EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of this 26th
day of March, 2002 between iPARTY CORP., a Delaware corporation having its
principal offices at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Company"), and ▇▇▇ ▇▇▇▇▇▇▇▇, an individual residing at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Perisano").
WITNESSETH:
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
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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 as of March 31, 2002 and continuing until the close of business on
March 30, 2004 (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
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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. 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 West Roxbury, Massachusetts and
shall be available to travel as the needs of the Company require.
3. Compensation.
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(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
annual rate of Two Hundred Fifty Thousand Dollars ($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. Without limiting the generality of the foregoing, such
performance bonus may be paid in stock, stock options, restrictive stock or cash
or any combination of the foregoing.
4. Expenses; Vacations. Perisano shall be entitled to
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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 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
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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
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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)
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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 over-the-counter market by
a member of a national securities exchange.
8. Confidential Information. All confidential information
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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.
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9. Termination.
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(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 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 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 twelve (12) months salary at the Base Salary, payable in twelve
(12) equal monthly installments; in addition, for such twelve (12) 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.
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(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.
(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 material
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 without Perisano's consent. 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 twelve (12) months
salary at the Base Salary, payable in twelve (12) equal monthly installments; in
addition, for such twelve (12) 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
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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
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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.
12. Modification. This Agreement sets forth the entire
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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
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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 Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Notice to
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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
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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
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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
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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.
17. Headings. The headings in this Agreement are solely for
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the convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
18. Counterparts; Governing Law. This Agreement may be
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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.
[signature page follows]
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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/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
/s/ ▇▇▇ ▇▇▇▇▇▇▇▇
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