Exhibit 10.1

Execution Version

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”), dated as of 01/06/2020 by and between Party
City Holdings Inc. a Delaware corporation (the “Company”), Party City Holdco
Inc. (“Holdco”) and Todd Vogensen (the “Executive”) and effective as of
February 3, 2020 (the “Effective Date”).

WHEREAS, the Company, Holdco and the Executive desire to set forth in this
Agreement the terms and conditions under which the Executive will be employed as
Executive Vice President and Chief Financial Officer of the Company and Holdco,
effective as of the Effective Date.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.    Employment Period. The Company and Holdco shall employ the Executive, and
the Executive agrees to, and shall, serve the Company and Holdco, on the terms
and conditions set forth in this Agreement, for the period beginning on the
Effective Date and ending on February 2, 2023 (the “Initial Term”), and,
thereafter, this Agreement shall automatically renew for additional successive
twelve (12) month periods (each a “Renewal Term”), unless sooner terminated as
set forth hereinafter (collectively, Initial Term and applicable Renewal Terms
are referred to herein as the “Employment Period”). Notwithstanding anything
contained herein to the contrary, the Company may elect to terminate this
Agreement, and thereby conclude Executive’s service with and for the Company and
Holdco, by providing Executive with at least twelve (12) months prior written
notice of its intent to not renew this Agreement, such termination being
effective upon the expiration of the next successive applicable Renewal Term or
such other date which the parties mutually agree.

2.    Position and Duties.

(a)    During the Employment Period, the Executive shall serve as Executive Vice
President and Chief Financial Officer of the Company and Holdco with such duties
and responsibilities as are assigned to him by the Board of Directors of Holdco
(the “Board”), any committee of the Board or the Chief Executive Officer of
Holdco (the “CEO”) consistent with his position as Executive Vice President and
Chief Financial Officer of the Company and Holdco, including, as the CEO may
request, without additional compensation, to serve as an officer or director of
certain of the subsidiaries and other affiliates of Holdco and/or the Company.
During the Employment Period, the Executive shall report to the CEO.

(b)    During the Employment Period, and excluding any periods of vacation and
sick leave to which the Executive is entitled, the Executive shall devote his
full attention and time during normal business hours to the business and affairs
of the Company and Holdco and shall use his reasonable best efforts to carry out
the responsibilities assigned to the Executive faithfully and efficiently. It
shall not be considered a violation of the foregoing for the Executive to
(i) serve on civic or charitable boards or committees, (ii) deliver lectures,
fulfill speaking engagements or teach at educational institutions, (iii) serve
on the board of directors of other companies, so long as the Board approves such
appointments (such approval not to be unreasonably withheld), or (iv) manage
personal investments, so long as such activities do not compete with and are not
provided

 

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to or for any entity that competes with or intends to compete with the Company,
Holdco or any of their respective subsidiaries and affiliates and does not
unreasonably interfere with the performance of the Executive’s responsibilities
as an employee of the Company or Holdco in accordance with this Agreement.

3.    Compensation and Expense Reimbursements.

(a)    Base Salary. During the Employment Period, the Executive shall receive
from the Company or any of its affiliates a base salary of $625,000.00 (per full
fiscal year or otherwise on a pro rata basis) and as such amount may be adjusted
from time to time, in the sole discretion of the Board or the Compensation
Committee of the Board (the “Committee” and the “Annual Base Salary,”
respectively), payable in regular intervals in accordance with customary payroll
practices for employees of the Company in effect during the Employment Period.

(b)    Annual Bonus. In addition to the Annual Base Salary, during the
Employment Period, the Executive shall be eligible to receive annual bonus
compensation (the “Annual Bonus”) consistent with the bonus plan for key
executives of the Company as in effect from time to time (the “Bonus Plan”). The
Annual Bonus (including any pro rata portion thereof, to the extent payable
pursuant to Section 5 of this Agreement), if any, shall be paid no later than
two and one-half months following the end of the calendar year to which such
Annual Bonus corresponds. During the Employment Period, the target amount of the
Annual Bonus shall be seventy percent (70%) of the Annual Base Salary (the
“Target Bonus Amount”) and the maximum amount of the Annual Bonus shall be one
hundred forty percent (140%) of the Annual Base Salary (the “Maximum Bonus
Amount”), with the actual amount of the Annual Bonus, if any, to be determined
by the Board or the Committee in accordance with the Bonus Plan. Except as
otherwise provided in Section 5(a) (Death or Permanent Disability), Section 5(c)
(Termination other than Cause or By Executive for Good Reason), or Section 5(d)
(Change in Control Termination) of this Agreement, eligibility for the Annual
Bonus shall require Executive’s employment during the full fiscal year for which
such Annual Bonus corresponds and through the applicable payout date.

(c)    Sign-On Bonus.    In addition to the Annual Base Salary and the Annual
Bonus, the Executive shall receive a one-time cash award equal to four hundred
twenty thousand dollars ($420,000), payable as a lump sum within forty-five
(45) days following the Effective Date. In the event that the Executive
terminates his employment with the Company other than for Good Reason (as
defined below), or if the Executive’s employment is terminated by the Company
for Cause (as defined below), the Executive will be required to repay (i) one
hundred percent (100%) of the Sign-On Bonus as set forth herein if such
termination occurs within one year of the Effective Date and (ii) fifty percent
(50%) of the Sign-On Bonus as set forth herein if such termination occurs more
than one year following the Effective Date but less than two years following the
Effective Date, in either case, within fifteen (15) days of such termination.

(d)    Other Benefits; Car Allowance.

(i) During the Employment Period: (i) the Executive shall be eligible to
participate in all incentive, savings and retirement plans, practices, policies
and programs for employees of the Company and shall be entitled to paid
vacation, to the same extent and

 

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on the same terms and conditions as peer executives; and (ii) the Executive
and/or the Executive’s family, as the case may be, shall be eligible for
participation in, and shall receive all benefits under, all other welfare
benefit plans, practices, policies and programs provided for employees of the
Company to the same extent and on the same terms and conditions as peer
executives.

(ii) During the Employment Period, the Company will pay the Executive an annual
car allowance equal to $8,100, payable in equal bi-weekly installments.

(e)    Incentive Equity Grants.

(i) Beginning in 2020, at the discretion of the Board or the Committee, the
Executive shall be eligible to receive incentive equity (or other long-term
incentive) grants under Holdco’s long-term compensation program for senior
executives, subject to the terms of such program as in effect from time to time
and with any grants under such program in the discretion of the Board or the
Committee. As of the date hereof, the Company intends to make the following
grant to senior executives under such program for calendar year 2020: (a) one
half of such grant shall be made in the form of restricted cash which vest
(I) two thirds following the second anniversary of such grant and (II) one third
following the third anniversary of such grant; and (b) one half of such grant
shall be made in the form of performance-based restricted stock units, which
shall be eligible to vest based on the achievement of performance objectives
determined by the Board or the Committee during a three-year performance period.
It is acknowledged and agreed that the target value for such 2020 grant will be
equal to one hundred sixty percent (160%) of Executive’s Base Salary, which
value will be determined consistent with Holdco’s process for determining grants
to other senior executives.

(f)    Relocation Expenses.

(i) The Company will reimburse the Executive for reasonable and customary
relocation expenses actually incurred by the Executive as a direct result of his
relocation to a location within reasonable commuting distance of the Company’s
offices in Elmsford, NY (the “Relocation Expenses”), subject to Company policies
and to such reasonable substantiation and documentation as may be specified by
the Company, including house-hunting visits for the Executive as reasonably
necessary; the cost of packing and moving the Executive’s household goods and
the moving of automobiles to the Executive’s home in or around Elmsford, NY; the
cost of temporary housing for the Executive and his immediate family (not to
exceed six (6) months in duration); the cost of temporary storage of the
Executive’s household goods for a reasonable period of time; real estate
commissions on the purchase of a new home in or around Elmsford, NY; reasonable
closing costs on a new home that is a reasonable commuting distance from
Elmsford, NY; and airfare to the New York City area for all members of the
Executive’s immediate family. For the avoidance of doubt, such reimbursable
Relocation Expenses will not include payment of any losses in connection with
any capital transaction, such as the sale of a home. In the event that any of
the reimbursements for Relocation Expenses are taxable to the Executive, the
Company will promptly make additional “gross up” payments to the Executive
sufficient to cover such additional taxes (including taxes on the gross-up). The

 

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Company will pay the Executive any amounts due to him in respect of Relocation
Expenses within thirty (30) days after submission of written documentation
substantiating such amounts.

(ii) In the event that the Executive terminates his employment with the Company
other than for Good Reason (as defined below), or if the Executive’s employment
is terminated by the Company for Cause (as defined below), the Executive will be
required to repay (i) one hundred percent (100%) of the gross amount of
reimbursed Relocation Expenses if such termination occurs within one year of the
Effective Date and (ii) fifty percent (50%) of the gross amount of reimbursed
Relocation Expenses if such termination occurs more than one year following the
Effective Date but less than two years following the Effective Date, in either
case, within fifteen (15) days of such termination.

(g)    Other Expenses. During the Employment Period, the Executive shall be
entitled to receive reimbursement for all reasonable travel and other expenses
incurred by the Executive in carrying out the Executive’s duties under this
Agreement; provided that the Executive complies with the policies, practices and
procedures of Holdco and/or the Company for submission of expense reports,
receipts, or similar documentation of such expenses.

(h)    Indemnification. During and after the Employment Period, the Executive
shall be entitled to all rights to indemnification available under the by-laws,
certificate of incorporation and any director and officer insurance policies of
Holdco and the Company, or to which he may otherwise be entitled, through
Holdco, the Company, and/or any of their respective subsidiaries and affiliates,
in accordance with their respective terms.

4.    Termination of Employment.

(a)    Death or Permanent Disability. The Executive’s employment shall terminate
automatically upon the Executive’s death during the Employment Period. The
Company and its affiliates shall be entitled to terminate the Executive’s
employment because of the Executive’s Permanent Disability during the Employment
Period. “Permanent Disability” means that the Executive (i) is unable to perform
his duties under this Agreement by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than twelve (12) months; (ii) is, by
reason of any medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a continuous period
of not less than twelve (12) months receiving income replacement benefits for a
period of not less than three (3) months under an accident and health plan
covering employees of Holdco or the Company; or (iii) has been determined to be
totally disabled by the Social Security Administration. A termination of the
Executive’s employment by Holdco or any of its affiliates for Permanent
Disability shall be communicated to the Executive by written notice and shall be
effective on the 30th day after receipt of such notice by the Executive (the
“Disability Effective Date”), unless the Executive returns to full-time
performance of the Executive’s duties in accordance with the provisions of
Section 2 before such 30th day. In the event of a dispute as to whether the
Executive has suffered a Permanent Disability, the final determination shall be
made by a licensed physician selected by the Board and acceptable to the
Executive in the Executive’s reasonable judgment.

 

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(b)    Other than Death or Disability. Holdco and its affiliates may terminate
the Executive’s employment at any time during the Employment Period with or
without Cause upon notice to the Executive.

(c)    Good Reason. The Executive may terminate his employment at any time
during the Employment Period for Good Reason, upon prior written notice to
Holdco or the Company setting forth in reasonable detail the nature of such Good
Reason, as set forth below. For purposes of this Agreement, “Good Reason” is
defined as any one or more of the following: any attempt to relocate the
Executive to a work location that is more than fifty (50) miles from his primary
office as of the Effective Date; any material diminution in the nature or scope
of the Executive’s responsibilities or duties as defined under this Agreement
(provided that a change in reporting relationships resulting from the direct or
indirect control of Holdco or the Company (or a successor corporation) by
another corporation or other person(s) shall not be deemed to constitute “Good
Reason”); any material breach by Holdco, the Company or any affiliate of the
Company of any provision of this Agreement or any other written agreement with
the Executive; or any material failure of Holdco or the Company to provide the
Executive with at least the Annual Base Salary and/or any other compensation or
benefits in accordance with the terms of Section 3 hereof, other than an
inadvertent failure which is cured within ten (10) business days following
written notice from the Executive specifying in reasonable detail the nature of
such failure. Notwithstanding the foregoing, the appointment of an interim Chief
Financial Officer of the Company or Holdco during and for any period of the
Executive’s disability (which may potentially result in a Permanent Disability)
will not be considered “Good Reason” (so long as the Executive continues to be
compensated pursuant to the terms of this Agreement), until the occurrence of a
Permanent Disability as defined in Section 4(a). The Executive’s employment will
only be deemed to have been terminated for Good Reason (i) if he gives written
notice to the Company within ninety (90) days of the date of the Executive’s
knowledge of the circumstances giving rise to Good Reason setting forth in
reasonable detail the nature of such Good Reason, (ii) the Company and Holdco
are provided an opportunity to cure such Good Reason event (which cure period
shall not be less than fifteen (15) days) and (iii) the Executive terminates
employment with Holdco, the Company and all their affiliates within sixty
(60) days of the date of the later of the first occurrence and the Executive’s
knowledge of the circumstances giving rise to Good Reason (to the extent Holdco
or the Company has not previously cured the circumstances giving rise to Good
Reason).

(d)    Change in Control. If there occurs a “Change in Control” (as hereinafter
defined) during the Employment Period and the Executive is not offered
employment on substantially similar terms by Holdco or one of its continuing
affiliates immediately thereafter, then, for all purposes of this Agreement, the
Executive’s employment shall be deemed to have been terminated by Holdco and the
Company in a manner qualifying as a “Change in Control Termination” effective as
of the date of such Change in Control; provided, however, that none of Holdco or
any of its affiliates shall have any obligation to the Executive under this
Section 4 if the Executive is hired or offered employment on substantially
similar terms by the purchaser of the stock or assets of Holdco, or the Company,
if the Executive’s employment hereunder is continued by Holdco or one of its
continuing affiliates, or if the Executive does not actually terminate
employment. Further, if Holdco and its affiliates terminates the Executive’s
employment without Cause or the Executive terminates his employment for Good
Reason, in either case, within six (6) months prior to or twenty-four
(24) months following the consummation of such Change in Control (the “Change in
Control Protection Period”), the Executive shall be deemed to have had

 

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a Change in Control Termination. As used herein, a “Change in Control” shall be
deemed to have occurred solely upon the occurrence of any of the following
events:

(i)    a change in the ownership of Holdco within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(v) as in effect on the date hereof; or

(ii)    a change in the ownership of all or substantially all of Holdco’s assets
within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vii) as in
effect on the date hereof; or

(iii)    the (A) acquisition of more than forty percent (40%) of the total value
of Holdco capital stock in one transaction or a series of related transactions
by a person or more than one person acting as a group, which (B) within 12
months thereafter results in the replacement of more than fifty percent (50%) of
the make-up of the Holdco Board of Directors, as compared to its make-up
immediately prior to such acquisition (or series of acquisitions), that is not
endorsed by majority of the members of the Holdco board of directors as of
immediately prior to such acquisition (or series of acquisitions).

(e)    Date of Termination. The “Date of Termination” means the date of the
Executive’s death, the Disability Effective Date or the date on which the
termination of the Executive’s employment by Holdco and its affiliates, or by
the Executive, is effective, as the case may be, including by reason of the
expiration of the Employment Period.

5.    Obligations of Holdco and the Company Upon Termination.

(a)    By Holdco and the Company Upon the Executive’s Death or Permanent
Disability. If the Executive dies during the Employment Period or Holdco and its
affiliates terminates the Executive’s employment due to the Executive’s
Permanent Disability, Holdco or any of its affiliates shall pay the Executive or
his legal representative:

(i)    the Executive’s accrued but unpaid cash compensation (the “Accrued
Obligations”), which shall equal the sum of (1) any portion of the Executive’s
Annual Base Salary through the Date of Termination that has not yet been paid;
(2) any annual bonus that the Executive has earned for a prior full calendar
year that has ended prior to the date of termination but which has not yet been
calculated and paid (the “Prior Year’s Bonus”); and (3) any unreimbursed
expenses incurred prior to the Date of Termination, including any then unpaid
car allowance for the period during which the Executive was employed by the
Company; and

(ii)    an amount equal to a pro rata Annual Bonus for the year of termination,
which pro-ration shall reflect the number of days the Executive was employed by
Holdco and its affiliates in the applicable year prior to the Date of
Termination.

The Accrued Obligations (other than the Prior Year’s Bonus) shall be paid in
cash within thirty (30) days of the Date of Termination. The Annual Bonus, if
earned, shall be pro-rated as described above and both such pro-rated Annual
Bonus and the Prior Year’s Bonus, if payable, shall otherwise be calculated and
paid in accordance with Section 3(b)). Notwithstanding anything to the contrary
set forth herein, the Executive shall not be entitled to the Prior Year’s Bonus
or any

 

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payment or benefit pursuant to clause (ii) of this Section 5(a) unless the
Executive (or his legal representative) shall have executed a release of any and
all legal claims substantially in the form attached hereto as Exhibit A (which
form may be modified by Holdco or the Company to the extent necessary to reflect
execution by a person other than the Executive and to include restrictive
covenants that are consistent with those set forth herein) (the “Release”) no
later than twenty-one (21) days (or, if so instructed by Holdco or the Company,
forty-five (45) days) following the Date of Termination and shall not have
revoked the Release in accordance with its terms. Holdco or the Company shall
provide the final Release promptly in connection with any termination of the
Executive’s employment hereunder.

(b)    By Holdco and the Company for Cause. If the Executive’s employment is
terminated by Holdco and its affiliates for “Cause” (as hereinafter defined),
then the Executive shall be entitled to only the payment of the Accrued
Obligations (excluding the Prior Year’s Bonus, which shall not be payable),
which shall be paid to the Executive in cash in a lump sum within thirty
(30) days of the Date of Termination and neither the Holdco nor any of its
affiliates shall have any further obligation under this Agreement, except as
expressly provided herein. For purposes of this Agreement, “Cause” shall mean
(1) conviction of the Executive by a court of competent jurisdiction of a felony
(excluding felonies under any state or local vehicle and traffic code); (2) any
act of intentional fraud in connection with his duties under this Agreement;
(3) any act of gross negligence or willful misconduct with respect to the
Executive’s duties and/or performance under this Agreement and (4) any act of
willful disobedience in violation of the Executive’s duties; provided, in the
case of clause (3) or (4), that the Executive has not cured the circumstances
giving rise to “Cause” within fifteen (15) days of the date Holdco or any of its
affiliates gives notice to the Executive of its intent to terminate his
employment on such basis.

(c)    By Holdco for any reason other than Cause or by the Executive for Good
Reason other than a Change in Control Termination. If the Executive’s employment
is terminated during the Employment Period (i) by Holdco and its affiliates
other than for Cause, death or Permanent Disability or (ii) by the Executive for
Good Reason, in each case, except if such termination is a Change in Control
Termination:

(i) Holdco or one of his affiliates shall pay to the Executive the Accrued
Obligations, paid in cash within thirty (30) days of the Date of Termination;
provided that the Prior Year’s Bonus, if earned, shall be calculated and paid in
accordance with Section 3(b);

(ii) Holdco or one of his affiliates shall pay to the Executive the following:

(A) a severance payment (the “Severance Payment”), in an amount equal to twelve
(12) months’ Annual Base Salary,

(B) an amount equal to a pro rata Annual Bonus for the year of termination,
calculated and paid in accordance with Section 3(b), which pro-ration shall
reflect the number of days the Executive was employed by Holdco and its
affiliates in the applicable year prior to the Date of Termination, and

 

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(C) any stock options, restricted stock, restricted stock units, performance
stock units or similar awards shall be treated as follows: (A) such awards or
rights which are due to vest within 364 days of such Date of Termination and
which vest solely based on the Executive’s continued service during such period
shall immediately become fully vested as of the date of the Date of Termination,
(B) restricted cash awards which are due to vest within 364 days of such Date of
Termination and which vest solely based on the Executive’s continued service
during such period shall immediately become fully vested as of the date of the
Date of Termination, and (C) such awards or rights that vest upon the occurrence
of specified performance metrics, shall be treated as earned and vest as
follows: (1) if the full performance period has elapsed as of the date of the
Date of Termination, such awards and rights shall be earned based on actual
achievement of the applicable performance goals, as provided in the applicable
award agreement and shall immediately become vested without pro-ration and
(2) otherwise, such awards and rights shall be earned based on assumed
achievement of the applicable performance goals at 100% of the performance
target, as provided in the applicable award agreement, and shall immediately
vest as to a prorated portion of each such award or right based on the date
which is 364 days following the Date of Termination during the applicable full
performance period.

The Severance Payment shall be payable in cash in the form of salary
continuation over the twelve (12) months following the Date of Termination, with
the first payment(s) being payable in arrears on the date that is sixty
(60) days following the Date of Termination. Notwithstanding anything to the
contrary set forth herein, the Executive shall not be entitled to the Prior
Year’s Bonus or any payment or benefit pursuant to clause (ii) of this
Section 5(c) unless the Executive shall have, at the written request of Holdco
or any its affiliates, executed the Release no later than twenty-one (21) days
(or, if so instructed by Holdco and its affiliates, forty-five (45) days)
following the date of the Change in Control Termination and shall not have
revoked such release in accordance with its terms. Holdco or the Company shall
provide the final Release promptly in connection with any termination of the
Executive’s employment hereunder.

(d)    Change in Control Termination. Notwithstanding anything to the contrary
set forth herein, in the event of a Change in Control Termination:

(i)    Holdco or any of its affiliates shall pay to the Executive the Accrued
Obligations;

(ii)    Holdco or any of its affiliates shall pay to the Executive:

(A)    an amount equal to two times the sum of (1) the Executive’s then current
Annual Base Salary and (2) the target Annual Bonus,

(B)    an amount equal to a pro rata Annual Bonus for the year of termination,
calculated and paid in accordance with Section 3(b), which pro-ration shall
reflect the number of days the Executive was employed by Holdco or any of its
affiliates in the applicable year prior to the Date of Termination, and

 

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(C)    provided that the Executive timely elects to continue his coverage in the
group health plan covering employees of the Company or Holdco under the federal
law known as “COBRA”, a monthly amount equal to that portion of the monthly
health premiums for such coverage paid by Holdco or the Company on behalf of the
Executive prior to the Date of Termination until the date that is twenty-four
(24) months following the Date of Termination (the “Health Continuation
Benefits”); and

(iii)    any stock options, restricted stock, restricted stock units,
performance stock units or similar awards (or any awards or rights issued in
exchange for such grants in connection with a Change in Control or otherwise),
shall be treated as follows: (A) such awards or rights that vest solely based on
the Executive’s continued service over time shall immediately become fully
vested as of the date of the Change in Control Termination, (B) restricted cash
awards that vest solely based on Executive’s continued service over time shall
immediately become fully vested as of the date of the Change in Control
Termination, and (C) such awards or rights that vest upon the occurrence of
specified performance metrics, shall be treated as earned and vest as follows:
(1) if the full performance period has elapsed as of the date of the Change in
Control Termination, such awards and rights shall be earned based on actual
achievement of the applicable performance goals, as provided in the applicable
award agreement and shall immediately become vested without pro-ration and
(2) otherwise, such awards and rights shall be earned based on assumed
achievement of the applicable performance goals at 100% of the performance
target, as provided in the applicable award agreement, and shall immediately
vest as to a prorated portion of each such award or right based on the number of
days of the Executive’s actual employment or other service with Holdco or any of
its affiliates prior to the Change in Control Termination during the applicable
full performance period; provided, that, if the Executive does not experience a
Change in Control Termination prior to the end of the applicable original
performance period, such awards and rights shall be earned based on assumed
achievement of the applicable performance goals at 100% of the performance
target, as provided in the applicable award agreement, and shall be eligible to
vest as of the last day of the applicable original performance period without
pro-ration, subject to the terms of the applicable award agreement. Any stock
options, restricted stock, restricted stock units, performance stock units,
restricted cash or similar awards (or any awards or rights issued in exchange
for such grants in connection with a Change in Control or otherwise) that do not
vest after application of the preceding sentence or clause (iii) hereof shall be
immediately forfeited without payment due thereon.

Notwithstanding the foregoing, in the event that the Health Continuation
Benefits would subject the Executive or Holdco or any of its affiliates to any
tax or penalty under the ACA or Section 105(h) of the Code (as defined below),
or applicable subsequent regulations, guidance or successor statutes, the
Executive and the Company agree to work together in good faith to restructure
the Health Continuation Benefits in a manner that avoids such adverse
consequences.

 

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All amounts payable hereunder (except the pro rata Annual Bonus and the Prior
Year’s Bonus, which are each payable in accordance with Section 3(b), the
Accrued Obligations (other than the Prior Year’s Bonus), which shall be
calculated and paid in a lump sum in cash within thirty (30) days of the date of
the Change in Control Termination and the Health Continuation Benefits, which
shall be paid as described above in this Section 5(d)) shall be paid in cash in
a lump sum on the date that is the later of sixty (60) days following the date
of the Change in Control Termination or sixty (60) days following the
consummation of the Change in Control (except that, if the Change in Control
Termination occurs due to a qualifying termination within six (6) months prior
to a Change in Control, such payment will be made over the twenty four
(24) months following the Date of Termination, with the first payment(s) being
payable in arrears on the date that is sixty (60) days following the Date of
Termination). Notwithstanding anything to the contrary set forth herein, the
Executive shall not be entitled to the Prior Year’s Bonus or any payment or
benefit pursuant to clauses (ii) or (iii) of this Section 5(d) unless the
Executive shall have, at the written request of Holdco or any its affiliates,
executed the Release no later than twenty-one (21) days (or, if so instructed by
Holdco and its affiliates, forty-five (45) days) following the date of the
Change in Control Termination and shall not have revoked such release in
accordance with its terms. Holdco or the Company shall provide the final Release
promptly in connection with any termination of the Executive’s employment
hereunder.

(e)     By the Executive other than for Good Reason. If during the Employment
Period the Executive terminates his employment with Holdco and its affiliates
other than for Good Reason, Holdco or one of its affiliates shall pay the
Accrued Obligations (excluding the Prior Year’s Bonus, which shall not be
payable) to the Executive in a lump sum in cash within thirty (30) days of the
Date of Termination and neither Holdco or any of its affiliates shall have any
further obligation under this Agreement except as expressly provided herein.

(f)    Expiration of the Term. Unless otherwise terminated pursuant to any of
the foregoing clauses of this Section 5 or renewed in the ordinary course, the
Executive’s employment hereunder will automatically terminate at the expiration
of the Employment Period and Holdco or the Company shall pay to the Executive
the Accrued Obligations in a lump sum in cash within thirty (30) days of the
Date of Termination, no additional amount will be due and no further Restriction
Period shall apply; provided that the Prior Year’s Bonus, if earned, shall be
calculated and paid in accordance with Section 3(b); and provided, further, that
if the Company allows the Executive’s employment to terminate due to an
expiration of the Employment Period occurring during the Change in Control
Protection Period, the Executive will be deemed to have had a Change in Control
Termination and will be entitled to the payments and benefits described in
Section 5(d) above and shall not otherwise receive payment under this
Section 5(f).

6.    Section 409A. The parties intend for the compensation provided under this
Agreement to comply with, or be exempt from, the provisions of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) (together with the
regulations thereunder, “Section 409A”) and, accordingly, to the maximum extent
permitted, this Agreement will be interpreted to be in compliance with or exempt
from Section 409A. The parties agree to work together in good faith to consider
amendments to this Agreement and take such reasonable actions which are
necessary, appropriate or desirable to avoid imposition of additional tax or
income recognition to Executive prior to actual payment under Section 409A.
Notwithstanding the foregoing, in no event shall Holdco or any of its affiliates
have any liability to the Executive or to

 

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any other person claiming rights under this Agreement relating to the failure or
alleged failure of any payment or benefit under this Agreement to comply with,
or be exempt from, the provisions of Section 409A.

(a)    Definitions. For purposes of this Agreement, all references to
“termination of employment” and similar or correlative phrases shall be
construed to require a “separation from service” (as defined in
Section 1.409A-1(h) of the Treasury regulations after giving effect to the
presumptions contained therein), and the term “specified employee” means an
individual determined by Holdco to be a specified employee under Treasury
regulation Section 1.409A-1(i).

(b)    Certain Delayed Payments. If any payment or benefit hereunder
constituting “nonqualified deferred compensation” subject to Section 409A would
be subject to subsection (a)(2)(B)(i) of Section 409A (relating to payments made
to “specified employees” of publicly-traded companies upon separation from
service), any such payment or benefit to which the Executive would otherwise be
entitled during the six (6) month period following the Executive’s separation
from service will instead be provided or paid without interest on the first
business day following the expiration of such six (6) month period, or if
earlier, the date of the Executive’s death.

(c)    Separate Payments. Each payment made under this Agreement shall be
treated as a separate payment.

(d)    Reimbursements. Notwithstanding anything to the contrary in this
Agreement, any reimbursement that constitutes or could constitute nonqualified
deferred compensation subject to Section 409A will be subject to the following
additional requirements: (i) the expenses eligible for reimbursement will have
been incurred during the term of this Agreement, (ii) the amount of expenses
eligible for reimbursement during any calendar year will not affect the expenses
eligible for reimbursement in any other taxable year; (iii) reimbursement will
be made not later than December 31 of the calendar year following the calendar
year in which the expense was incurred; and (iv) the right to reimbursement will
not be subject to liquidation or exchange for any other benefit.

7.    Full Settlement. Holdco’s and the Company’s obligations to provide for the
payments provided for in, and otherwise to perform its obligations under, this
Agreement shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action that Holdco, the Company or any of their
affiliates may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and such amounts shall not be reduced, regardless
of whether the Executive obtains other employment.

8.    Confidential Information. The Executive shall hold in a fiduciary capacity
for the benefit of Holdco and its affiliates all secret or confidential
information, knowledge or data relating to the Company, Holdco or any of their
affiliates and their respective businesses that the Executive obtains during the
Executive’s employment by Holdco or the Company (whether before, during or after
the Employment Period) and that is not public knowledge (other than as a result
of the Executive’s violation of this Section 8) (“Confidential Information”).
The Executive shall not communicate, divulge or disseminate Confidential
Information at any time during or after the

 

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Executive’s employment with Holdco or the Company, except with the prior written
consent of Holdco or the Company or as otherwise required by law. For the
avoidance of doubt, (a) nothing contained in this Agreement or any other
agreement containing confidentiality provisions or other restrictive covenants
in favor of any of Holdco or any of its affiliates, shall be construed to limit,
restrict or in any other way affect the Executive’s communicating with any
governmental agency or entity, or communicating with any official or staff
person of a governmental agency or entity, concerning matters relevant to the
governmental agency or entity and (b) the Executive will not be held criminally
or civilly liable under any federal or state trade secret law for disclosing a
trade secret (i) in confidence to a federal, state, or local government
official, either directly or indirectly, or to an attorney, solely for the
purpose of reporting or investigating a suspected violation of law, or (ii) in a
complaint or other document filed under seal in a lawsuit or other proceeding;
provided that notwithstanding this immunity from liability, the Executive may be
held liable if the Executive unlawfully accesses trade secrets by unauthorized
means.

9.    Noncompetition; Nonsolicitation.

(a)    Noncompetition. During the Employment Period, and following termination
of the Executive’s employment with Holdco and its affiliates, during the
“Restriction Period” (as hereinafter defined), the Executive shall not directly
or indirectly participate in or permit his name directly or indirectly to be
used by or become associated with (including as an advisor, representative,
agent, promoter, independent contractor, provider of personal services or
otherwise) any person, corporation, partnership, firm, association or other
enterprise or entity (a “person”) that is, or intends to be, engaged in any
business which is in competition with any business of Holdco and its affiliates
in any geographic area in which Holdco and its affiliates operate, compete or
are engaged in such business or at such time intend so to operate, compete or
become engaged in such business; provided, however, that the foregoing will not
prohibit the Executive from participating in or becoming associated with a
person if (i) less than 10% of the consolidated gross revenues of such person,
together with its affiliates, derive from activities or businesses that are in
competition with any business of Holdco or any of its affiliates (a “Competitive
Business”) and (ii) the Executive does not, directly or indirectly, participate
in, become associated with, or otherwise have responsibilities that relate to
the conduct or operations of, any Competitive Business that is conducted by such
person or a division, group, or subsidiary or affiliate of such person. For
purposes of this Agreement, the term “participate” includes any direct or
indirect interest, whether as an officer, director, employee, partner, sole
proprietor, trustee, beneficiary, agent, representative, independent contractor,
consultant, advisor, provider of personal services, creditor, or owner (other
than by ownership of less than five percent of the stock of a publicly-held
corporation whose stock is traded on a national securities exchange or in an
over-the-counter market).

(b)    Nonsolicitation. During the Employment Period, and during the Restriction
Period following termination of employment, the Executive shall not, directly or
indirectly, encourage or solicit, or assist any other person or firm in
encouraging or soliciting, any person or firm that during the six month period
preceding such termination of the Executive’s employment with Holdco and its
affiliates (or, if such action occurs during the Employment Period, on the date
such action was taken) is or was engaged in a business relationship with Holdco
and its affiliates to terminate its relationship with Holdco and its affiliates
or, in the case of any such person, to engage in a business relationship with a
Competitor.

 

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(c)    No Hire. During the Employment Period, and during the Restriction Period
following termination of employment, the Executive will not, except with the
prior written consent of Holdco and its affiliates, directly or indirectly,
induce any employee of Holdco and its affiliates to terminate employment with
such entity, and will not, directly or indirectly, either individually or as
owner, agent, employee, consultant or otherwise, employ, offer employment or
cause employment to be offered to any person (including employment as an
independent contractor) who is or was employed by Holdco and its affiliates
unless such person shall have ceased to be employed by such entity for a period
of at least twelve (12) months; provided that the foregoing shall not apply to
inducing any employee pursuant to a blanket solicitation not specifically
targeted at that employee. For purposes of this Section 9(c), “employment” shall
be deemed to include rendering services as an independent contractor and
“employees” shall be deemed to include independent contractors.

(d)    Restriction Period. The term “Restriction Period” as used herein, shall
mean the twelve (12)-month period (except in the case of a Change in Control
Termination (or a deemed Change in Control Termination under Section 5(f)), in
which case such period shall be the two-year period) immediately following the
Date of Termination (other than a termination at the expiration of the
Employment Period in which case there will be no post-employment restriction
period).

(e)    Return of Confidential Information. Promptly following the Executive’s
termination of employment, including due to expiration of the Employment Period,
the Executive shall return to the Company all property of Holdco and its
affiliates, and all copies thereof, in the Executive’s possession or under his
control, including, without limitation, all Confidential Information in whatever
media such Confidential Information is maintained.

(f)    Injunctive Relief. The Executive acknowledges and agrees that the
Restriction Period and the covenants and obligations of the Executive in
Section 8 and this Section 9 with respect to noncompetition, nonsolicitation and
confidentiality and with respect to the property of Holdco and its affiliates,
and the territories covered thereby, are fair and reasonable and the result of
negotiation. The Executive further acknowledges and agrees that the covenants
and obligations of the Executive in Section 8 and this Section 9 with respect to
noncompetition, nonsolicitation and confidentiality and with respect to the
property of Holdco and its affiliates, and the territories covered thereby,
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants and obligations will cause Holdco and its
affiliates irreparable injury for which adequate remedies are not available at
law. Therefore, the Executive agrees that Holdco and its affiliates shall be
entitled to an injunction, restraining order or such other equitable relief as a
court of competent jurisdiction may deem necessary or appropriate to restrain
the Executive from committing any violation of such covenants and obligations.
These injunctive remedies are cumulative and are in addition to any other rights
and remedies Holdco and its affiliates may have at law or in equity. If, at the
time of enforcement of Section 8 and/or this Section 9, a court holds that any
of the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum period, scope, and/or
geographical area legally permissible under such circumstances will be
substituted for the period, scope and/or area stated herein.

 

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10.    Successors.

(a)    This Agreement is personal to the Executive and shall not be assignable
by the Executive. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives and heirs and successors.

(b)    This Agreement shall inure to the benefit of and be binding upon Holdco,
the Company and their respective successors and assigns.

11.    Section 280G. In the event that Holdco and its affiliates undergoes a
change in control at a time when it (or any affiliate of the Company, including
Holdco, that would be treated, together with Holdco, as a single corporation
under Section 280G of the Code and the regulations thereunder) has stock that is
readily tradeable on an established securities market (within the meaning of
Section 280G of the Code and the regulations thereunder), if all, or any
portion, of the payments provided under this Agreement, either alone or together
with other payments or benefits which the Executive receives or is entitled to
receive from Holdco and its affiliates, could constitute an “excess parachute
payment” within the meaning of Section 280G of the Code, then the Executive
shall be entitled to receive (i) an amount limited so that no portion thereof
shall fail to be tax deductible under Section 280G of the Code (the “Limited
Amount”), or (ii) if the amount otherwise payable hereunder, together with the
other payments or benefits the Executive is so entitled to receive, (without
regard to clause (i)) reduced by the excise tax imposed by Section 4999 of the
Code and all other applicable federal, state and local taxes (with income taxes
all computed at the highest applicable marginal rate) is greater than the
Limited Amount reduced by all taxes applicable thereto (with income taxes all
computed at the highest marginal rate), the amount otherwise payable hereunder.
If it is determined that the Limited Amount will maximize the Executive’s
after-tax proceeds, payments and benefits shall be reduced to equal the Limited
Amount in the following order: (i) first, by reducing cash severance payments,
(ii) second, by reducing other payments and benefits to which Q&A 24(c) of
Section 1.280G-1 of the Treasury Regulations does not apply, and (iii) finally,
by reducing all remaining payments and benefits, with all such reductions done
on a pro rata basis. All determinations made pursuant this Section 11 will be
made at Holdco’s expense by the independent public accounting firm most recently
serving as the Company’s outside auditors or such other accounting or benefits
consulting group or firm as Holdco may designate. Such accounting firm or other
designated preparer engaged to make the determinations hereunder shall provide
its calculations, together with all supporting documentation, to Holdco and
Executive as soon as reasonably practicable following the date such
determinations are completed.

12.    Miscellaneous.

(a)    This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without reference to principles of conflict
of laws. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their respective
heirs, successors and legal representatives.

 

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(b)    All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by overnight
courier or by registered or certified mail, return receipt requested, postage
prepaid, or by facsimile (with receipt confirmation), addressed as follows:

 

If to the Executive:    Todd Vogensen       At his most recent address      
shown in the Company’s records    If to Holdco:    Party City Holdco, Inc.    or
the Company    80 Grasslands Road       Elmsford, NY 10523       Attention:
Corporate Secretary       Fax no.: (914) 345-2056   

or to such other address as either party furnishes to the other in writing in
accordance with this Section 12(b). Notices and communications shall be
effective when actually received by the addressee.

(c)    The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.

(d)    Notwithstanding any other provision of this Agreement, Holdco and its
affiliates may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes or other amounts that are required to be withheld
by applicable laws or regulations or otherwise. In addition, the obligations of
Holdco and its affiliates under this Agreement shall be conditional on
compliance with this Section 12(d), and Holdco and its affiliates shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment otherwise due to the Executive.

(e)    Any party’s failure to insist upon strict compliance with any provision
of, or to assert any right under, this Agreement shall not be deemed to be a
waiver of such provision or right or of any other provision of or right under
this Agreement.

(f)    Except as expressly set forth in this Agreement, all disagreements,
disputes, controversies and claims arising out of this Agreement and the
Executive’s employment hereunder, shall be submitted to and resolved by
arbitration in accordance with and pursuant to the Employment Arbitration Rules
of the American Arbitration Association, as then in effect. The parties agree
that any dispute will be heard by a single arbitrator. The arbitrator shall be
selected by mutual agreement of the Parties, or if no agreement can be reached,
the arbitrator shall be selected by the American Arbitration Association. All
arbitration costs shall be shared equally by the parties and each party shall
bear its own costs and expenses in the event of any dispute hereunder.

(g)     The Executive acknowledges that this Agreement, together with the
Exhibit hereto and the other agreements referred to herein except as modified
herein or therein, supersedes all other agreements and understandings, both
written and oral, between the Executive, on one hand, and Holdco and its
affiliates, on the other, with respect to the subject matter hereof.

(h)    This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which shall together constitute one and the
same instrument.

 

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(i)    Provisions of this Agreement shall survive any termination of employment
if so provided herein or if necessary or desirable to accomplish the purposes of
other surviving provisions, including, without limitation, the obligations of
the Executive under Sections 8 and 9 hereof.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization of their respective boards of directors, Holdco
and the Company have each caused this Agreement to be executed in its name on
its behalf, all as of the day and year first above written.

 

PARTY CITY HOLDCO INC. By:  

/s/ James Harrison

Name:   James Harrison Title:   Chief Executive Officer

 

PARTY CITY HOLDINGS INC. By:  

/s/ Brad Weston

Name:   Brad Weston Title:   President

 

/s/ Todd Vogensen

Todd Vogensen

 

[Signature Page to Employment Agreement]

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Exhibit A

FORM OF RELEASE OF CLAIMS

This Release of Claims is provided by me, Todd Vogensen (or by my designated
beneficiary or estate, in the event of my death during my employment), pursuant
to the Employment Agreement between me, Party City Holdings Inc. (the “Company”)
and Party City Holdco Inc. (“Holdco”) effective as of February 3, 2020 (the
“Employment Agreement”).

This Release of Claims is given in consideration of the severance benefits to be
provided to me (or, in the event of my death during my employment, to my
designated beneficiary) in connection with the termination of my employment
under Section 5 of the Employment Agreement (the “Separation Payments”), which
are conditioned on my signing this Release of Claims and to which I am not
otherwise entitled, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged. On my own behalf and that of my
heirs, executors, administrators, beneficiaries, representatives and assigns,
and all others connected with or claiming through me, I hereby release and
forever discharge the Company from any and all causes of action, rights or
claims of any type or description, known or unknown, which I have had in the
past, now have or might have, through the date of my signing of this Release of
Claims. This includes, without limitation, any and all causes of action, rights
or claims in any way resulting from, arising out of or connected with my
employment by the Company or the termination of that employment or pursuant to
any federal, state or local law, regulation or other requirement, including
without limitation Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act, the Age Discrimination in Employment Act, the fair employment
practices statutes of the state or states in which I have provided services to
the Company or any other federal, state, local or foreign law, all as amended,
any contracts of employment, any tort claims, or any agreements, plans or
policies.

For purposes of this Release of Claims, the word “Company” always includes the
Company, Holdco the subsidiaries and affiliates of the Company or Holdco and all
of their respective past, present and future officers, directors, trustees,
shareholders, employees, employee benefit plans and any of the trustees or
administrators thereof, agents, general and limited partners, members, managers,
investors, joint venturers, representatives, predecessors, successors and
assigns, and all others connected with any of them, both individually and in
their official capacities.

Nothing in this Release of Claims shall be construed to prohibit me from filing
a charge with or participating in any investigation or proceeding conducted by
the federal Equal Employment Opportunity Commission or a comparable state or
local agency, except that I hereby agree to waive my right to recover monetary
damages or other individual relief in any charge, complaint or lawsuit filed by
me or by anyone else on my behalf.

Nothing in this Release of Claims is intended to or does waive or release any
rights I may have with respect to (i) coverage under liability insurance or
indemnification rights provided or maintained by the Company during, or
applicable to, my employment with the Company, or

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under any other obligation or policy of insurance maintained by the Company in
accordance with their respective terms; (ii) any other defense or indemnity
right under applicable law; (iii) the enforcement of the right to any payment or
benefits due upon the termination of my employment in accordance with the
express terms of the Employment Agreement or (iv) any right or claim that
cannot, by law, be waived or released through this Release of Claims.

Also excluded from the scope of this Release of Claims is any right to benefits
that were vested or eligible for continuation under the Company’s employee
benefit plans on the date on which my employment with the Company terminated, in
accordance with the terms of such plans.

In signing this Release of Claims, I give the Company assurance that I have
returned to the Company any and all documents, materials and information related
to the business, whether present or otherwise, of the Company and all keys and
other property of the Company that were in my possession or control, all as
required by and consistent with Section 9(e) of the Employment Agreement. I
agree that I will not, for any purpose, attempt to access or use any computer or
computer network or system of the Company, including without limitation their
electronic mail systems. I further acknowledge that I have disclosed to the
Company all passwords necessary or desirable to enable the Company to access all
information which I have password-protected on its computer network or system.

In signing this Release of Claims, I agree that I have been paid in full all
compensation due to me, whether for services rendered by me to the Company or
otherwise, through the date on which my employment with the Company terminated
and that, exclusive only of the Separation Payments and the Accrued Obligations,
as defined in the Employment Agreement (except as otherwise provided therein),
no further compensation of any kind shall be due to me by the Company, whether
arising under the Employment Agreement or otherwise, in connection with my
employment or the termination thereof. I also agree that except for any right I
and my eligible dependents may have to continue participation in the Company’s
health and dental plans under the federal law commonly known as COBRA, my right
to participate in any employee benefit plan of the Company will be determined in
accordance with the terms of such plan.

I acknowledge that my eligibility for the Separation Payments is not only
contingent on my signing and returning this Release of Claims to the Company in
a timely manner and not revoking it thereafter, but also is subject to my
compliance with the covenants contained in the Employment Agreement.

In signing this Release of Claims, acknowledge that I have not relied on any
promises or representations, express or implied, that are not set forth
expressly in this Release of Claims. I further acknowledge that I am waiving and
releasing any rights I may have under the Age Discrimination in Employment Act
of 1967, as amended (“ADEA”), and that this waiver and release is knowing and
voluntary and is being done with a full understanding of its terms. I agree that
the consideration given for this wavier and release is in addition to anything
of value to which I was already entitled. I further acknowledge that I have been
advised by this writing as required by the ADEA that:

1.    I have the right to and am advised by the Company to consult with an
attorney prior to executing this Release of Claims; and I acknowledge that I
have had sufficient time to consider this Release of Claims and to consult with
an attorney, if I wished to do so, or to consult with any other person of my
choosing before signing;

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2.    I may not sign this Release of Claims prior to the termination of my
employment, but that I may consider the terms of this Release of Claims for up
to twenty-one (21) days (or, if the Company so instructs, forty-five (45) days)
from the later of the date my employment with the Company terminates or the date
I receive this Release of Claims;

3.     I have seven (7) days following my execution of this Release of Claims to
revoke this Release of Claims; and

4.    This Release of Claims shall not be effective until the revocation period
has expired.

Intending to be legally bound, I have signed this Release of Claims under seal
as of the date written below.

 

Signature:                                    
                                                                  

Date signed:                                  

 

Party City Holdco Inc.

 

Name: Title: Party City Holdings Inc.

 

Name: Title: