Exhibit 10.7E
SUPPLEMENTAL RETIREMENT AGREEMENT
AGREEMENT, made and entered into as of the 1st day of March, 2000, by and
between PATHMARK STORES, INC., a Delaware corporation (the "Company"), and Xxxxx
Xxxxxxx (the "Executive"), residing at2 Xxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx, Xxx
Xxxxxx 00000.
WHEREAS, to induce the Executive to continue employment with the Company,
the Company desires to provide a minimum retirement income for the Executive on
the terms hereinafter set forth;
WHEREAS, the Company considers the Executive as one of a select group of
management or highly compensated employees of the Company, to be of unique value
to the Company.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Definitions
The following terms whenever used in this Agreement shall have the
meanings set forth in this Section 1. Each capitalized term used in this
Agreement and not defined in this Section 1 shall be deemed to have such meaning
as in the SGC Pension Plan (as defined below).
1.1 "Actuarial Equivalent" means a benefit of equivalent value to the
benefit that would otherwise be payable when computed on the basis of the rate
of interest specified by the Pension Benefit Guaranty Corporation for the
period after payment begins for purposes of determining the value of lump sum
payments as of the date of the Executive's termination of employment and using
the 1983 Basic Group Annuity Mortality Table projected to 1988 with Scale H. For
purposes of determining Actuarial Equivalent, male mortality shall be used for
the Executive and female mortality shall be used for any Beneficiary.
1.2 "Agreement" means this Supplemental Retirement Agreement by and
between the Company and the Executive dated as of the 1st day of March, 2000.
1.3 "Average Final Compensation" shall mean the highest average annual
Compensation (whether or not consecutive) paid to the Executive for the five (5)
full calendar years within the most recent ten (10) consecutive calendar years
during which the Executive received Compensation, ending with the December 31
coincident with or next preceding the date of Termination of Employment,
Retirement, date of death or Disability, whichever is applicable, provided,
however, that an Executive whose Retirement or death occurs on or after December
1 of his/her final Plan Year shall be deemed to have a full calendar year of
Compensation. Notwithstanding the foregoing, if an Executive is employed less
than 12 full months in his/her final calendar year of employment, Compensation
earned in such year shall, if higher than the lowest year's Compensation used in
determining Average Final Compensation, be substituted for such lowest year's
Compensation and the determination of Average Final Compensation shall be made
based on the most recent eleven (11) consecutive calendar years during which the
Executive received Compensation.
2
1.4 "Beneficiary" means the Executive's surviving spouse to whom the
Executive was married for the six-month period immediately preceding the earlier
of the date of commencement of the Executive's Supplemental Retirement Benefit
or the date of the Executive's death.
1.5 "Board of Directors" means the Board of Directors of the Company as
constituted from time to time.
1.6 "Code" means the Internal Revenue Code of 1986, as may be amended from
time to time.
1.7 "Company" means with respect to periods prior to October 22, 1993,
Supermarkets General Corporation, and with respect to periods on or after
October 22, 1993, Pathmark Stores, Inc., or Plainbridge, Inc., or any successor
thereto.
1.8 "Compensation" means Compensation as defined under the SGC Pension
Plan as in effect on the date of this Agreement, determined, however, without
regard to any dollar limitation imposed by Section 401(a)(17) of the Code on the
amount of compensation which may be taken into account under such Plan.
1.9 "Disability" means "Total and Permanent Disability" as defined under
the SGC Pension Plan.
1.10 "Disability Retirement" means the termination of the Executive's
employment with the Company by reason of Disability.
3
1.11 "Pension Plan Benefit" means the annual retirement benefit payable to
or on account of the Executive pursuant to the SGC Pension Plan.
1.12 "SGC Pension Plan" means the SGC Pension Plan, as amended and
restated effective January 1, 1989, and as amended from time to time thereafter.
1.13 "SGC Profit Sharing Plan" means the SGC Profit Sharing Plan as in
effect immediately prior to April 1, 1983.
1.14 "SGC Savings Plan" means the SGC Savings Plan, as amended and
restated effective January 1, 1989, and as amended from time to time thereafter.
1.15 "Supplemental Retirement Benefit" means the Executive's benefit under
this Agreement.
2. Amount of Supplemental Retirement Benefit; Termination Of Employment After
Age 60
Except as provided in Sections 3 and 4 of this Agreement, the annual
amount of the Executive's Supplemental Retirement Benefit shall be equal to the
excess, if any, of the amount of the Executive's "Unreduced Supplemental
Retirement Benefit" as described in subparagraph (a) over the Executive's "Other
Company Plan Benefits" as described in subparagraph (b), where
a. "Unreduced Supplemental Retirement Benefit" is equal to the sum of 30%
of the Executive's Average Final Compensation after completion of 10 years of
Vesting Service, plus 1% of the Executive's Average Final
4
Compensation multiplied by each additional year of Vesting Service in excess of
10; provided, however, that in no event shall the Executive's Unreduced
Supplemental Retirement Benefit exceed the lesser of (i) 40% of his Average
Final Compensation, or (ii) $250,000; and
b. "Other Company Plan Benefits" are the amounts payable under the SGC
Pension Plan, the SGC Profit Sharing Plan, the Company's Excess Benefit Plan and
the Company's disability income plan (other than (i) amounts payable under group
life insurance, Retirement and Survivor's Insurance under the Federal Social
Security Act, Worker's Compensation and other Company plans required by any
governmental authority, (ii) amounts payable under the SGC Savings Plan to the
extent attributed to amounts paid or contributed by the Company or any
predecessor thereto, and any amounts payable after termination of employment as
retirement, death or disability benefits (other than severance benefits) under a
contract between the Company and the Executive.
If the Executive has a Beneficiary on the date Supplemental Retirement
Benefits commence under this Agreement, Other Company Plan Benefits shall be
determined, on a joint and two-thirds survivor annuity basis, except as
otherwise provided in this Agreement, as of such date, with the Executive's
Beneficiary as joint annuitant. The adjustment to the amount otherwise payable
under the applicable Company plan for the applicable joint survivor annuity form
of payment shall be made on the basis of the factors specified in such Company
plan or, if no such factors are set forth in such Company plan, on an Actuarial
Equivalent basis. If the Executive does not have a Beneficiary on the date
Supplemental Retirement Benefits are to commence under this Agreement, Other
Company Plan Benefits shall be determined on a single life annuity basis.
5
The Executive's Supplemental Retirement Benefit under this Section 2 shall
be payable monthly for life commencing on the first day of the month following
the Executive's termination of employment after attainment of age 60.
3. Termination of Employment Prior to Age 60
In the case of the Executive's termination of employment with the Company
prior to attaining age 60 (other than by reason of the Executive's death or
Disability) but after completing 10 years of Vesting Service, the amount of the
Executive's Supplemental Retirement Benefit shall be equal to the Executive's
Unreduced Supplemental Retirement Benefit (computed on the basis of the Vesting
Service which the Executive would have completed had the Executive remained in
the employ of the Company until attainment of age 60), multiplied by a fraction,
the numerator of which is the number of the Executive's years of Vesting Service
at termination of employment (up to a maximum of 20) and the denominator of
which is the number of years of Vesting Service (up to a maximum of 20) which
the Executive would have completed had the Executive remained in the employ of
the Company until attainment of age 60, offset by the amount of the Executive's
Other Company Plan Benefits; provided that Other Company Plan Benefits shall be
assumed to commence on the first day of the month after the Executive's
attainment of age 60 and to be paid in the form of a joint and two-thirds
survivor annuity unless Executive does not have a Beneficiary in which case
benefits shall be assumed paid in the form of a life annuity. The Executive's
Supplemental Retirement Benefit under this Section 3 shall be payable monthly
for life commencing on the first day of the month following the Executive's
attainment of age 60.
6
4. Disability Retirement
In the case of the Executive's Disability Retirement, the amount of the
Executive's Supplemental Retirement Benefit shall be the amount determined under
Section 2 of this Agreement; provided, however, that the Executive's Unreduced
Supplemental Retirement Benefit shall be computed on the basis of the Vesting
Service which the Executive would have completed had the Executive remained in
the employ of the Company until attainment of age 60, and the Executive's
Unreduced Supplemental Retirement Benefit shall not be offset by Other Company
Plan Benefits prior to the date on which payment of such Other Company Plan
Benefits commence. The Executive's Supplemental Retirement Benefit under this
Section 4 shall be payable monthly for life commencing on the first day of the
month following the Executive's Disability Retirement.
5. Death Prior to Retirement
a. In the event that the Executive dies while in the employ of the Company
and has a Beneficiary on the date of his death, the Executive's Beneficiary
shall receive, beginning with the first day of the month following the
Executive's death and payable monthly, an annual amount equal to two-thirds of
the Executive's Unreduced Supplemental Retirement Benefit (computed on the basis
of the Vesting Service which the Executive would have completed had the
Executive remained in the employ of the Company until attainment of age 60)
offset by the Other Company Plan Benefits; provided, however, that such offset
shall be made at such time as Other Company Plan Benefits are payable (whether
or not the Beneficiary has elected to defer payment to a later date) and in an
amount equal to (i) a life annuity payable to the Executive's
7
Beneficiary that is equal to the Actuarial Equivalent of the SGC Profit Sharing
Plan balance, and (ii) the survivor annuity actually payable to Executive's
Beneficiary pursuant to any Other Company Plan, each determined as of the
earliest date on which payments of Other Company Plan Benefits are payable to
the Beneficiary.
b. In the event that the Executive dies after termination of employment
with the Company but prior to commencement of Supplemental Retirement Benefit
payments under this Agreement, and has a Beneficiary on the date of his death,
the Executive's Beneficiary shall receive, beginning with the first day of the
month following the Executive's death and payable monthly, an annual amount
equal to two-thirds of the Executive's Unreduced Supplemental Retirement Benefit
offset by the amount of Other Company Plan Benefits; provided, however, that
such offset shall be made at such time as Other Company Plan Benefits are
payable (whether or not the Beneficiary has elected to defer payment to a later
date) and in an amount equal to the benefit that would have been payable to
Executive's Beneficiary had Executive retired on the date of his or her death
and commenced benefit payments in the form of a joint and two-thirds annuity on
such date.
6. Death After Retirement
In the event of the Executive's death after commencement of the
Executive's Supplemental Retirement Benefit, the Executive's Beneficiary shall
receive, beginning with the first day of the month following the Executive's
death and payable monthly, an annual amount equal to two-thirds of the
Supplemental Retirement Benefit that was being paid to the Executive prior to
the Executive's death.
8
7. Limitation on Spouse's Benefits
Payment of Supplemental Retirement Benefits to the Executive's Beneficiary
under Sections 5 or 6 hereof shall terminate on the earlier of the date of death
or remarriage of such Beneficiary.
8. Benefits Payable by Company
All benefits payable under this Agreement shall constitute an unfunded
obligation of the Company. Payments shall be made, as due, from the general
funds of the Company. The Company may, in its sole and absolute discretion,
establish one or more accounts, funds or trusts to reflect its obligations under
this Agreement and may make such investments as it may deem desirable to assist
it in meeting such obligations. Any assets held in such accounts, funds or
trusts shall remain assets of the Company subject to claims of its creditors. No
person eligible for a benefit under this Agreement shall have any right, title
or interest in any such assets. This Agreement shall constitute solely an
unsecured promise by the Company to pay supplemental retirement benefits to the
extent provided herein.
9. Inalienability of Benefits
The right of any person to any benefit or payment under this Agreement
shall not be subject to voluntary or involuntary transfer, alienation or
assignment, and, to the fullest extent permitted by law, shall not be subject to
attachment, execution, garnishment, sequestration or other legal or equitable
process or be transferable by operation of law in the event of bankruptcy or
insolvency of the Executive or any Beneficiary. In the event a person who is
receiving or is entitled to receive benefits under the Agreement attempts to
9
assign, transfer or dispose of such right, or if an attempt is made to subject
said right to such process, such assignment, transfer or disposition shall be
null and void.
10. Forfeiture of Benefits
The Executive shall forfeit his Supplemental Retirement Benefit in the
event of the Executive's conviction of a felony relating to the conduct of the
business of the Company or willful unauthorized disclosure of a trade secret of
the Company.
11. Payments to Minors and Incompetents
If the Executive or Beneficiary entitled to receive any benefits hereunder
is a minor or is deemed by the Company or is adjudged to be legally incapable of
giving valid receipt and discharge for such benefits, payment of benefits will
be made to the duly appointed guardian or legal representative of such minor or
incompetent or to such other legally appointed person as the Company may
designate. Such payment shall, to the extent made, be deemed a complete
discharge of any liability for such payment under this Agreement.
12. Withholding
The Company shall have the right to deduct from any payments due under
this Agreement any taxes required to be withheld with respect to such payments.
10
13. Merger, Consolidation or Sale of Assets
In the event the Company shall, at any time, be merged or consolidated
with or into any corporation or corporations, or in the event that all or
substantially all of the assets of the Company shall be sold or otherwise
transferred to another corporation, the provisions of this Agreement, including
the provisions of this Section, shall be binding upon and inure to the benefit
of the successor of the Company resulting from such merger, consolidation or
sale of assets.
14. Governing Law
Except to the extent pre-empted by federal law, the provisions of this
Agreement will be construed according to the laws of the State of Delaware
(without giving effect to the provisions thereof relating to conflicts of law).
IN WITNESS WHEREOF, the Company and the Executive have caused this
Agreement to be executed effective as of the 1st day of March, 2000.
PATHMARK STORES, INC.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Chairman, President
and Chief Executive Officer
ATTEST:
/s/ Xxxx X. Xxxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxxx
Secretary /s/ Xxxxx Xxxxxxx
----------------------------------------
Executive
11
