Exhibit 10.6

Party City Holdco Inc.

Amended and Restated 2012 Omnibus Equity Incentive Plan

NONQUALIFIED STOCK OPTION AWARD AGREEMENT

THIS AGREEMENT (this “Award Agreement”), is made effective as of April 1, 2020
(the “Date of Grant”), by and between Party City Holdco Inc., a Delaware
corporation (the “Company”), and James M. Harrison (the
“Participant”).  Capitalized terms not otherwise defined herein shall have the
meanings set forth in the Party City Holdco Inc. Amended and Restated 2012
Omnibus Equity Incentive Plan (as amended from time to time, the “Plan”).

R E C I T A L S:

WHEREAS, the Committee has determined that it would be in the best interests of
the Company and its stockholders to grant the option provided for herein to the
Participant pursuant to the Plan and the terms set forth herein.

NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:

Grant of the Option.  The Company hereby grants to the Participant the right and
option to purchase, on the terms and conditions set forth in the Plan and this
Award Agreement, 200,000 Shares (the “Option”), subject to adjustment as set
forth in the Plan.  The Option is intended to be a Nonqualified Stock
Option.  The Option shall be subject to the vesting conditions described in
Section 3 below.   At any time, the portion of the Option that has become vested
and exercisable is hereinafter referred to as the “Vested Portion” and any
portion of the Option that is not a Vested Portion is hereinafter referred to as
the “Unvested Portion”.  

Option Price.  The purchase price of all of the Shares subject to the Option
shall be $3.00 per Share (the “Option Price”), subject to adjustment as set
forth in the Plan.

Vesting of the Option.  One-half (1/2) of the Option shall vest on December 31,
2020 and the remaining one-half (1/2) of the Award shall vest on December 31,
2021 (each such date, a “Time-Vesting Date”), subject, in each case, to the
Participant’s continued employment with the Company or Party City Holdings Inc.
(“Service”) (or deemed Service as described in Section 4(a) below) on the
applicable Time-Vesting Date.  

Forfeiture; Expiration.  

Termination of Employment.  Upon the termination of the Participant’s Service
for any reason at any time, any Unvested Portion of the Option will be forfeited
automatically without consideration; provided that in the event the
Participant’s Service is terminated by the Company or Party City Holdings Inc.
other than for Cause, death or Permanent Disability, the Participant will,
subject to the otherwise applicable terms of the Option, be deemed to remain in
Service through the time of any Time-Vesting Date that follows such termination.
Notwithstanding anything herein or any other agreement to the contrary, in the
event the Participant’s Service is terminated for Cause or the Participant
resigns at a time when the Participant’s acts or omissions constituted grounds
to terminate the Participant’s Service for Cause without regard to any
applicable cure rights, the Vested Portion of the Option shall also be forfeited
without consideration.

Breach of Restrictive Covenants.  Any outstanding portion of the Option,
including the Vested Portion, shall be forfeited without consideration if the
Participant breaches any restrictive covenant relating to non-competition,
non-solicitation and/or non-disparagement and/or other similar restrictive
covenants in favor of the Company or any of its Subsidiaries.

Expiration of Option Term.  To the extent not earlier terminated or forfeited,
any unexercised portion of the Option shall expire upon the tenth (10th)
anniversary of the Date of Grant.

 

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Period of Exercise.  Subject to the provisions of the Plan and this Award
Agreement, the Participant may exercise all or any part of the Vested Portion at
any time prior to the earliest to occur of:

the tenth (10th) anniversary of the Date of Grant;

the date that is sixty (60) days following termination of the Participant’s
Service for any reason other than death, Permanent Disability or Cause; and

the date that is one (1) year following termination of the Participant’s Service
due to death or Permanent Disability.

Exercise Procedures.

Notice of Exercise.  Subject to Section 5 hereof, the Vested Portion may be
exercised by delivering to the Company at its principal office written notice of
intent to so exercise in the form attached hereto as Exhibit A (such notice, a
“Notice of Exercise”) or by such other means as is permitted by the Committee in
its sole discretion.  Such Notice of Exercise or such exercise by such other
means shall be accompanied by payment in full of the aggregate Option Price for
the Shares to be acquired upon exercise.  In the event the Option is being
exercised by the Participant’s representative, the Notice of Exercise or such
exercise by such other means shall be accompanied by proof (satisfactory to the
Committee) of the representative’s right to exercise the Option.  The aggregate
Option Price for the Shares to be exercised may be paid in cash or its
equivalent (e.g., by cashiers check) or by such other means as are permitted by
the Committee in its sole discretion.

Rights of Participant; Method of Exercise.  Neither the Participant nor the
Participant’s representative shall have any rights to dividends, voting rights
or other rights of a stockholder with respect to Shares subject to the Option
until (i) the Participant has given a Notice of Exercise of the Option (or has
otherwise exercised the Option in a manner permitted by the Committee in its
sole discretion) and paid in full for such Shares, (ii) such Shares have been
issued, and (iii) if applicable, the Participant has satisfied any other
conditions imposed by the Committee pursuant to the Plan.  In the event of the
Participant’s death, the Vested Portion shall be exercisable by the executor or
administrator of the Participant’s estate, or the person or persons to whom the
Participant’s rights under this Award Agreement shall pass by will or by the
laws of descent and distribution, as the case may be.  Any heir or legatee of
the Participant shall take rights herein granted subject to the terms and
conditions of this Award Agreement and the Plan.

No Right to Continued Service.  The granting of the Option shall impose no
obligation on the Company or any Subsidiary to continue the employment or other
Service of the Participant and shall not lessen or affect any right that the
Company or any Subsidiary may have to terminate the employment or other Service
of the Participant.

Withholding.  The Company shall have the power and the right to deduct or
withhold automatically from any payment or Shares deliverable under this Award
Agreement, or require the Participant to remit to the Company, the minimum
statutory amount to satisfy federal, state, and local taxes, domestic or
foreign, required by law or regulation to be withheld with respect to any
taxable event arising as a result of this Award Agreement.  The Participant
authorizes the Company and its Subsidiaries to withhold such amounts due
hereunder from any payments otherwise owed to the Participant, but nothing in
this sentence shall be construed as relieving the Participant of any liability
for satisfying his or her obligation under the preceding provisions of this
Section 8.

Transferability.  Unless otherwise determined by the Committee, the Participant
shall not be permitted to transfer or assign the Option except in the event of
death and in accordance with Section 14.6 of the Plan.

Adjustment of Option.  Adjustments to the Option (or any Shares underlying the
Option) shall be made in accordance with the terms of the Plan.

 

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Option Subject to Plan.  By entering into this Award Agreement the Participant
agrees and acknowledges that the Participant has read a copy of the Plan, which
has been made available to him.  The Option is subject to the terms and
conditions of the Plan.  In the event of a conflict between any term hereof and
a term of the Plan, the applicable term of the Plan shall govern and prevail.

Choice of Law.  This Award Agreement, and all claims or causes of action or
other matters that may be based upon, arise out of or relate to this Award
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware, excluding any conflict or choice of law rule or principle
that might otherwise refer construction or interpretation thereof to the
substantive laws of another jurisdiction.

Consent to Jurisdiction.  The Company and the Participant, by his or her
execution hereof, (a) hereby irrevocably submit to the exclusive jurisdiction of
the state and federal courts in the State of Delaware for the purposes of any
claim or action arising out of or based upon this Award Agreement or relating to
the subject matter hereof, (b) hereby waive, to the extent not prohibited by
applicable law, and agree not to assert by way of motion, as a defense or
otherwise, in any such claim or action, any claim that it, he or she is not
subject personally to the jurisdiction of the above-named courts, that its, his
or her property is exempt or immune from attachment or execution, that any such
proceeding brought in the above-named court is improper or that this Award
Agreement or the subject matter hereof may not be enforced in or by such court
and (c) hereby agree not to commence any claim or action arising out of or based
upon this Award Agreement or relating to the subject matter hereof other than
before the above-named courts nor to make any motion or take any other action
seeking or intending to cause the transfer or removal of any such claim or
action to any court other than the above-named courts whether on the grounds of
inconvenient forum or otherwise; provided, however, that the Company and the
Participant may seek to enforce a judgment issued by the above-named courts in
any proper jurisdiction.  The Company and the Participant hereby consent to
service of process in any such proceeding, and agree that service of process by
registered or certified mail, return receipt requested, at its, his or her
address specified pursuant to Section 16 is reasonably calculated to give actual
notice.

WAIVER OF JURY TRIAL.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS THAT HE, SHE OR
IT SHALL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF
ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR
INVESTIGATION ARISING OUT OF OR BASED UPON THIS AWARD AGREEMENT OR THE SUBJECT
MATTER HEREOF OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING.  EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER
PARTY HERETO THAT THIS SECTION 14 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH
THEY ARE RELYING AND SHALL RELY IN ENTERING INTO THIS AWARD AGREEMENT.  ANY
PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 14 WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF
ITS RIGHT TO TRIAL BY JURY.

Compliance with Securities Laws.  Shares shall not be issued pursuant to this
Award Agreement unless the issuance and delivery of such Shares comply with (or
are exempt from) all applicable requirements of law, including, without
limitation, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, state securities laws and regulations, and the
regulations of any stock exchange or other securities market on which the
Company’s securities may then be traded.  The Company shall not be obligated to
file any registration statement under any applicable securities laws to permit
the purchase or issuance of any Shares, and accordingly any certificates for
Shares may have an appropriate legend or statement of applicable restrictions
endorsed thereon.  If the Company deems it necessary to ensure that the issuance
of Shares under this Award Agreement is not required to be registered under any
applicable securities laws, the Participant shall deliver to the Company an
agreement containing such representations, warranties and covenants as the
Company may reasonably require.

 

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Notices.  Any notice or other communication provided for herein or given
hereunder to a party hereto must be in writing, and shall be deemed to have been
given (a) when personally delivered or delivered by facsimile transmission with
confirmation of delivery, (b) one (1) business day after deposit with Federal
Express or similar overnight courier service, or (c) three (3) business days
after being mailed by first class mail, return receipt requested.  A notice
shall be addressed to the Company at its principal executive office, attention
General Counsel and to the Participant at the address that he most recently
provided to the Company.

Entire Agreement.  This Award Agreement, including Exhibit A attached hereto,
and the Plan constitute the entire agreement and understanding among the parties
hereto in respect of the subject matter hereof and supersede all prior and
contemporaneous arrangements, agreements and understandings, whether oral or
written and whether express or implied, and whether in term sheets, appendices,
exhibits, presentations or otherwise, among the parties hereto, or between any
of them, with respect to the subject matter hereof; provided, that, the
Participant shall continue to be bound by any other confidentiality,
non-competition, non-solicitation and other similar restrictive covenants
contained in any other agreements between the Participant and the Company, its
Affiliates and their respective predecessors to which the Participant is
bound.  

Amendment; Waiver.  No amendment or modification of any term of this Award
Agreement shall be effective unless signed in writing by or on behalf of the
Company and the Participant, and made in accordance with the terms of the
Plan.  No waiver of any breach or condition of this Award Agreement shall be
deemed to be a waiver of any other or subsequent breach or condition whether of
like or different nature.

Successors and Assigns; No Third Party Beneficiaries.  The provisions of this
Award Agreement shall inure to the benefit of, and be binding upon, the Company
and its successors and assigns and upon the Participant and the Participant’s
heirs, successors, legal representatives and permitted assigns.  Nothing in this
Award Agreement, express or implied, is intended to confer on any person other
than the Company and the Participant, and their respective heirs, successors,
legal representatives and permitted assigns, any rights, remedies, obligations
or liabilities under or by reason of this Award Agreement.

Signature in Counterparts.  This Award Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

No Guarantees Regarding Tax Treatment.  The Participant (or his beneficiaries)
shall be responsible for all taxes with respect to the Option.  The Committee
and the Company make no guarantees regarding the tax treatment of the
Option.  Neither the Committee nor the Company has any obligation to take any
action to prevent the assessment of any tax under Section 409A (as defined
below), Section 4999 of the Code or otherwise and none of the Company, any
Subsidiary or Affiliate, or any of their employees or representatives shall have
any liability to a Participant with respect thereto.

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Award Agreement.

 

 

PARTY CITY HOLDCO INC.

 

 

 

 

 

 

 

 

 

 

By:  

/s/ Denise Kulikowsky

 

 

 

Name: Denise Kulikowsky

 

 

 

Title: Executive Vice-President & Chief Human Resources Officer  

 

 

Agreed and acknowledged as

of the date first above written:

 

 

 

/s/ Jim Harrison

 

James M. Harrison

 

 

 

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EXHIBIT A

NOTICE OF EXERCISE

 

Party City Holdco Inc.

 

 

 

 

 

80 Grasslands Road

 

 

 

 

 

Elmsford NY 10523

 

 

 

 

 

Attention:  Chief Executive Officer

 

 

Date of Exercise:

 

 

 

Ladies & Gentlemen:

1.Exercise of Option.  This constitutes notice to Party City Holdco Inc. (the
“Company”) that pursuant to my Nonqualified Stock Option Award Agreement, dated
July 25, 2019 (the “Award Agreement”), I elect to purchase the number of Shares
set forth below and for the price set forth below.  Capitalized terms used and
not otherwise defined herein shall have the meaning ascribed to such term in the
Award Agreement.  By signing and delivering this notice to the Company, I hereby
acknowledge that I am the holder of the Option exercised by this notice and have
full power and authority to exercise the same.

 

 

Number of Shares as to

which the Option is exercised

(the “Shares”):

 

 

 

 

 

 

 

 

 

Date of Grant:

 

 

 

 

 

 

 

 

 

Shares to be issued in name of:

 

 

 

 

 

 

 

 

 

Total exercise price of the Shares:

 

 

 

 

2.Form of Payment.  Forms of payment other than cash or its equivalent (e.g., by
cashier’s check) are permissible only to the extent approved by the Committee,
in its sole discretion.

3.Delivery of Payment.  With this notice, I hereby deliver to the Company the
full exercise price of the Shares, and any and all withholding taxes due in
connection with the exercise of my Option or have otherwise satisfied such
requirements.

4.Rights as Stockholder.  While the Company shall endeavor to process this
notice in a timely manner, I acknowledge that until the issuance of the Shares
(as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) and my satisfaction of any other
conditions imposed by the Committee pursuant to the Plan or set forth in the
Award Agreement, no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to such shares, notwithstanding the
exercise of my Option.  No adjustment shall be made for a dividend or other
right for which the record date is prior to the date of issuance of the Shares.

5.Interpretation.  Any dispute regarding the interpretation of this notice shall
be submitted promptly by me or by the Company to the Committee.  The resolution
of such a dispute by the Committee shall be final and binding on all parties.

6.Entire Agreement.  The Plan and the Award Agreement under which the Shares
were granted are incorporated herein by reference, and together with this notice
constitute the entire agreement of the parties with respect to the subject
matter hereof.

 

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Very truly yours,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(social security number)