UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
September 9, 2005 (September 6, 2005)
Date of Report (Date of earliest event reported)
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THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.
(Exact name of registrant as specified in its charter)
Maryland 1-4141 13-1890974
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification No.)
Two Paragon Drive
Montvale, New Jersey 07645
(Address of principal executive offices)
(201) 573-9700
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
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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:
__ Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
__ Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
__ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d- 2(b))
__ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
Executive Employment Agreement with Eric Claus
On July 22, 2005, The Great Atlantic & Pacific Tea Company, Inc. (the
"Company") filed a Form 8-K, which indicated that effective August 15,
2005, the Company would promote Mr. Eric Claus from President of The
Great Atlantic & Pacific Tea Company of Canada Limited ("A&P Canada"),
to President and Chief Executive Officer of the Company. In the Form
8-K, the Company indicated that in conjunction with Mr. Claus'
promotion, it would enter into a new employment agreement with Mr.
Claus, which would supersede the Executive Employment Agreement dated
November 11, 2002, between Mr. Claus and A&P Canada (the "Canadian
Agreement"). On September 8, 2005, the Company executed the new
employment agreement with Mr. Claus (the "Claus Employment Agreement").
Under the Claus Employment Agreement, Mr. Claus shall serve as
President and Chief Executive Officer of the Company, reporting
directly to Christian Haub, Executive Chairman of the Company. The
initial term of the Claus Employment Agreement shall terminate on
August 14, 2008, after which it shall renew automatically for
successive twelve (12) month periods, unless either party gives notice
of non-renewal at least six (6) months prior to the date on which the
applicable term would otherwise terminate. Mr. Claus will receive a
base salary of $550,000 and will be eligible for a cash bonus, if he
and the Company meet certain performance targets, of up to 200% of his
base salary. The Claus Employment Agreement contains the following
additional benefits: (i) a signing bonus of $800,000, (ii) a grant of
150,000 restricted stock units pursuant to the Company's 2005
Turnaround Incentive Compensation Plan, (iii) continued participation
in the Company's Supplemental Retirement Plan and in all other employee
benefit plans and programs from time to time in effect for the benefit
of senior executives of the Company, and (iv) certain severance
benefits, including twenty-four (24) months of salary, in the event
that the Company terminates Mr. Claus without Cause (as defined
therein), or Mr. Claus terminates his employment for Good Reason (as
defined therein); provided, however, that such severance payments
are reduced to twelve (12) months of salary if the Company terminates
Mr. Claus for Performance (as defined therein).
The foregoing description of the Claus Employment Agreement is
qualified in its entirety by reference to the full text of the Claus
Employment Agreement, filed as Exhibit 10.1 to this Form 8-K, and
incorporated herein by reference.
Letter Agreement with Mitchell P. Goldstein
On September 6, 2005, Mitchell P. Goldstein notified the Company that
he will resign from his position as Executive Vice President, Chief
Financial Officer & Secretary of the Company, and in conjunction
therewith, will terminate his employment agreement with the Company,
made and entered into as of February 24, 2002 ("Goldstein Employment
Agreement"), for Good Reason (as defined therein).
On September 6, 2005, the Company entered into a letter agreement with
Mr. Goldstein (the "Letter Agreement"), pursuant to which Mr. Goldstein
agreed to continue to serve as Chief Financial Officer through December
31, 2005 (or an earlier date if decided upon by the Company). As
detailed in the Letter Agreement, the parties agreed, among other
things, that upon separation from the Company, Mr. Goldstein will sign
a Confidential Separation and Release Agreement with the Company that
will provide him with, in addition to the benefits provided in the
Goldstein Employment Agreement, among other things, (i) six (6) months
of severance pay and of benefit coverage continuation, (ii) a prorata
bonus for fiscal year 2005 of not less than 100% of Mr. Goldstein's
bonus target, (iii) immediate vesting of all unvested stock options as
of Mr. Goldstein's separation date, such options to be exerciseable for
one (1) year from Mr. Goldstein's separation date, and (iv) a one-time
lump sum incentive payment in the gross amount of $250,000.
The foregoing description of the Letter Agreement is qualified in its
entirety by reference to the full text of the Letter Agreement, filed
as Exhibit 10.2 to this Form 8-K. Both the Goldstein Employment
Agreement and the Letter Agreement are incorporated herein by
reference.
Promotion of John E. Metzger to Executive Vice President of the Company
On September 6, 2005, the Company announced that it has promoted John
E. Metzger from Senior Vice President, Chief Information Officer to
Executive Vice President of the Company. In his new position, Mr.
Metzger will earn an annual salary of $350,000. Mr. Metzger will
continue to serve the Company under his Employment Agreement, dated May
14, 2001, as amended February 14, 2002, September 13, 2004 and October
25, 2004 (the "Metzger Employment Agreement"), pursuant to which he is
eligible for a cash bonus, if he and the Company meet certain
performance targets, of up to 55% of his base salary. Under the Metzger
Employment Agreement, Mr. Metzger is also entitled to participate in
the Company's benefit programs, services, facilities and perquisites
from time to time in effect for senior executives of the Company, and,
in the event that the Company terminates Mr. Metzger other than for
cause, to certain benefits, including insurance coverage and severance,
for a period of eighteen (18) months.
The foregoing description of the Metzger Employment Agreement is
qualified in its entirety by reference to the full text of the Metzger
Employment Agreement, as amended, filed as Exhibit 10.13 to the
Company's Form 10-K filed on July 5, 2002, and Exhibit 10.11 and
Exhibit 10.12 to the Company's Form 10-K filed on May 10, 2005, and
such information is incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
Termination of the Executive Employment Agreement between A&P Canada
and Eric Claus
The Claus Employment Agreement, executed by the Company on September 8,
2005, supersedes the Canadian Agreement, and thus terminates any rights
and/or obligations of both the Company and Mr. Claus under the Canadian
Agreement. The full text of the Canadian Agreement is contained in
Exhibit 10.1 to the Company's Form 10-Q filed on January 10, 2003 and
incorporated herein by reference. All other information required by
Item 1.02 of Form 8-K regarding the termination of the Canadian
Agreement is set forth in Item 1.01 of this Current Report on Form 8-K
and incorporated herein by reference.
Termination of the Executive Employment Agreement between the Company
and Mitchell P. Goldstein
On September 6, 2005, the Company and Mr. Goldstein agreed that he
would terminate the Goldstein Employment Agreement for Good Reason,
effective December 31, 2005 (or an earlier date if decided upon by the
Company). As detailed in the Goldstein Employment Agreement, as a
result of his termination for Good Reason, Mr. Goldstein shall be
entitled to receive (i) a pro rata bonus for the calendar year in which
the termination occurs, (ii) continued benefit and insurance coverage
for a period of eighteen (18) months, and (iii) severance for a period
of eighteen (18) months, equal to one-twelfth of annual base salary
plus the average of the three (3) highest bonuses in the five (5)
calendar years preceding resignation.
The foregoing description of the Goldstein Employment Agreement is
qualified in its entirety by reference to the full text of the
Goldstein Employment Agreement, filed as Exhibit 10.8 to the Company's
Form 10-K filed on July 5, 2002, and such information is incorporated
herein by reference. Additional information required by Item 1.02 of
Form 8-K regarding the termination of the Goldstein Employment
Agreement is set forth in Item 1.01 of this Current Report on Form 8-K
and incorporated herein by reference.
Item 5.02 Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers
The Company announced on September 6, 2005, that Mr. Mitchell P.
Goldstein will resign from his position as Executive Vice President,
Chief Financial Officer & Secretary of the Company, effective December
31, 2005 (or an earlier date if decided upon by the Company). The
Company also announced that upon Mr. Goldstein's resignation from the
Company, Ms. Brenda Galgano, currently Senior Vice President and
Corporate Controller will assume the role of Senior Vice President &
Chief Financial Officer. A copy of the press release announcing Ms.
Galgano's appointment and Mr. Goldstein's resignation is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
In her new position, Ms. Galgano will earn an annual salary of $325,000
and be eligible for a cash bonus, if she and the Company meet certain
performance targets, of up to 55% of her base salary. Ms. Galgano
entered into an Employment Agreement with the Company on June 16, 2003
(the "Galgano Employment Agreement"), and will serve as Senior Vice
President & Chief Financial Officer in accordance with such agreement.
Under the Galgano Employment Agreement, Ms. Galgano is entitled to
participate in the Company's Executive Medical Plan, and other benefit
programs and services, facilities and perquisites appropriate to her
position. In the event that the Company terminates Ms. Galgano other
than for Cause (as defined therein), Ms. Galgano will be entitled to
certain benefits, including severance for a period of eighteen (18)
months.
Upon Ms. Galgano's promotion to Senior Vice President & Chief Financial
Officer, Ms. Melissa E. Sungela, 39, will assume the role of Vice
President Corporate Controller. Ms. Sungela has served as Vice
President Assistant Corporate Controller of the Company since June,
2004. Prior to joining the Company, Ms. Sungela was North American
Controller for GE Healthcare, formerly Amersham Biosciences, from
April, 2002 to June, 2004, and Director Accounting Policy for
Honeywell, formerly AlliedSignal, from June 1998 to January 2002.
The foregoing description of the Galgano Employment Agreement is
qualified in its entirety by reference to the full text of the Galgano
Employment Agreement, filed as Exhibit 10.9 to the Company's Form 10-Q
filed on October 17, 2003, and such information is incorporated herein
by reference. The biographical and other information with respect to
Ms. Galgano, which is required by Item 5.02(c) of Form 8-K, is
contained in the Company's Form 10-K filed with the Securities and
Exchange Commission on May 10, 2005, and such information is
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
Exhibit
Number Exhibit Description
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10.1 Executive Employment Agreement, between Mr. Eric Claus and
The Great Atlantic & Pacific Tea Company, Inc., signed by
the Company on September 8, 2005
10.2 Letter Agreement dated September 6, 2005, between Mr.
Mitchell P. Goldstein and The Great Atlantic &
Pacific Tea Company, Inc.
99.1 Press Release, dated September 6, 2005, announcing the
Company's New Senior Management Team
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: September 9, 2005
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
By: /s/Mitchell P. Goldstein
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Mitchell P. Goldstein, Executive Vice President,
Chief Financial Officer & Secretary
INDEX TO EXHIBITS
Exhibit
Number Exhibit Description
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10.1 Executive Employment Agreement, between Mr. Eric
Claus and The Great Atlantic & Pacific Tea Company,
Inc., signed by the Company on September 8, 2005
10.2 Letter Agreement dated September 6, 2005, between
Mr. Mitchell P. Goldstein and The Great Atlantic &
Pacific Tea Company, Inc.
99.1 Press Release, dated September 6, 2005, announcing
the Company's New Senior Management Team