EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of this
6th day of July, 1998, between iParty Corp., a Delaware corporation having its
principal offices at 1350 Avenue of the Americas, Xxxxx 0000, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company"), and Xxxxxxx Xxxxxxxxx Xxxxxx, an individual
residing at 000 Xxxxxxxx Xxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000 (the
"Employee").
W I T N E S E T H:
WHEREAS, the Company desires to employ the Employee and the
Employee desires to be employed by the Company as its President 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 the Employee and the Employee agrees to serve the Company as
its President upon the terms and conditions contained herein, for a three year
term commencing as of July 6, 1998 and continuing until July 6, 2001 (the
"Employment Term").
2. Duties and Powers as Employee. During the Employment
Term, the Employee shall be employed by the Company as its President. The
Employee agrees to devote substantially all her full working time, energy and
efforts to the business of the Company. In the
performance of her duties, the Employee shall be subject to the direction of
the Board of Directors of the Company. The Employee shall be available to
travel as the needs of the business require.
3. Compensation.
(a) As compensation for her services hereunder, the
Company shall pay the Employee, 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). Additionally,
the Employee shall be entitled to participate in the present or future
employee benefit plans of the Company provided that she meets the eligibility
requirements therefor.
(b) The Employee shall be granted stock options for an
aggregate of 300,000 shares of common stock of the Company pursuant to the
iParty Stock Option Plan which options shall vest as follows: options with
respect to 150,000 shares shall vest on the date of this Agreement; provided
the Employee remains continuously employed by the Company on January 6, 1999,
options with respect to 50,000 shares shall vest on January 6, 1999; provided
the Employee remains continuously employed by the Company on July 6, 1999,
options with respect to 50,000 shares shall vest on July 6, 1999; and provided
the Employee remains continuously employed by the Company on January 6, 2000,
options with respect to 50,000 shares shall vest on January 6, 2000.
(c) In addition to the Base Salary provided herein, the
Employee may be entitled to receive an annual performance bonus payment, as
determined in the sole discretion of
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the Compensation Committee, or in the absence of a Compensation Committee, the
Board of Directors of the Company.
4. Expenses; Vacations. The Employee shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses
necessarily incurred in the performance of her duties hereunder, upon
submission and approval of written statements and bills in accordance with the
then regular procedures of the Company. The Employee shall be entitled to four
(4) weeks vacation time in accordance with the then regular procedures of the
Company governing executives as determined from time to time by the Company's
Board of Directors. The Employee also shall be eligible to participate in all
medical, health and disability benefit programs provided to executives of the
Company.
5. Representations and Warranties of Employee. The Employee
represents and warrants to the Company that she (a) is under no contractual or
other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of her duties hereunder, or the other rights
of the Company hereunder; and (b) is under no physical or mental disability
that would hinder her performance of duties under this Agreement.
6. Non-Competition. The Employee agrees that she will not
(a) during the period she is employed under this Agreement 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 she ceases to be employed by
the Company under this Agreement,
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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 6 will not be deemed breached merely because she owns not more
than five percent (5.0%) of the outstanding common stock of a corporation, if,
at the time of its acquisition by the Employee, 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.
7. Patents; Copyrights. Any interest in patents, patent
applications, inventions, copyrights, developments, and processes ("Such
Inventions") which the Employee now or hereafter during the period she is
employed by the Company under this Agreement may own or develop relating to
the fields in which the Company may then be engaged shall belong to the
Company; and forthwith upon request of the Company, the Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all her right,
title, and interest in and to Such Inventions, free and clear of all liens,
charges, and encumbrances.
8. Confidential Information. All confidential information
which the Employee may now possess, may obtain during the Employment Term, or
may create prior to the end of the period she is employed by the Company under
this Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or
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made accessible by her to any other person, firm, or corporation during the
Employment Term or any time thereafter without the prior written consent of
the Company. The Employee shall return all tangible evidence of such
confidential information to the Company prior to or at the termination of her
employment.
9. Termination.
(a) Notwithstanding anything herein contained, if on or
after the date hereof and prior to the end of the Employment Term, the Employee
is terminated "For Cause" (as defined below) then the Company shall have the
right to give notice of termination of Employee'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 the Employee shall (i)
be charged with a felony crime, (ii) commit any act or omit to take any action
in bad faith and to the detriment of the Company, (iii) commit an act of moral
turpitude, (iv) commit an act of fraud against the Company, or (v) materially
breach any term of this Agreement and fail to correct such breach within ten
days after written notice of commission thereof.
(b) In the event that the Employee shall be physically
or mentally incapacitated or disabled or otherwise unable fully to discharge
her duties hereunder for a period of six months, then this Agreement shall
terminate upon thirty (30) days' written notice to the Employee, and no further
compensation shall be payable to the Employee, except for any accrued but
unpaid Base Salary and expenses as contemplated under Section 4 and as may
otherwise be provided under any disability insurance policy, if any.
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(c) In the event that the Employee shall die, then this
Agreement shall terminate on the date of the Employee's death, and no further
compensation shall be payable to the Employee, except for any accrued but
unpaid Base Salary and 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 9(a), then the Employee 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 the
Employee for any reason other than as provided under Section 9(a), 9(b) or
9(c), then this Agreement shall terminate upon thirty (30) days' written notice
to the Employee and the Company shall be obligated to pay to the Employee an
amount equal to any unpaid expenses as contemplated under Section 4 and
one-half of the annualized amount of the Base Salary.
(f) Nothing contained in this Section 9 shall be deemed
to limit any other right the Company may have to terminate the Employee's
employment hereunder upon any ground permitted by law.
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 corporation.
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11. Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive the
Employee's termination of employment, irrespective of any investigation made
by or on behalf of any party.
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 the Employee shall be sufficient if addressed to __________
__________ 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
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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. The Employee'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 the
Employee'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 the Employee and her 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. 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 (and by facsimile), 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 given 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: /s/ Xxxxx Hero
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Name: Xxxxx Hero
Title: CEO
/s/ Xxxxxxx Xxxxxxxxx Xxxxxx
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Xxxxxxx Xxxxxxxxx
