vest on March 30, 2001; and provided Perisano remains
continuously employed by the Company through March 30, 2002, options for the
final 112,500 shares shall vest on March 30, 2002. The strike price of the
Initial Options is the closing price on the date of grant, which price was $3.75
per share.
(d) On August 26, 1999, Perisano was granted additional stock
options (the "Additional Options") for an aggregate of 434,730 shares of common
stock of the Company pursuant to the Plan which Additional Options vest as
follows: provided Perisano remains continuously employed by the Company through
August 26, 2000, options for 144,910 shares shall vest on August 26, 2000;
provided Perisano remains continuously employed by the Company through August
26, 2001, options for an additional 144,910 shares shall vest on August 26,
2001; and provided Perisano remains continuously employed by the Company through
August 26, 2002, options for the final 144,910 shares shall vest on August 26,
2002. The strike price of the Additional Options is $2.00 per share.
(e) Through March 30, 2000, the Company will provide Perisano
with temporary housing in the New York City area. The parties agree that such
temporary housing may be used, at the option of the Company, by persons other
than Perisano. The parties agree that the cost of such temporary housing shall
not exceed $2,500 per month and shall be paid directly by the Company. Through
March 30, 2000, the Company shall reimburse Perisano for all of his reasonable
commuting expenses relating to his travel to New York as required by the
Company.
4. Expenses; Vacations. Perisano shall be entitled to reimbursement
for reasonable travel and other out-of-pocket expenses necessarily incurred in
the performance of his duties hereunder, upon submission and approval of written
statements and bills in accordance with the then regular
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procedures of the Company. Perisano shall be entitled to vacation time in
accordance with the regular procedures of the Company governing senior executive
officers as determined from time to time by the Company's Board of Directors.
Perisano also shall be eligible to participate in all medical, health and
disability benefit programs provided to senior executives of the Company.
5. Representations and Warranties of Employee. Perisano represents
and warrants to the Company that (a) Perisano is under no contractual or other
restriction or obligation which is inconsistent with the execution of this
Agreement, the performance of his duties hereunder, or the other rights of the
Company hereunder; and (b) Perisano is under no physical or mental disability
that would hinder his performance of duties under this Agreement.
6. Representations and Warranties of the Company. The Company
represents and warrants to Perisano that (i) pursuant to the Delaware General
Corporation Law, the Company's Certificate of Incorporation provides for
indemnification of officers and directors of the Company and that so long as
Perisano serves as Chief Executive Officer of the Company it will not be amended
to limit such indemnification without Perisano's written consent, and (ii) the
Company maintains an officers and directors liability insurance policy and will
maintain such a policy for so long as Perisano serves as Chief Executive Officer
of the Company.
7. Non-Competition. Perisano agrees that he will not (a) during the
period he is employed by the Company engage in, or otherwise directly or
indirectly be employed by, or act as a consultant or lender to, or be a
director, officer, employee, owner or partner of, any other business or
organization that is or shall then be competing with the Company, and (b) for a
period of one year after he ceases to be employed by the Company, directly or
indirectly compete with or be engaged in the same business as the Company, or be
employed by, or act as consultant or lender to, or be a director,
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officer, employee, owner or partner of, any business or organization which, at
the time of such cessation, competes with or is engaged in the same business as
the Company, except that in each case the provisions of this Section 7 will not
be deemed breached merely because Perisano owns not more than five percent
(5.0%) of the outstanding common stock of a corporation, if, at the time of its
acquisition by Perisano, such stock is listed on a national securities exchange,
is reported on NASDAQ, or is regularly traded in the over-the-counter market by
a member of a national securities exchange. Nothing in this Section 7 shall
preclude Perisano from continuing in his role as a director and consultant to
The Big Party Corporation or being a stockholder of The Big Party Corporation,
provided, however, that it is agreed and understood that Perisano may not be
employed by The Big Party Corporation in the event it acquires a presence on the
World Wide Web that competes with or is engaged in the same business as the
Company.
8. Confidential Information. All confidential information which
Perisano may now possess, may obtain during the Employment Term, or may create
prior to the end of the period he is employed by the Company, relating to the
business of the Company or of any customer or supplier of the Company shall not
be published, disclosed, or made accessible by him to any other person, firm, or
corporation during the Employment Term or any time thereafter without the prior
written consent of the Company. Perisano shall return all tangible evidence of
such confidential information to the Company prior to or at the termination of
his employment.
9. Termination.
(a) Notwithstanding anything herein contained, if on or after
the date hereof and prior to the end of the Employment Term, Perisano is
terminated "For Cause" (as defined below) then the Company shall have the right
to give notice of termination of Perisano's services hereunder as of
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a date to be specified in such notice, and this Agreement shall terminate on the
date so specified. Termination "For Cause" shall mean Perisano shall (i) be
convicted of a felony crime, (ii) commit any act or omit to take any action in
bad faith and to the detriment of the Company, (iii) intentionally fail to
follow any commercially reasonable and lawful direction of the Board of
Directors and continue to fail to follow such direction within three (3) days of
written notification of same, (iv) commit an act of fraud against the Company,
or (v) breach any term of this Agreement and fail to correct such breach within
ten (10) days after written notice of commission thereof.
(b) In the event that Perisano shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his duties
hereunder, with reasonable accommodation, for a period of six months, then this
Agreement shall terminate upon thirty (30) days' written notice to Perisano, and
no further compensation shall be payable to Perisano, except for any accrued and
unpaid Base Salary and bonus, if any, as contemplated under Section 3, and any
accrued and unpaid expenses as contemplated under Section 4 and as may otherwise
be provided under any disability insurance policy, if any.
(c) In the event that Perisano shall die, then this Agreement
shall terminate on the date of Perisano's death, and no further compensation
shall be payable to Perisano, except for any accrued and unpaid Base Salary and
bonus, if any, as contemplated under Section 3 and any accrued and unpaid
expenses as contemplated under Section 4 and as may otherwise be provided under
any insurance policy or similar instrument.
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(d) In the event that this Agreement is terminated "For Cause"
pursuant to Section 8(a), then Perisano shall be entitled to receive only the
Base Salary at the rate provided in Section 3 to the date on which termination
shall take effect.
(e) In the event that the Company terminates Perisano for any
reason other than as provided under Section 9(a), (b), (c) or (d), then this
Agreement shall terminate upon thirty (30) days' written notice to Perisano and
the Company shall be obligated to pay to Perisano an amount equal to any unpaid
expenses as contemplated under Sections 4 and a severance payment equal to nine
(9) months salary at the Base Salary then in effect, payable in nine (9) equal
monthly installments; in addition, for such nine (9) month period, Perisano
shall be entitled to continue to receive his then current medical benefits. If
this Agreement is not renewed at the end of the Employment Term, such
non-renewal shall not be deemed a termination of this Agreement without cause.
(f) Nothing contained in this Section 9 shall be deemed to
limit any other right the Company may have to terminate Perisano's employment
hereunder upon any ground permitted by law.
(g) In the event that Perisano desires to resign voluntarily
as Chief Executive Officer, Perisano covenants to provide the Company with not
less than thirty (30) days written notice of any such voluntary resignation; and
further Perisano covenants to cooperate in good faith in order to facilitate a
smooth transfer of authority during the period from notice of resignation to the
date of termination. In the event that this Agreement is terminated by Perisano
pursuant to this Section 9(g), then Perisano shall be entitled to receive an
amount payable in a lump sum within ten (10) business days following the date of
termination, equal to the sum of any accrued and unpaid Base Salary and bonus,
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if any, as contemplated by Section 3 and any accrued and unpaid expenses as
contemplated by Section 4.
(h) Notwithstanding anything herein to the contrary, Perisano
may, upon thirty (30) days written notice, terminate this Agreement for "Good
Reason". "Good Reason" shall mean any material breach by the Company of its
obligations hereunder which are not cured within ten (10) days following receipt
of written notice from Perisano detailing such breach. The parties agree that a
material breach shall include, but not be limited to, (x) any reduction in
Perisano's duties, authority, reporting relationships or responsibilities
(whether or not accompanied by a title change), and (y) the relocation of the
principal executive offices of the Company a distance of more than 35 miles from
its current location. In the event Perisano terminates this Agreement pursuant
to this Section 9(h), the Company shall be obligated to pay to Perisano an
amount equal to any unpaid expenses as contemplated under Section 4 and a
severance payment equal to nine (9) months salary at the Base Salary then in
effect, payable in nine (9) equal monthly installments; in addition, for such
nine (9) month period, Perisano shall be entitled to continue to receive his
then current medical benefits
10. Merger, Etc. In the event of a future disposition of the
properties and business of the Company, substantially as an entirety, by merger,
consolidation, sale of assets, sale of stock, or otherwise, then the Company may
elect to assign this Agreement and all of its rights and obligations hereunder
to the acquiring or surviving entity.
11. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Perisano's termination of employment, irrespective of any investigation made by
or on behalf of any party.
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12. Modification. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested, or delivered against receipt to the party to whom it
is to be given at the address of such party set forth in the preamble to this
Agreement (or to such other address as the party shall have furnished in writing
in accordance with the provisions of this Section 13). In the case of a notice
to the Company, a copy of such notice (which copy shall not constitute notice)
shall be delivered to Camhy ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Notice to the estate of
Perisano shall be sufficient if addressed to Perisano as provided in this
Section 13. Any notice or other communication given by certified mail shall be
deemed given at the time of certification thereof, except for a notice changing
a party's address which shall be deemed given at the time of receipt thereof.
14. Waiver. Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
15. Binding Effect. Perisano's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to encumbrance or the
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claims of Perisano's creditors, and any attempt to do any of the foregoing shall
be void. The provisions of this Agreement shall be binding upon and inure to the
benefit of Perisano and his heirs and personal representatives, and shall be
binding upon and inure to the benefit of the Company and its successors and
those who are its assigns under Section 10.
16. Termination of Prior Agreement. This Agreement terminates and
supercedes any and all prior agreements and understandings between the parties
with respect to employment with or compensation of Perisano by the Company,
including the letter consulting agreement dated September 28, 1999.
16. Headings. The headings in this Agreement are solely for the
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
17. Counterparts; Governing Law. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. It shall be
governed by, and construed in accordance with, the laws of the State of New
York, without giving effect to the rules governing the conflicts of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
iPARTY CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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