Exhibit 10.22
Date
Name & Address
Dear:
Reference: 2005 Turnaround Incentive Compensation Program ("Program")
Restricted Share Unit Award Agreement ("Agreement")
This will confirm the terms and conditions of an Award being made to you
pursuant to The Great Atlantic & Pacific Tea Company, Inc. (the "Company") 1998
Long Term Incentive and Share Award Plan (the "Plan"), a copy of which is
attached hereto and made a part of this Agreement.
1. Restricted Share Units. Provided that you have signed and returned this
Agreement indicating your acceptance of its terms and conditions, the Company
will grant ________ Restricted Share Units ("Units") to you, subject to all of
the terms contained in this Agreement.
2. Shareholder Approval. The grant of the Units is contingent upon the
Shareholders approving an increase in the number of Shares reserved for issuance
under the Plan at the July 2005 Annual Meeting of Shareholders, and is subject
to the performance criteria outlined below.
3. Performance Criteria and Vesting Requirements. (a) If the Company achieves
After-Tax Profitability, as hereinafter defined, in fiscal year 2006, then 33.3%
of the Units awarded shall vest as of April 31, 2007, an additional 33.3% of the
Units awarded shall vest as of April 31, 2008 if After-Tax Profitability is
sustained in fiscal year 2007, and the remaining 33.3% of the Units awarded
shall vest as of April 31, 2009 if After-Tax Profitability is sustained in
fiscal years 2007 and 2008. If the Company does not achieve After-Tax
Profitability in fiscal year 2006 but does achieve After-Tax Profitability in
fiscal year 2007, then 50% of the Units awarded shall vest as of April 31, 2008
and an additional 50% of the Units awarded shall vest as of April 31, 2009 if
After-Tax Profitability is sustained in fiscal year 2008. For purposes of this
grant, After-Tax Profitability is defined as net income as defined by GAAP,
adjusted for the following items: Adjustments required as a result of changes in
GAAP or interpretations of GAAP; Impairment charges outside the normal course of
business (e.g., normal store closures and remodels); Restructuring charges
(including severance, impairments, vacancy and other exiting costs);
Discontinued operations; One-time costs associated with major transactions,
including: Refinancing costs and other costs associated with raising capital,
Acquisition costs, Disposal costs, Costs of establishing outsourcing
arrangements; Gains and losses on disposals of businesses relating either to a
restructuring or discontinued operation; Costs of special projects approved by
board; Costs associated with significant litigation; Costs associated with
regulatory changes (e.g., tax law changes, labor law changes, etc.); and, Other
items of a similar nature.
(b) The Units will vest only if you are, at all times during the period
beginning with the date hereof and ending on the dates of vesting, an employee
of the Company or a parent or subsidiary of the Company.
(c) As the Units vest, each vested Unit will be converted to one share
of the Company's Common Stock. Such vested Units will be delivered to you in the
form of a stock certificate as soon as practicable following each vesting date.
(d) The Units are subject to the terms, conditions, limitations and
restrictions contained in the Plan and may not be assigned or transferred, in
whole or in part, except as therein provided.
(e) In the event that your employment is terminated for any reason by
you or by the Company or a parent or subsidiary of the Company, you shall
forfeit the Units immediately upon such termination of employment.
4. Non-Competition. In exchange for the opportunity to participate in the
Program, you agree that during the term of your employment with the Company, and
for a period of eighteen months following termination of your employment for
whatever reason, you will not, within any of the geographical areas of the
United States or Canada in which the Company is then conducting business (either
directly or through franchisees), directly or indirectly, own, manage, operate,
control, be employed by, participate in, provide consulting services to, or be
connected in any manner with the ownership, management, operation or control of
any business engaged in retail sale of goods and products that are in direct
competition with any of the types of businesses conducted by the Company to any
significant extent during your employment or on the date of termination of your
employment, except that you may own for investment purposes up to 1% of the
capital stock of any company whose stock is publicly traded. For the same
eighteen-month period, you also agree to not contact or solicit employees of the
Company for the purpose of inducing such employees to leave the employ of the
Company.
5. Trade Secrets and Proprietary Information. You hereby acknowledge that you
have and/or will have access to and become acquainted with various trade secrets
and proprietary information of the Company and other confidential information
relating to the Company. You covenant that you will not, directly or indirectly,
disclose or use such information except (i) as is necessary and appropriate in
connection with your employment by the Company, (ii) as is required pursuant to
a judicial or administrative subpoena, or (iii) if such information is already
in the public domain (other than by reason of your breach of your obligations
hereunder). Subject to the exceptions set forth above, you agree that you will
adhere in all respects to the Company's policies against the use or disclosure
of such information.
6. Confidentiality. You further agree that your participation in the Program,
and the terms and conditions of this Agreement, are confidential and that you
will not in any manner publish, publicize, disclose or otherwise make known or
permit or cause to be made known to any third person your participation in the
Program or the terms and conditions of this Agreement. Nothing in this paragraph
shall be construed to prohibit the disclosure of this Agreement to your spouse
or any legal, tax or financial consultant retained by you, provided that the
persons to whom the disclosure is being made agree to be bound by the
confidentiality provisions of this paragraph.
7. Arbitration; Injunctive Relief. Any controversy or claim arising out of or
relating to this Agreement, directly or indirectly, or the performance or breach
thereof, will be settled by arbitration in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
arbitration will be held in Bergen County or Passaic County in New Jersey, or
such other place as may be agreed upon at the time by the parties to the
arbitration. The parties shall bear their own expenses in connection with any
arbitration or proceeding arising out of or relating to this Agreement, directly
or indirectly, or the performance or breach thereof; provided, however, that in
the event that you substantially prevail, the Company agrees promptly to
reimburse you for all expenses (including costs and fees of witnesses, evidence
and attorneys fees and expenses) reasonably incurred by you in investigating,
prosecuting, defending, or preparing to prosecute or defend any action,
proceeding or claim arising out of or relating to this Agreement, directly or
indirectly, or performance or breach thereof. You acknowledge and agree that a
breach of your obligations under Sections 4, 5 and/or 6 of this Agreement could
cause irreparable harm for which the Company would have no adequate remedy at
law, and further agree that, notwithstanding the agreement to arbitrate
controversies or claims as set forth above, the Company may apply to a court of
competent jurisdiction to seek to enjoin preliminarily or permanently any breach
or threatened breach of your obligations under Sections 4, 5 and/or 6 of this
Agreement.
8. General. (a) Each share of stock awarded hereunder, once vested, shall be
fully paid and non-assessable.
(b) You shall not have any rights of a record holder with respect to
such shares until such certificates are actually issued to you.
(c) You shall assume all risks incident to any change hereafter in the
applicable laws or regulations or incident to any change in the market value of
any shares issued to you upon the vesting of the Units in whole or in part.
(d) Nothing herein contained shall obligate the Company, or any parent,
division, affiliate or subsidiary of the Company, to continue your employment
for any particular period or on any particular basis of compensation.
9. Your Acceptance and Return of Agreement. To indicate your agreement and
acceptance, please sign the Agreement where indicated below. If you are located
in Montvale, return the signed original Agreement by hand delivery to Judy
Barbarino (3rd floor Hartford building, extension 4461) on or before Wednesday,
March 9, 2005. If you are located in Paterson, return the signed original
Agreement by hand delivery to Alexia Finley (1st floor Human Resources area,
extension 3713) on or before Wednesday, March 9, 2005. You should retain a
signed copy of the original Agreement for your records.
Very truly yours,
By:/s/Allan Richards
------------------------------------
ALLAN RICHARDS
Senior Vice President, Human Resources
and Labor Relations
Agreed and accepted:
By: _____________________________________
Signature
Print Name: ______________________________
Social Security No.: ________________________
Date: ____________________________________