a6023095ex10_4.htm


    Exhibit
10.4

     

    INCENTIVE
STOCK OPTION AGREEMENT FOR 2009 STOCK INCENTIVE PLAN

    


    iParty
Corp.

    Employer
ID: 76-0547750

    270 Bridge
Street, Suite 301

    Dedham,
Massachusetts 02026

    


    
      	 
      
	
              «FirstName»
      «MiddleName» «LastName»

            
	
              «Street
      Address»

              «City»,
      «State» «Zip»

            


    

     

    You have
been granted an option to purchase iParty Corp. Common Stock as
follows:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	
                                                        Type
      of Option:

                                                      	
                                                        Incentive
      Stock Option

                                                      
	
                                                        Grant
      No.:

                                                      	 
      
	
                                                        Stock
      Option Plan:

                                                      	
                                                        2009
      Stock Incentive Plan

                                                      
	
                                                        Date
      of Grant:

                                                      	 
      
	
                                                        Total
      Number of Option Shares:

                                                      	 
      
	
                                                        Option
      Price per Share:

                                                      	
                                                        $

                                                      
	
                                                        Total
      Exercise Price of Option Shares:

                                                      	
                                                        $

                                                      


                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
 

    
      
        	
                Vesting Dates

              	 
      	
                Number of Shares 

                Vesting on Vesting Date

              	 
      	
                Percent
      Vested

                (Cumulative)

              


      

    

     

     

    


     

    By your
acceptance of this Stock Option Grant, you agree that this option is granted
under and governed by the terms and conditions of iParty Corp.’s 2009 Stock
Incentive Plan (as further amended or restated from time to time) and by the
terms and conditions of iParty Corp.’s Incentive Stock Option Agreement, which
is attached hereto.

     

     

    iParty
Corp.

     

     

    Sal
Perisano

    Chairman
of the Board and Chief Executive Officer

     

    Acknowledged
and Accepted by:

     

    
________________________
[Optionee
Name]

     

     

    Attachment:
iParty Corp. Incentive Stock Option Agreement

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    INCENTIVE
STOCK OPTION AGREEMENT

    


    1.           Grant of
Option.    iParty Corp., a Delaware corporation
("iParty"), hereby
grants to the Optionee named in the accompanying Stock Option Grant (the "Option Grant") the option,
pursuant to iParty's 2009 Stock Incentive Plan noted in the Option Grant (the
"Plan"), to purchase an
aggregate of the Total Number of Option Shares of Common Stock of iParty stated
in the Option Grant at a price per share equal to the Option Price per Share
stated in the Option Grant, purchasable as set forth in and subject to the terms
and conditions of this Option Agreement and the Plan. Except where the context
otherwise requires, the term "iParty" shall include the parent and all present
and future subsidiaries of iParty as defined in Sections 424(e) and 424(f)
of the Internal Revenue Code of 1986, as amended or replaced from time to time
(the "Code").

    


    2.           Incentive Stock
Option.    This option is intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and
shall be so construed; provided however, that nothing in this Agreement shall be
interpreted as a representation, guarantee or undertaking on the part of iParty
that the Option Grant is or will be determined to be an incentive stock option
within the meaning of Section 422 of the Code.  As noted in the Plan,
to the extent that the aggregate fair market value (determined at the Date of
Grant) of the shares of Common Stock with respect to which this Option Grant
plus all other incentive stock options the Optionee holds are exercisable for
the first time by the Grantee during any calendar year (under all iParty plans)
exceeds one hundred thousand dollars ($100,000), all or a portion of this Option
Grant or any other incentive stock option held by the Optionee that exceed such
limit (according to the order in which they were granted) shall be treated as
nonqualified stock options.  In addition, the Option Grant, to the
extent it has not been exercised, shall no longer be treated as an incentive
stock option three (3) months after employment with iParty ceases due to
retirement or a termination of employment, or one (1) year after employment
terminates due to disability (within the meaning of
Section 22(e)(3) of the Code or any successor provision).

    


    3.           Exercise
of Option and Provisions for Termination.

    


    (a)   Vesting
Schedule.    Except as otherwise provided in this
Option Agreement, this option may be exercised up to and including the tenth
anniversary of the Date of Grant stated in the Option Grant (hereinafter the
"Expiration Date"). This
option shall become exercisable (or "vest") in installments for the
number of shares set forth in the table in the Option Grant commencing on each
of the respective Vesting Dates noted (each a "Vesting Date"). The right of
exercise shall be cumulative so that if the option is not exercised to the
maximum extent permissible during any exercise period, it shall be exercisable,
in whole or in part, with respect to all shares not so purchased at any time
prior to the Expiration Date or the earlier termination of this option. This
option may not be exercised at any time after the Expiration Date.

    


    (b)   Exercise
Procedure.    Subject to the conditions set forth in
this Agreement, this option shall be exercised by the Optionee's delivery of
written notice of exercise to the Secretary of iParty, specifying the Date of
Grant of this Option Agreement, the number of shares to be purchased and the
purchase price to be paid therefor, and accompanied by payment in full in
accordance with Section 4. Such exercise
shall be effective upon receipt by the Secretary of iParty of such written
notice together with the required payment. The Optionee may purchase less than
the number of shares covered hereby, provided that no partial exercise of this
option may be for any fractional share.

    


     (c)   Continuous
Relationship with iParty Required.    Except as
otherwise provided in this Section 3, this option
may not be exercised unless the Optionee, at the time he or she exercises this
option, is, and has been at all times since the Date of Grant of this option, an
employee or director of, or a consultant, advisor or service provider to, iParty
(an "Eligible
Optionee"). In addition, this option may not be exercised while the
Optionee is suspended for an offense which could lead to a termination by iParty
for "cause" (as defined
below).

    


    (d)   Termination
of Relationship with iParty.    If the Optionee
ceases to be an Eligible Optionee for any reason, then, except as provided in
this paragraph (d) and in paragraphs (e) and (f) below, the right
to exercise this option shall terminate three (3) months after such
cessation (but in no event after the Expiration Date), provided that this option
shall be exercisable only to the extent that the Optionee was entitled to
exercise this option on the date of such cessation. In addition, if the Optionee
is an employee on an approved leave of absence, then this option shall not
terminate as a result of such leave of absence unless and until the Optionee's
employment relationship is ultimately terminated.

    
      
        
        

      

      
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    (e)   Exercise
Period Upon Death or Disability.    If the Optionee
dies or becomes disabled (within the meaning of Section 22(e)(3) of the
Code) prior to the Expiration Date while he or she is an Eligible Optionee, or
if the Optionee dies within three (3) months after the Optionee ceases to
be an Eligible Optionee (other than as the result of a termination of such
relationship by iParty for "cause" as specified in paragraph (f) below),
this option shall be exercisable, within the period of 12 months following
the date of death or disability of the Optionee (but in no event after the
Expiration Date) only to the extent the Optionee was entitled to exercise this
option on the date of such death or disability, by the Optionee or by the person
to whom this option is transferred by will or the laws of descent and
distribution.  Except as otherwise indicated by the context, the term
"Optionee," as used in this option, shall be deemed to include the estate of the
Optionee or any person who acquires the right to exercise this option by bequest
or inheritance or otherwise by reason of the death of the Optionee.

    


    (f)    Termination
for Cause.    If (a) the Optionee's relationship
with iParty is terminated by iParty for "cause" (as defined below), or
(b) if the Optionee retires or resigns and iParty determines within three
months thereafter that the Optionee's conduct prior to his or her retirement or
resignation warranted a discharge for "cause," then (x) the right to
exercise this option with respect to any shares not previously exercised shall
terminate immediately, and (y) without limiting any other remedy available
to iParty, iParty shall be entitled to repurchase from the Optionee at the
Exercise Price the shares of Common Stock previously purchased by the Optionee
hereunder, or, if the Optionee at such time no longer owns such shares, iParty
shall be entitled to recover from the Optionee the gross profit earned by the
Optionee upon the purchase and disposition (whether by sale, gift, donation or
otherwise) of such shares.

            

    "Cause," as determined by
iParty (which determination shall be conclusive), unless otherwise defined in an
employment agreement with the Optionee and iParty, in which case for purposes
herein “Cause” shall be defined therein, shall mean:

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      (i)

                                    	
                                      willful
      failure by the Optionee to substantially perform his or her duties with
      iParty (other than any failure resulting from incapacity due to physical
      or mental illness). No act or failure to act on the Optionee's part will
      be deemed "willful" unless the Optionee acted or failed to act without a
      good faith or reasonable belief that his or her conduct was in iParty'
      best interest; or

                                    
	
                                      (ii)

                                    	
                                      breach
      by the Optionee of any provision of any employment, consulting, advisory,
      proprietary information, non-disclosure, non-competition, non-solicitation
      or other similar agreement between the Optionee; or

                                    
	
                                      (iii)

                                    	
                                      violation
      by the Optionee of the Code of Ethics or an attempt by the Optionee to
      secure any improper personal profit in connection with the business of
      iParty; or

                                    
	
                                      (iv)

                                    	
                                      failure
      by the Optionee to devote his or her full working time to the affairs of
      iParty except as may be authorized in writing by iParty' Board of
      Directors or other authorized Company official; or

                                    
	
                                      (v)

                                    	
                                      the
      Optionee's engagement in business other than the business of iParty except
      as may be authorized in writing by iParty' Board of Directors or other
      authorized Company official; or

                                    
	
                                      (vi)

                                    	
                                      the
      Optionee's engagement in misconduct which is demonstrably and materially
      injurious to
iParty.

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
       

    

    4.           Payment
of Purchase Price.

     

    
       (a)   Method
of Payment.    Payment of the purchase price for
shares purchased upon exercise of this option shall be made (i) by delivery
to iParty of cash or a check to the order of iParty in an amount equal to the
purchase price of such shares, (ii) subject to the consent of iParty, by
delivery to iParty of shares of Common Stock of iParty then owned by the
Optionee having a fair market value equal in amount to the purchase price of
such shares, (iii) by any other means which the Board of Directors
determines are consistent with the purpose of the Plan and with applicable laws
and regulations (including, without limitation, the provisions of
Rule 16b-3 under the Securities Exchange Act of 1934 and Regulation T
promulgated by the Federal Reserve Board), or (iv) by any combination of
such methods of payment.  Notwithstanding the prior sentence, under no
circumstances may payment for shares be made by a promissory note.

      
        
          
          

        

        
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     (b)   Valuation
of Shares or Other Non-Cash Consideration Tendered in Payment of Purchase
Price.    For the purposes hereof, the fair market
value of any share of iParty' Common Stock or other non-cash consideration which
may be delivered to iParty in exercise of this option shall be determined by the
Board of Directors of iParty.

    


    (c)   Delivery
of Shares Tendered in Payment of Purchase
Price.    If the Optionee exercises this option by
delivery of shares of Common Stock of iParty, the certificate or certificates
representing the shares of Common Stock of iParty to be delivered shall be duly
executed in blank by the Optionee or shall be accompanied by a stock power duly
executed in blank suitable for purposes of transferring such shares to iParty,
and the Common Stock delivered may not be subject to any repurchase, forfeiture,
unfulfilled vesting or other similar requirement and must have been held for at
least six months if such Common Stock was previously issued to the Optionee
through an iParty compensation plan.  Fractional shares of Common Stock of
iParty will not be accepted in payment of the purchase price of shares acquired
upon exercise of this option.

    


    5.           Delivery of
Shares; Compliance With Securities Laws, Etc.

    


    (a)   General.     iParty shall, upon payment of the option
price for the number of shares purchased and paid for, make prompt delivery of
such shares to the Optionee, provided that if any law or regulation requires
iParty to take any action with respect to such shares before the issuance
thereof, then the date of delivery of such shares shall be extended for the
period necessary to complete such action.

    


     (b)   Listing,
Qualification, Etc.     This option shall be subject
to the requirement that if, at any time, counsel to iParty shall determine that
the listing, registration or qualification of the shares subject hereto upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental or regulatory body, or that the disclosure of
non-public information or the satisfaction of any other condition is necessary
as a condition of, or in connection with, the issuance or purchase of shares
hereunder, this option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, disclosure, or
satisfaction of such other condition shall have been affected or obtained on
terms acceptable to the Board of Directors.  Nothing herein shall be deemed
to require iParty to apply for, effect or obtain such listing, registration,
qualification, or disclosure or satisfy such other condition.

    


    6.           Transferability
of Option.    This option is personal and may not be
transferred other than by will or the laws of descent and distribution, and this
option shall be exercised during the lifetime of the Optionee only by the
Optionee or his or her legal representative.  Other than pursuant to the
prior sentence, no rights granted hereunder may be transferred, assigned,
pledged or hypothecated in any way (whether by operation of law or otherwise)
nor shall any such rights be subject to execution, attachment or similar
process.  All transferees of this Option must agree to be bound by all of
the terms and conditions of this Option Agreement upon such written instrument
in form and substance satisfactory to iParty.  Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this option or of
such rights contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon this option or such rights, this option and
such rights shall, at the election of iParty, become null and void.

    


    7.     Limitation of
Rights

    


    (a)           No Special
Employment or Similar Rights.    Nothing contained in
the Plan or this option shall be construed or deemed by any person under any
circumstances to bind iParty to continue the employment or other relationship of
the Optionee with iParty for the period within which this option may be
exercised.

    


    (b)           Rights as a
Shareholder.     The Optionee shall have no rights as
a stockholder with respect to the shares of Common Stock covered by this option
until the date of the issuance to him or her of a stock certificate therefore,
and no adjustment will be made for dividends or other rights (except as provided
in Section 11(b) of
the Plan) for which the record date is prior to the date such certificate is
issued.

    
      
        
        

      

      
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    8.           Adjustment
Provisions.

    


     (a)   General.    
In the event of any stock split, reverse stock split, stock dividend,
recapitalization, combination of shares, reclassification of shares, spin-off or
other similar change in capitalization or event, or any dividend or distribution
to holders of Common Stock other than an ordinary cash dividend, the Optionee
shall, with respect to this option or any unexercised portion thereof, be
entitled to the rights and benefits, and be subject to the limitations, set
forth in Section 4(c) of the
Plan.

    


     (b)   Board
Authority to Make Adjustments.    Any adjustments
under this Section 8 will be made by
the Board of Directors, whose determination as to what adjustments, if any, will
be made and the extent thereof will be final, binding and conclusive. No
fractional shares will be issued pursuant to this option on account of any such
adjustments.

    


    9.           Mergers,
Consolidations, Asset Sales, Liquidations, Etc.    In
the event of a merger or consolidation or any share exchange transaction in
which outstanding shares of Common Stock are exchanged for securities, cash or
other property of any other corporation or business entity, or in the event of a
liquidation of iParty, prior to the Expiration Date or termination of this
option, the Optionee shall, with respect to this option or any unexercised
portion hereof, be entitled to the rights and benefits, and be subject to the
limitations, set forth in Section 10(e) of the
Plan. This option shall
immediately become exercisable in full in the event a Change in Control (as
defined in the Plan) of iParty occurs.

     

    10.           Withholding
Taxes.    

    


    (a)           iParty'
obligation to deliver shares upon the exercise of this option shall be subject
to the Optionee's satisfaction of all applicable federal, state and local income
and employment tax withholding requirements. iParty may deduct any such tax
obligations from any payment of any kind otherwise due to the Optionee,
including salary and bonus payments, and may withhold or sell a sufficient
number of shares otherwise issuable pursuant to the exercise of this option on
behalf of the Optionee to satisfy such tax obligations.  Subject to
iParty' prior approval, which may be withheld in its sole discretion, the
Optionee may elect to satisfy such tax withholding obligations (i) by
causing iParty to withhold shares of Common Stock otherwise issuable pursuant to
the exercise of this option or (ii) by delivering to iParty shares of
Common Stock already owned by the Optionee.

    


    (b)           If
(i) the purchase of shares of Common Stock pursuant to the exercise of the
Option or (ii) the Optionee’s disposition (within the meaning of Section 424(c)
of the Code and the regulations promulgated thereunder) of any such shares
within the two-year period commencing on the day after the date of the grant or
within the one-year period commencing on the day after the date of transfer of
such shares to the Optionee pursuant to such exercise, becomes a taxable event
that requires the Company to collect withholding taxes, the Optionee shall
cooperate with the Company in the procedures it may establish to track any such
dispositions and to make appropriate arrangements with iParty for any taxes
which iParty is obligated to collect.

    


    11.           Miscellaneous.

            

    (a)   Except
as provided herein, this option may not be amended or otherwise modified unless
evidenced in writing and signed by iParty and the Optionee unless the Board of
Directors of iParty determines that the amendment or modification, taking into
account any related action, would not materially and adversely affect the
Optionee. This Option Agreement may be executed in multiple counterparts, each
of which shall represent the same option agreement.

    


    (b)   All
notices under this option shall be mailed or delivered by hand to iParty at its
main office, Attn: Secretary, and to the Optionee to his or her last known
address on the employment records of iParty or at such other address as may be
designated in writing by either of the parties to one another.

    


    (c)   This
option shall be governed by and interpreted in accordance with the laws of the
State of Delaware without regard to any applicable conflicts of
law.

     

     

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