Exhibit - 10.4
SENIOR EXECUTIVE AGREEMENT
          WHEREAS, Michael Perri (the “Executive”) is the Senior Vice President
of Merchandising and Marketing of Factory Card & Party Outlet Corp., a Delaware
corporation (the “Company”);
          WHEREAS, the Executive entered into an employment agreement with
Factory Card Outlet of America, Ltd., which is a wholly-owned subsidiary of the
Company, dated as of December 29, 2004, as amended on December 9, 2005, which
remains in effect on the date hereof (the “Employment Agreement”);
          WHEREAS, the Executive may, under certain circumstances, become a
participant in the Company’s Amended and Restated Executive Severance Plan (the
“Executive Severance Plan”) (it being understood that, in no event will the
Executive become such a participant for as long as the Executive is also a party
to the Employment Agreement);
          WHEREAS, in connection with the proposed acquisition (the “Merger”) of
the Company pursuant to an Agreement and Plan of Merger (the “Merger Agreement”)
dated as of September 17, 2007, by and among Amscan Holdings, Inc., a Delaware
corporation (“Parent”), Amscan Acquisition, Inc., a Delaware corporation and a
direct wholly owned subsidiary of Parent (“Newco”) and the Company, the Company
shall become a wholly owned subsidiary of Parent; and
          WHEREAS, the Employment Agreement and the Executive Severance Plan
shall remain in effect on and after the consummation of the transactions
contemplated by the Merger Agreement, with such changes as may be effected by
this Agreement, and, in connection therewith, the Executive shall continue to
serve as Senior Vice President of Merchandising and Marketing of the Company.
          NOW THEREFORE, in consideration of the mutual promises contained
herein, the Executive, Parent and the Company agree as follows:
          1. The Executive shall continue employment with the Company in
accordance with the terms and conditions of the Employment Agreement following
the closing of the Merger (the “Closing”), it being understood that the Company
shall thereupon be a direct or indirect subsidiary of Parent and/or AAH Holdings
Corporation (“Holdings”). The Executive shall report to the President and Chief
Executive Officer of the Company. The Executive hereby agrees that changes to
his duties, responsibilities and authorities caused solely and as a direct and
proximate result of the Company becoming a privately held subsidiary of Parent
and/or Holdings will not in and of itself constitute “Good Reason” within the
meaning of Section 10(b) of the Employment Agreement or within the meaning of
Section 1.2 of the Executive Severance Plan. The Executive will have such
duties, responsibilities and authorities as are prescribed by the President and
Chief Executive Officer of the Company from time to time and normally associated
with those of senior vice presidents of buying, merchandising and marketing of
retail businesses of similar size in the United States. For the avoidance of
doubt, Executive’s duties,

 

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responsibilities and authority will include, but not be limited to:
(i) preparation of budgets, business plans and staffing plans of the Executive’s
department for recommendation to the President and CEO of the Company,
(ii) implementation of budgets, business plans and staffing plans, and
(iii) selection, retention and termination of employees of the Executive’s
department. The Executive agrees that the material employee benefit plans,
programs and arrangements listed on Exhibit A to be provided by the Company,
Parent or Holdings to the Executive are reasonably acceptable to the Executive;
provided, however, amendments or modifications to the material employee benefit
plans, programs and arrangements listed on Exhibit A that apply to senior
executives of the Company, Parent and Holdings generally (whether or not they
also apply to other participants) shall not result in a breach of this Agreement
or constitute “Good Reason” under the Employment.
          2. On the date of the Closing, Parent shall cause to be granted to the
Executive nonqualified stock options to purchase 24 shares of common stock of
Holdings (such options, the “New Options”), at an exercise price equal to the
fair market value of a share of common stock at the date of grant, which is
expected to be $17,500 per share. One-half (50%) of the New Options shall be
subject to vesting in equal annual installments over a period of 5 years
following the date of grant, and the remaining one-half (50%) of the New Options
shall be subject to performance vesting, in each case on the terms set forth in
the attached form of Option Agreements (attached as Exhibit B-1 and
Exhibit B-2). Such Option Agreements shall be granted under and pursuant to the
terms of the AAH Holdings Corporation 2004 Equity Incentive Plan (the “AAH
Option Plan”), in or substantially in the form of the attached options
certificates. Notwithstanding anything else in the Executive Severance Plan
(including Section 3.5 thereof) or in any other agreement, the New Options shall
vest on such terms as provided in such Option Agreements.
          3. The Executive’s Employment Agreement is hereby amended as follows:
          (i) Section 2 of the Employment Agreement is hereby amended by
substituting “April 7, 2009” for “April 7, 2008”;
          and
          (ii) The characters “(a)” in Section 7(a) of the Employment Agreement
are hereby deleted and Section 7(b) of the Employment Agreement is hereby
deleted in its entirety.
          4. Contemporaneous with the execution of this Agreement, the Company
shall amend the Executive Severance Plan to be in the form attached hereto as
Exhibit C (subject to the terms of this Agreement, including the last sentence
of Section 2).
          5. The parties hereto acknowledge and agree that in the event the
Executive is given a Notice of Non-Renewal (as defined in the Employment
Agreement), then, on and after expiration of the Term (as defined in the
Employment Agreement), the Executive shall participate in the Executive
Severance Plan as in effect on the date hereof in accordance with the terms
thereof (subject to the terms of this Agreement, including the last sentence of
Section 2) and shall not be entitled to benefits pursuant to the Employment
Agreement. For the avoidance of doubt, the giving of a Notice of Non-Renewal is
neither (i) a no Cause termination or (ii) a

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termination for Good Reason for purposes of the Employment Agreement; provided,
however, the Executive shall be entitled to severance pay and benefits under the
Executive Severance Plan in the event of the Company’s decision not to continue
Executive’s employment upon the expiration of the Term. Without limiting the
generality of the foregoing, the parties hereto acknowledge and agree that the
transactions contemplated by the Merger Agreement shall constitute a “Change in
Control” (as defined in the Employment Agreement and the Executive Severance
Plan) and that if the Executive becomes entitled to severance benefits under the
Employment Agreement or the Executive Severance Plan within two years after the
consummation of the transactions contemplated by the Merger Agreement, the
“Severance Period” (as defined in the Employment Agreement or the Executive
Severance Plan, as applicable) shall be eighteen months.
          6. This Agreement shall become effective on the Closing (as defined in
the Merger Agreement) and shall be of no force or effective if the Merger
Agreement is terminated in accordance with its terms.
          IN WITNESS WHEREOF, the parties have executed this Agreement,
effective as of this 17th day of September, 2007.

            Amscan Holdings, Inc.
      By:   /s/ Robert J. Small         Name:   Robert J. Small        Title:  
Chairman of the Board          Factory Card and Party Outlet Corp.
      By:   /s/ Gary Rada         Name:   Gary Rada        Title:   CEO         
Factory Card Outlet of America, Ltd.
      By:   /s/ Gary Rada         Name:   Gary Rada        Title:   CEO       
Executive
        /s/ Michael Perri    

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