Document:

EX-10.1

 Exhibit 10.1 

Execution Version 

EMPLOYMENT AGREEMENT 

EMPLOYMENT AGREEMENT (“Agreement”), dated as of the 15th day of July, 2016, by and between Party City Holdings Inc., a
Delaware corporation (the “Company”), Party City Holdco Inc., a Delaware corporation (“Holdco”), and Daniel Sullivan (the “Executive”) and effective as of August 29, 2016 (or, if later, the
date the Executive commences employment with the Company) (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 the Chief Financial Officer of each 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 December 31, 2019, unless sooner terminated as set forth hereinafter (the “Employment Period”). 

2. Position and Duties. 

(a) During the Employment Period, the Executive shall serve as the Chief Financial Officer of the Company and of Holdco with such duties and
responsibilities as are assigned to him by the bylaws or Board of Directors of Holdco (the “Board”) or the Chief Executive Officer of the Company (the “CEO”) consistent with his position as Chief Financial Officer
of the Company and Holdco, including, as the Board or 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 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 do not interfere with the performance of
the Executive’s responsibilities as an employee of the Company or Holdco in accordance with this Agreement. 

  
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 3. Compensation. 

(a) Base Salary. During the Employment Period, the Executive shall receive from the Company an annual base salary of $650,000
(as such amount may be increased from time to time, in the sole discretion of the Board or the Compensation Committee of the Board (the “Committee”), the “Annual Base Salary”), payable in regular intervals in
accordance with the Company’s customary payroll practices 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 Company’s bonus plan for key
executives as in effect from time to time (the “Bonus Plan”). The Annual Bonus (including any pro rata portion thereof, to the extent payable under 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 75% of the Annual Base Salary (the “Target Bonus Amount”) and the maximum
amount of the Annual Bonus shall be 150% of the Annual Base Salary, 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; provided that unless the employment of
the Executive is terminated by the Company for Cause, as defined below, or by the Executive without Good Reason, as defined below, prior to the date the Annual Bonus for 2016 is paid, the Executive’s Annual Bonus for 2016 will be not less than
the Target Bonus Amount. Except as otherwise provided in Section 5 of this Agreement, for any year during which the Executive is employed by the Company and Holdco for less than the entire calendar year (including a year in which the
Executive’s employment is terminated but excluding 2016), the Annual Bonus, if any, shall be determined based on actual performance, pro-rated for the period during which the Executive was employed during such calendar year (based on the number
of days in such calendar year the Executive was so employed divided by 365), as determined in good faith by the Board or the Committee. 

(c) Other Benefits; Car Allowance. During the Employment Period: (i) the Executive shall be eligible to participate in all
incentive, savings and retirement plans, practices, policies and programs of the Company and shall be entitled to paid vacation, to the same extent and 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 by the Company (including, to the extent provided,
without limitation, medical, prescription, dental, disability, employee life insurance, group life insurance, accidental death and travel accident insurance plans and programs) to the same extent and on the same terms and conditions as peer
executives. The term “peer executives” means the Executive Chairman, Chief Executive Officer and Senior Vice Presidents of the Company, if such positions exist, and if such positions do not exist, the definition of the term “peer
executives” shall be determined by the Board or the Committee in good faith. During the Employment Period, the Company will pay the Executive a monthly car allowance equal to $600, which will be paid not later than thirty (30) days after
the end of the month to which it relates. 

  
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 (d) Incentive Equity Grants. 

(i) In connection with the commencement of the Executive’s employment with the Company and Holdco, subject to Board or
Compensation Committee approval prior to the Effective Date, the Executive will receive a one-time grant of options (the “Options”) on the Effective Date to acquire 100,000 shares of Holdco’s common stock, with an exercise
price equal to the closing price of a share of Holdco common stock on the date the Options are granted. Twenty percent (20%) of the Options will vest on each of the first five anniversaries of the Effective Date, subject to the Executive’s
continuous employment with Holdco and/or the Company from the Effective Date through the applicable vesting date. The Options will be granted under and subject to the terms of the Company’s Amended and Restated 2012 Omnibus Equity Incentive
Plan and a stock option agreement that is substantially similar to the form used to evidence grants to peer executives (as defined above). 

(ii) Beginning in 2017, the Executive will also be eligible to receive incentive equity grants under the Company’s new
equity 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. 

(e) 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 the Company for submission of expense reports,
receipts, or similar documentation of such expenses. 
 (f) Indemnification. During and after the Employment Period, the Executive
shall be entitled to all rights to indemnification available under the by-laws or certificate of incorporation of Holdco and the Company, or to which he may otherwise be entitled, through the Company, Holdco 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 or Holdco 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 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 12 months receiving income replacement
benefits for a period of not less than three months under an 

  
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accident and health plan covering employees of the Company; or (iii) has been determined to be totally disabled by the Social Security Administration. A termination of the
Executive’s employment by the Company or Holdco 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. 

(b) Other than Death or Disability. The Company or Holdco 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 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 100 miles from the Company’s offices in Elmsford, New York; any material diminution in the nature or scope of the
Executive’s responsibilities or duties as defined under this Agreement; any material breach by the Company or any affiliate of the Company of any provision of this Agreement or any other written agreement with the Executive, which breach is not
cured within twenty (20) days following written notice by the Executive to the Company; or any material failure of 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 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 if he gives written notice to the Company setting forth in reasonable detail the nature of such Good Reason, and terminates employment 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 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 the Company other than for Cause effective as of the date of such Change in Control; provided, however, that neither the Company nor Holdco shall have any obligation to the Executive under this Section 4 if the
Executive is hired or offered employment on 

  
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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. 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. 
 Notwithstanding anything to the contrary
set forth in d(i) or (ii) hereinabove, no Change in Control shall be deemed to have occurred so long as affiliates of Thomas H. Lee Partners and Advent International Corporation continue to own at least 50% of the stock of Holdco in the
aggregate. 
 (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 the Company and Holdco, or by the Executive, is effective, as the case may be, including by reason of the expiration of the Employment Period. 

5. Obligations of the Company Upon Termination. 

(a) By the Company Upon the Executive’s Death or Permanent Disability. If the Executive dies during the Employment Period or the
Company or Holdco terminates the Executive’s employment due to the Executive’s Permanent Disability, the Company 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; (3) any accrued but unpaid vacation pay and (4) any unreimbursed expenses incurred prior to the Date of Termination, including any then unreimbursed car allowance for each
month or partial month of employment; 
 (ii) a pro rata Annual Bonus for the year of death or termination, calculated and
paid in accordance with Section 3(b); provided that if such death or termination occurs prior to January 1, 2017, in lieu of such payment, the Executive shall receive not less than the full Target Bonus Amount for 2016, paid in accordance
with Section 3(b); and 
 (iii) if such death or termination occurs on or after January 1, 2017 and before the date
on which the Annual Bonus for 2016 is paid, not less than the full Target Bonus Amount for 2016, paid in accordance with Section 3(b) (but without duplication of any Accrued Obligation). 

  
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 The Accrued Obligations shall be paid in cash within thirty (30) days of the Date of
Termination (other than the amount described in clause (2) of the definition of Accrued Obligations, which shall be paid in accordance with Section 3(b)). Notwithstanding anything to the contrary set forth herein, the Executive shall not
be entitled to any payment pursuant to clause (ii) or (iii) of this Section 5(a) unless the Executive (or the Executive’s beneficiary previously designated in writing to the Company or, if no such beneficiary has been so
designated, the Executive’s estate, as applicable) shall have, at the written request of the Company or Holdco, executed a release of any and all legal claims substantially in the form attached hereto as Exhibit A (which form may be
modified by the Company to the extent necessary to reflect execution by a person other than the Executive) (the “Release”) no later than twenty-one (21) days (or, if so instructed by the Company, forty-five (45) days)
following the Date of Termination (which period shall be sixty-five (65) days following the Date of Termination in the case of a termination of the Executive’s employment due to his death) and shall not have revoked the Release in
accordance with its terms. The Company shall provide the final Release promptly in connection with any termination of the Executive’s employment hereunder. 

(b) By the Company for Cause. If the Executive’s employment is terminated by the Company or Holdco for “Cause” (as
hereinafter defined), then the Executive shall be entitled to only the payment of the Accrued Obligations which shall be paid to the Executive in cash in a lump sum within thirty (30) days of the Date of Termination (other than the amount
described in clause (2) of the definition of Accrued Obligations, which shall be paid in accordance with Section 3(b)) and neither the Company nor Holdco 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 under this Agreement and (4) any act of willful disobedience in
violation of specific reasonable directions of the Board or the CEO consistent with 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 the Company gives notice to the Executive of its intent to terminate his employment on such basis. 

(c) By the Company for any reason other than Cause or by the Executive for Good Reason. If the Executive’s employment is
terminated during the Employment Period (i) by the Company or Holdco other than for Cause (including by reason of a Change in Control), death or Permanent Disability or (ii) by the Executive for Good Reason, the Company shall pay to the
Executive (A) the Accrued Obligations, paid in cash within thirty (30) days of the Date of Termination (other than the amount described in clause (2) of the definition of Accrued Obligations, which shall be paid in accordance with
Section 3(b)); (B) a pro rata Annual Bonus for the year of termination, calculated and paid in accordance with Section 3(b); provided that if such termination occurs prior to January 1, 2017, in lieu of such payment, the
Executive shall 

  
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receive not less than the full Target Bonus Amount for 2016, paid in accordance with Section 3(b); (C) if such termination occurs on or after January 1, 2017 and prior to the date
the 2016 Annual Bonus is paid, not less than the full Target Bonus Amount for 2016 (but without duplication of any Accrued Obligation), paid in accordance with Section 3(b); and (D) a severance payment (the “Severance
Payment”), in an amount equal to the Executive’s then current Annual Base Salary. 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 any payment pursuant to
clauses (B), (C) or (D) of this Section 5(c) unless the Executive shall have executed the Release not later than twenty-one (21) days (or, if so instructed by the Company, forty-five (45) days) following the Date of
Termination and shall not have revoked the Release in accordance with its terms. The Company shall provide the final Release promptly in connection with any termination of the Executive’s employment hereunder. 

(d) By the Executive other than for Good Reason. If during the Employment Period the Executive terminates his employment with the
Company and Holdco other than for Good Reason, the Company shall pay the Accrued Obligations to the Executive in a lump sum in cash within thirty (30) days of the Date of Termination (other than the amount described in clause (2) of the
definition of Accrued Obligations, which shall be paid in accordance with Section 3(b)) and neither the Company nor Holdco shall have any further obligation under this Agreement except as expressly provided herein. 

(e) Expiration of the Term. Unless otherwise terminated pursuant to any of the foregoing clauses of this Section 5, the
Executive’s employment hereunder will automatically terminate at the expiration of the Employment Period. The Accrued Obligations shall be paid to the Executive in a lump sum in cash within thirty (30) days of the Date of Termination
(other than the amount described in clause (2) of the definition of Accrued Obligations, which, for the avoidance of doubt, shall be the Annual Bonus for the calendar year in which the Employment Period expires and which shall be paid in
accordance with Section 3(b)). Upon expiration of the Employment Period, no Severance Payment will be due and no further Restriction Period shall apply. 

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”). Notwithstanding the foregoing, in no event shall the Company,
Holdco or any of their respective affiliates have any liability to the Executive or to 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). 

  
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 (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. The Company’s obligations to make 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 the Company 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 the Company and Holdco 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 the
Company and Holdco (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 Executive’s employment with the Company and Holdco, except with the prior written consent of the Company or as otherwise required
by law. For the avoidance of doubt, nothing contained in this Agreement or any other agreement containing confidentiality provisions or other restrictive covenants in favor of any of Holdco, the Company or any affiliate of either of them, restricts
or in any other way affects 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. 

  
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 9. Noncompetition; Nonsolicitation. 

(a) Noncompetition. During the Employment Period, and following termination of the Executive’s employment with the Company,
Holdco and any of their 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 the Company, Holdco or any of their respective subsidiaries or affiliates in any geographic area in which the Company, Holdco or any of their respective subsidiaries
or affiliates operate, compete or are engaged in such business or at such time intend so to operate, compete or become engaged in such business (a “Competitor”); 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 the Company or any of its subsidiaries or 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 three-year period preceding such termination of the Executive’s employment with the
Company and Holdco (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 the Company or Holdco, any of their respective subsidiaries or affiliates to terminate
its relationship with the Company or Holdco or any of their respective subsidiaries or affiliates or, in the case of any such person, to engage in a business relationship with a Competitor. 

(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 the Company, directly or indirectly, induce any employee of the Company, Holdco or any of their respective subsidiaries or affiliates to terminate employment with such entity, and will not, directly or
indirectly, either individually or as owner, agent, employee, 

  
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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 the Company, Holdco
or any of their respective subsidiaries or affiliates unless such person shall have ceased to be employed by such entity for a period of at least twelve months. 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 one-year period immediately following the Date of Termination (other than a termination at the expiration of the Employment 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 the Company, Holdco and their respective subsidiaries and 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 the Company and its subsidiaries and 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 the Company, Holdco and their respective subsidiaries and 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 the Company, Holdco and their respective subsidiaries and affiliates irreparable
injury for which adequate remedies are not available at law. Therefore, the Executive agrees that the Company and Holdco 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 the Company and Holdco 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. 

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. 

  
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 (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 the Company undergoes a change in control
at a time when it (or any affiliate of the Company, including Holdco, that would be treated, together with the Company, 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 the Company or an affiliate, 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 the Company’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 the Company may designate. 
 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. 
 (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:	  	Daniel Sullivan
		  	 At his most recent address
 shown in the
Company’s records

  
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	If to the Company:	  	Party City Holdings Inc.
		  	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 11(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, the Company may withhold from amounts payable under this Agreement all federal, state, local and foreign taxes that are required to be withheld by applicable laws or regulations. In addition, the obligations of the
Company under this Agreement shall be conditional on compliance with this Section 12(d), and the Company 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) 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 the Company and Holdco, on the other, with respect to the subject matter hereof. 
 (g) 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. 

(h) 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] 

  
 -12- 

 IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant
to the authorization of their respective boards of directors, the Company and Holdco 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 HOLDINGS INC.
		
	By:	 	 /s/ James M. Harrison

		 	Name: James M. Harrison
		 	Title:   Chief Executive Officer
	
	PARTY CITY HOLDCO INC.
		
	By:	 	 /s/ James M. Harrison

		 	Name: James M. Harrison
		 	Title:   Chief Executive Officer
	
	 /s/ Daniel Sullivan

	DANIEL SULLIVAN

 [Signature Page to Employment Agreement] 

 Exhibit A 

FORM OF RELEASE OF CLAIMS 

This Release of Claims is provided by me, Daniel Sullivan (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”) dated as of July 15, 2016 (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 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], 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; 

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 Holdings Inc.
	
	  

	Name:
	Title:

  

	
	Party City Holdco Inc.
	
	  

	Name:
	Title:Exhibit

EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of 20 July 2016, by and between Coty Services UK Limited, a company incorporated in England and Wales under registration number 325646 (the “Company”), and Camillo Pane (the “Executive”). 
WHEREAS, the Company and Executive have agreed that Executive shall become an employee of the Company in order that the Company may provide the services of the Executive under a management services agreement to be entered into between the Company and Coty Inc., a Delaware corporation (the “Parent”) on or after the date hereof; and 
WHEREAS, the Company and Executive mutually desire to set forth the other terms and conditions under which Executive will be employed by the Company beginning on the Commencement Date (as defined below).
NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and for other good and valuable consideration, the parties agree as follows: 
1.    Employment Term.  Executive’s employment by the Company hereunder shall be for a period which shall commence on the day following the closing of the transactions contemplated by the Transaction Agreement, dated as of July 8, 2015, by and among The Procter & Gamble Company, Galleria Co., Coty Inc. and Green Acquisition Sub Inc. (such date hereinafter referred to as the “Commencement Date”) and shall continue until terminated in accordance with this Agreement (including, without limitation, the provisions of the document attached at Annex 2).  The period commencing as of the Commencement Date and ending on the date on which the Executive’s employment terminates (the “Expiration Date”) is hereinafter referred to as the “Employment Term”. The parties acknowledge that Executive’s period of continuous employment with the Company began on 30 June 2015.
2.    Positions.  During the Employment Term, Executive shall serve as Chief Executive Officer of the Parent and in such positions with the Parent, the Company or any other business entity, directly or indirectly, controlled by or under common control with the Parent (each, a “Group Company” and together the “Group”) as the Board of directors of the Parent (the “Board”) shall reasonably direct the board of the Company to assign to the Executive.  In such capacities, Executive shall carry out such duties appropriate to his status and exercise such powers in relation to, any applicable Group Company and each of their respective businesses as may from time to time be assigned to or vested in him by the Board.  Executive shall perform his duties and responsibilities as Chief Executive Officer based in the Coty office in London, and shall travel as required by the Group’s business to other Group Company offices in New York, Paris, and Geneva, as and on such basis as the parties shall mutually agree; provided, however, that Executive shall not perform services from the United States or any other jurisdiction unless and until all necessary visas, work permits or other documentation to permit him lawfully to provide such services in such jurisdictions have been obtained.  The Company may also require 

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Executive to work on a temporary basis from any Group Company location and travel to such location as may be required for the performance of his duties.  Executive will be required to keep a complete and accurate records of the time spent performing his duties under this Agreement, the nature of those duties, and the location from where such duties were performed.  Executive shall devote his best efforts to the performance of his duties hereunder and shall not engage in any other business, profession or occupation for compensation or otherwise; provided, that nothing herein shall be deemed to preclude Executive from engaging in personal, charitable or civic activities or serving on the board of directors of a corporation or the equivalent governing body of another business entity that would not violate the covenants contained in Annex 2 hereto as long as such activities, either individually or in the aggregate, do not interfere with the performance of his duties hereunder.  
3.    Base Salary.  During the Employment Term, the Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of the equivalent of US$1,000,000 payable in pounds sterling (“GBP”), converted at an exchange rate equal to the average of the daily US$:GBP spot exchange rates published by the Bank of England on each day of September 2016.  The Base Salary shall be payable in arrears, in accordance with the usual payment practices of the Company.  Salary shall be inclusive of any sums receivable (and shall abate by any sums received) by the Executive as director’s fees from any Group Company or otherwise arising from any office, held by the Executive by virtue of his employment under this Agreement.  Executive’s Base Salary shall be subject to periodic review by the Board, not less frequently than annually, for possible increase and any such increased rate will thereafter be the Base Salary for all purposes of this Agreement.  Under no circumstances may the Base Salary be decreased during the Employment Term. 
4.    Bonus.  
(a)     With respect to each fiscal year in the Employment Term, Executive shall be eligible for a target bonus of one-hundred percent (100%) of his Base Salary payable for such year (the “Target Bonus”) based on the achievement by the Group of performance criteria to be established by the Board (or any duly authorized committee thereof) in accordance with the Parent’s annual incentive plan as established by the Board and as in effect from time to time (the “Performance Plan”).  The bonus to which the Executive would be eligible under the terms of this Section 4(a) during the remainder of the current fiscal year at the Commencement Date shall be determined on a pro rata basis to reflect the proportion of the current fiscal year remaining at the Commencement Date. The bonus actually payable for any year may be less than the Target Bonus (including zero), if performance goals are not met, or may exceed the Target Bonus, if performance goals are exceeded, up to a maximum amount equal to 3.6 times the Target Bonus.  Any amount payable as a bonus hereunder shall be paid in accordance with the terms of the Performance Plan at or about the same time bonuses are paid to the Parent’s other senior executives, but not later than 15 March of the calendar year following the end of the performance period upon which such bonus is determined.  The Executive must be in employment on the payment date in order to be entitled to a bonus under this Section 4(a) in respect of the preceding fiscal year. 

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(b)    In the event of the exchange of any Vested Series A Preferred Stock in accordance with the terms of the Second Subscription Agreement (as defined below) where the Fair Market Value of a share of Class A Common Stock on the Exchange Date is greater than an amount to be determined by the Company at the time the Second Subscription is entered into, subject to Board approval, Executive shall be entitled to receive a cash bonus equal to the number of Vested Series A Preferred Stock which are exchanged multiplied by a multiplier to be determined by the Company at the time the Second Subscription is entered into, less any deductions required by law.  A bonus payable under this Section 4(b) shall be paid within 30 days of the relevant Exchange Date.  Capitalized terms used in this Section 4(b) shall have the meaning given to them in the Second Subscription Agreement (as defined below).  Notwithstanding anything else contained in this Agreement to the contrary, if and to the extent that any portion of the bonus payable under this Agreement is attributable to services performed in the United States or is otherwise subject to US taxation because the Executive is resident in the United States, such amount will be payable not later than March 15 of the year following the year in which the bonus is earned (unless otherwise deferred in accordance with the requirements of Section 409A of the Internal Revenue Code).
(c)    If at the date on which the shares of preferred stock of Parent purchased by Executive pursuant to the terms of the subscription agreement entered into by Executive dated 15 April, 2015 (the “First Subscription Agreement”) become Vested Series A Preferred Stock (the “Vesting Date”): (i) the Executive is still employed by the Company; and (ii) the Fair Market Value of a share of Class A Common Stock of Parent on the Vesting Date exceeds the aggregate of US$3.00 and the Fair Market Value of a share of Class A Common Stock of Parent on the original issue date of the Shares under the First Subscription Agreement, Executive shall be entitled to receive a cash bonus equal to US$1,937,763, less any deductions required by law.  A bonus payable under this Section 4(c) shall be paid not later than March 15 of the year following the Vesting Date.  Capitalized terms used in this Section 4(c) but not otherwise defined in this Agreement shall have the meanings given to them in the First Subscription Agreement.
5.    Inducement Equity Grant.  By the Commencement Date, Executive and the Parent shall enter into a subscription agreement, substantially in the form attached hereto as Annex 1, and as may be amended from time to time (the “Second Subscription Agreement”), pursuant to which, and subject to Board approval, Executive shall buy from the Parent (or such other person or third party as nominated by the Parent) 1,000,000 Series A Preferred Stock at a purchase price (the “Purchase Price”) to be determined at or about the date of such purchase by an independent qualified professional appraisal firm selected by the Parent.
6.    Executive Benefits.  During the Employment Term, Executive shall be entitled to participate in the employee benefit plans generally made available to senior executives of the Group in the United Kingdom, including, without limitation, any pension plan and plans providing medical, dental, accidental death and disability and life insurance coverage, on, and in accordance with, the terms and conditions specified in such plans.  With respect to each calendar year during which Executive is employed by the Company and subject in each case to his continued employment through the date of grant, at or about 

3

the time that the Group makes annual grants generally to its senior executives Executive shall receive annual equity based incentive compensation awards pursuant to and in accordance with the Group’s then effective equity incentive plan and the Group’s generally applicable incentive compensation practices as in effect from time to time.  Subject to the discretion of the Board (or the appropriate duly authorized committee thereof) to modify the form and/or size of such award, it is currently expected that that annual grants to Executive shall be with respect to an amount of 3,000,000 USD in restricted stock units of the Parent, with each such unit representing the right to receive upon vesting one share of the Related Common Stock (the “Annual RSUs”), having terms and conditions established in accordance with the terms of such plan that the Board (or the appropriate duly authorized committee thereof) determines to be appropriate; provided that such Annual RSUs shall remain subject to forfeiture until, and shall only become vested upon, Executive’s completion of five years of continuous service following the date of grant or Executive’s earlier termination of employment due to his death or Disability (as defined in the Equity and Long-Term Incentive Plan of Parent (the “LTIP”).  The Executive shall be entitled to 25 vacation days in additional to public holidays per year subject to the terms and conditions of the Company’s standard vacation policies for its employees as in effect from time to time (the “Vacation Policy”), including, without limitation, such overall limitations on accrued but unused vacation as the Vacation Policy may provide.  Executive shall also be provided with the use of a Company-provided automobile in accordance with the policy applicable to the use of Company-provided vehicles by senior executives of the Group or, at the election of Executive, be entitled to receive a car allowance of an amount calculated in accordance with such policy.
7.    Business Expenses.  The Company shall reimburse such of Executive’s travel, entertainment and other business expenses as are reasonably and necessarily incurred by Executive during the Employment Term in the performance of his duties hereunder, in accordance with the Company’s policies as in effect from time to time.   Subject to any limitations and conditions that may apply at applicable law, Executive hereby authorizes the Company to deduct from any sums owing to him (including but not limited to salary and accrued holiday pay) the amount of any sums owing from the Executive to the Company at any time. 
8.    Termination.  Upon a termination of the Employment Term, Executive shall be entitled to the payments described in this Section 8.  Capitalized terms in this Section 8 shall have the meaning given to them in the LTIP.
(a)    For Cause by the Company; by Executive without Good Reason.  The Employment Term may be terminated by the Company, subject to the provisions of this Section 8(a), for Cause  or by Executive without Good Reason.  If the Employment Term is terminated by the Company for Cause or by Executive without Good Reason, Executive shall be entitled to receive his Base Salary through the date of termination, any Bonus that has been earned in accordance with Section 4(a) for a prior fiscal year but not yet paid, and any unreimbursed business expenses, payable promptly following the later of the date of such termination and the date on which the appropriate documentation is provided.  The amounts payable under the immediately preceding sentence shall be called the “Accrued Obligations.”  Executive shall also be entitled to receive any other non-forfeitable benefits

4

that may be payable following termination of the Employment Term pursuant to the express provisions of the plans, policies and practices of the Company applicable to Executive (the “Vested Plan Benefits”), which shall be payable at the time(s) determined in accordance with such plans, policies or practices.
(b)    Disability; Death.   The Employment Term shall terminate upon Executive’s death or, at the Company’s election, if Executive incurs a Disability.  In such event, the Company shall pay Executive, his estate or his duly designated beneficiaries, the Accrued Obligations and the Vested Plan Benefits.   In addition, Executive, his estate or his duly designated beneficiaries shall be entitled to receive, at such time as annual bonuses for the fiscal year in which his termination occurs are determined and paid for other executives, (i) the bonus the Executive would have received under the Performance Plan in respect of the year in which his termination of employment occurs, taking into account the performance certified under the Performance Plan with respect to such year and disregarding any application of discretionary factors that would have the effect of reducing amounts earned under the Performance Plan except to the extent that such reduction does not exceed the average reduction applied to all other Performance Plan participants for such year, multiplied by (ii) a fraction, the numerator of which is the number of days in the applicable fiscal year occurring before and including the date of Executive’s termination, and the denominator of which is 365 (the “Pro-Rated Bonus”).  Any amount owing to Executive, his estate or his duly designated beneficiaries under the preceding sentence shall be reduced, but not below zero, by the amount, if any, previously received under the Performance Plan in respect of such year. 
(c)    By the Company without Cause; by Executive with Good Reason.  The Employment Term may be terminated by the Company without Cause or by Executive with Good Reason subject to compliance with any statutory notice periods, and the notice period referred to in Annex 2, that may be applicable or payment in lieu thereof.  If the Employment Term is terminated by the Company without Cause or by Executive with Good Reason, subject to Executive’s continued compliance with the covenants set forth in Annex 2 hereto and execution of a general release having customary terms and conditions satisfactory to the Company, Executive shall receive (i) the Accrued Obligations, (ii) the Vested Plan Benefits, (iii) the Pro-Rated Bonus, (iv) a payment equal to two (2) times (or, in the event of termination of the Employment Term by Executive for Good Reason following a Change in Control, three (3) times) the aggregate of the Base Salary and the higher of the Target Bonus and the average of the bonuses paid under Section 4(a) above in the three years immediately prior to the termination of the Employment Term (the “Severance Benefit”), (v) payment by the Company of Executive’s cost to continue participation in the Group’s medical plans until the earlier of (A) the end of the period over which the Severance Benefit is payable and (B) such time as Executive is eligible to receive comparable welfare benefits from a subsequent employer, and (vi) any unreimbursed business expenses, payable promptly following the later of the date of such termination and the date on which the appropriate documentation is provided. 
Without limiting the generality of the foregoing, any Severance Benefits payable under this Section 8(c) will be reduced by an amount equal to (i) compensation to which the Executive may be awarded in respect of a claim brought by him for unfair or 

5

constructive dismissal or/and any other compensatory payments that might be awarded to him by any court or tribunal of competent jurisdiction; (ii) any additional compensation which the Executive may be awarded in any other country in which he works as a result of the termination of his employment or directorship with any Group Company and (iii) any payment in lieu of notice.
(d)    Notice of Termination.  Where notice of termination has been served by either party the Company may in its absolute discretion require Executive to take “Garden Leave” for all or any part of the notice period.  If the Executive is asked to take Garden Leave he may not attend at his place of work or any of the premises of any Group Company.  Executive may be required not to carry out any duties during the remaining period of employment.  Executive may be asked to resign immediately from any offices he holds with the Company or any Group Company.  During Garden Leave, Executive may not without prior written permission of the Company contact or attempt to contact any client, customer, supplier, agent, professional adviser, broker or banker of any Group Company or any employee (save for personal reasons) of any Group Company.  During any period of Garden Leave Executive will continue to receive full salary and benefits and all of the obligations that Executive has to the Company under this Agreement and at common law remain in full force and effect.
(e)    Resignation from Positions Upon Termination.  Unless otherwise agreed upon in writing by the Company and Executive, upon the termination of Executive’s employment for any reason, Executive shall be deemed to have resigned, without any further action by Executive, from any and all positions (including, but not limited to, any officer and/or director positions or positions as a fiduciary of any of the Group’s employee benefit plans) that Executive, immediately prior to such termination, (i) held within the Group and (ii) held with any other entities at the direction of, or as a result of Executive’s affiliation with, the Group.  If for any reason this Section 8(e) is deemed to be insufficient to effectuate such resignations, then Executive shall, upon the Company’s request, execute any documents or instruments that the Company may deem necessary or desirable to effectuate such resignations. 
9.    Restrictive Covenants.  On or prior to the Commencement Date, Executive shall enter into the Company’s standard restrictive covenant agreement for senior executives contained in the Confidentiality, Non-Competition and Non-Solicitation Deed attached hereto as Annex 2 and comply with all other provisions of such deed.  Participation, and continued participation, in the Group long-term incentive plan(s) and other equity plans is subject to the execution of such agreement, a copy of which has been given to Executive.  
10.    Indemnification.  Executive shall be entitled to indemnification by the Company in accordance with the provisions of the Parent’s certificate of incorporation, bylaws, actions of the Board, as the same shall be in effect from time to time and to the extent permitted by law, and Executive shall be entitled to the protection of any insurance policies any Group Company may elect to maintain generally for the benefit of its officers and directors. 

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11.    Miscellaneous. 
(a)    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of England and Wales.  
(b)    Entire Agreement.  This Agreement contains the entire understanding of the parties with respect to the subject matter hereof, including, without limitation, the employment of Executive by the Company, and supersedes any prior oral or written agreements between, by or among the Parent, the Company and Executive.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein and therein.  No provision in this Agreement may be amended unless such amendment is agreed to in writing and signed by the Executive and the Company. 
(c)    No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.  No waiver by either party of any breach by the other party of any condition or provision contained in this Agreement to be performed by such other party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time.  Any waiver must be in writing and signed by the Executive or the Company, as the case may be. 
(d)    Severability.  It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in Annex 2 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that the time or territory restriction or any other restriction contained in Annex 2 is an unenforceable restriction against Executive, such provision shall not be rendered void but shall be deemed amended to apply to such maximum time and territory, if applicable, or otherwise to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in Annex 2 is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.  In the event that any one or more of the other provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. 
(e)    Assignment.  This Agreement is for the performance of personal services by Executive and may not be assigned by Executive without the consent of the Company.  The Company may assign its rights and delegate its duties hereunder in whole or in part to any transferee of all or a portion of the assets or business to which Executive’s employment relates.
(f)    Mitigation.  Executive shall not be required to mitigate the amount of any payment or benefit to be provided pursuant to Section 8 by seeking other employment or otherwise and, except to the extent expressly set forth in Section 8, no such amount shall be subject to offset due to compensation provided to Executive by another employer.

7

(g)    Successors.  This Agreement shall inure to the benefit of and be binding upon the personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees of the parties hereto. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. The Executive shall be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following the Executive’ death by giving the Company written notice thereof. In the event of the Executive’s death or a judicial determination of his incompetence, reference in this Agreement to the Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative. 
(h)    Communications.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be seemed to have been duly given when faxed or delivered or two business days after being posted by registered post, addressed (A) to the Executive at his address then appearing in the personnel records of the Company and (B) to the Chairman of the Company at the Company’s then current head office, with a copy to the Parent’s general counsel, or (C) to such other address as either party may have furnished to the other in writing in accordance herewith, with such notice of change of address being effective only upon receipt. 
(i)    Withholding Taxes.  Each Group Company may withhold from any and all amounts payable and other benefits receivable under this Agreement such national, local and any other applicable taxes and national insurance contributions and other social charges or taxes as may be required to be withheld pursuant to any applicable law or regulation. Executive shall indemnify the Company for itself and on behalf of each Group Company in relation to any national, local and any other applicable taxes and national insurance contributions and other social charges or taxes not already deducted from the Employee’s remuneration (or any taxes replacing the same) for which the Company or any Group Company has an obligation at any time to account (whether during the Employee’s employment by the Company or after the termination of the Employment Term) in relation to Executive and authorizes each Group Company to deduct any indemnified amount from any amount otherwise payable to Executive.
(j)    Survivorship.  The respective rights and obligations of the parties hereunder shall survive any termination of Executive’s employment to the extent necessary to the agreed preservation of such rights and obligations. 
(k)    Representations.  Each party represents and warrants to the other that he or it is fully authorized and empowered to enter into this Agreement and that the performance of his or its obligations under this Agreement will not violate any agreement between his or it and any other person or entity. 
(l)    Dispute Resolution.  Any dispute or controversy arising under or in connection with this Agreement or Executive’s employment with the Company that cannot 

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be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be resolved exclusively in the courts of England and Wales.  Each party hereto hereby irrevocably accepts and submits to the exclusive jurisdiction of such courts for purposes hereof. 
(m)    Compliance with Section 409A.  This Agreement shall be interpreted to avoid any penalty sanctions under Section 409A of the Internal Revenue Code (“Section 409A”).  If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A, all payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A, each payment made under this Agreement shall be treated as a separate payment and the right to a series of installment payments under this Agreement is to be treated as a right to a series of separate payments. In no event shall the Executive, directly or indirectly, designate the calendar year of payment. 
All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in the Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar-year, calendar year following the year in which the expense is incurred, and (iii) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. 
To the extent payment of any amounts or benefits under this Agreement is conditioned upon Executive’s execution of a general release of claims in favor of the Parent, the Company and/or any Group Company, such release must be executed, returned to the Company and become irrevocable within the period that is no later than sixty (60) days following the termination of the Employment Term.  To the extent that the period for consideration of such a release spans two (2) calendar years, no payment of any amount or benefit that is considered to be nonqualified deferred compensation within the meaning of Section 409A and conditioned upon the release shall be made before the first day of the second calendar year, regardless of when the release is actually executed and returned to the Company.
(n)    Delay in Payment.  Notwithstanding any provision in this Agreement to the contrary, if at the time of the Executive’s termination of employment with the Company (or any successor thereto), the Company (or any corporation, partnership, joint venture, organization or entity within the Company’s controlled group within the meaning of Sections 414(b) and (c) of the Internal Revenue Code) has securities which are publicly-traded on an established securities market and the Executive is a “specified employee” (as defined in Section 409A and determined in the sole discretion of the Company, or any successor thereto, in accordance with the Company’s, or any successor’s, “specified employee” determination policy) and it is necessary to postpone the commencement of any 

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severance payments or deferred compensation otherwise payable pursuant to this Agreement as a result of such termination of employment to prevent any accelerated or additional tax under Section 409A, then the Company (or any successor thereto) will postpone the commencement of the payment of any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately paid or provided to the Executive) that are not otherwise paid within the short-term deferral exception under Section 409A and are in excess of the lesser of two (2) times (i) the Executive’s then-annual compensation or (ii) the limit on compensation then set forth in Section 401(a)(17) of the Internal Revenue Code, until the first payroll date that occurs after the date that is six (6) months following the Executive’s “separation from service” with the Company (or any successor thereto), as defined under Section 409A.  If any payments are postponed due to such requirements, such postponed amounts will be paid in a lump sum to the Executive on the first payroll date that occurs after the date that is six (6) months following the Executive’s “separation from service” with the Company (or any successor thereto), and any amounts payable to the Executive after the expiration of such six (6)-month period under this Agreement shall continue to be paid to Executive in accordance with the terms of this Agreement. If the Executive dies during the postponement period prior to the payment of the postponed amount, the amounts withheld on account of Section 409A shall be paid to the personal representative of the Executive’s estate within sixty (60) days after the date of the Executive’s death. 
(o)    Clawback.  All compensation and benefits hereunder shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (1) any clawback, forfeiture or other similar policy adopted by the Board or a duly authorized committee of the Board, as in effect from time to time, and (2) applicable law.  In addition, if Executive receives any amount in excess of the amount that Executive should have otherwise received under the terms of this Agreement or any compensation or benefit plans of the Group for any reason (including, without limitation, by reason of a financial restatement, mistake in calculations or other administrative error), the Board or a duly authorized committee of the Board may provide that Executive shall be required to repay any such excess amount.
(p)    Data Protection.  Executive consents to the holding and processing of personal data provided by him to the Company for all purposes relating to this employment, including but not limited to administering and maintaining personnel records, paying and reviewing salary and other remuneration and benefits, undertaking performance appraisals and reviews, maintaining sickness and other absence records and taking decisions as to fitness for work.  The Company may make such information available to any Group Company, those who provide products or services to any Group Company (such as advisers and payroll administrators), regulatory authorities, potential purchasers of the Company or the business in which the Executive works, and as may be required by law. The Executive consents to the transfer of such information to any Group Company and any Group Company's business contacts outside the European Economic Area in order to further their business interests even where the country or territory in question does not maintain adequate data protection standards. Executive further acknowledges and agrees that the Company may, in the course of its duties as an employer, be required to disclose 

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personal data relating to him, after the end of his employment.  This does not affect Executive’s rights under the Data Protection Act 1998.
(q)    Working Time Regulations. Executive and the Company each agree that the nature of Executive’s position is such that his working time cannot be measured, that in accordance with Regulation 5 of the Working Time Regulations 1998 the provisions of Regulation 4(1) do not apply to Executive, and that Executive’s appointment hereunder falls within the scope of Regulation 20 of the Working Time Regulations 1998. Executive shall give the Company three months’ notice in writing if he wishes Regulation 4(1) to apply to him.
(r)    Third Party Rights. Save as expressly provided in this Agreement, a person who is not a party to this agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement. Executive will, at the request of the Company, enter into a separate agreement with any entity within the Group that the Company may require under the terms of which he will agree to be bound by provisions of this Agreement and the document attached at Annex 2 which are to the benefit of such other entity.
(s)    Tax Election.  the Participant irrevocably agrees to enter into such tax elections including (without limitation) a joint election, under section 431(1) or section 431(2) of Income Tax (Earnings and Pensions) Act 2003, in respect of the acquisition, holding or disposal of any shares of securities, in such form and within such time limits as may be required by the Company.
(t)    Counterparts.  This 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. 
(u)    Headings.  The headings of the sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. Any reference to the Executive in the masculine gender herein is for convenience and is not intended to express any preference by the Company for executives of any gender. 
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written. 
	
							
	 
	 
	 
	 
	 
	 
	 

	 COTY SERVICES UK LIMITED
	 
	CAMILLO PANE
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 

	By: /s/ Sébastien Froidefond
	 
	/s/Camillo Pane
	 

	 
	 
	  
	 

	 Name: Sébastien Froidefond
	 
	 
	 
	 

	 Title: Director
	 
	 
	 
	 

	 
	 
	 
	 
	 

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