Document:

EXHIBIT 10.18

 

Exhibit 10.18

Party City Corporation

Summary of FY 2005 Corporate Bonus Plan

Bonus Period:

	•  	July 4, 2004 through July 2, 2005.

Eligible Participants:

	•  	All officers, corporate directors and certain managers are eligible to participate.
	 
	•  	Employees must be employed (i) in an eligible position for the last six months of the bonus period and (ii)
at the time the bonus is paid.
	 
	•  	Employees must be in good standing at the time the bonus is paid. “Good standing” is defined as performing
at a “meets expectations” level in accordance with applicable internal review policies.

Bonus Criteria:

	•  	50% of an employee’s target bonus will be based on the Company’s EBITDA target
(defined as earnings before interest, taxes, depreciation and amortization).

	•  	50% of an employee’s target bonus will be based on the individual’s performance:
	 
	•  	The performance goals for the executive officers will be determined by the CEO while the performance goals for
the CEO will be determined by the Compensation Committee. For all other eligible employees, performance goals will
be determined by the applicable supervisor of the employee.
	 
	•  	The performance goals must be measurable and based on goals not otherwise part of the individual’s job
description.
	 
	•  	The target bonus for each employee level will be approved by the Compensation Committee.
	 
	•  	If the Company does not achieve 85% of its EBITDA target, employees are not entitled to receive any bonus,
regardless of individual performance.
	 
	•  	The Company reserves the right to adjust the EBITDA target based on market conditions and make other
discretionary adjustments.

Pro Rata Bonuses:

	•  	Eligible employees who work less than twelve months during the fiscal year (i.e., a new hire or due to a leave
of absence) will be eligible for a pro-rated bonus in 1/12th increments corresponding with each “full
month” of employment.
	 
	•  	Leave of absences (including, but not limited to, absences due to the FMLA, workers compensation or a personal
leave of absence) will result in a prorated bonus payment based on the duration of the leave.

Bonus Payout:

	•  	It is anticipated that FY 2005 bonuses will be paid in September 2005.EXHIBIT 10.19

 

Exhibit 10.19

Party City Corporation

Compensation Payable to Non-Employee Directors

     The non-employee directors of Party City Corporation (the “Company”) will receive the
following compensation for service on the Company’s Board of Directors:

Participation Fees

	 	 	 	 	 
	Annual Retainer
	 	$	25,000	 
	Board Meeting Fee
	 	$	2,000	 
	Audit Committee Meeting Fee—Chairperson
	 	$	4,000	 
	Audit Committee Meeting Fee—Member
	 	$	2,000	 
	Compensation Committee Meeting Fee—Chairperson
	 	$	3,000	 
	Compensation Committee Meeting Fee—Member
	 	$	2,000	 
	Nominating and Corporate Governance Committee Meeting Fee—Chairperson
	 	$	2,000	 
	Nominating and Corporate Governance Committee Meeting Fee—Member
	 	$	1,000	 

In addition, any member of the Board of Directors who is requested by the Chairperson to perform
services for the Company that is outside of the scope of preparing for or attending a meeting will
be paid $2,000 per each eight hours of time spent performing such services. The Company also
reimburses directors for travel and lodging expenses, if any, incurred in connection with
attendance at the Board of Directors and Committee meetings.

Stock Option Grants 

The Company’s non-employee directors each receive an annual grant of 10,000 stock options on or
following the date of the annual meeting of stockholders. Such options will be fully vested at the
time of grant.EXHIBIT 10.21

 

Exhibit 10.21

FIRST AMENDMENT AGREEMENT

     THIS FIRST AMENDMENT AGREEMENT (this “Amendment”) is entered into as of February 10,
2005 by and among, on the one hand, the financial institutions from time to time party to the Loan
Agreement referred to below as Lenders (the “Lenders”), Wells Fargo Retail Finance, LLC, as
the arranger, collateral and administrative agent for the Lender Group and any other holder of
Obligations (in such capacity, “Agent”), and, on the other hand, Party City Corporation, a
Delaware corporation (the “Borrower”).

RECITALS

     Borrower, the Lenders and the Agent have entered into a Loan and Security Agreement dated as
of January 9, 2003 (as amended to the date hereof, as amended hereby and as further amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”)
pursuant to which the Lenders and the Agent have agreed to make revolving credit loans and to
provide other financial accommodations to Borrower. The parties signatory hereto wish to amend the
Loan Agreement as set forth herein.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties signatory hereto agree as follows.

     1. Definitions. Capitalized terms not otherwise defined herein shall have the
respective meanings given such terms in the Loan Agreement.

     2. Amendment. Section 7.1 of the Loan Agreement is hereby amended by deleting
subsection (h) of such Section 7.1 in its entirety and inserting in lieu thereof the
following new subsection (h):

     “(h) Unsecured Indebtedness not otherwise permitted under this Section not to
exceed $1,000,000 in the aggregate at any one time outstanding.”

     3. Conditions Precedent to Amendment. The satisfaction of each of the following,
unless waived or deferred by the Agent in its Permitted Discretion, shall constitute conditions
precedent to the effectiveness of this Amendment.

     (a)
After giving effect to this Amendment, the representations and warranties in the
Loan Agreement and the other Loan Documents
shall be true and correct in all material respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate solely to an
earlier date);

     (b)
After giving effect to this Amendment, no Default or Event of Default shall have occurred and be continuing on the date hereof,
nor shall any Default or Event of Default result from the consummation of the transactions
contemplated herein;

     (c) This Amendment shall have been executed by Borrower, the Agent and the Required Lenders
and shall be in full force and effect; and

 

 

     (d) No injunction, writ, restraining order, or other order of any nature prohibiting,
directly or indirectly, the consummation of the transactions contemplated herein or by the Loan
Documents shall have been issued and remain in force by any Governmental Authority against
Borrower, the Agent or any Lender.

     4. Representations and Warranties. Borrower hereby represents and warrants to the
Agent that:

     (a) the execution, delivery, and performance of this Amendment and of the Loan Agreement are
within Borrower’s corporate, limited liability company and/or partnership powers, as applicable,
have been duly authorized by all necessary corporate, limited liability company and/or partnership
action, as applicable, and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ or injunction, or award of any arbitrator, court, or governmental
authority, or of the terms of its charter, bylaws or other operative or formative documents, or of
any contract or undertaking to which it is a party or by which any of its properties may be bound
or affected;

     (b) this Amendment has been duly executed and delivered by Borrower;

     (c) this Amendment and the Loan Agreement constitute Borrower’s legal, valid, and binding
obligation, enforceable against Borrower in accordance with its terms;

     (d)
after giving effect to this Amendment, Borrower is in compliance with all of the
terms and provisions set forth in the Loan
Agreement and each of the other Loan Documents, each as previously amended and as amended hereby,
on their part to be observed or performed on or prior to the date hereof;

     (e)
after giving effect to this Amendment, no Default or Event of Default
has occurred and is continuing; and

     (f) since December 31, 2004, no Material Adverse Change has occurred.

     5. Choice of Law. The validity of this Amendment, its construction, interpretation
and enforcement, and the rights of the parties hereunder, shall be determined under, governed by,
and construed in accordance with the laws of the State of New York.

     6. Counterparts; Telefacsimile Execution. This Amendment may be executed in any
number of counterparts and by different parties in separate counterparts, each of which when so
executed and delivered, shall be deemed an original, and all of which, when taken together, shall
constitute one and the same instrument. Delivery of an executed counterpart of a signature page to
this Amendment by telefacsimile shall be as effective as delivery of a manually executed
counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by
telefacsimile also shall deliver a manually executed counterpart of this Amendment but the failure
to deliver a manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.

     7. Reaffirmation. Borrower further reaffirms all of its obligations under the Loan
Agreement and the other Loan Documents.

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     8. Effect on Loan Agreement. The execution, delivery, and performance of this
Amendment, except as expressly set forth herein, shall not operate as a waiver of or as an
amendment of, any right, power, or remedy of the Agent or any Lender under the Loan Agreement.

     9. Further Assurances. Borrower shall execute and deliver all agreements, documents,
and instruments, in form and substance satisfactory to Agent, and take all actions as Agent may
reasonably request from time to time, to perfect and maintain the perfection and priority of the
security interest in the Collateral held by Agent and to fully consummate the transactions
contemplated under this Amendment and the Loan Agreement.

     10. Miscellaneous.

     (a) Upon and after the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Loan
Agreement, and each reference in the other Loan Documents to “the Loan Agreement”, “thereunder”,
“therein”, “thereof”, or words of like import referring to the Loan Agreement, shall mean and be a
reference to the Loan Agreement as amended hereby.

     (b) Except to the extent expressly amended hereby, the Loan Agreement and all other Loan
Documents shall be unaffected hereby, shall continue in full force and effect, are hereby in all
respects ratified and confirmed, and shall constitute the legal, valid, binding and enforceable
obligations of Borrower to the Lenders and the Agent.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	PARTY CITY CORPORATION
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ Gregg Melnick	 	 
	 	 	 	 	 
	

	 	 	 	Name:    Gregg Melnick	 	 
	

	 	 	 	Title:      Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	WELLS FARGO RETAIL FINANCE, LLC,

as Agent and as a Lender
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ Lynn S. Whitmore	 	 
	 	 	 	 	 
	

	 	 	 	Name:    Lynn S. Whitmore	 	 
	

	 	 	 	Title:      Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	FLEET RETAIL FINANCE, INC.,

as a Lender
	 
	 	 	 	 	 	 
	

	 	By:	 	/s/ Christine Hutchinson	 	
	 	 	 	 	 
	

	 	 	 	Name:   Christine Hutchinson	 	 
	

	 	 	 	Title:     Vice President	 	 

Signature Page

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