Exhibit 10.25
Execution
Copy
Pathmark Stores,
Inc.
February 1, 2000
Marc Strassler
c/o Pathmark Stores, Inc.
200 Milik Street
Carteret, New Jersey 07008
Sale and Retention Bonus
Agreement
Dear Marc:
The following sets forth the
agreement between you and Pathmark Stores, Inc., a corporation
organized under the laws of Delaware (the
“Company” ), regarding the terms of the sale
bonus (the “Sale Bonus” ) and the retention
bonus (the “Retention Bonus” ) that you may be
eligible to receive in accordance with the terms and conditions set
forth below. This letter agreement (the “Letter
Agreement” ) is in addition to, and not in substitution
for, any other agreements between or among you and the Company
Group (as defined below), including without limitation the
employment agreement between you and the Company, dated February 1,
1999 (the “Employment Agreement” ), and the
Retention Bonus and the Sale Bonus are in addition to, and not in
substitution for, any other pay or benefits to which you are
eligible to earn from the Company Group.
1.
Definitions . For purposes of this Letter Agreement, the
following capitalized words that are not otherwise defined in the
text of the Letter Agreement shall have the meanings set forth
below:
“Aggregate
Consideration” shall mean an amount equal to the sum of the
aggregate fair market value of any securities issued and any other
non-cash consideration delivered, and any cash consideration paid
to the Company Group or its security holders in connection with a
Change in Control, plus the amount of all indebtedness of the
Company Group which is assumed or acquired by any Purchaser in
connection with a Change in Control or retired or defeased in
connection with such Change in Control. The fair market value of
any securities issued and any other non-cash consideration
delivered in connection with a Change in Control will be the value
determined in good faith by the Board.
“Beneficial
Owner” shall have
the meaning given to such term in Rule 13D-3 under the Securities
and Exchange Act of 1934, as amended.
“Board”
shall mean the Board of Directors of
Holdings.
“Change in
Control” shall mean
the consummation of a Triggering Event.
“Company”
shall mean Pathmark Stores,
Inc.
“Company
Group” shall mean,
individually and as a group, Holdings, the Company, PTK Holdings,
Inc. and Supermarkets General Holdings Corporation, and any
successors thereto.
“Effective
Date” shall mean
February 1, 2000.
“Holdings”
shall mean SMG-II Holdings
Corporation, a corporation organized under the laws of the State of
Delaware.
“Independent Third
Party” shall mean
any entity other than a member of the Company Group or any of the
Stockholders or any entity controlled by or under common control
with any of the Stockholders or the Company Group.
“Payment
Date” shall mean
July 31, 2000.
“Purchaser” shall mean any Independent Third Party that
engages in a Change in Control.
“Sellers”
shall mean selling equity holders,
which holders may be at the level of any of the Company
Group.
A “Triggering
Event” shall be deemed to have occurred on the date that
any of he following shall have occurred:
(A) any
member of the Company Group enters into a binding agreement with
one or more Independent Third Parties to directly acquire, in
exchange for cash, stock, claims, or property, fifty percent or
more of the aggregate equity securities of Holdings for which the
MLCP Investors and the Equitable Investors (as defined in the
Amended and Restated Stockholders Agreement among Holdings and its
Stockholders, dated January 22, 1998) (together, the
“Stockholders” ) are Beneficial Owners as of the
Effective Date;
(B) any
member of the Company Group enters into a binding agreement
providing for a merger, consolidation, reorganization or other
business combination upon consummation of which one or more
Independent Third Parties would own or control fifty percent or
more of either (i) the aggregate voting securities of the Company
Group, (ii) the aggregate economic interest of the outstanding
equity securities of the Company Group or (iii) the aggregate value
of the assets of the Company;
(C) any
member of the Company Group enters into transaction upon
consummation of which an Independent Third Party would acquire in
exchange for cash, stock, claims or property fifty percent or more
of either (I) the aggregate equity securities of the Company, PTK
Holdings, Inc. or Supermarkets General Holdings Corporation, or
(II) the Company’s assets; or
(D) any
member of the Company Group files a plan of reorganization or
motion for relief in a case under title 11 of the United States
Code for the purpose of implementing an agreement or transaction of
the type described in any of the preceding clauses (A), (B) or
(C);
2
provided, however,
that a Triggering Event shall not
include any change of ownership resulting from a public offering of
any of the securities of any of the Company Group pursuant to an
effective registration statement under the Securities Act of 1933,
as amended.
2.
Term . The term of this Letter Agreement (the
“Term”) shall commence on the Effective Date and
shall continue until the later of (a) first anniversary of the
Effective Date if a Triggering Event does not occur prior to such
anniversary or (b) in the event that a Triggering Event occurs
prior to the first anniversary of the Effective Date, either the
date of a Change in Control that occurs subsequent to a
corresponding Triggering Event or the date the Triggering Event is
definitively canceled or otherwise becomes void.
In consideration of, and subject to,
your continued employment with the Company during the period
beginning on the Effective Date and ending on the Payment Date, the
Company will pay you a Retention Bonus equal to the annual rate of
your base salary, as in effect on the Payment Date multiplied by
0.75. The Company will pay the Retention Bonus to you in a lump sum
cash amount as soon as practicable after the Payment Date but in no
event more than thirty days thereafter.
(a)
General Terms . You will become entitled to receive the Sale
Bonus in the event that (I) a Triggering Event occurs during the
Term, and (ii) a Change in Control contemplated by such Triggering
Event occurs thereafter. The amo
