Exhibit 10.1
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
This First Amendment to Employment Agreement (this "Amendment") is made
and entered into as of December 30, 2008 by and between iParty Corp., a Delaware
corporation (the "Company"), and Xxx Xxxxxxxx (the "Executive").
WHEREAS, the Company and the Executive entered into an Employment
Agreement dated as of March 22, 2007 (the "Agreement"); and
WHEREAS, the Company and the Executive desire to modify the terms and
conditions of the Agreement as set forth below.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Agreement as follows:
1. Amendment to ss.11(e) of the Agreement. Section 11(e) of the
Agreement is hereby amended by deleting Section 11(e) in its entirety and
replacing it with the following:
"Termination Without Cause. In the event that the Company terminates
the Executive for any reason other than as provided under Section 11(a), 11(b),
11(c) or 11(d), then the Executive's employment shall terminate upon thirty (30)
days' written notice to the Executive and, the Company shall be obligated to pay
to the Executive Base Salary earned, but not yet paid to the Executive, prior to
the date of such termination in accordance with Section 3(a), and reimburse the
Executive for any accrued vacation and unpaid expenses incurred by the Executive
through the date of termination in accordance with Section 5, and any Accrued
Bonus Payments. In addition, subject to the provisions of Section 11(i) hereof
and the Executive's compliance (and continued compliance) with the provisions of
Sections 7, 8 and 9 hereof, (i) the Company shall pay to the Executive a
severance payment equal to twelve (12) months salary at the Base Salary then in
effect, payable in twelve (12) equal monthly installments and (ii) for such
twelve (12) month period, the Executive shall be entitled to continue to receive
his then current health, life and disability insurance benefits or, in the case
of health insurance benefits, payment by the Company of applicable "COBRA"
payments (collectively (i) and (ii) are called the "Severance Payments"). The
Severance Payments shall commence no earlier than seven (7) working days after
the Company receives the executed release and resignations required under
Section 11(i) and no later than 60 days after the date of the Executive's
termination, the exact payment date to be determined by the Company in its sole
discretion, provided that the Executive timely executes and returns the release
and does not subsequently revoke such execution. In no event shall any Severance
Payments hereunder be made to the Executive later than December 31 of the second
calendar year following his termination."
2. Amendment to ss.11(f) of the Agreement. Section 11(f) of the
Agreement is hereby amended by deleting Section 11(f) in its entirety and
replacing it with the following:
"Change of Control. Subject to the provisions of Sections
11(i) and 11(j), in the event that the Company shall terminate this Agreement
and the Executive's employment hereunder pursuant to the provisions of Section
11(e) within thirteen (13) months following a Change in Control (as defined
below) or the Executive shall terminate this Agreement and the Executive's
employment hereunder for Good Reason (as defined in Section 11(h)) within
thirteen (13) months following a Change in Control, then, in lieu of (and not in
addition to) the amounts to be paid (and benefits to be provided) by the Company
pursuant to Section 11(e) or Section 11(h), the Company shall have no further
obligations under this Agreement to the Executive other than the obligation to:
(i) pay to the Executive Base Salary earned, but not yet paid to the Executive,
prior to the date of such termination in accordance with Section 3(a), (ii)
reimburse the Executive for any accrued vacation and unpaid expenses incurred by
the Executive through the date of termination in accordance with Section 5, and
pay any Accrued Bonus Payments and (iii) subject to the provisions of Sections
11(i) and 11(j), pay to the Executive a lump sum amount equal to the product of
(1) the Executive's Base Salary then in effect and (2) a fraction, the numerator
of which is the number of days remaining from the date the termination occurred
through the end of the Employment Term, but, subject to the provisions of
Section 11(j), in no event less than 912, and the denominator of which is 365.
In addition, for the twelve (12) month period following the date of such
termination, the Executive shall be entitled to continue to receive his then
current health, life and disability insurance benefits or, in the case of health
insurance benefits, payment by the Company of applicable "COBRA" payments. Such
lump sum payment set forth above shall be made no later than 75 days after the
date of termination hereunder, the exact payment date to be determined by the
Company in its sole discretion, provided that the Executive timely complies with
Section 11(i) and has not subsequently revoked such release thereunder.
"As used in this Agreement, "Change in Control" shall mean the
occurrence of any one of the following events:
(i) any Person other than an employee benefit plan of the
Company or of any wholly-owned subsidiary of the Company
becomes the owner of 50% or more of the combined voting power
of the Company's then outstanding voting securities and
thereafter individuals who were not directors of the Company
prior to the date such Person became a 50% owner are elected
as directors pursuant to an arrangement or understanding with,
or upon the request of or nomination by, such Person and
constitute at least one-half of the Board; provided, however,
such acquisition of ownership shall not constitute a Change of
Control if the Executive or an Executive Related Party is the
Person or a member of a group constituting the Person
acquiring such ownership; or
(ii) there occurs any solicitation or series of solicitations
of proxies by or on behalf of any Person other than the Board
and thereafter individuals who were not directors of the
Company prior to the commencement of such solicitation or
series of solicitations are elected as directors pursuant to
an arrangement or understanding with, or upon the request of
or nomination by, such Person and constitute at least one-half
of the Board of Directors; or
(iii) the Company executes an agreement of sale, merger or
consolidation which contemplates that (x) after the effective
date provided for in such agreement, all or substantially all
of the business and/or assets of the Company shall be owned,
leased or otherwise controlled by another Person and (y)
individuals who are directors of the Company when such
agreement is executed shall not constitute at least one-half
of the board of directors of the survivor or successor entity
immediately after the effective date provided for in such
agreement; provided, however, that for purposes of this
paragraph (iii), if such agreement requires as a condition
precedent approval by the Company's shareholders of the
agreement or transaction, a Change of Control shall not be
deemed to have taken place unless and until such approval is
secured (but upon any such approval, a Change of Control shall
be deemed to have occurred on the effective date of such
agreement)."
"Executive Related Party" shall mean any Affiliate or Associate of the
Executive other than the Company or a Subsidiary of the Company. The terms
"Affiliate" and "Associate" shall have the meanings ascribed thereto in Rule
12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(the term "registrant" in the definition of "Associate" meaning, in this case,
the Company).
"Person" shall have the meaning used in Section 13(d) of the Exchange
Act, as in effect on the date hereof."
3. Amendment to ss.11(h) of the Agreement. Section 11(h) of the
Agreement is hereby amended by deleting Section 11(h) in its entirety and
replacing it with the following:
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"Good Reason. The Executive may, upon thirty (30) days written notice,
terminate his employment with the Company for "Good Reason". "Good Reason" shall
mean any material breach by the Company of its obligations hereunder which are
not cured within thirty (30) days following receipt of written notice from the
Executive detailing such breach and such notice is sent by the Executive within
thirty (30) days after the occurrence of such an event. The parties agree that a
material breach shall mean (x) any material diminution in the Executive's
duties, authority, reporting relationships or responsibilities (whether or not
accompanied by a title change) not consented to by the Executive, other than a
Permitted Change, and (y) the relocation of the principal executive offices of
the Company a distance of more than 35 miles from its current location not
consented to by the Executive. Notwithstanding the foregoing or anything to the
contrary contained herein, the Executive shall not be entitled to terminate his
employment for "Good Reason" (1) in connection with a Permitted Change, or (2)
at any time during the Extension Period or the Transition Period, for any
reason. In the event that the Executive terminates his employment with the
Company for Good Reason, the Company shall be obligated to pay to the Executive
Base Salary earned, but not yet paid to the Executive, prior to the date of such
termination in accordance with Section 3(a), reimburse the Executive for any
accrued vacation and unpaid expenses incurred by the Executive through the date
of termination in accordance with Section 5 and pay any Accrued Bonus Payments.
In addition, subject to the provisions of Section 11(i) hereof, and the
Executive's compliance (and continued compliance) with the provisions of
Sections 7, 8 and 9 hereof, and so long as the Executive's termination of
employment shall occur within two (2) years following the initial existence of
one or more of the foregoing conditions constituting Good Reason hereunder, the
Company shall pay and provide to the Executive the Severance Payments."
4. Amendment to ss.11(k) of the Agreement. Section 11(k) of the
Agreement is hereby amended by deleting Section 11(k) in its entirety and
replacing it with the following:
"Coordination with Section 409A of the Code. Notwithstanding anything
to the contrary set forth in this Section 11, in the event that the Executive is
determined to be a "key employee" as defined by Section 416(i) of the Code
(without regard to paragraph 5), to the extent necessary to comply with Section
409A of the Code and the Treasury Regulations thereunder, any payments or
distributions due the Executive under this Agreement as a result of or following
any separation from service shall not be made before the date which is 6 months
after the date of separation from service (or if earlier, the date of death of
the Executive). All payments that would have been made to the Executive during
such six (6) month period shall be made in a lump sum on the date six (6) months
and two days after the Executive's date of separation from service and all
remaining payments (if any) shall commence on the next regular payroll date in
the seventh (7th) month following the Executive's date of separation from
Service. Notwithstanding anything to the contrary contained in this Agreement,
Executive's termination of employment shall occur only upon his "separation from
service" within the menaing of Treasury Regulations Section 1.409A-1(h). For all
purposes of Section 409A of the Code and the related Treasury Regulations, the
Executive's entitlement to severance pay pursuant to this Agreement shall be
treated as an entitlement to a series of separate payments. All payments and
benefits provided under this Agreement are intended to either comply with or be
exempt from Section 409A of the Code and the terms hereof shall be administered
and construed accordingly, provided that nothing in this Agreement shall
constitute an agreement not to withhold any sums required under Section 409A or
to assume any liability for withholdings necessary under Section 409A."
4. Ratification. Except as expressly amended hereby, the Agreement is
hereby ratified and confirmed in all respects and shall continue in full force
and effect. This Amendment and the Agreement shall hereafter be read and
construed together as a single document, and all references in the Agreement
shall hereafter refer to the Agreement as amended by this Amendment.
5. Amendments; Governing Law.This Amendment may not be changed orally
but only by a written instrument signed by the parties hereto. This Amendment
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts without giving effect to the rules governing the
conflicts of laws.
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6. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
iParty Corp.
By: /s/ XXXXX X. XXXXXXXXX
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Name: Xxxxx X. Xxxxxxxxx.
Title: Vice President, Chief Financial Officer
EXECUTIVE:
/s/ XXX XXXXXXXX
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Xxx Xxxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx XX 00000
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