Exhibit 10.3
FIRST AMENDMENT TO
LETTER AGREEMENT
This First Amendment to Letter Agreement (this "Amendment") is made and
entered into as of December 30, 2008 by and between iParty Corp., a Delaware
corporation (the "Company"), and Xxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Company and the Executive entered into a Letter Agreement
dated as of March 21, 2007 (the "Letter 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 Severance Paragraph of the Letter Agreement. The section
titled "Severance" of the Letter Agreement is hereby amended by deleting the
section in its entirety and replacing it with the following section:
"SEVERANCE After you have completed 6 months of active, continuous
employment with the company, if your employment with the company is subsequently
terminated for any reason, other than as a result of death or disability or for
Cause, which termination constitutes a separation from service within the
meaning of Treasury Regulations Section 1.409A-1(h), as promulgated under
Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), you
will be entitled to: (a) receive 6 months of severance pay to be payable in
accordance with the normal payroll policies and procedures of the company; and
(b) the continuation of health, dental and life insurance benefits on the
company's plans for a period of 6 months after the termination of your
employment (to the extent such continuation of benefits is allowed by the
applicable plans), and the continuation of the company's contribution to the
cost of such coverage (as of your termination of employment) for such period;
such payments to commence no earlier than seven (7) working days after the
company receives the executed release required below and no later than 90 days
after the date of your separation from service, the exact payment date to be
determined by the company in its sole discretion, provided that you timely
execute and return the release and have not subsequently revoked such execution.
A separation from service will not occur while you are on sick leave, or a bona
fide leave of absence, if the period of such leave does not exceed six months,
or if longer, so long as you have a right to reemployment with the company and
there is a reasonable expectation that you will return to service with the
company. Notwithstanding anything to the contrary set forth in this paragraph,
in the event that you are determined to be a "key employee" as defined by
Section 416(i) of the Internal Revenue 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 to you under this
Letter Agreement as a result of or following any separation from service, that
constitute "nonqualified deferred compensation" as defined under Section 409A of
the Code, shall not be made before the date which is 6 months after the date of
separation from service (or if earlier, the date of your death) and (i) all
payments that would have been made to you during such six (6) month period shall
be made in a lump sum on the date six (6) months and two days after the your
separation from service and (ii) all remaining payments (if any) shall commence
on the next regular payroll date in the seventh (7th) month following your
separation from service. For all purposes of Section 409A of the Code and the
related Treasury Regulations, the Executive's entitlement to severance pay
pursuant to this Letter Agreement shall be treated as an entitlement to a series
of separate payments.
The receipt of any payments or benefits under this section, is subject
to your execution of a release in a form acceptable to the company. All payments
to be made under this section are subject to applicable withholding and other
taxes.
For purposes of this letter, "Cause" shall mean you shall (a) be
charged with the commission of a felony crime; (b) commit any act or omit to
take any action in bad faith and to the detriment of the company; (c) fail to
follow any commercially reasonable and lawful direction of the Board or Chief
Executive Officer of the company and continue to fail to follow such direction
within 10 days of written notification of same; (d) commit an act of fraud
against the company; (e) knowingly provide materially false information
concerning the company to the Board, any governmental body, any regulatory
agency, any lender or other financing source of the company, or any shareholder
of the company; or (f) breach any term of this letter or the Confidentiality
Agreement and fail to correct such breach within 10 days after written notice of
commission thereof."
2. Ratification. Except as expressly amended hereby, the Letter
Agreement is hereby ratified and confirmed in all respects and shall continue in
full force and effect. This Amendment and the Letter Agreement shall hereafter
be read and construed together as a single document, and all references in the
Letter Agreement shall hereafter refer to the Letter Agreement as amended by
this Amendment.
3. 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.
4. 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/ XXX XXXXXXXX
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Name: Xxx Xxxxxxxx
Title: President and Chief Executive Officer
EXECUTIVE:
/s/ XXXXX X. XXXXXXXXX
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Xxxxx X. Xxxxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx XX 00000
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