Exhibit 10.9
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of this ____
day of _____, 1999 between iPARTY CORP., a Delaware corporation having its
principal offices at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
"Company"), and XXX XXXXXXXX, an individual residing at 000 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000 ("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, the
Company shall pay Perisano, during the Employment Term, a base salary (the "Base
Salary"), payable in equal semi-monthly installments in arrears, at the annual
rate of One Hundred Fifty Thousand Dollars ($150,000). The Base Salary shall be
reviewed on an annual basis by the Compensation Committee of the Board of
Directors, with a target annual increase of at least 20% per year, provided that
such increase is consistent with the then current business plan of the Company.
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.
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(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 "Option") for an aggregate of 337,500 shares of common stock of the Company
pursuant to the iParty Stock Option Plan (the "Plan") which Options vest as
follows: provided Perisano remains continuously employed by the Company on March
30, 2000, options for 112,500 shares shall vest on March 30, 2000; provided
Perisano remains continuously employed by the Company on March 30, 2001, options
for 112,500 shall vest on March 30, 2001; and provided Perisano remains
continuously employed by the Company on March 30, 2002, options for 112,500
shares shall vest on March 30, 2002 (the "Options"). The strike price of the
Options is the closing price on the date of grant, which price was $3.75.
In the event that, prior to December 31, 1999, the Company
completes one or more equity financing, Perisano shall be granted additional
common stock options under the Plan (the "Additional Options") equal to 5% of
the number of shares of common stock into which the securities issued in such
equity financing(s) may convert; provided, however, that such Additional Options
will only be granted with respect to securities issued in connection with up to
the first $5,000,000 raised in such equity financing(s). The strike price of
such Additional Options shall be the lower of (i) the conversion price (into
common stock) of the securities issued in the equity financing triggering such
grant, or (ii) the fair market value of the common stock on the date of grant
(which date shall be the date of the closing of the equity financing triggering
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such grant). The Additional Options shall vest in three equal annual
installments so long as Perisano has remained in the continuous employ of the
Company on each such vesting date.
(d) For the first twelve (12) months of the Employment
Term, 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. For the first twelve (12) months of the
Employment Term, 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
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
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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, 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
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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 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
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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.
(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.
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(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, if any, as contemplated by Section 3 and any
accrued and unpaid expenses as contemplated by Section 4.
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(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 Xxxxxxxxx & Xxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn. Xxxxxx X. XxXxxx. 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
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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 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.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
iPARTY CORP.
By:
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Name: Xxxxxx X. XxXxxx
Title: Secretary
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Xxx Xxxxxxxx
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