September 6, 2005
Dear Xxxxxxxx:
This letter will memorialize our conversations to date and our agreement
regarding your separation from employment.
The Employment Agreement between you and The Great Atlantic & Pacific Tea
Company, Inc. (the "Company") dated February 24, 2002 (the "Agreement") remains
in full force and effect without amendment or modification. The Company
recognizes that you have exercised your right to terminate your employment for
good reason and you will be entitled to all applicable benefits under the
Agreement.
As we agreed, if you (i) continue to serve as Chief Financial Officer through
December 31, 2005 (or an earlier date only if the Company in its sole discretion
determines that such date is acceptable), (ii) assist in positioning Xxxxxx
Xxxxxxx as your successor, (iii) assist in transitioning supervision of the
Legal function to Xxxxx Xxxxxxxx, (iv) continue to work on the divestiture of
the Xxxxxx Xxxx operation and (v) sign a Confidential Separation and Release
Agreement, the Company will provide you, in addition to the benefits provided in
your Agreement, with: (a) 6 months of severance pay as calculated in the
Agreement and 6 months of benefit coverage continuation, (b) your Company car,
(c) outplacement assistance, (d) a prorata bonus for fiscal year 2005 at 100% of
your bonus target (if the bonus payout pursuant to your Agreement is less than
100%), (e) a positive reference from the Chairman of the Company, (f) immediate
vesting of all unvested stock options as of your separation date (you will have
one (1) year from your separation date to exercise all vested options) and (g) a
one-time lump sum incentive payment in the gross amount of $250,000.00.
If any payments hereunder would not comply with the requirements of Section 409A
of Internal Revenue Code of 1986, as amended, and the regulations and Internal
Revenue Service guidance thereunder, you and the Company agree to use best
efforts to modify the terms of such payments in a manner mutually agreeable so
that such requirements are satisfied.
Sincerely,
The Great Atlantic & Pacific Tea Company, Inc.
By: /s/Xxxx Xxxxx
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Agreed to and accepted this 6th day of September, 2005
/s/Xxxxxxxx X. Xxxxxxxxx
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