UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): August 1, 2005
PARTY CITY CORPORATION
(Exact name of Registrant as Specified in Chapter)
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Delaware
(State or Other Jurisdiction of
Incorporation)
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0-27826
(Commission File Number)
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22-3033692
(IRS Employer
Identification No.) |
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400 Commons Way, Rockaway, NJ
(Address of Principal Executive Offices)
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07866
(Zip Code) |
Registrant’s telephone number, including area code: (973) 983-0888
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
Item 1.01 Entry Into A Material Definitive Agreement
Separation Agreement
On
August 1, 2005, Party City Corporation (the “Company”) entered into a separation agreement
(the “Separation Agreement”) with Nancy Pedot, the Company’s former Chief Executive Officer and
Director, effective March 30, 2005 (the “Effective Date”). In accordance with applicable law, Ms.
Pedot has seven days after execution of the Separation Agreement to revoke such agreement. The
summary below is qualified in its entirety by the Separation Agreement, a copy of which is attached
hereto as Exhibit 10.1 and is incorporated herein by reference. Ms. Pedot’s resignation was
initially set forth in the Company’s Current Report on Form 8-K dated March 30, 2005.
The Separation Agreement provides that Ms. Pedot will be paid (i) her annual salary of
$600,000 for 52 weeks (by installment, in accordance with the Company’s regular payroll practices),
(ii) $23,076.92 for accrued but unused vacation, (iii) $23,073.89 for reimbursable business
expenses, and (iv) all other accrued benefits under employee benefit plans. From April 1, 2005
through June 30, 2006, the Company will provide Ms. Pedot and her dependents with medical and
dental coverage and will pay the Company portion of insurance premiums (assuming Ms. Pedot pays the
applicable employee portion of such premiums), and Ms. Pedot will be permitted to purchase
continuation coverage of such health benefits thereafter in accordance with applicable law. In
addition, 32,055 shares of non-qualified stock options of the Company held by Ms. Pedot scheduled
to vest and become exercisable on January 12, 2006 shall be vested and exercisable as of March 31,
2005, and such options, along with all of Ms. Pedot’s other vested and exercisable options as of
March 31, 2005, shall be exercisable until March 31, 2006. All other stock options held by Ms.
Pedot that were not vested and exercisable as of March 31, 2005 shall be cancelled.
For a period of six and 12 months after the Effective Date, respectively, Ms. Pedot is subject
to non-compete and non-solicitation provisions, each with specified exceptions. The Separation
Agreement provides for Ms. Pedot’s general release of all claims arising out of her employment and
separation from the Company. The Separation Agreement also provides that from March 30, 2005
through June 28, 2005 Ms. Pedot would make herself available to the Company for reasonable
part-time consultation on senior-level projects.
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers
A summary of the Separation Agreement is incorporated by reference herein to “Item 1.01 Entry
Into A Material Definitive Agreement” of this current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
A list of exhibits is set forth in the Exhibit Index which immediately precedes such Exhibits
and is incorporated herein by reference.