Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
On September 11, 2019, Gerald C. Rittenberg resigned as a member of the Board of
Directors (the "Board") of Party City Holdco Inc. (the "Company") pursuant to
the terms of an Amended and Restated Transition and Consulting Agreement (the
"Consulting Agreement") by and between him and the Company. There were no
disagreements between Mr. Rittenberg and the Company on any matter relating to
the Company's operations, policies or practices that resulted in his
Pursuant to the Consulting Agreement, Mr. Rittenberg will continue to serve as a
senior advisor to the Company, advising on certain strategic matters and
providing other transitional and consulting services, in each case, as are
reasonably requested by the Board through December 31, 2020 (unless the
Consulting Agreement is earlier terminated in accordance with its terms). Under
the Consulting Agreement, Mr. Rittenberg will continue to receive (i) a
consulting fee of $40,000 per month through December 31, 2020; (ii) an annual
cash retainer payment equal to the amount payable as an annual cash retainer to
a member of the Board through the day prior to Company's annual meeting of
stockholders in 2021 (but in no event later than June 30, 2021) (the "Board
Payment Expiration Date"); and (iii) an annual equity award grant in the same
form as, and with a value and with terms substantially similar to, the annual
equity awards made to members of the Board until the Board Payment Expiration
Date (the "Equity Award"). Any portion of the Equity Award granted in 2020 that
remains outstanding and unvested as of the end of the Board Payment Expiration
Date will immediately vest at that time. If Mr. Rittenberg's consulting services
are terminated prior to December 31, 2020 by the Company without cause or by
Mr. Rittenberg for good reason, subject to his execution and non-revocation of
release of claims and his continued compliance with certain restrictive
covenants, he will continue to receive the payments described above as if his
services had not been so terminated.
On September 11, 2019, the Board of the Company elected James Conroy and John
Frascotti to serve on the Board. The Board increased the size of the Board from
ten to eleven members and appointed Mr. Conroy and Mr. Frascotti to fill the
vacancies. Each of Mr. Conroy and Mr. Frascotti will hold office until the 2020
annual meeting of shareholders and until his respective successor is elected and
qualified. The Board does not expect to appoint Mr. Conroy or Mr. Frascotti to
any Board committee at this time.
Neither Mr. Conroy nor Mr. Frascotti was selected as a director pursuant to any
arrangement or understanding with the Company or any other person. Each will
receive compensation for his service as a member of the Board in accordance with
the Company's non-employee director compensation policy. Pursuant to this policy
Mr. Conroy and Mr. Frascotti will each receive (i) an annual cash retainer of
$75,000 for service as a Board member and (ii) an annual grant of restricted
stock units ("RSUs") equal to $125,000 (based on the aggregate value of the
underlying shares on the date of grant), which will fully vest on the one year
anniversary of the date of grant. In connection with their appointments to the
Board, each of Mr. Conroy and Mr. Frascotti will receive a pro-rata annual grant
of RSU's based on the closing stock price of the Company's common stock on the
New York Stock Exchange on September 11, 2019 to reflect each of Mr. Conroy's
and Mr. Frascotti's service from September 11, 2019 through June 4, 2020, which
is the assumed date of the Company's 2020 annual meeting of stockholders.
Since the beginning of the Company's last fiscal year through the present, there
have been no transactions with the Company, and there are currently no proposed
transactions with the Company, in which the amount involved exceeds $120,000 and
in which Mr. Conroy had or will have a direct or indirect material interest
within the meaning of Item 404(a) of Regulation S-K.
Since the beginning of the Company's last fiscal year through the present, the
Company has been involved in the following transactions in which Mr. Frascotti
could be deemed to have a direct or indirect material interest within the
meaning of Item 404(a) of Regulation S-K as a result of Mr. Frascotti's position
as President and Chief Operating Officer of HASBRO, Inc: (i) The Company paid
royalties to HASBRO, Inc. in an aggregate amount of $1,975,000 during such
period; and (ii) the Company purchased merchandise from HASBRO, Inc. in an
aggregate amount of $2,700,954 during such period.
In addition, each of Mr. Conroy and Mr. Frascotti and the Company entered into
the Company's standard indemnification agreement, the terms of which are
described in the Company's Registration Statement on Form S-1 (File
No. 333-193466) (the "Registration Statement") and a form of such agreement was
filed as Exhibit 10.2 to the Registration Statement.
Item 7.01. Regulation FD Disclosure.
A copy of the Company's press release announcing Mr. Conroy's and
Mr. Frascotti's appointment is attached hereto as Exhibit 99.1 and is
incorporated by reference herein.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated September 11, 2019.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
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