EMPLOYMENT AGREEMENT
AGREEMENT (the "Agreement") by and between Amscan Holdings, Inc., a
Delaware corporation (the "Company"), and Xxxxx Xxxxxx (the "Executive"), dated
as of the 6th day of August, 1998.
WHEREAS, the Company has, simultaneously with the execution and
delivery of this Agreement, entered into a Stock Purchase Agreement, dated as of
the date hereof (the "Stock Purchase Agreement"), with certain stockholders of
Anagram International Inc., a Minnesota corporation ("Anagram"), that now
employs the Executive, pursuant to which, among other things, the Company will
acquire all of the stock of Anagram (the "Acquisition"); and
WHEREAS, the Company wishes to employ the Executive after the
Acquisition and the Executive is willing to be so employed.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. (a) Initial Term. The Company shall employ
the Executive, and the Executive agrees to, and shall, serve the Company, on the
terms and conditions set forth in this Agreement, for the period commencing on
the Closing Date (as defined in the Stock Purchase Agreement) and ending on the
third anniversary of such date (the "Initial Term").
(b) Extension of Initial Term. The Initial Term of this Agreement
will be automatically extended after the third anniversary of the Closing Date
for additional successive periods of one year each, each such extension to be
effective immediately after the last day of the term then in effect, with the
first such extension period beginning on the third anniversary of the Closing
Date (each such additional period, an "Additional Term") (the Initial Term and
any Additional Term thereof pursuant to this Section 1(b) being hereinafter
referred to as the "Employment Period"), unless either the Company gives the
Executive or the Executive gives the Company not less than twelve months'
written notice prior to the end of the Initial Term or any such Additional Term
of such party's intention not to extend the Employment Period.
2. Position and Duties. (a) During the Employment Period, the
Executive shall be Senior Vice President of the Company and President of
Anagram, in each case, with such duties and responsibilities as are assigned to
him by the Board of Directors of the Company (the "Board") consistent with such
position, including, as the Board may request, without additional compensation,
to serve as an officer or director of certain subsidiaries and other affiliated
entities of the Company.
(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 shall perform his services primarily at Anagram's
headquarters, wherever the Board may from time to time designate them to be, but
in any case, within a 000-xxxx xxxxxx xx Xxxx Xxxxxxx, Xxxxxxxxx, 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 and the board of directors of K-tel International, Inc., (ii) deliver
lectures, fulfill speaking engagements or teach at educational institutions, or
(iii) 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 or any of its subsidiaries and affiliates and do not
interfere with the performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement.
3. Compensation. (a) Base Salary. During the Initial Term, the
Executive shall receive from the Company an annual base salary ("Annual Base
Salary") of $250,000, payable in regular intervals in accordance with the
Company's customary payroll practices in effect during the Employment Period.
Such Annual Base Salary shall be increased by 5% (from the Annual Base Salary
theretofore in effect) at the beginning of each Additional Term and shall be
payable in accordance with the preceding sentence.
(b) Other Compensation. In addition to the Annual Base Salary, the
Executive shall be eligible for an annual discretionary bonus for each calendar
year of employment hereunder (the "Bonus"). The exact amount of the Bonus, if
any, payable to the Executive hereunder shall be determined and awarded in the
sole discretion of the Board.
(c) Other Benefits. During the Employment Period: (i) the Executive
shall be entitled 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 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; provided,
however, that nothing in this Agreement shall impose on the Company any
obligation to offer to the Executive participation in any stock, stock option,
bonus or other incentive award, plan, practice, policy or program other than the
awards made pursuant to paragraph (b) of this Section 3. The term "peer
executives" means the Chief Executive Officer, the President and the Senior Vice
President in charge of Sales and Marketing of the Company, if such positions
exist.
(d) 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.
(e) Options. Promptly following the "Closing" under the Stock
Purchase Agreement, the Executive shall be granted options (the "Options") to
purchase 6.648 shares of common stock of the Company at an exercise price equal
to $125,000 per share. Such Options shall be granted pursuant to the Company's
1997 Stock Incentive Plan and related option
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agreement, in the form attached hereto as Exhibit A (together, the "Option
Documents"). Such Options will vest in equal annual installments over a
five-year period and will be subject to forfeiture upon termination of the
Executive's employment, if not vested and exercised within the time period
specified in the Option Documents. Unless sooner exercised or forfeited as
provided for in the Option Documents, the Options shall expire on the tenth
anniversary of the Closing.
4. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. The Company shall be entitled to terminate the
Executive's employment because of the Executive's Disability during the
Employment Period. "Disability" means that the Executive has been unable, for a
period of (i) 180 consecutive days or (ii) an aggregate of 210 days in a period
of 365 consecutive days, to perform his duties under this Agreement, as a result
of physical or mental illness or injury. A termination of the Executive's
employment by the Company for 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 of this Agreement before the Disability Effective
Date. In the event of a dispute as to whether Executive has suffered a
Disability, the final determination shall be made by a licensed physician
selected by the Board of Directors of the Company and acceptable to Executive in
Executive's reasonable judgment.
(b) Not Death or Disability. The Company may terminate the
Executive's employment at any time during the Employment Period with or without
Cause. The Executive may terminate his employment at any time during the
Employment Period for any reason.
(c) 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, or by the
Executive, is effective, as the case may be.
5. Obligations of the Company Upon Termination. (a) By the Company,
Other Than for Death or Disability. If, during the Employment Period, the
Company terminates the Executive's employment other than due to the Executive's
death or Disability, the Company shall, except as provided in clause (ii) below,
pay the amounts described in subparagraph (i) below to the Executive in a lump
sum in cash within 30 days after the Date of Termination:
(i) The amounts to be paid in a lump sum as described above are:
(A) 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 Bonus that
the Executive has earned for a prior full calendar year that
has ended prior to the Date of Termination which has been
awarded but not yet paid; (3) any compensation previously
deferred by the Executive (together with any accrued interest
or earnings thereon) that has not yet been paid (subject to
any applicable provisions of
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any deferred compensation plan with respect to the payment
thereof); and (4) any accrued but unpaid vacation pay; and
(B) Severance pay equal to the Annual Base Salary.
(ii) Notwithstanding the foregoing, if the Executive's employment
is terminated for Cause, the Executive shall not be entitled to the
payments contemplated by clause (i)(B) of this Section 5(a) and the
payment to the Executive in connection therewith shall be limited to
payment of the Accrued Obligations and the Company shall have no
further obligations under this Agreement. 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 the Motor Vehicle Code); (2) any act of intentional fraud
against the Company; (3) any act of gross negligence or wilful
misconduct with respect to the Executive's duties under this
Agreement; and (4) any act of wilful disobedience in violation of
specific reasonable directions of the Board consistent with the
Executive's duties.
(b) Death or Disability. If the Executive's employment is
terminated by reason of the Executive's death or Disability during the
Employment Period, the Company shall pay the Accrued Obligations to the
Executive or the Executive's estate or legal representative, as applicable, in a
lump sum in cash within 30 days of the Date of Termination and the Company shall
have no further obligations under this Agreement.
(c) By the Executive. If the Executive terminates his employment
with the Company, the Company shall pay the Accrued Obligations to the Executive
in a lump sum in cash within 30 days of the Date of Termination and the Company
shall have no further obligations under this Agreement.
(d) Effect of Employment of Executive by Certain Stock or Asset
Purchasers. If all or substantially all of the stock or assets of the Company is
sold or otherwise disposed of to a third party not affiliated with the Company,
and the Executive is not offered employment on substantially similar terms by
the Company 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 sale or other disposition; provided, however, that the Company
shall have no obligations to the Executive under this Section 5 of this
Agreement if the Executive is hired or offered employment on substantially
similar terms by the purchaser of the stock or assets of the Company or if the
Executive's employment is continued by the Company.
6. 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
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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.
7. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any company affiliated
with the Company or Anagram and its respective businesses that the Executive
obtains during the Executive's employment by the Company or Anagram (whether
before, during or after the Employment Term) and that is not public knowledge
(other than as a result of the Executive's violation of this Section 7)
("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, except with the prior written consent of the
Company or as otherwise required by law.
8. Noncompetition; Nonsolicitation. (a) During the Employment
Period and during the three-year period following any termination of the
Executive's employment with the Company and any of its affiliates, including due
to expiration of the Employment Period (the "Restriction Period"), 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 the business of the Company, or any of
its subsidiaries or controlled affiliates, in any country where the products of
the Company or any of its subsidiaries or controlled affiliates are sold or
could reasonably be expected to be sold throughout the world (a "Competitor").
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, 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) During the portion of the Restriction Period following any
termination of the Executive's employment with the Company and any of its
affiliates, the Executive shall not, directly or indirectly, encourage or
solicit, or assist any other person or firm in encouraging or soliciting, any
person that during the three-year period preceding such termination of the
Executive's employment with the Company is or was engaged in a business
relationship with the Company, any of its subsidiaries or controlled affiliates
to terminate its relationship with the Company or any of its subsidiaries or
controlled affiliates or to engage in a business relationship with a Competitor.
(c) During the portion of the Restriction Period following any
termination of the Executive's employment with the Company and any of its
affiliates, the Executive will not, except with the prior written consent of the
Company, directly or indirectly, induce any employee of the Company, or any of
its subsidiaries or controlled affiliates to terminate employment with such
entity, and will not, directly or indirectly, either individually or as owner,
agent, employee, consultant or otherwise, employ, offer employment or cause
employment to be
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offered to any person (including employment as an independent contractor) who is
or was employed by the Company or any of its respective subsidiaries or
controlled 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
8(c), "employment" shall be deemed to include rendering services as an
independent contractor and "employees" shall be deemed to include independent
contractors.
(d) 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 and its 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.
(e) The Executive acknowledges and agrees that the Restriction
Period and the covenants and obligations of the Executive in Section 7 and this
Section 8 with respect to noncompetition, nonsolicitation and confidentiality
and with respect to the property of the Company and its subsidiaries and
controlled affiliates, and the territories covered thereby, are fair and
reasonable and the result of negotiation and that this Agreement was entered
into in connection with and as a condition to the Acquisition. The Executive
further acknowledges and agrees that the covenants and obligations of the
Executive in Section 7 and this Section 8 with respect to noncompetition,
nonsolicitation and confidentiality and with respect to the property of the
Company and its subsidiaries and controlled 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 and its subsidiaries and affiliates irreparable injury for which
adequate remedies are not available at law. Therefore, the Executive agrees that
the Company 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 may have at law or in
equity. If, at the time of enforcement of Section 7 and/or this Section 8, a
court holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope, or geographical area legally permissible under such circumstances will be
substituted for the period, scope or area stated herein.
9. 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.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
10. 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
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force or effect. This Agreement may not be amended or modified except by a
written agreement executed by the parties hereto or their respective 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, addressed as follows:
If to the Executive:
Xxxxx Xxxxxx
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxx, Xxxxxxxx and Xxxxxx, P.A.
0000 Xxxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to the Company:
Amscan Holdings, Inc.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
Telecopier No.: (000) 000-0000
with a copy to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
or to such other address as either party furnishes to the other in writing in
accordance with this Section 10(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.
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(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.
(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 supersedes all
other agreements and understandings concerning the subject matter hereof, both
written and oral, between the Executive and the Company and between the
Executive and Anagram.
(g) The effectiveness of this Agreement is contingent upon the
consummation of the "Closing" under the Stock Purchase Agreement. If such
Closing does not occur, this Agreement shall have no effect and shall be void ab
initio without any party hereto having any liability to any other party hereto
(provided that the foregoing shall not limit the rights of the parties thereto
under the Stock Purchase Agreement).
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board of Directors, the Company
has caused this Agreement to be executed in its name on its behalf, all as of
the day and year first above written.
AMSCAN HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
/s/ Xxxxx Xxxxxx
-------------------------
Xxxxx Xxxxxx
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EXHIBIT A
[Form of Stock Option Agreement]
FORM OF STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT ("Agreement") dated as of ___________, 1998,
by and between Amscan Holdings Inc., a Delaware corporation (the "Company"), and
Xxxxx Xxxxxx (the "Executive"), who is presently an officer of the Company.
WHEREAS, pursuant to the Amscan Holdings, Inc. 1997 Stock Incentive
Plan (the "Plan"), the Committee (as defined in the Plan) has decided to award
stock options on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
1. Definitions.
As used in this Agreement, the following terms shall have the
meanings ascribed to them below. Any capitalized term used in this Agreement and
not defined herein shall have the meaning ascribed to it in the Plan.
"Acquisition" shall have the meaning set forth in Section 5.3.
"Common Stock" shall mean the Common Stock, par value $0.10 per
share, of the Company, subject to adjustment pursuant to the third paragraph of
Section 3 of the Plan, under certain circumstances.
"Exercise Price" shall have the meaning set forth in Section 2.2.
"Grant Date" shall have the meaning set forth in Section 2.1.
"Options" shall have the meaning set forth in Section 2.1.
In addition, certain other terms used herein have definitions
otherwise ascribed to them herein.
2. Grant and Terms of Options.
2.1. Grant of Options. The Company hereby grants to the Executive
as of the date hereof (the "Grant Date") 6.648 nonqualified stock options (the
"Options") to purchase one share of Common Stock per Option (i.e., 6.648 shares
in the aggregate) on the terms and conditions set forth below, and in reliance
upon the representations and covenants of the Executive set forth below. Unless
sooner exercised or forfeited as provided for in the Plan or this Agreement, the
Options shall expire on the tenth anniversary of the date of this Agreement.
2.2. Exercise Price. The exercise price of the Options is $125,000
per share of Common Stock subject thereto (the "Exercise Price").
2.3. Exercisability. The Options shall vest and become
exercisable according to the following schedule:
Years of Employment
Since the Grant Date Vested Percentage
Less than 1 year 0 percent
At least 1 year, but less than 2 years 20 percent
At least 2 years, but less than 3 years 40 percent
At least 3 years, but less than 4 years 60 percent
At least 4 years, but less than 5 years 80 percent
5 years or more 100 percent
Options that have become exercisable shall remain exercisable until they
terminate as set forth in this Agreement or the Plan.
3. Plan Shares.
3.1. Transferability of Plan Shares and Options. The Executive
shall not be permitted to sell, assign, transfer, pledge or otherwise encumber
any Plan Shares or Options, except as provided in the Plan or, in the case of
Plan Shares, as provided in Sections 2.3, 2.4 and 2.5 of the Stockholders'
Agreement.
Any transfer of Plan Shares otherwise permitted pursuant to this
Agreement shall remain subject to the terms of the Stockholders' Agreement, and
shall not be permitted other than in accordance with the terms thereof,
notwithstanding any provision of this Agreement that would otherwise permit such
transfer.
4. Executive's Representations, Warranties and Agreements.
In connection with the exercise of any Options, the Executive shall
make to the Company, in writing, such representations, warranties and agreements
in connection with such exercise and investment in shares of Common Stock as the
Committee shall reasonably request.
5. Successors.
5.1. This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than (i) by will or the laws of descent and distribution, (ii)
pursuant to a qualified domestic relations order (as defined in the Code) or
(iii) pursuant to a gift to the Executive's spouse, children, grandchildren or
other living descendants, whether directly or indirectly or by means of a trust,
partnership, limited liability company or otherwise. This Agreement shall inure
to the benefit of and be enforceable by the Executive's legal representatives.
5.2. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
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5.3. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise (an "Acquisition")) to
all or substantially all of the business and/or assets of the Company expressly
to assume and to agree to perform this Agreement in the same manner and to the
same extent that the Company would have been required to perform it if no such
succession had taken place (or by substituting for such Options new options,
based upon the stock of such successor, having an aggregate spread between the
Fair Market Value of the underlying stock and the Exercise Price thereof, and
the same term, immediately after such substitution, equal to the spread on, and
the term of, such Options immediately before such substitution), and the
Executive hereby agrees to such assumption (or substitution); provided, however,
that the Company or such successor may, at its option, at the time of or
promptly after such Acquisition, terminate all of its obligations hereunder with
respect to the Options by paying to the Executive or the Executive's successors
or assigns an amount equal to the product of (i) the number of Options and (ii)
the Fair Market Value per share of the shares underlying such Options at the
time of such Acquisition less the amount of such Options' exercise price (but
not in excess of such Fair Market Value per share), in either case, in exchange
for the Executive's Options. As used in this Agreement, the "Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation of law or otherwise.
6. Miscellaneous.
6.1. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York, without regard to the
principles of conflicts of law thereof. 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 successors and legal representatives.
6.2. 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
registered or certified mail, return receipt requested, postage prepaid,
addressed if to the Executive, at the address set forth on the signature page
hereto, and if to the Company: Amscan Holdings, Inc., 00 Xxxxxxxxxx Xxxx,
Xxxxxxxx, Xxx Xxxx 00000, Attention: Secretary, or to such other addresses as
either party furnishes to the other in writing in accordance with this Section
6.2. Notices and communications shall be effective when actually received by the
addressee.
6.3. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
6.4. No later than the date as of which an amount first becomes
includible in the gross income of the Executive for federal income tax purposes
with respect to any Options, the Executive shall pay to the Company, or if
appropriate, any of its Affiliates, or make arrangements satisfactory to the
Committee regarding the payment of, any federal, state, local or foreign taxes
of any kind required by law to be withheld with respect to such amount. If
approved by the Committee, withholding obligations may be settled with Common
Stock, including Common Stock that is part of the Award that gives rise to the
withholding requirement.
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The obligations of the Company under the Plan shall be conditional on such
payment or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Executive. The Committee may establish such procedures as
it deems appropriate, including making irrevocable elections, for the settlement
of withholding obligations with Common Stock.
6.5. The Executive's or the Company'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.
6.6. The Options are granted pursuant to the Plan which is
incorporated herein by reference and the Options shall, except as otherwise
expressly provided herein, be governed by the terms thereof. The Executive
hereby acknowledges receipt of a copy of the Plan and agrees to be bound by all
the terms and provisions thereof. The Executive and the Company each
acknowledges that this Agreement (together with the Stockholders' Agreement, the
Plan and the other agreements referred to herein and therein) constitutes the
entire agreement and supersedes all other agreements and understandings, both
written and oral, among the parties or either of them, with respect to the
subject matter hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
AMSCAN HOLDINGS, INC.
By:
-------------------------
Name: Xxxxx X. Xxxxxxxx
Title: President
EXECUTIVE:
-------------------------------
Name: Xxxxx Xxxxxx
Address: 0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
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