Exhibit 10.19
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of June 1, 1995, between Pathmark Stores, Inc.,
a Delaware corporation (the "Company"), and Robert Joyce ("Executive").
W I T N E S S E T H
WHEREAS, the Company wishes to assure itself of the services of
Executive for the period provided in this Agreement, and Executive is willing to
serve in the employ of the Company on a full time basis for said period, and
upon the other terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of the promises and the mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment and Duties.
(a) General. Subject to paragraph 2 hereof, the Company hereby
employs Executive and Executive agrees upon the terms and conditions herein set
forth to serve the Company as Senior Vice President and, in such capacity, shall
perform such duties as may be delineated in the By-Laws of the Company, and such
other duties, commensurate with Executive's title and position of Senior Vice
President, as may be assigned to Executive from time to time by the Chief
Executive Officer of the Company. If elected or appointed, Executive shall also
serve as a director or officer of any of the Company's subsidiaries or
affiliated companies without further compensation.
(b) Full-Time Service. Throughout the Period (as defined in
paragraph 2 below), Executive shall, except as may from time to time be
otherwise agreed to in writing by the Company and unless prevented by ill
health, devote his full-time working hours to his duties hereunder, shall in all
respects conform to and comply with the lawful and reasonable directions and
instructions given to him by the Chief Executive Officer of the Company, and
shall use his best efforts to promote and serve the interests of the Company.
(c) No Other Employment. Throughout the Period, Executive shall
not, directly or indirectly, render services to any other person or organization
for which he receives compensation without the consent of the Board of Directors
of the Company, or otherwise engage in activities which would interfere
significantly with his faithful performance of his duties hereunder. Executive
may perform inconsequential services without specific compensation therefor in
connection with the management of personal investments, provided that such
activity does not contravene the provisions of subparagraph 1(b) hereof or
paragraph 5 hereof.
2. Term of Employment. The Company shall retain Executive and Executive
shall serve in the employ of the Company for an initial period of approximately
24 months commencing on June 1, 1995 (the "Commencement Date") and extending
through and including May 31, 1997 (the "Initial Period"); provided, however,
that commencing on June 1, 1996 and each successive June1st thereafter, the term
of employment hereunder shall be automatically extended for one additional year,
unless at least 30 days prior to such June 1st the Company has delivered to
Executive, or Executive has delivered to the Company, written notice of its or
his desire, as the case may be, not to extend the term of employment (the
Initial Period, including the extensions thereof, if any, is herein referred to
as the "Period"; provided, further, that the Period shall terminate when
Executive's employment hereunder terminates).
3. Compensation and Other Benefits. Subject to the provisions of this
Agreement, the Company shall pay and provide the following compensation and
other benefits to Executive during the Period as compensation for services
rendered hereunder:
(a) Base Salary. The Company shall pay to Executive a minimum
annual base salary (the "Base Salary") at the rate of $200,000 per annum,
payable in accordance with the Company's then current payroll practice. The Base
Salary shall be reviewed annually on or about May 1st of each year during the
Period and may be increased in the discretion of the Board of Directors of the
Company or the Compensation Committee of the Board of Directors of the Company
or of one of
2
its parent corporations (the "Compensation Committee"). The Company shall be
entitled to deduct or withhold all taxes and charges which the Company may be
required to deduct or withhold therefrom.
(b) Bonus. Commencing on the Commencement Date, for each fiscal
year in the Period (or fraction thereof), Executive shall be eligible to receive
a bonus, ranging in each year from 0 to a maximum rate of 60% of annual Base
Salary, in accordance with the targets adopted by the Compensation Committee
pursuant to the terms of the Executive Incentive Plan ("EIP") of the Company as
in effect for Company executives. Bonuses payable hereunder shall be paid in
accordance with the Company's payroll practice concerning bonuses.
(c) Employee Benefit Plans. At all times during the Period,
Executive shall be provided the opportunity to participate in pension and
welfare plans, programs and arrangements (the "Plans") that are generally made
available to executives of the Company, or as may be deemed appropriate by the
Compensation Committee, in accordance with their respective terms.
(d) Relocation. The Company shall not, without Executive's
consent, relocate Executive's principal place of business to a location beyond
20 miles from Woodbridge, New Jersey.
(e) Travel. The Company shall not, without Executive's consent,
require Executive to travel on the Company's business to an extent materially
inconsistent with the Company's normal business travel requirements.
4. Termination of Employment.
(a) Termination for Cause (i) If, prior to the expiration of the
Period, Executive's employment is terminated by the Company for Cause, as
defined in subparagraph 4(a)(ii), or if Executive resigns from his employment
without Good Reason, as defined in subparagraph 4(b)(iv), Executive shall not be
eligible to receive Base Salary under subparagraph 3(a) or to participate in
3
any Plans under subparagraph 3(c) with respect to future periods after the date
of such termination or resignation except for the right to receive benefits
which have become vested under any Plan in accordance with the term of such
Plan. In addition, Executive shall not be eligible to receive any bonus
described in subparagraph 3(b) for the Company's fiscal year during which the
date of termination or resignation occurs and any later years.
(ii) Termination for "Cause" shall mean termination
of Executive's employment with the Company by the Chief Executive Officer or
Board of Directors of the Company based upon the occurrence of any of the
following events in the good faith opinion of the Chief Executive Officer or
Board of Directors: (A) Executive shall have committed an offense constituting a
first, second or third degree crime (as defined by the New Jersey Code of
Criminal Justice), or a felony under any other state or federal law; (B) the
willful engaging by Executive in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise. For purposes of this
subparagraph (ii)(B), no act on Executive's part shall be considered "willful"
unless done by Executive not in good faith and without reasonable belief that
Executive's action was in the best interests of the Company, or (C) the
Executive shall have habitually neglected his duties to the Company if such
neglect is not cured by the Executive within five days after written notice is
given to Executive by the Chief Executive Officer or Board of Directors
identifying the manner in which the Chief Executive Officer or Board of
Directors (whichever is applicable) believes that the Executive has habitually
neglected his duties.
(iii) The date of termination of employment by the
Company under this paragraph 4(a) shall be the date specified in a written
notice of termination (which date shall be no earlier than the date of
furnishing such notice), or if no such date is specified therein, the date of
receipt by Executive of such written notice of termination. The date of
resignation under this paragraph 4(a) shall be two weeks after receipt by the
Company of written notice of resignation, or if no such notice is provided, the
date the Executive ceases to perform his duties hereunder.
4
(b) Termination Without Cause; Resignation for Good Reason (i)
Subject to the provisions of subparagraph 4(a) and subparagraph 4(b)(vi) hereof,
if, prior to expiration of the Period, Executive's employment is terminated by
the Company without Cause, or if Executive resigns from his Employment for Good
Reason, Executive shall be entitled to receive during the Severance Period, as
severance pay or liquidated damages, or both ("Severance Benefits"), (A) a sum
equal to his Base Salary at the annual rate then in effect immediately prior to
such termination or resignation, and (B) continued coverage under Company health
and insurance plans applicable to Executive immediately prior to such
termination or resignation, or, if any such plan does not permit continued
coverage of the Executive, the Company shall arrange to provide a benefit
substantially similar to and no less favorable than the benefit he was entitled
to under such plan, reduced by any compensation or benefits which Executive
receives, or is entitled to receive, in connection with any employment of the
Executive by another employer during the time that Severance Benefits are
payable to Executive pursuant to this paragraph 4(b). Executive shall provide
the Company with any evidence of amounts received in connection with other
employment which the Company shall reasonably request. The Severance Period
shall commence on the day following the date of such termination or resignation
for Good Reason and shall expire on the date this Agreement would have expired
but for said termination or resignation.
(ii) If, following a termination of employment for
resignation for Good Reason, Executive breaches the provisions of paragraph 5
hereof, Executive shall not be eligible, as of the date of such breach, for the
payment of Severance Benefits and all obligations and agreements of the Company
to pay Severance Benefits shall thereupon cease.
(iii) The date of termination of employment by the
Company under this paragraph 4(b) shall be the date specified in a written
notice of termination to Executive (which date shall be no earlier than the date
of furnishing such notice) or, if no such date is specified therein, the date on
which such notice is given to Executive. The date of resignation under this
paragraph 4(b) shall be two weeks after receipt by the Company of the written
notice of resignation.
5
(iv) Resignation for "Good Reason" shall mean the
Executive's voluntary termination of employment with the Company because of (A)
a reduction, without Executive's written consent, in Executive's current base or
aggregate compensation, unless such reduction is generally applicable to all
executives of the Company, (B) a reduction, without the Executive's consent, in
Executive's then current responsibilities, (C) receipt of notice by Executive
pursuant to paragraph (2) hereof of the Company's desire not to extend the term
of employment, or (D) such other events of hardship as the Compensation
Committee or Board of Directors may determine on a case-by-case basis.
(v) Severance Benefits shall be paid in connection with
the Company's then current payroll practice commencing on the next payroll date
following the date of the termination of Executive's employment under
subparagraph 4(b), in a gross amount equal to the amount paid to Executive by
the Company for the payroll period immediately prior to such termination or
resignation.
(c) Death. If Executive dies prior to the expiration of the
Period, his Base Salary and bonus (determined as the bonus he would have earned
had his employment continued until the end of the applicable bonus period during
which his death occurred) will be prorated through his day of death and paid to
his beneficiary or estate.
(d) Disability. If Executive becomes Permanently Disabled, as
defined below in this subparagraph, prior to the expiration of the Period, the
Company shall be entitled to terminate his employment and Executive shall be
entitled to receive disability benefits in accordance with the disability policy
maintained by the Company as of the date of such disability. For the purposes of
this subparagraph, Executive shall be deemed "Permanently Disabled" when, and
only when, he suffers a physical or mental disability or infirmity that prevents
the normal performance of duties lasting for a continuous period of six months
or more.
6
5. Secrecy and Noncompetition.
(a) No Competing Employment. For so long as Executive is
receiving, or is entitled to receive, any payments under or pursuant to this
Agreement (such period being referred to hereinafter as the "Restricted
Period"), Executive shall not, unless he receives the prior written consent
of the Company, directly or indirectly, whether as owner, consultant,
employee, partner, venturer, agent, through stock ownership, investment of
capital, lending of money or property, rendering of services, or otherwise
(except ownership of less than 5% of the number of shares outstanding of any
securities which are publicly traded), compete with the retail
supermarket/drugstore business of the Company or any other business
contributing at least 15% of the consolidated revenues of the Company at the
time of termination of Executive's employment hereunder (such businesses are
hereinafter referred to as the "Business"), or assist, become interested in
or be connected with any corporation, firm, partnership, joint venture, sole
proprietorship or other entity which so competes with the Business, except
for the aforementioned 5% ownership of publicly traded securities. The
restrictions imposed by this subparagraph shall not apply to any geographic
area in which the Company is not engaged in the Business at the time of
termination.
(b) No Interference. During the Restricted Period, Executive
shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization or
entity (other than the Company), intentionally solicit, endeavor to entice away
from the Company or any Affiliate or otherwise interfere with the relationship
of the Company or any Affiliate with, any person who is employed by or
associated with the Company or any Affiliate (including, but not limited to, any
independent sales representatives or organizations) or any person or entity who
is, or was within the then most recent 12 month period, a customer or client of
the Company or any Affiliate.
(c) Secrecy. Executive recognizes that the services to be
performed by him hereunder are special, unique and extraordinary in that, by
reason of his employment hereunder with the Company, he may acquire confidential
information and trade secrets concerning the operations of
7
the Company or its Affiliates, the use or disclosure of which could cause the
Company substantial loss and damages which could not be readily calculated and
for which no remedy at law would be adequate. Accordingly, Executive covenants
and agrees with the Company that he will not at any time, except in performance
of Executive's obligations to the Company hereunder or with the prior written
consent of the Board of Directors of the Company, directly or indirectly,
disclose any secret or confidential information that he may learn by reason of
his association with the Company, or use any such information to the detriment
of the Company, or any of its Affiliates. The term "confidential information"
includes, without limitation, information not previously disclosed to the public
or to the trade by the Company's management with respect to the Company's, or
any of its respective subsidiaries' or Affiliates' business plans, prospects and
opportunities, the identity of clients, suppliers or customers, information
regarding operational strengths and weaknesses, trade secrets, know-how and
other intellectual property, systems, procedures, manuals, confidential reports,
product price lists, marketing plans or strategies, and financial information.
Executive understands and agrees that the rights and obligations set forth in
this subparagraph 5(c) are perpetual and, in any case, shall extend beyond the
Restricted Period and Executive's employment hereunder.
(d) Exclusive Property. Executive confirms that all confidential
information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by Executive relating to the
business of the Company shall be and remain the property of the Company. Upon
the termination of his employment with the Company or upon the request of the
Company at any time, Executive shall promptly deliver to the Company, and shall
not, without the consent of the Company (which consent shall not be unreasonably
withheld), retain copies of any written materials not previously made available
to the public, records and documents made by Executive or coming into his
possession concerning the business or affairs of the Company. Executive may
retain records relating exclusively to the terms and conditions of his
employment relationship with the Company. Executive understands and agrees that
the rights and obligations set forth in this subparagraph 5(d) are perpetual
and, in any case, shall extend beyond the Restricted Period and Executive's
employment hereunder.
8
(e) Stock Ownership. Other than as provided in subparagraph 1(c)
or 5(a) hereof, nothing in this Agreement shall prohibit Executive from
acquiring or holding any issue of stock or securities of any company or other
business entity, provided that Executive does not participate in the operations
of any such company and provided further that, with respect to any class of
voting securities listed on a national securities exchange or quoted on the
automated quotations system of the National Association of Securities Dealers,
Inc., Executive and members of his immediate family do not own at any time
during the Restricted Period more than 5% of the issued and outstanding shares
of such class of securities.
(f) Injunctive Relief. Without intending to limit the remedies
available to the Company, Executive acknowledges that a breach of any of the
covenants contained in this paragraph 5 may result in material irreparable
injury to the Company for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the
event of such a breach or threat thereof, the Company shall be entitled to
obtain a temporary restraining order and/or a preliminary or permanent
injunction restraining Executive from engaging in activities prohibited by this
paragraph 5 or such other relief as may be required to specifically enforce any
of the covenants in this paragraph 5.
6. Nonassignability, Binding Agreement. Neither this Agreement nor any
right, duty, obligation or interest hereunder shall be assignable or delegable
by Executive without the Company's prior written consent provided, however, that
nothing in this paragraph shall preclude Executive from designating any of his
beneficiaries to receive any benefits payable hereunder upon his death, or the
executors, administrators, or other legal representatives from assigning any
rights hereunder to the person or persons entitled thereto.
This Agreement shall be binding upon, and inure to the benefit of, the
parties hereto, any successors to or assigns of the Company and Executive's
heirs and the personal representatives of Executive's estate.
9
7. Severability. If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term or
provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired, and (b) the invalid or unenforceable term
or provision shall be deemed replaced by a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision.
8. Amendment; Waiver. This Agreement may not be modified, amended or
waived in any manner except by an instrument in writing signed by both parties
hereto. The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any other provision of this Agreement, or of any subsequent breach by such party
of a provision of this Agreement.
9. Governing Law. All matters affecting this Agreement, including the
validity thereof, are to be governed by, interpreted and construed in accordance
with the laws of the State of New Jersey.
10. Notices. Any notice hereunder by either party to the other shall be
given in writing by personal delivery or certified mail, return receipt
requested. If addressed to Executive, the notice shall be delivered or mailed to
Executive at the address last known to the Company, or if addressed to the
Company, the notice shall be delivered or mailed to the Company at its executive
offices, to the attention of the Chairman of the Board, with a copy to the
Secretary of the Company, at 301 Blair Road, Woodbridge, NJ 07095. A notice
shall be deemed given, if by personal delivery, on the date of such delivery or,
if by certified mail, on the date shown on the applicable return receipt.
11. Supersedes Previous Agreements. This Agreement supersedes all prior
or contemporaneous negotiations, commitments, agreements and writings with
respect to the subject matter hereof, all such other negotiations, commitments,
agreements and writings will have no further force or effect, and the parties to
any such other negotiation, commitment, agreement or writing will have no
further rights or obligations thereunder.
10
12. Counterparts. This Agreement may be executed by either of the
parties hereto in counterpart, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
13. Headings. The headings of paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
14. Tax Withholding. The Company shall be entitled to deduct or withhold
from any payment made hereunder all Federal, state and local taxes which the
Company is required by law to deduct or withhold therefrom.
15. Definition of Affiliate. As used in this Agreement, the term
"Affiliate" shall mean a person, corporation or other entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
pursuant to the authority of its Board of Directors, and Executive has executed
this Agreement as of the day and year first written above.
PATHMARK STORES, INC.
By /s/ Jack Futterman
----------------------------
Jack Futterman, Chairman and
Chief Executive Officer
/s/ Robert Joyce
----------------------------
11