Exhibit 10.46
TRANSITION AGREEMENT
THIS TRANSITION AGREEMENT, dated
March 27, 2006, (the “ Agreement ”), by and
between Pathmark Stores, Inc., a Delaware corporation
(the “ Company ”) and Harvey M. Gutman
(the “ Executive ”).
WHEREAS, the Company and the
Executive are parties to a certain Employment Agreement, dated as
of February 1, 1999, as amended by the First Amendment to
Employment Agreement dated April 15, 1999, and by the Side Letter
to the Sale and Retention Bonus Agreement, the Employment Agreement
and Certain Additional Understandings dated July 1, 2000
(the “ Employment Agreement ”);
WHEREAS, the Executive has
elected to retire from the employ of the Company in accordance with
the Pathmark Stores, Inc. Retirement Incentive Program offering
December 9, 2005 to January 23, 2006 (the “Program”, a
copy of which is attached hereto as Schedule A);
WHEREAS, Executive has executed
the waiver and release of claims attached to the Program (the
“Release”);
WHEREAS, the Executive has
agreed, at the request of the Company, to remain in his current
position actively employed with the Company until April 8, 2006
(the “Retirement Date”).
NOW, THEREFORE, in consideration
of the covenants and agreements hereinafter set forth in this
Agreement, the parties hereto hereby agree as follows:
1. Retirement . The
Executive has elected to retire pursuant to the Program, effective
as of the Retirement Date. Executive agrees to remain actively
employed with the Company until the Retirement Date. The Employment
Agreement shall terminate on the Retirement Date.
2. Salary and Bonus. In
consideration of the covenants set forth herein and the Release,
the Company shall provide the Executive the following:
(a)
Salary . The Company shall continue to pay Executive at his
current weekly rate of pay through the Retirement Date in
accordance with the Employment Agreement.
(b)
Treatment of Equity-Based Compensation.
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(i)
The Stock Options previously awarded to Executive under the 2000
Employee Equity Plan (together with the individual award agreements
applicable to Executive’s awards, (the “ Equity
Plan ”)), as listed on Schedule B hereto (the “
Stock Options ), which vested prior to the date hereof,
shall remain exercisable in accordance with the terms of the Equity
Plan until the second anniversary of the Retirement
Date.
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(ii)
Stock Options granted on June 9, 2005 (the “ June
Grant ”), as listed on Schedule B, will be treated as
follows:
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If
Executive remains actively employed through the Retirement Date,
50% of the June Grant will vest on June 9, 2006 and the remainder
of the June Grant will be forfeited immediately. The June Grant (to
the extent vested) shall remain exercisable in accordance with the
terms of the Equity Plan until the second anniversary of the
Retirement Date.
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(iii)
In the event of any merger, sale or consolidation of the Company or
other transaction affecting the Company’s Common Stock, the
Compensation Committee of the Company’s Board of Directors,
in its sole discretion and without Executive’s consent, may
provide for:
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(A)
the continuation of the Stock Options by the Company (if the
Company is the surviving corporation);
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(B)
the assumption of the Stock Options by the surviving corporation;
and
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(C)
the substitution by the surviving corporation of stock option(s)
with substantially the same terms for the outstanding Stock
Options; or the cancellation of the Stock Options upon payment to
Executive of a per share amount in cash or cash equivalents equal
to (A) the highest price paid for a share of the
Company’s Common Stock in such merger, sale, consolidation or
other transaction, minus (B) the exercise price of the
applicable Stock Option.
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(iv)
Restricted Stock Units (“ Stock Awards ”)
granted on June 9, 2005, as listed on Schedule B, will be treated
as follows:
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If
Executive remains actively employed through the Retirement Date,
50% of the Stock Awards will vest on June 9, 2006 and the remainder
will be forfeited immediately.
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(v)
Stock Awards shall be settled in accordance with the terms and
provisions of the Equity Plan.
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(c)
Pension/401(k) Plan . The Executive’s participation in
the Company’s Savings Plan, Pension Plan and Excess Benefit
Plan and the Supplemental Retirement Agreement, dated as of June 1,
1994, as amended by Amendment No. 1, between the Company and the
Executive (collectively the “ Retirement Plans
”) shall terminate on the Retirement Date. The
Executive’s rights and obligations under the Retirement Plans
shall be governed by applicable law and the terms and conditions of
the Retirement Plans, as the same may be amended as provided in
Section 5(c) hereof.
(d)
Bonus . In the event the Company implements a quarterly
bonus plan for 2006, Executive will participate as a Senior Vice
President in said plan with respect to the first quarter of 2006 if
Executive remains actively employed through the Retirement
Date.
(e)
Accrued Vacation . The Executive shall continue to accrue
vacat
