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<SEC-DOCUMENT>0001125282-02-002164.txt : 20020705
<SEC-HEADER>0001125282-02-002164.hdr.sgml : 20020704
<ACCEPTANCE-DATETIME>20020705081542
ACCESSION NUMBER: 0001125282-02-002164
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 17
CONFORMED PERIOD OF REPORT: 20020223
FILED AS OF DATE: 20020705
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: GREAT ATLANTIC & PACIFIC TEA CO INC
CENTRAL INDEX KEY: 0000043300
STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-GROCERY STORES [5411]
IRS NUMBER: 131890974
STATE OF INCORPORATION: MD
FISCAL YEAR END: 0228
FILING VALUES:
FORM TYPE: 10-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-04141
FILM NUMBER: 02697034
BUSINESS ADDRESS:
STREET 1: 2 PARAGON DR
CITY: MONTVALE
STATE: NJ
ZIP: 07645
BUSINESS PHONE: 2015739700
MAIL ADDRESS:
STREET 1: 2 PARAGON DRIVE
CITY: MONTVALE
STATE: NJ
ZIP: 07645
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>b319220_10k.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended February 23, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 1-4141
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
----------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 13-1890974
- ------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Paragon Drive
Montvale, New Jersey 07645
(Address of principal executive offices)
Registrant's telephone number, including area code: 201-573-9700
Securities registered pursuant to Section 12 (b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
Common Stock - $1 par value New York Stock Exchange
Securities registered pursuant to Section 12 (g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ ] No [X]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant at May 23, 2002 was approximately $415,356,000. The number of shares
of common stock outstanding at May 23, 2002 was 38,506,565.
DOCUMENTS INCORPORATED BY REFERENCE
The information required by Part I, Items 1 and 3, and Part II, Items 5, 6, 7,
7A, 8 and 14 are incorporated by reference from the Registrant's 2001 Annual
Report to Stockholders.
<PAGE>
PART I
ITEM 1 - Business
General
- -------
The Great Atlantic & Pacific Tea Company, Inc. ("A&P" or the "Company") is
engaged in the retail food business. The Company operated 702 stores averaging
approximately 38,000 square feet per store as of February 23, 2002. In addition,
the Company served as wholesaler to 67 franchise stores in Canada averaging
approximately 31,500 square feet per store as of February 23, 2002. On the basis
of reported sales for fiscal 2001, the Company believes that it is one of the 10
largest retail food chains in the United States.
Operating under the trade names A&P(R), Super Fresh(R), Sav-A-Center(R), Farmer
Jack(R), Kohl's, Waldbaum's(TM), Super Foodmart, Ultra Food & Drug, Dominion(R),
Food Basics(TM), The Barn Markets and The Food Emporium(TM), the Company sells
groceries, meats, fresh produce and other items commonly offered in
supermarkets. In addition, many stores have bakery, delicatessen, pharmacy,
floral, fresh fish and cheese departments, and on-site banking. National,
regional and local brands are sold as well as private label merchandise. In
support of its retail operations, the Company also operates one coffee roasting
plant in the United States. Through its Compass Foods Division, the Company
manufactures and distributes a line of whole bean coffees under the Eight
O'Clock(R), Bokar(R) and Royale(TM) labels, for sale through its own stores as
well as other retail channels. The Company sells other private label products in
its stores under other brand names of the Company which include without
limitation, America's Choice(R), Master Choice(R), Health Pride(R), Savings Plus
and The Farm.
Building upon a broad base of A&P supermarkets, the Company has historically
expanded and diversified within the retail food business through the acquisition
of other supermarket chains and the development of several alternative store
types. The Company now operates its stores with merchandise, pricing and
identities tailored to appeal to different segments of the market, including
buyers seeking gourmet and ethnic foods, a wide variety of premium quality
private label goods and health and beauty aids along with the array of
traditional grocery products.
Modernization of Facilities
- ---------------------------
The Company is engaged in a continuing program of modernizing its operations
including retail stores, warehousing and distribution facilities, supply and
logistics and processes. In support of its modernizing program, on March 13,
2000, the Company announced its business process initiative, a plan to develop a
state of the art supply chain and business management infrastructure over four
years.
During fiscal 2001, the Company expended approximately $246 million for capital
projects which included 21 new supermarkets and 26 major remodels or
enlargements. The Company has planned capital expenditures of approximately $300
million in fiscal 2002. These expenditures relate primarily to opening 25 new
supermarkets, enlarging or remodeling 70 - 75 supermarkets and capital purchases
associated with the Company's business process initiative. In addition, the
Company plans to continue with similar levels of capital expenditures in fiscal
2003 and several years thereafter.
2
<PAGE>
Restatement of Previously Issued Financial Statements
- -----------------------------------------------------
Prior to filing its 2001 Annual Report on Form 10-K, the Company discovered
certain irregularities relating to the timing for the recognition of vendor
allowances and the accounting for inventory. As the Company announced on May 24,
2002, it promptly commenced a review of these issues. This review caused the
Company to delay filing its Annual Report on Form 10-K. As a result of this
review, the Company has restated its financial statements for fiscal 1999,
fiscal 2000 and the first, second and third quarters of fiscal 2001, to adjust
for vendor allowances recorded prior to the accounting period in which they were
earned and improper inventory adjustments, each in violation of Company
policies. In addition, the Company has concluded that the financial statements
should also be restated to reflect primarily 1) the appropriate timing for the
recognition of vendor allowances, 2) an actuarially-based methodology of
estimating self-insurance reserves, and 3) the timing of recognition of sublet
income associated with certain closed stores. See Note 2 "Restatement of
Previously Issued Financial Statements" of the Company's Financial Statements in
the 2001 Annual Report to Stockholders filed herein for further details
regarding this restatement.
Asset Disposition Initiative
- ----------------------------
In May 1998, the Company initiated an assessment of its business operations in
order to identify the factors that were impacting the performance of the
Company. As a result of this assessment, in fiscal 1998 and 1999, the Company
announced a plan to close two warehouse facilities and a coffee plant in the
U.S., a bakery plant in Canada and 166 stores including the exit of the
Richmond, Virginia and Atlanta, Georgia markets.
3
<PAGE>
As of February 23, 2002, the Company had closed all stores and facilities
related to this phase of the initiative. The Company paid $29 million of the
total net severance charges from the time of the original charges through
February 23, 2002, which resulted from the termination of approximately 3,400
employees. The remaining severance liability primarily relates to future
obligations for early withdrawals from multi-employer union pension plans.
During the third quarter of fiscal 2001, the Company's Board of Directors
approved a plan resulting from Management's review of the performance and
potential of each of the Company's businesses and individual stores. At the
conclusion of this review, the Company determined that certain underperforming
operations, including 39 stores (30 in the United States and 9 in Canada) and 3
warehouses should be closed and/or sold, and certain administrative streamlining
should take place. As a result of these decisions, the Company announced on
November 14, 2001 that it would incur costs of approximately $200 - $215 million
pretax ($115 - $125 million after tax) through the third quarter of fiscal 2002.
Of this amount, $193.5 million pretax ($112.3 million after tax) was included in
the Statements of Consolidated Operations for fiscal 2001. The components of
this net pretax charge were as follows:
o $180.3 million of costs to close the stores and warehouses and perform
certain administrative streamlining, of which $63.5 million related to the
present value of future occupancy obligations, $85.0 million related to the
write-down of fixed assets, $24.3 million related to severance for store
and administrative personnel and $7.5 million related to other
miscellaneous items;
o $20.8 million of costs to discontinue development of 4 potential stores, of
which $16.9 million related to the present value of future occupancy
obligations, $3.5 million related to fixed asset write-offs and $0.4
million related to occupancy costs incurred in the current period; and
o $7.6 million in gains on the sale of other properties and equipment,
primarily land and buildings.
As of February 23, 2002, the Company had closed 31 of the aforementioned stores.
As of February 23, 2002, the Company paid approximately $2.9 million of the
total severance charge recorded to date which resulted from the termination of
approximately 850 employees. The remaining individual severance payments will be
paid by the end of fiscal 2003.
Sources of Supply
- -----------------
The Company obtains the merchandise sold in its stores from a variety of
suppliers located primarily in the United States and Canada. The Company has
long-standing and satisfactory relationships with its suppliers.
The Company maintains a processing facility that produces coffee products. The
main ingredients for coffee products are purchased principally from Brazilian
and Central American sources. Other ingredients are obtained from domestic
suppliers.
4
<PAGE>
Employees
- ---------
As of February 23, 2002, the Company had approximately 79,000 employees, of
which 67% were employed on a part-time basis. Approximately 88% of the Company's
employees are covered by union contracts.
Competition
- -----------
The supermarket business is highly competitive throughout the marketing areas
served by the Company and is generally characterized by low profit margins on
sales with earnings primarily dependent upon rapid inventory turnover, effective
cost controls and the ability to achieve high sales volume. The Company competes
for sales and store locations with a number of national and regional chains, as
well as with many independent and cooperative stores and markets.
Segment Information
- -------------------
The segment information required is contained under the caption "Note 13 -
Operating Segments" in the 2001 Annual Report to Stockholders and is herein
incorporated by reference.
Foreign Operations
- ------------------
The information required is contained under the captions "Management's
Discussion and Analysis", "Note 5 - Wholesale Franchise Business", "Note 6 -
Indebtedness", "Note 9 - Income Taxes", "Note 10 - Retirement Plans and
Benefits" and "Note 13 - Operating Segments" in the 2001 Annual Report to
Stockholders and is herein incorporated by reference.
ITEM 2 - Properties
At February 23, 2002, the Company owned 121 properties consisting of the
following:
Stores, Not Including Stores in Owned Shopping Centers
------------------------------------------------------
Land and building owned 27
Building owned and land leased 19
----
Total stores 46
Shopping Centers
----------------
Land and building owned 13
Building owned and land leased 1
----
Total shopping centers 14
Warehouses
----------
Land and building owned 7
Building owned and land leased -
----
Total warehouses 7
5
<PAGE>
Administrative and Other Properties
-----------------------------------
Land and building owned 22
Building owned and land leased 2
Property under development building owned and land leased 2
Property under development land and building owned 2
Property under development land only 1
Undeveloped land 25
----
Total other properties 54
----
Total Properties 121
====
At February 23, 2002, the Company operated 702 retail stores and serviced 67
franchised stores. These stores are geographically located as follows:
Company Stores:
---------------
New England States:
-------------------
Connecticut 37
Massachusetts 17
New Hampshire 1
Vermont 2
----
Total 57
Middle Atlantic States:
-----------------------
District of Columbia 1
Delaware 9
Maryland 32
New Jersey 100
New York 142
Pennsylvania 23
----
Total 307
Midwestern States:
------------------
Michigan 104
Ohio 6
Wisconsin 33
----
Total 143
Southern States:
----------------
Louisiana 21
Mississippi 4
North Carolina 1
Virginia 1
----
Total 27
----
Total United States 534
Ontario, Canada 168
----
Total Stores 702
====
Franchised Stores:
Ontario, Canada 67
----
Total Franchised Stores 67
====
6
<PAGE>
The total area of all Company operated retail stores is 26.7 million square feet
averaging approximately 38,000 square feet per store. Excluding liquor and The
Food Emporium(TM) stores, which are generally smaller in size, the average store
size is approximately 40,400 square feet. The total area of all franchised
stores is 2.1 million square feet averaging approximately 31,500 square feet per
store. The 21 new stores added in fiscal 2001 consisted of 20 supermarkets and 1
liquor store. Excluding the liquor store, the supermarkets opened in fiscal 2001
had a range in size from 31,500 to 72,100 square feet, with an average size of
approximately 52,200 square feet. The stores built by the Company over the past
several years and those planned for fiscal 2002 and thereafter, generally range
in size from 50,000 to 60,000 square feet. The selling area of new stores is
approximately 74% of the total square footage.
As of the end of fiscal 2001, the Company operated one coffee roasting plant in
the United States. In addition, the Company operated 13 warehouses to service
its store network. These warehouses are geographically located as follows:
Indiana 1
Louisiana 1
Maryland 1
Michigan 2
New Jersey 2
New York 2
Pennsylvania 1
Wisconsin 1
----
Total United States 11
Ontario, Canada 2
----
Total Warehouses 13
====
During fiscal 2001, one of the Company's warehouses was closed as part of the
asset disposition initiative. Subsequent to the end of fiscal 2001, one
warehouse was closed and another was announced for closure as a result of the
asset disposition initiative.
The net book value of real estate pledged as collateral for all mortgage loans
amounted to $1.0 million as of February 23, 2002. The net book value of real
estate pledged as collateral for the Company's $425 million Secured Revolving
Credit Agreement expiring December 31, 2003 amounted to $85.7 million as of
February 23, 2002.
ITEM 3 - Legal Proceedings
The information required is contained under the caption "Note 12 - Commitments
and Contingencies" in the 2001 Annual Report to Stockholders and is herein
incorporated by reference.
ITEM 4 - Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the fourth
quarter of fiscal 2001.
7
<PAGE>
PART II
ITEM 5 - Market for the Registrant's Common Stock and Related Security Holder
Matters
The information required is contained under the captions "Summary of Quarterly
Results", "Five Year Summary of Selected Financial Data", and "Stockholder
Information" in the 2001 Annual Report to Stockholders and is herein
incorporated by reference.
On December 14, 2001, the Company issued $275 million 9 1/8% Senior Notes due
December 15, 2011. These notes were issued at par, pay interest semi-annually on
June 15 and December 15 and are callable beginning December 15, 2006. The
Company used the proceeds from the issuance of these notes to repay
approximately $178 million of the total $200 million 7.70% Senior Notes due
January 15, 2004 and for general corporate purposes including repayment of
borrowings under the Company's secured revolving credit agreement. The joint
lead underwriters of these notes were Lehman Brothers and Goldman, Sachs & Co.
ITEM 6 - Selected Financial Data
The information required is contained under the caption "Five Year Summary of
Selected Financial Data" in the 2001 Annual Report to Stockholders and is herein
incorporated by reference.
ITEM 7 - Management's Discussion and Analysis
The information required is contained under the caption "Management's Discussion
and Analysis" in the 2001 Annual Report to Stockholders and is herein
incorporated by reference.
ITEM 7A - Quantitative and Qualitative Disclosures About Market Risk
The information required is contained in the section "Market Risk" under the
caption "Management's Discussion and Analysis" in the 2001 Annual Report to
Stockholders and is herein incorporated by reference.
ITEM 8 - Financial Statements and Supplementary Data
(a) Financial Statements: The financial statements required to be filed herein
are described in Part IV, Item 14 of this report. Except for the sections
included herein by reference, the Company's 2001 Annual Report to
Stockholders is not deemed to be filed as part of this report.
8
<PAGE>
(b) Supplementary Data: The information required is contained under the
caption "Summary of Quarterly Results" in the 2001 Annual Report to
Stockholders and is herein incorporated by reference.
ITEM 9 - Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
ITEM 10 - Directors and Executive Officers of the Registrant
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Current Position
- --------------------------- ------ -----------------------------------------------------------
<S> <C> <C>
Christian W.E. Haub 37 Chairman of the Board and Chief Executive Officer
Elizabeth R. Culligan 52 President, Chief Operating Officer and Director
Victor T. Alessandro 43 Senior Vice President, Chief Category Management
Officer
William P. Costantini 54 Senior Vice President, General Counsel & Secretary
Brenda M. Galgano 33 Vice President and Corporate Controller
Mitchell P. Goldstein 41 Senior Vice President, Chief Financial Officer
Laurane S. Magliari 51 Senior Vice President, People Resources and
Services
John E. Metzger 47 Senior Vice President, Chief Information Officer
William Moss 54 Vice President and Treasurer
Brian Pall 42 Senior Vice President, Chief Development Officer
Brian Piwek 55 Chairman, President and Chief Executive Officer,
The Great Atlantic & Pacific Company of Canada,
Limited
David A. Smithies 57 President, Atlantic Region
Don Sommerville 43 Senior Vice President, Chief Marketing Officer
John D. Barline, Esq. 55 Director
Rosemarie Baumeister 68 Director
Bobbie Gaunt 55 Director
Helga Haub 67 Director
Dan P. Kourkoumelis 51 Director
Edward Lewis 62 Director
Richard L. Nolan 62 Director
Maureen B. Tart-Bezer 46 Director
</TABLE>
The directors are elected annually. Each of the current directors has been
nominated for election to the Board of Directors at the Company's Annual Meeting
of Stockholders to be held on July 30, 2002.
9
<PAGE>
The executive officers of the Company are chosen annually and serve under the
direction of the Chief Executive Officer with the consent of the Board of
Directors.
Mr. Haub was elected a director on December 3, 1991, Chairman of the Board on
March 20, 2001, effective May 1, 2001 and Chief Executive Officer on May 1,
1998. Prior to that, he was Chief Operating Officer from December 7, 1993 until
he became Co-Chief Executive Officer on April 2, 1997 and was President from
December 7, 1993 until the election of Ms. Culligan on February 24, 2002. Mr.
Haub is Chairman of the Executive Committee and a member of the Finance
Committee. Mr. Haub, son of Erivan and Helga Haub, is a partner, and as of July
1, 2002 Co-Chief Executive Officer, of Tengelmann Warenhandelsgesellschaft, a
partnership organized under the laws of the Federal Republic of Germany
("Tengelmann"). Mr. Haub is on the Board of Directors of the Food Marketing
Institute.
Ms. Culligan was elected a director on March 19, 2002 and President & Chief
Operating Officer of the Company on February 24, 2002. Prior to that, she was
Executive Vice President, Chief Operating Officer since joining the Company in
January, 2001. Ms. Culligan was President of Nabisco International from March
1998 to December 2000. She joined Nabisco in September 1996 as Senior Vice
President of Marketing in the Nabisco Biscuit Division. She started her career
at Bristol-Myers Squibb and served in various managerial positions in the
pharmaceutical industry over the course of her career. Ms. Culligan serves on
the Board of Directors of F. Schumacher and Co.
Mr. Alessandro was elected Senior Vice President and Chief Category Management
Officer on July 13, 2001. Prior to joining the Company, Mr. Alessandro served as
Vice President, Category Management and Retail Services for PLMARKET INC. from
June 2000 to June 2001. From July 1996 to June 2000, Mr. Alessandro operated a
category management and merchandising consultancy. Prior to that Mr. Alessandro
was employed by H.E. Butt Grocery Co. from March 1991 to July 1996.
Mr. Costantini was elected Senior Vice President, General Counsel & Secretary
effective April 24, 2000. Prior to joining the Company, Mr. Costantini served as
Executive Vice President & General Counsel and Senior Vice President & General
Counsel of Olsten Corporation, during the period from June, 1992 through March,
2000.
Ms. Galgano was appointed Vice President, Corporate Controller on February 24,
2002. Ms. Galgano served as Assistant Corporate Controller of the Company from
July 2000 to February 2002 and Director of Accounting from October 1999 to July
2000. Prior to joining the Company, Ms. Galgano was with PriceWaterhouseCoopers
from July 1997 to July 1999 as Senior Manager and Manager of the Audit and
Business Advisory Services Group respectively.
Mr. Goldstein was elected Senior Vice President & Chief Financial Officer on
February 24, 2002. From January 2000 to February 24, 2002, Mr. Goldstein was
Senior Vice President, Finance & Treasurer of the Company. Prior to joining the
Company, Mr. Goldstein was Chief Financial Officer from October 1998 to January
2000 and, Vice President of Strategic Planning and Corporate Development from
September 1997 to October 1998 at Vlasic Foods International. Before that, he
was Director of Strategic Planning at the Campbell Soup Company. Vlasic Foods
International filed a petition under the Federal bankruptcy laws in January
2001.
10
<PAGE>
Ms. Magliari was elected Senior Vice President, People Resources and Services on
February 16, 1999. Prior to joining the Company, she was Vice President, Human
Resources, Publishers Clearing House from December 1997 to February 1999 and,
before that, Vice President, Global Marketing, Chase Manhattan Bank from
February 1990 to March 1997.
Mr. Metzger was appointed Senior Vice President, Chief Information Officer on
February 11, 2002. Prior to that, he was Senior Vice President and Business
Process Initiative Business Leader from May 2001 to February 2002, and Vice
President, Supply & Logistics from October 1999 to May 2001. Prior to joining
the Company, Mr. Metzger was Senior Vice President of CS Integrated LLC from
January 1998 to October 1999 and before that, Vice President, Distribution for
Darden Restaurants, Inc. from October 1993 to November 1998.
Mr. Moss was appointed Vice President, Treasurer on February 24, 2002. Prior to
that Mr. Moss was Vice President, Treasury Services and Risk Management from
1992 to February 2002.
Mr. Pall was appointed Chief Development Officer on May 1, 2000. Prior to that,
he was Senior Vice President, Development from 1996 to 2000 and, before that,
Corporate Vice President, Real Estate Development from 1993 to 1996.
Mr. Piwek was appointed Chairman, President and Chief Executive Officer of The
Great Atlantic & Pacific Company of Canada, Limited on April 1, 2002. Prior to
that, he was Vice Chairman, President and Chief Executive Officer of The Great
Atlantic & Pacific Company of Canada, Limited from February 2000. Before that,
Mr. Piwek was Vice Chairman and Co-Chief Executive Officer of The Great Atlantic
& Pacific Company of Canada, Limited from October 1997. Prior to joining the
Company, he was President of Overwaitea Food Group, a retailer and franchisor in
British Columbia and Alberta, Canada.
Mr. Smithies was elected President of the Atlantic Region on February 24, 2002.
Prior to that, he was President of the Atlantic Region's Northeast Operations
Group from February 2000 to February 2002 and President of Waldbaum Inc. from
August 1995 to January 2000.
Mr. Sommerville was appointed Senior Vice President, Chief Marketing Officer on
October 4, 2000. Prior to that, he was President of the Company's Compass Foods
division since March 1999. Mr. Sommerville joined the Company as Vice President
and General Manager of Eight O'Clock(R)Coffee in June 1998. Prior to joining the
Company, Mr. Sommerville was Director of Marketing at the Thomas J. Lipton
Company Inc., a subsidiary of Unilever, from July 1980 to May 1998.
Mr. Barline has been a member of the Board of Directors since July 9, 1996. He
is Chairman of the Compensation Committee and a member of the Governance and
Executive Committees. Mr. Barline, an attorney in private practice since 1973,
is currently associated with the law firm of Williams, Kastner & Gibbs LLP in
Tacoma, Washington. His areas of practice include corporate tax law, mergers and
acquisitions, general business law, estate planning and real estate. He provides
personal legal services to the Haub family, including Helga and Erivan Haub and
Christian W. E. Haub. Mr. Barline is a member of the Board of Directors and
corporate secretary of Sun Mountain Resorts, Inc. and a director of Wissoll
Trading Company, Inc., each a small closely held corporation owned primarily by
the Haub family. He is also a director of the Franciscan Foundation, the Le May
Automobile Museum, Precision Machine Works, Inc. and Sun Mountain Lodge, Inc.
11
<PAGE>
Mrs. Baumeister has been a member of the Board of Directors since 1979. She is a
member of the Compensation Committee. Mrs. Baumeister is currently Senior Vice
President of Tengelmann. Prior to assuming her present position, she served in
various executive capacities with Tengelmann. Mrs. Baumeister is a member of the
Supervisory Board of Kaiser's Tengelmann AG, an affiliate of Tengelmann, a
member of the Supervisory Board of Tengelmann Espana and a member of the
Advisory Board of Deutsche Bank.
Mrs. Gaunt was elected to the Board of Directors on May 15, 2001. She is a
member of the Compensation and Audit Committees. Mrs. Gaunt was elected Officer,
Vice President, of the Ford Motor Company in June, 1999, and served as President
and Chief Executive Officer of the Ford Motor Company of Canada, Ltd., from 1997
until her retirement from the company in December of 2000. Mrs. Gaunt began her
automotive career with Ford in 1972 and over 28 years served in various
managerial positions in the areas of sales, marketing, research and building
customer relationships. Mrs. Gaunt also serves on the Board of Advisors at the
Katz Business School, University of Pittsburgh and serves as a mentor to fellows
of the International Women's Forum in Washington, D.C.
Mrs. Haub has been a member of the Board of Directors since 1979. She is a
member of the Executive and Finance Committees. Mrs. Haub is a member of the
Supervisory Board of Kaiser's Tengelmann AG, an affiliate of Tengelmann, a
consultant to Tengelmann and has an interest in Tenga Capital Corporation. She
is also a director of The George C. Marshall Home Preservation Fund, Inc., a
member of the Board of Governors of World USO, president of the Board of
Trustees of the Elizabeth Haub Foundation for Environmental Policy and Law and a
member of the Supervisory Board of GfK Gesellschaft fur Konsumforschung,
Germany. Mrs. Haub is the wife of Mr. Erivan Haub and mother of Mr. Christian
Haub.
Mr. Kourkoumelis has been a member of the Board of Directors since March 21,
2000. Mr. Kourkoumelis is Chairman of the Governance Committee and a member of
the Audit and Executive Committees. Mr. Kourkoumelis was President and Chief
Operating Officer of Quality Food Centers, Inc. from May 1989 until September
1996, and thereafter President and Chief Executive Officer of Quality Food
Centers, Inc. until September 25, 1998, when he retired after Quality Food
Centers, Inc. was acquired. He also served as a director of Quality Food
Centers, Inc. from April 1991 until March 1998. Mr. Kourkoumelis is a director
of Expeditors International, a director, and past president, of the Western
Association of Food Chains and a director of Briazz, Inc.
Mr. Lewis has been a member of the Board of Directors since May 16, 2000. Mr.
Lewis is Chairman of the Finance Committee and a member of the Executive and
Governance Committees. Mr. Lewis is Chairman and Chief Executive Officer of
Essence Communications Partners. He is cofounder and publisher of ESSENCE
magazine. He is also a member of the Leadership Council of the Tanenbaum Center
for Interreligious Understanding, the Harvard Business School Board of Directors
of the Associates, the Economic Club of New York and a committee member of the
Minority Business Round Table of the Joint Center for Political and Economic
Studies. Mr. Lewis sits on the boards of the New York City Partnership, the
Central Park Conservancy, Girls, Inc., NYC2012, the committee leading New York's
bid effort to host the 2012 Olympic Games, and the Board of Jazz at Lincoln
Center for the Performing Arts. He also served as chairman of the Magazine
Publishers of America from 1997 to 1999, becoming the first African-American to
hold this position in the 75-year history of the organization.
12
<PAGE>
Mr. Nolan has been a member of the Board of Directors since October 5, 1999. He
is Chairman of the Audit Committee and a member of the Executive and Governance
Committees. Mr. Nolan, the William Barclay Harding Professor of Management of
Technology at the Harvard Business School since 1991, is the originator of the
"Stages Theory," one of the most widely used management frameworks for
information technology baselining and planning. He is also a member of the Board
of Directors for Novell and ArcStream.
Ms. Tart-Bezer has been a member of the Board of Directors since May 15, 2001.
She is a member of the Audit and Finance Committees. Ms. Tart-Bezer is a Senior
Financial Advisor to Wireless MVNO (mobile virtual network operator) Ventures in
the United States. Prior to this Ms. Tart-Bezer was Executive Vice President and
General Manager of the American Express Company, U.S. Consumer Charge Group
through December, 2001. From 1977 to 2000, Ms. Tart-Bezer was with AT&T
Corporation, serving as a senior financial officer of the company, including
positions as Senior Vice President and Corporate Controller and Senior Vice
President and Chief Financial Officer for the Consumer Services Group. Ms.
Tart-Bezer has served as a trustee of the AT&T Foundation and as a director of
AT&T Capital Corp. and Lucent Technologies. She is a prior director of
MaMamedia.com and trustee to St. Peter's College in Jersey City, New Jersey.
Compliance with Section 16(a) of the Exchange Act
In November, 2001, Don Sommerville, Senior Vice President, Chief Marketing
Officer, filed a late Form 4 for shares of the Company's Common Stock that Mr.
Sommerville purchased in October, 2001. In April, 2002, John Metzger filed a
late Form 4 for stock options that the Company granted to Mr. Metzger in
conjunction with his promotion to Chief Information Officer in February 2002.
The Company believes that during fiscal 2001, all other reports required by
Section 16 of the Securities Exchange Act of 1934 were timely filed.
ITEM 11 - Executive Compensation
Summary Compensation Table
The following table sets forth the compensation paid by the Company and its
subsidiaries for services rendered in all capacities during each of the last
three (3) fiscal years to or for the account of the chief executive officer of
the Company (the "CEO") and the other four (4) most highly compensated officers
of the Company other than the CEO during fiscal 2001 (collectively with the CEO,
the "Named Executive Officers"), each of whom was serving as an executive
officer at February 23, 2002.
13
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Securities
Underlying All Other
Options/ Compensation
Principal Position During Fiscal Year Year Salary ($) Bonus ($) SAR's ($)(1)
--------- ------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Christian Haub 2001 696,851 490,000 150,000 33,746
Chairman & Chief Executive Officer 2000 660,000 112,475 82,500 32,744
1999 619,615 319,838 - 12,444
Elizabeth Culligan (2) 2001 500,000 330,000 - 11,900
President & Chief Operating Officer 2000 67,307 - 200,000 -
1999 - - - -
Fred Corrado (3) 2001 585,000 239,680 110,000 69,397
Vice Chairman of the Board 2000 563,462 58,850 57,750 60,105
Chief Financial Officer 1999 546,677 167,348 - 47,805
Laurane S. Magliari 2001 335,000 150,000 75,000 20,353
Senior Vice President 2000 313,462 33,550 27,500 19,093
People Resources and Services 1999 300,000 122,000 - 1,293
Craig Sturken (3) 2001 400,000 108,580 75,000 45,095
President, Chief Executive Officer, 2000 350,096 28,258 50,000 35,975
Atlantic Region 1999 332,308 98,820 - 26,075
</TABLE>
- ------------
(1) Consists of, respectively, Company contributions to the Retirement/Savings
Plan and related supplemental plan, and the cost for insurance, for 2001:
Mr. Haub ($32,634 and $1,112); Mr. Corrado ($28,500 and $35,897); Ms.
Culligan ($11,900 and $0); Ms. Magliari ($18,500 and $1,853); and Mr.
Sturken ($23,995 and $21,100). Additionally, a tax preparation and
planning fee of $5,000 is included for Mr. Corrado.
(2) Ms. Culligan was hired on January 8, 2001.
(3) Mr. Corrado retired as an officer of the Company, from the Board of
Directors and as an employee on February 23, 2002, March 19, 2002 and May
20, 2002, respectively. Mr. Sturken retired as an officer of the Company
and as an employee on February 25, 2002 and April 9, 2002, respectively.
Employment and Termination Agreements
The Company is a party to employment agreements with each of Ms. Culligan and
Ms. Magliari (the "Employment Agreements") which provide for minimum base annual
salaries of $575,000 and $375,000, respectively. The Employment Agreements for
Ms. Culligan and Ms. Magliari have initial termination dates of January 8, 2004
and October 31, 2003, respectively; provided, however, that they provide for a
rolling eighteen (18) month term commencing July 8, 2002 for Ms. Culligan and
May 1, 2002 for Ms. Magliari. The Employment Agreements also provide for
participation in Company benefit programs (including bonus programs) and
services, facilities and perquisites appropriate to their positions, including
without limitation, the Executive Medical Plan.
14
<PAGE>
Following termination other than for cause, permanent total disability, death or
a resignation not for Good Reason and in the absence of a Change of Control (as
such terms are defined in the Employment Agreements), each executive is entitled
to receive (i) eighteen (18) equal monthly payments of one-twelfth of annual
base salary plus average bonus and (ii) continued insurance coverage for such
eighteen (18) month period. In addition, the Employment Agreements provide for a
pro rata bonus for the year of termination.
Under the Change of Control provisions of the Employment Agreements, the
separation pay is increased to three (3) times the executive's final base salary
plus the bonus amount and is payable in lump sum. Additionally, the insurance
continuation is extended to three (3) years. These provisions apply to
terminations without cause or resignations for Good Reason occurring within
thirteen (13) months following a Change of Control and for any reason during the
thirty (30) days beginning on the first anniversary of a Change of Control. The
Employment Agreements also provide for gross-up payments to the executive with
respect to any excise tax on golden parachute payments.
Mr. Corrado resigned as an officer of the Company as of February 23, 2002, and
as a member of the Company's Board of Directors as of March 19, 2002. In
connection with such resignations, the Company and Mr. Corrado entered into a
letter agreement on February 22, 2002 pursuant to which Mr. Corrado continued as
a non-executive employee of the Company until May 20, 2002 in order to provide
certain transition services and retired on that date. Pursuant to the letter
agreement, Mr. Corrado became entitled upon his retirement to (i) the eighteen
(18) months of severance benefits and other benefits provided under his
employment agreement, which are the same as those indicated in the Employment
Agreements above, except that Mr. Corrado's employment agreement also provided
for life insurance coverage equal to three (3) times his base salary upon
attainment of age 62, a credit for twenty years of service under Supplemental
Executive Retirement Plan ("SERP"), infra, and a SERP benefit unreduced for
early retirement prior to age 65 and (ii) employer provided executive medical
coverage for three (3) years following his retirement. In addition, the Company
agreed to vest the stock options granted to Mr. Corrado on March 20, 2001,
covering 110,000 shares of the Company's Common Stock, and to allow these
options to be exercised until the third anniversary of Mr. Corrado's retirement.
Mr. Sturken resigned from his positions with the Company on February 25, 2002
and as an employee on April 9, 2002. In connection with Mr. Sturken's
resignation, Mr. Sturken became entitled to the eighteen (18) months of
severance benefits and other benefits provided under his employment agreement,
which are the same as those indicated in the Employment Agreements above.
15
<PAGE>
Option Tables
The following tables provide information with respect to stock options granted
to the Named Executive Officers during Fiscal 2001 and the fiscal year-end value
of options held by such officers.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Number of % of Total
Securities Options
Underlying Granted to Exercise Grant Date
Options Employees or Base Present
Granted in Fiscal Price Expiration Value
Name (#)(1) Year (2) ($/Sh) Date ($)(3)
- ----------------------------------------------- ----------- ------------- ----------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Christian Haub................................. 150,000 10.01 9.06 3/20/11 826,500
Elizabeth Culligan............................. - - - - -
Fred Corrado................................... 110,000 7.34 9.06 3/20/11 606,100
Laurane S. Magliari............................ 75,000 5.00 9.06 3/20/11 413,250
Craig C. Sturken............................... 75,000 5.00 9.06 3/20/11 413,250
</TABLE>
- ------------
(1) The options vest 100% on the third anniversary of the grant date. All grants
have a ten-year term.
(2) Based on total grants during Fiscal 2001 of 1,498,513.
(3) These values were calculated using the Black-Scholes option pricing model.
The Black-Scholes model is a complicated mathematical formula which is widely
used and accepted for valuing traded stock options. The model is premised on
immediate exercisability and transferability of the options. This is not
generally true for the Company's options granted to executive officers and other
employees. Therefore, the values shown are purely theoretical and do not reflect
the market value of the Company's stock at a future date. In addition to the
stock prices at time of grants and exercise prices, which are identical, and the
ten-year term of each option, the following assumptions were used to calculate
the values shown for options granted during Fiscal 2001: expected dividend yield
of 0.0, expected stock price volatility of 55%, risk-free rate of return of
4.07% and 5.54% and a weighted average of seven (7) years from date of grant to
date of exercise. If the Named Executive Officers realize the grant date values
shown in the table, such values will be less than 1% of the total stockholder
appreciation.
Fiscal Year-End Option/SAR Values
<TABLE>
<CAPTION>
Value of Unexercised
Number of Securities In-the-Money
Shares Underlying Options/SARs Options/SARs at
Acquired at Fiscal Year End Fiscal Year End (1)
on Value ------------------------------- -------------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- --------------------------- ------------- ------------ ------------- --------------- ------------- ---------------
(#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
Christian Haub............. None - 250,625 261,875 271,414 3,294,117
Elizabeth Culligan......... None - 13,750 186,250 271,734 3,680,766
Fred Corrado............... None - 219,437 73,313 2,240,873 401,187
Laurane S. Magliari........ None - 34,625 104,875 63,680 1,551,539
Craig C. Sturken........... 6,250 97,813 31,250 125,250 57,891 1,866,047
</TABLE>
- ------------
(1) Based on the closing price of the Company's Common Stock on February 22,
2002 of $27.20.
16
<PAGE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------------------------------------------
Remuneration 15 20 25 30 35
----------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
$450,000 $202,500 $270,000 $270,000 $270,000 $270,000
500,000 225,000 300,000 300,000 300,000 300,000
550,000 247,500 330,000 330,000 330,000 330,000
600,000 270,000 360,000 360,000 360,000 360,000
650,000 292,500 390,000 390,000 390,000 390,000
700,000 315,000 420,000 420,000 420,000 420,000
</TABLE>
The table above indicates the amount of annual benefit payable to a person at
age 65 in the specified final average remuneration and years-of-service
classifications under the SERP, except that such benefits do not reflect the
requisite reduction for any applicable Social Security, or other Company
retirement benefits. SERP is an unfunded defined benefit final average pay plan
that covers, among the Named Executive Officers, Messrs. Corrado and Sturken and
Ms. Culligan.
The compensation covered by SERP is base salary, the "Annual Salary" reflected
in the Summary Compensation Table, computed as an average of such base salary
over the highest compensated five (5) years of employment during the last ten
(10) years. The benefit is computed at the rate of 3% for Messrs. Corrado and
Sturken for each year up to twenty (20) years of service, and for Ms. Culligan,
4% for each year up to fifteen (15) years of service, all with a maximum benefit
of up to 60% of such average base salary. Estimated or actual credited years of
service at retirement for each participating Named Executive Officer are: Mr.
Corrado, eighteen (18) years; Mr. Sturken, eighteen (18) years; Ms. Culligan,
fifteen (15) years.
Compensation of Directors
The Company does not pay officers of the Company who are also directors any
additional compensation or benefits for serving on the Board of Directors. The
Company pays directors who are neither officers nor employees of the Company an
annual retainer of $32,000, plus an attendance fee of $1,000 for each Board of
Directors meeting attended and $1,000 for each Committee meeting attended if
substantial time or effort is involved, plus expenses of attendance. If two (2)
compensable meetings are held on the same day, the fee for the second meeting is
limited to $500. The Company pays the Chairman of each Committee, except the
Executive Committee, an additional $5,000 per year. Under the directors stock
option plan, non-employee directors are entitled to an initial stock option
grant of 2,000 shares and an additional grant of 500 shares after each annual
meeting thereafter. These shares vest in one-third increments on succeeding
annual meeting dates.
The Company revised the compensation program for its non-employee directors
effective May 1, 1996. It suspended the retirement plan pursuant to which
directors, after serving five (5) years and attaining age 70, were entitled upon
retirement from the Board of Directors to an annual benefit equal to the highest
annual retainer paid during their tenure (currently $32,000) for a period equal
to their years of service up to fifteen (15) years. The directors had a one-time
election to transfer the present value of their accrued benefits to the new
plan. Under the deferred compensation plan, the Company contributes to book
accounts of all directors with less than fifteen (15) years of service an amount
equal to 75% of the current retainer. Up to all and at least 50% of these
deferred payments will be credited to a Company Common Stock equivalent account.
The balance, at the director's election in increments of 25% will be credited to
a 10-year U. S. Treasury bond equivalent account. The directors are fully vested
in their accounts. Accruals will be made to these accounts through the fifteenth
anniversary of service on the Board of Directors. Upon termination from service
as a director, the value of the Company Common Stock equivalent account will be
determined using the final average market value of the Company's shares for the
prior 180 calendar days, inclusive of appreciation for the effect of dividends.
The value of the bond equivalent account will be the sum of the credits and
interest to the date of termination. Benefits will then be paid to the retired
director equally over the subsequent 180 months or the length of service,
whichever is shorter. However, in the event of death, benefits will continue to
be paid to the director's beneficiary for a maximum of ten (10) years, which
includes any period of payment before death.
17
<PAGE>
Compensation Committee Interlocks and Insider Participation
No member of the Compensation Committee of the Board of Directors during fiscal
2001 has ever been an officer or employee of the Company or any of its
subsidiaries.
ITEM 12 - Security Ownership of Certain Beneficial Owners and Management
Beneficial Ownership of More than 5% of the Company's Common Stock
Except as set forth below, as of June15, 2002, no person beneficially owned, to
the knowledge of the Company, more than 5% of the outstanding shares of the
Company's Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of Beneficial Ownership
--------------------------------------------------------------------
Sole Shared
Total Voting/ Voting/
Name and Address of Beneficial Investment Investment % of
Beneficial Owner Ownership Power Power Class
--------------------------------- --------------- ---------------- --------------- ----------------
<S> <C> <C> <C> <C>
Erivan Karl Haub (1) 21,800,100 90,100 21,710,000 56.8%
Wissollstrasse 5-43
45478 Mulheim/Ruhr, Germany
Tengelmann 21,710,000 - 21,710,000 56.6%
Warenhandelsgesellschaft (1)
Wissollstrasse 5-43
45478 Mulheim/Ruhr, Germany
Dimensional Fund Advisors Inc. (2) 2,032,600 2,032,600 - 5.3%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
</TABLE>
- ------------
(1) The Company obtained the information regarding Tengelmann from Tengelmann
itself. Erivan Karl Haub controls Tengelmann. The partners of Tengelmann
are Erivan Karl Haub, Erivan Karl Haub's three sons, Karl-Erivan W. Haub,
Georg R. O. Haub and Christian W. E. Haub, and Tengelmann Verwaltungs-und
Beteiligungsgesellschaft, whose only shareholders are Erivan Karl Haub and
his three sons. Tengelmann controls, among others, Kaiser's Tengelmann AG,
a supermarket retailer in Germany, as well as Wilh. Schmitz-Scholl
("Wissoll"), a candy manufacturer in Germany. Mr. Erivan Haub also has an
interest in Tenga Capital Corporation.
18
<PAGE>
(2) The information regarding Dimensional Fund Advisors Inc., a Delaware
corporation ("Dimensional"), is derived from a Schedule 13G filed with the
Securities and Exchange Commission on February 12, 2002. Dimensional is an
investment advisor registered under Section 203 of the Investment Advisors
Act of 1940. It furnishes investment advice to four registered investment
companies, and serves as investment manager to certain other commingled
group trusts and separate accounts (collectively, the "Funds"). In its
role as investment advisor or manager, Dimensional possesses voting and/or
investment power over the securities of the Company that are owned by the
Funds, but all such securities are owned by the Funds. Dimensional
disclaims beneficial ownership of such securities.
Security Ownership of Directors and Management
The following table sets forth the number of shares of Common Stock of the
Company beneficially owned as of June 15, 2002, by each director and nominee,
the chief executive officer of the Company (the "CEO"), the four (4) most highly
compensated officers of the Company other than the CEO during the fiscal year
ended February 23, 2002 (collectively, with the CEO, the "Named Executive
Officers") and by all directors and the Named Executive Officers as a group:
<TABLE>
<CAPTION>
Shares Stock
Beneficially Option Deferred % of
Owned Shares (1) Plan (2) Total Class
--------------- ---------------- --------------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
John D. Barline, Esq. (3)........ 2,700 3,600 5,978 12,278 *
Rosemarie Baumeister (3)......... 2,800 4,200 - 7,000 *
Elizabeth Culligan............... 10,000 266,000 - 276,000 *
Fred Corrado (4)................. 11,700 252,750 - 264,450 *
Christian Haub (3)............... 3,500 482,500 - 486,000 1.3
Helga Haub (3)................... 2,800 4,200 - 7,000 *
Bobbie Andrea Gaunt.............. - 2,500 1,044 3,544 *
Dan Kourkoumelis................. - 3,000 3,247 6,247 *
Edward Lewis..................... - 3,000 3,070 6,070 *
Laurane S. Magliari.............. 507 139,500 - 140,007 *
Richard L. Nolan................. - 3,000 3,647 6,647 *
Craig Sturken (4)................ 50 31,249 - 31,299 *
Maureen B. Tart-Bezer............ - 2,500 521 3,021 *
All directors and
executive officers -------- ----------- -------- ----------- -----
as a group (13 persons)....... 34,057 1,197,999 17,507 1,249,563 3.2
======== =========== ======== =========== =====
</TABLE>
* Less than 1%
(1) The amounts shown include all purchase options granted under the Company's
stock option plans regardless of whether exercisable within sixty (60)
days.
(2) These shares represent the stock equivalent units accrued under the
Company's deferred compensation plan for non-employee directors. These
share equivalents are subject to Common Stock market price fluctuations.
(3) The association of Mmes. Baumeister and Haub, and Messrs. Barline and
Haub, with Tengelmann and Mr. Erivan Haub is set forth herein under Items
10 and 11. Mr. Christian Haub disclaims investment and voting power over
the shares owned by Tengelmann and they are excluded herein. Mrs. Haub
disclaims any investment or voting power over the shares owned by Mr.
Erivan Haub and the organizations which he controls and the same are not
included herein.
(4) Mr. Corrado retired as an officer of the Company, from the Board of
Directors and as an employee on February 23, 2002, March 19, 2002 and May
20, 2002, respectively. Mr. Sturken retired as an officer of the Company
and as an employee on February 25, 2002 and April 9, 2002, respectively.
19
<PAGE>
ITEM 13 - Certain Relationships and Related Transactions
A&P Properties Limited, an indirect subsidiary of the Company, leases a store in
Windsor, Ontario, Canada that sits on property of Tenga Capital Corporation,
which is owned by Erivan and Helga Haub. The initial term of the lease, which
commenced in 1983, expires on October 31, 2003, with four 5-year renewal
options. The base annual rental is CN$467,603, with percentage rents subject to
specified caps.
The Company is a party to agreements granting Tengelmann and its affiliates the
exclusive right to use the A&P(R) and Master Choice(R) trademarks in Germany and
other European countries pursuant to which it received $100,000 which is the
maximum annual royalty fee under such agreements. The Company is also a party to
agreements under which it purchased from Wissoll, an affiliate of Tengelmann,
approximately $598,091 worth of the Black Forest line and Master Choice candy.
The Company owns a jet aircraft which Tengelmann leases under a full cost
reimbursement lease that also allows the Company to charter the aircraft for its
use at a below market charter rate. During fiscal 2001, the annual amount
Tengelmann was obligated to reimburse the Company was $2.5 million.
PART IV
ITEM 14 - Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents filed as part of this report.
1) Financial Statements: The financial statements required by Item 8 are
included in the fiscal 2001 Annual Report to Stockholders. The
following required items are herein incorporated by reference:
Statements of Consolidated Operations
Statements of Consolidated Stockholders' Equity and
Comprehensive (Loss) Income
Consolidated Balance Sheets
Statements of Consolidated Cash Flows
Notes to Consolidated Financial Statements
Independent Auditors' Report
2) Financial Statement Schedules are omitted because they are not required
or do not apply, or the required information is included elsewhere in
the Consolidated Financial Statements or Notes thereto.
3) Exhibits:
The following are filed as Exhibits to this Report:
20
<PAGE>
EXHIBIT NO. DESCRIPTION
----------- -----------
3.1 Articles of Incorporation of the Great Atlantic &
Pacific Tea Company, as amended through July 1987
(incorporated herein by reference to Exhibit 3(a) to
Form 10-K filed on May 27, 1988)
3.2* By-Laws of The Great Atlantic & Pacific Tea Company,
Inc., as amended through July 2, 2002
4.1 Indenture, dated as of January 1, 1991 between the
Company and JPMorgan Chase Bank (formerly The Chase
Manhattan Bank as successor by merger to
Manufacturers Hanover Trust Company), as trustee
(the "Indenture") (incorporated herein by reference
to Exhibit 4.1 to Form 8-K
4.2 First Supplemental Indenture, dated as of December
4, 2001, to the Indenture, dated as of January 1,
1991 between the Company and JPMorgan Chase Bank,
relating to the 7.70% Senior Notes due 2004
(incorporated herein by reference to Exhibit 4.1 to
Form 8-K filed on December 4, 2001)
4.3 Second Supplemental Indenture, dated as of December
20, 2001, to the Indenture between the Company and
JPMorgan Chase Bank, relating to the 9 1/8% Senior
Notes due 2011 (incorporated herein by reference to
Exhibit 4.1 to Form 8-K filed on December 20, 2001)
+ Agreements with respect to long-term debt where the total amount of securities
authorized thereunder does not exceed 10% of the total assets of the Registrant
and its subsidiaries on a consolidated basis shall be furnished to the
Commission on request.
10.1 Not Applicable
10.2 Employment Agreement, made and entered into as of
the 8th day of January, 2001, by and between the
Company and Elizabeth R. Culligan (incorporated
herein by reference to Exhibit 10 to Form 10-Q filed
on January 16, 2001) ("Culligan Agreement")
10.3* Amendment to Culligan Agreement dated April 8, 2002
10.4 Employment Agreement dated December 6, 1994, between
the Company and Fred Corrado (incorporated herein by
reference to Exhibit 10 to Form 10-K filed on May
24, 1995)
10.5* Amendment to Fred Corrado Employment Agreement dated
February 22, 2002
10.6 Employment Agreement, made and entered into as of
the 1st day of November, 2000, by and between the
Company and William P. Costantini (incorporated
herein by reference to Exhibit 10 to Form 10-Q filed
on January 16, 2001) ("Costantini Agreement")
10.7* Amendment to Costantini Agreement dated April 30,
2002
21
<PAGE>
10.8* Employment Agreement, made and entered into as of
the 24th day of February, 2002, by and between the
Company and Mitchell P. Goldstein
10.9 Employment Agreement, made and entered into as of
the 1st day of November, 2000, by and between the
Company and Nicholas Ioli, Jr. (incorporated herein
by reference to Exhibit 10 to Form 10-Q filed on
January 16, 2001)
10.10* Amendment to Nicholas Ioli Employment Agreement
dated April 3, 2002
10.11 Employment Agreement, made and entered into as of
the 1st day of November, 2000, by and between the
Company and Laurane Magliari (incorporated herein by
reference to Exhibit 10 to Form 10-Q filed on
January 16, 2001) ("Magliari Agreement")
10.12* Amendment to Magliari Agreement dated April 30, 2002
10.13* Employment Agreement, made and entered into as of
the 14th day of May, 2001, by and between the
Company and John E. Metzger ("Metzger Agreement") as
amended February 14, 2002
10.14* Employment Agreement, made and entered into as of
the 25th day of February, 2002 by and between the
Company and David A. Smithies
10.15 Supplemental Executive Retirement Plan effective as
of September 30, 1991 (incorporated herein by
reference to Exhibit 10.B to Form 10-K filed on May
28, 1993)
10.16 Supplemental Executive Retirement Plan effective as
of September 1, 1997 (incorporated herein by
reference to Exhibit 10.B to Form 10-K filed on May
27, 1998)
10.17 Supplemental Retirement and Benefit Restoration Plan
effective as of January 1, 2001 (incorporated herein
by reference to Exhibit 10(j) to Form 10-K filed on
May 23, 2001)
10.18 1994 Stock Option Plan (incorporated herein by
reference to Exhibit 10(e) to Form 10-K filed on May
24, 1995)
10.19 1994 Stock Option Plan for Non-Employee Directors
(incorporated herein by reference to Exhibit 10(f)
to Form 10-K filed on May 24, 1995)
10.20 Directors' Deferred Payment Plan adopted May 1, 1996
(incorporated herein by reference to Exhibit 10(h)
to Form 10-K filed on May 16, 1997)
22
<PAGE>
10.21 1998 Long Term Incentive and Share Award Plan
(incorporated herein by reference to Exhibit 10(k)
to Form 10-K filed on May 19, 1999)
10.22 Credit Agreement dated as of February 23, 2001,
among the Company, The Great Atlantic & Pacific
Company of Canada, Limited and the other Borrowers
party hereto and the Lenders party hereto, The Chase
Manhattan Bank, as U.S. Administrative Agent, and
The Chase Manhattan Bank of Canada, as Canadian
Administrative Agent ("Credit Agreement")
(incorporated herein by reference to Exhibit 10 to
Form 10-K filed on May 23, 2001)
10.23* Amendment No. 1 and Waiver, dated as of November 16,
2001 to Credit Agreement.
10.24* Amendment No. 2 dated as of March 21, 2002 to Credit
Agreement
10.25* Amendment No. 3 dated as of April 23, 2002 to Credit
Agreement
10.26* Waiver dated as of June 14, 2002 to Credit Agreement
11 Not Applicable
12 Not Applicable
13* 2001 Annual Report to Stockholders
16 Not applicable
18 Not Applicable
21* Subsidiaries of Registrant
22 Not Applicable
23* Independent Auditors' Consent
24 Not Applicable
99 Not Applicable
* Filed with this 10K
(b) Reports on Form 8-K
None.
23
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
The Great Atlantic & Pacific Tea Company, Inc.
(registrant)
Date: July 3, 2002 By: /s/ Mitchell P. Goldstein
-------------------------------------------------
Mitchell P. Goldstein, Senior Vice President and
Chief Financial Officer
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant in
the capacities and as of the date indicated.
<TABLE>
<S> <C>
/s/ Christian W.E. Haub Chairman of the Board and Chief Executive Officer
- ------------------------------------
Christian W.E. Haub
/s/ John D. Barline Director
- ------------------------------------
John D. Barline
/s/ Rosemarie Baumeister Director
- ------------------------------------
Rosemarie Baumeister
/s/ Elizabeth R. Culligan President, Chief Operating Officer and Director
- ------------------------------------
Elizabeth R. Culligan
/s/ Bobbie Gaunt Director
- ------------------------------------
Bobbie Gaunt
/s/ Helga Haub Director
- ------------------------------------
Helga Haub
/s/ Dan P. Kourkoumelis Director
- ------------------------------------
Dan P. Kourkoumelis
/s/ Edward Lewis Director
- ------------------------------------
Edward Lewis
/s/ Richard L. Nolan Director
- ------------------------------------
Richard L. Nolan
/s/ Maureen B. Tart-Bezer Director
- ------------------------------------
Maureen B. Tart-Bezer
</TABLE>
24
<PAGE>
The above-named persons signed this report on behalf of the registrant on
July 3, 2002.
<TABLE>
<S> <C>
/s/ Brenda M. Galgano Vice President, Corporate Controller
- ------------------------------------
Brenda M. Galgano July 3, 2002
</TABLE>
25
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>b319220ex_3-2.txt
<DESCRIPTION>AMENDED BY-LAWS
<TEXT>
<PAGE>
Exhibit 3.2
- --------------------------------------------------------------------------------
BY-LAWS OF THE GREAT ATLANTIC & PACIFIC
TEA COMPANY, INC.
As Amended
July 2, 2002
- --------------------------------------------------------------------------------
<PAGE>
BY LAWS
OF
THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
ARTICLE I.
OFFICES.
SECTION 1. Principal Office. The principal office of The Great Atlantic
& Pacific Tea Company, Inc. (hereinafter called the Corporation) in the State of
Maryland shall be 1300 Mercantile Bank & Trust Building, 2 Hopkins Plaza in the
City of Baltimore. The name of the resident agent in charge thereof is United
States Corporation Company.
SECTION 2. Other Offices. The Corporation may also have an office or
offices in the Borough of Montvale, in the State of New Jersey, and at such
other place or places either within or without the State of Maryland as the
Board of Directors may from time to time determine, or the business of the
Corporation may require.
ARTICLE II.
MEETING OF STOCKHOLDERS.
SECTION 1. Annual Meetings. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly be brought before such meeting shall be held on such date between the
thirtieth day of June and the thirty-first day of July in each year as may be
fixed by the Board of Directors, at such time and place as may be designed by
the Board of Directors in the notice thereof.
<PAGE>
SECTION 2. Special Meetings. A special meeting of the stockholders for
any purpose or purposes may be called at any time by the Chief Executive
Officer, the Chairman of the Board, or the President and shall be called by the
Secretary upon written request of three or more members of the Board of
Directors or of the holders of shares entitled to not less than twenty-five per
cent of all the votes entitled to be cast at any such meeting. Such request
shall state the purpose or purposes of such meeting and the matters proposed to
be acted on thereat. No special meeting need be called upon the request of the
holders of shares entitled to cast less than a majority of all votes entitled to
be cast at such meeting, to consider any matter which is substantially the same
as a matter voted upon at any special meeting of the stockholders held during
the preceding twelve months. Each such special meeting shall be held at such
time and place as may be designated in the notice thereof.
SECTION 3. Notice of Meetings. Notice of time and place of each meeting
of the stockholders shall be given to each stockholder entitled to vote at such
meeting at least fifteen and not more than ninety days before the day on which
the meeting is to be held by mailing such notice in a postage prepaid envelope
addressed to him at his post office address as it appears on the records of the
Corporation. The notice of a meeting of the stockholders shall also state
briefly the objects and purposes thereof as required by law. Any stockholder may
at any time, in writing or by telegraph or cable, waive any notice required to
be given him under Article 23 of the Annotated Code of Maryland, the Certificate
of Incorporation, or these By-Laws.
SECTION 4. Quorum. At each meeting of the stockholders, except as
otherwise expressly provided by statute or the Certificate of Incorporation, the
holders of record of a majority of the issued and outstanding shares of stock of
the Corporation entitled to vote at such meeting, present either in person or by
proxy, shall constitute a quorum for the transaction of business. If there be no
such quorum present the holders of a majority of such shares so present or
represented may adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of voting stock shall be
present. At such adjourned meeting at which the requisite amount of voting stock
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally notified.
<PAGE>
SECTION 5. Organization. At each meeting of the stockholders, the
Chairman of the Board shall act as Chairman and preside thereat. In his
absence, the following shall act in his stead in the order of precedence stated:
The Chief Executive Officer, the President, the Executive Vice Presidents (if
any) in order of seniority of service with the Corporation, the Vice Presidents
in order of seniority of service with the Corporation, the Treasurer, or the
Assistant Treasurer. The Secretary, or in his absence, the Assistant Secretary
or in the absence of both, such person as the Chairman may designate, shall act
as secretary of such meeting and keep the minutes thereof.
SECTION 6. Voting. Except as otherwise provided in the Certificate of
Incorporation, each stockholder shall at each meeting of the stockholders be
entitled to one vote in person or by proxy for each share of stock of the
Corporation entitled to be voted thereat held by him and registered in his name
on the books of the Corporation, on such date as may be fixed pursuant to
Section 4 of Article VI as the record date for the determination of stockholders
entitled to notice of and to vote at such meeting. At all meetings of the
stockholders all matters to be voted upon, except those the manner of deciding
which is otherwise expressly regulated by statute or the Certificate of
Incorporation, shall be decided by the vote of a majority in interest of the
stockholders present in person or by proxy and entitled to vote on such matters.
Except in the case of votes for the election of directors and for other matters
expressly so regulated by statute, the vote at any meeting of the stockholders
on any question need not be by ballot, unless demanded by a stockholder present
in person or by proxy and entitled to vote on such matters.
SECTION 7. List of Stockholders. It shall be the duty of the Secretary
who shall have charge of the stock ledger of the Corporation, either directly or
through a transfer agent appointed by the Board of Directors, to prepare and
make a complete list of the stockholders entitled to vote at any meeting. Such
list shall be kept at the place of election during the meeting.
SECTION 8. Inspectors of Election. Before, or at each meeting of the
stockholders, the Chairman of such meeting shall appoint two Inspectors of
Election to act thereat. Each Inspector of Election so appointed shall first
subscribe an oath or affirmation faithfully to execute the duties of an
Inspector of Election at such meeting with strict impartiality and according to
the best of his ability. Such Inspectors of Election shall take charge of the
ballots at such meeting and after the balloting thereat on any question shall
count the ballots cast thereon and shall make a report in writing to the
Secretary of such meeting of the results thereof.
<PAGE>
ARTICLE III.
BOARD OF DIRECTORS.
SECTION 1. General Powers. The property, business and affairs of the
Corporation shall be managed by the Board of Directors.
SECTION 2. Number, Qualification and Term of Office. The number of
directors shall be determined by the vote of a majority of the entire Board of
Directors, but such number shall not be decreased to less than three. Any
decrease in the number of directors shall not affect the tenure in office of any
director. Each director shall hold office until the annual meeting of the
stockholders next following his election and until his successor shall have been
elected and qualified or until his death, resignation or removal.
SECTION 3. Resignation and Removal of Directors. Any director may
resign at any time by giving notice to the Chief Executive Officer, the Chairman
of the Board, the President or the Secretary, in writing. Any such resignation
shall take effect at the time specified therein, or, if no time is so specified,
upon its receipt. The acceptance of such resignation shall not be necessary to
make it effective. At any meeting of stockholders, duly called and at which a
quorum is present, the stockholders may, by the affirmative vote of the holders
of a majority of the votes entitled to be cast thereon, remove any director or
directors from office and may elect a successor or successors to fill any
resulting vacancies for the unexpired terms of removed directors.
SECTION 4. Vacancies. Any vacancy in the Board of Directors may be
filled by vote of the majority of the remaining directors, except that a vacancy
occurring by reason of an increase in the number of directors may be filled by
vote of a majority of the entire Board, and each director so chosen shall hold
office until the next annual meeting of stockholders and until his successor
shall have been elected and shall qualify.
<PAGE>
SECTION 5. Meetings. As soon as practical after each annual meeting of
stockholders for the election of directors, the Board of Directors shall meet
for the purpose of organizing, for the election of officers, and for the
transaction of such other business as may come before the meeting. In addition
to such meeting of the Board of Directors, regular meetings of the Board of
Directors for the purpose of transacting such business as may properly come
before the meeting shall be held at such times as shall be designated by the
Board of Directors. All meetings of the Board of Directors shall be held at such
places as the Board may designate.
SECTION 6. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by the Chief Executive Officer, the
Chairman of the Board, or by the President, or by the Secretary on the written
request of three directors. Notice of such meeting shall be mailed to each
director addressed to him at his residence or usual place of business at least
five days before the day on which the meeting is to be held. which notice shall
designate the time and place of such meeting. Any director may at any time, in
writing or by telegraph or cable, waive any notice required to be given him
under Article 23 of the Annotated Code of Maryland, the Certificate of
Incorporation, or these By-Laws.
SECTION 7. Organization. At each meeting of the Board of Directors, the
Chairman and the Secretary shall be those persons who would have acted in such
offices, respectively, at a meeting of the stockholders, as provided for in
Section 5 of Article II of these By-Laws.
SECTION 8. Quorum and Manner of Acting. One-half of the whole Board of
Directors shall constitute a quorum for the transaction of business at any
meeting, and the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the Board of Directors.
SECTION 9. Compensation. All directors may be allowed a fixed sum for
attendance at each meeting of the Board of Directors as may be fixed by
resolution of the Board and reimbursement for expenses incurred in connection
with the performance of their duties. Directors who are not employees of the
Corporation or of any of its subsidiaries may also be paid such annual
compensation as may be fixed by resolution of the Board. Members of the
Executive Committee or of other committees or boards designated by the Board
of Directors may be allowed a fixed sum and expenses incurred for attending
meetings of such committees or boards and, if they are not employees of the
Corporation or of any of its subsidiaries, may also be paid such annual
compensation as may be fixed by resolution of the Board of Directors. Nothing
herein contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefore.
<PAGE>
SECTION 10. Committees of Board of Directors.
(A) The Executive Committee.
There shall be an Executive Committee, composed of not less than five
nor more than seven directors. During the intervals between the meetings of the
Board of Directors, the Executive Committee shall have all the powers of the
Board and may exercise such powers when the exercise thereof prior to the next
regular meeting of the Board of Directors is deemed by the Committee to be
necessary in the management and direction of the business and affairs of the
Corporation.
The Executive Committee shall be elected by a majority of the Board of
Directors at each Annual Meeting of the Board. A majority of the members of the
Executive Committee shall be composed of directors who are not employees of the
Company or any of its subsidiaries and alternates for such members, who shall
themselves be directors who are not employees of the Company or any of its
subsidiaries, shall also be elected. In the absence from a meeting of the
Executive Committee of any non-employee member or members thereof, available
alternates shall serve in the order their respective names shall appear in the
resolution electing them, and shall act and vote in the stead of any such absent
non-employee member or members.
The Executive Committee shall keep minutes of its meetings and a copy
of such minutes (or a summary thereof) shall be forwarded promptly to each
director, and all action by the Executive Committee shall be reported to the
Board of Directors at its next meeting.
(B) Other Committees.
The Board of Directors may by resolution designate other committees or
boards composed of three or more of its members, which resolution shall set
forth the powers of such committees or boards. All action by such other
committees or boards shall be reported to the Board of Directors at its next
meeting.
<PAGE>
(C) General.
A majority of the members of each committee or board shall constitute a
quorum, but in the absence of a quorum the remaining members present may
designate one or more other directors to act at such meetings in the place of
absent members, subject to the provisions of Subsection A of this Section 10.
Each committee or board may fix its rules of procedure, determine its
manner of acting and fix the time and place of its meetings and specify what
notice thereof, if any, shall be given, unless the Board of Directors shall
otherwise by a resolution provide.
The Board of Directors shall have the power to change the membership of
any committee or board (including the Executive committee) at any time, to fill
vacancies therein, to discharge any such committee or board, and to remove any
member thereof, either with or without cause, at any time.
SECTION 11. Any action required or permitted to be taken at any meeting
of the Board of Directors or any committee thereof may be taken without a
meeting, if written consent to such action is signed by all members of the Board
or of such committee, as the case may be, and such written consent is filed with
the minutes of proceedings of the Board or Committee.
The Board of Directors or any committee designated thereby may
participate in a meeting of the Board or such committee, as the case may be, by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time.
ARTICLE IV.
OFFICERS.
SECTION 1. The officers of the Corporation shall be a Chief Executive
Officer, a Chairman of the Board, a President, a Chief Financial Officer, one or
more Vice Presidents, a Secretary, a Treasurer, a General Counsel and a
Controller. The Board may also elect one or more Vice Chairmen, one or more
Executive Vice Presidents, and one or more Assistant Secretaries and Assistant
Treasurers. The same person may hold more than one office, except that the same
person shall not hold simultaneously the offices of President and Vice President
or Chief Executive Officer and Chief Financial Officer.
<PAGE>
SECTION 2. Election and Term of Office. The officers shall be elected
annually by the Board of Directors. Each officer shall hold office until the
next annual election of officers and until his successor shall have been elected
and qualified.
SECTION 3. Resignations and Removal. Any officer may at any time resign
in the same manner as provided for a director in Section 3 of Article III. Any
officer may be removed, either with or without cause, at any time, by the vote
of a majority of the whole Board of Directors.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause may be filled for the unexpired portion
of the term at any meeting of the Board of Directors.
SECTION 5. The Chief Executive Officer. The Chief Executive Officer
shall have general and active supervision over the business and affairs of the
Company, its officers employees and agents, subject to the control of the Board
of Directors, and shall be an ex-officio member of all committees of the Board
of Directors, with the exception of the Compensation Policy Committee and the
Audit Review Committee.
SECTION 6. The Chairman of the Board. The Chairman of the Board shall
act as Chairman and preside at all meetings of the stockholders and the Board of
Directors, and in general shall perform such duties as are incident to the
office of Chairman of the Board.
SECTION 7. [Intentionally Deleted]
SECTION 8. The President. The President shall in general perform such
duties as are incident to the office of President, subject to the control of the
Board of Directors, the Chief Executive Officer, or the Chairman of the Board.
<PAGE>
SECTION 9. Chief Financial Officer. The Chief Financial Officer shall
have charge of the financial affairs of the Corporation and shall have such
duties as may from time to time be assigned to him by the Board of Directors,
the Chief Executive Officer, the Chairman of the Board, or the President.
SECTION 10. Executive Vice Presidents. The Executive Vice Presidents
shall have such powers and perform such duties as may from time to time be
assigned to them by the Board of Directors, the Chief Executive Officer, the
Chairman of the Board, or the President.
SECTION 11. The Vice Presidents. The Vice Presidents shall have such
powers and perform such duties as may from time to time be assigned to them by
the Board of Directors, the Chief Executive Officer, the Chairman of the Board,
or the President.
SECTION 12. The Secretary. The Secretary shall record or cause to be
recorded all the proceedings of the meetings of the stockholders of the
Corporation and the Board of Directors in a book or books to be kept for that
purpose; shall see that all notices are duly given in accordance with the
provisions of these By-Laws or as required by statute or the Certificate of
Incorporation; shall have custody of the books and other records (other than the
accounting records) and of the seal of the Corporation and shall see that the
books, records and other documents required by law (including the stock ledger
and the records of the issue, transfer and registration of certificates for
shares of stock) are properly kept and filed; shall see that the seal of the
Corporation is affixed to all documents the execution of which on behalf of the
Corporation under its seal is duly authorized and shall attest such seal; and in
general shall perform all duties incident to the office of Secretary and such
other duties as from time to time may be assigned to him by the Board of
Directors, the Chief Executive Officer, the Chairman of the Board, or the
President.
SECTION 13. Assistant Secretaries. At the request of the Secretary, or
in the case of his absence or inability to act, the Assistant Secretary shall
perform the duties of the Secretary, and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Secretary.
SECTION 14. The Treasurer. The Treasurer shall have such duties as may
from time to time be assigned to him by the Board of Directors, the Chief
Executive Officer, the Chairman of the Board, the President, or the Chief
Financial Officer. He shall have the authority to enter into and execute on the
Company's behalf all banking arrangements.
<PAGE>
SECTION 15. Assistant Treasurers. At the request of the Treasurer, or
in case of his absence or inability to act, the Assistant Treasurer shall
perform the duties of the Treasurer, and when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer.
SECTION 16. The General Counsel. The General Counsel shall be the chief
legal advisor to the Corporation and shall have such powers and perform such
duties as may from time to time be assigned to him by the Board of Directors,
the Chief Executive Officer, the Chairman of the Board, or the President.
SECTION 17. The Controller. The Controller shall have such powers and
perform such duties as may from time to time be assigned to him by the Board of
Directors, the Chief Executive Officer, the Chairman of the Board, the
President, or the Treasurer.
SECTION 18. Salaries. The salaries of the officers shall be fixed from
time to time by the Board of Directors or by any committee or officer to which
or to whom the Board of Directors shall delegate authority so to do.
ARTICLE V.
NOTES, CHECKS, PROXIES, ETC.
SECTION 1. Loans. Loans may be contracted on behalf of the Corporation
by those officers duly authorized by a resolution of the Board of Directors.
Such authorization will pertain not only to the borrowing of funds but also to
the execution and delivery by such officers of bonds, debentures, promissory
notes, or other evidences of indebtedness of the Corporation relating thereto.
SECTION 2. Checks, Drafts, etc. All checks, drafts or other orders for
the payment of money issued in the name of the Corporation shall be signed by
such officer or officers, or by such agent or agents as may be authorized so to
do from time to time by the Board of Directors, the Chief Executive Officer, the
Chairman of the Board, the President, the Chief Financial Officer, or the
Treasurer.
<PAGE>
SECTION 3. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board of Directors, the Chief Executive Officer, the
Chairman of the Board, the President, the Chief Financial Officer, or the
Treasurer shall direct in such banks, trust companies or other depositories as
the Board of Directors or such officers may select or as may be selected by any
officer or officers, or agent or agents, to whom power in that respect shall
have been delegated by the Board of Directors.
SECTION 4. Proxies in Respect of Stock or Other Securities of Other
Corporations. Unless otherwise provided by resolution adopted by the Board of
Directors, the Chief Executive Officer, or in his absence, the President may
from time to time appoint on behalf of the Corporation by a proxy in writing an
attorney or attorneys, or an agent or agents, to exercise in the name and on
behalf of the Corporation the powers and rights which the Corporation may have
as the holder of stock or other securities in any other corporation to vote or
consent in respect of such stock or other securities, and the Chief Executive
Officer, or in his absence, the President may instruct the person or persons so
appointed as to the manner of exercising such powers and rights.
ARTICLE VI.
CAPITAL STOCK.
SECTION 1. Certificates of Stock. Each stockholder shall be entitled to
a certificate or certificates which shall represent and certify the number of
shares of stock owned by him in the Corporation. Each certificate shall be
signed by the Chairman of the Board or President and countersigned by the Chief
Financial Officer or the Treasurer and shall be sealed with the corporate seal
which may be a facsimile; provided, however, that where such certificate is
signed by a transfer agent acting on behalf of the Corporation and a registrar,
the signature of any such officer may be by facsimile. In case any officer who
has signed any certificate, or whose facsimile signature has been used thereon,
ceases to be an officer of the Corporation before the certificate is issued, the
certificate may nevertheless be issued by the Corporation with the same effect
as if the officer had not ceased to be such officer as of the date of its issue.
<PAGE>
SECTION 2. Transfers of Shares. Each transfer of shares of stock of the
Corporation shall be made only on the books of the Corporation by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, or with a
transfer agent appointed as provided in Section 3 of this Article, upon the
payment of all taxes thereon and the surrender of the certificate or
certificates for such shares properly endorsed. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
owner in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof.
SECTION 3. Regulations; Transfer Agents, etc. The Board of Directors
may make such rules and regulations as it may deem expedient, not inconsistent
with these By-Laws, concerning the issue, transfer and registration of
certificates for shares of stock of the Corporation. It may appoint one or more
transfer agents and one or more registrars, and may require all certificates for
shares of stock of the Corporation to bear the signature or signatures of any of
them.
SECTION 4. Record Date. The Board of Directors may fix in advance a
date, not exceeding ninety days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
capital stock shall go into effect, or a date for obtaining any consent of
stockholders for any purpose, as a record date for the determination of the
stockholders entitled to notice of, and to vote at, any such meeting and any
adjournment thereof, or entitled to receive payment of any such dividend,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
<PAGE>
SECTION 5. Lost, Destroyed and Mutilated Certificates. The holder of
any shares of stock of the Corporation shall immediately notify the Corporation
of any loss, destruction or mutilation of the certificate therefor, and the
Board of Directors may, by resolution, or regulation adopted pursuant to Section
3 of this Article, after the expiration of such period of time as it may
determine to be advisable, cause to be issued to him a new certificate or
certificates for shares of stock, upon the surrender of the mutilated
certificate or, in case of loss or destruction of the certificate, upon
satisfactory proof of such loss or destruction, and the Board of Directors may,
by such resolution or regulation, require the owner of the lost, destroyed or
mutilated certificate, or his legal representatives, to give the Corporation a
bond in such sum and with such surety or sureties as it may direct, to indemnify
the Corporation against any claim that may be made against it on account of the
alleged loss, destruction or mutilation of any such certificate or the issuance
of such new certificate.
SECTION 6. Examination of Books by Stockholders. The Board of Directors
shall, subject to any applicable statutes, have the power to determine whether
and to what extent and at what times and places and under what conditions and
regulations the accounts and books and documents of the Corporation or any of
them, shall be open to the inspection of the stockholders; and no stockholder
shall have any right to inspect any account or book or documents of the
Corporation, except as conferred by any such statute unless and until authorized
so to do by resolution of the Board of Directors.
ARTICLE VII.
SEAL.
The Board of Directors shall provide a corporate seal which shall be in
the form of a circle and shall bear the full name of the Corporation and words
and figures indicating the year and state in which the Corporation was
incorporated and such other words or figures as the Board of Directors may
approve and adopt.
ARTICLE VIII.
FISCAL YEAR.
The fiscal year of the Corporation shall end on the last Saturday in
February of each year.
<PAGE>
ARTICLE IX.
AMENDMENTS.
These By-Laws may be altered, amended or repealed and new By-Laws
adopted by the stockholders or by the Board of Directors by a majority vote at
any meeting called for that purpose but no amendment adopted by the stockholders
shall thereafter be altered or repealed by the Board of Directors.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>b319220ex_10-3.txt
<DESCRIPTION>EMPLOYMENT AND SEPARATION AGREEMENTS
<TEXT>
<PAGE>
Exhibit 10.3
April 8, 2002
Ms. Elizabeth R. Culligan
17 Worthington Avenue
Spring Lake, NJ 07762
Re: Amendment to Employment Agreement of Elizabeth Culligan
Dear Beth:
As discussed, effective February 24, 2002 (the "Effective Date"), The
Great Atlantic & Pacific Tea Company, Inc. (the "Company") has promoted you from
Executive Vice President and Chief Operating Officer of the Company to President
and Chief Operating Officer of the Company (the "Promotion"). Additionally, as
of the Effective Date, you will have a base salary of $575,000 (Five Hundred
Seventy Five Thousand Dollars) and will report directly to, and comply with all
reasonable instructions of, the Chairman and Chief Executive Officer of the
Company.
In conjunction with the Promotion, as of the Effective Date, the
Employment Agreement, made and entered into as of the 8th date of January 2001,
by and between the Company and Elizabeth R. Culligan (the "Agreement"), shall be
deemed amended as follows:
(1) All references to Executive Vice President and Chief Operating Officer shall
be changed to President and Chief Operating Officer; and
(2) The base salary of $500,000 indicated in Section 3.1 shall be increased to
$575,000 (Five Hundred Seventy Five Thousand Dollars).
Except as indicated above, the Agreement, its terms and conditions shall remain
in full force and effect.
If the terms outlined above, and the changes to your Agreement are acceptable,
please sign below, and return an original executed copy of this letter
agreement. Upon execution of this letter agreement, the Agreement shall be
deemed amended in accordance with Section 28 thereof.
Sincerely,
The Great Atlantic & Pacific Tea Company, Inc.
By: /s/Christian W.E. Haub
----------------------
Agreed to and accepted this 8th day
of April, 2002
/s/ Elizabeth R. Culligan
- -----------------------------------
Elizabeth R. Culligan
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>5
<FILENAME>b319220ex_10-5.txt
<DESCRIPTION>LETTER AGREEMENT
<TEXT>
<PAGE>
Exhibit 10.5
February 22, 2002
Mr. Fred Corrado
189 Brewster Road
Wyckoff, NJ 07481
Dear Fred:
In consideration of the agreements reflected below and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
this Letter Agreement (the "Letter Agreement") will serve to amend the
Employment Agreement entered into as of November 1, 2000, by and between
yourself and The Great Atlantic & Pacific Tea Company, Inc. (the "Company"), as
amended on May 30, 2001 (the "Agreement"). By executing this Letter Agreement,
you resign your position as an officer of the Company effective as of February
23, 2002, resign as a member of the Company's Board of Directors on March 19,
2002, and retire from the Company on May 20, 2002 (the "Retirement Date"). The
Company accepts such resignations as of the 23rd of this month and the 19th of
next month, respectively, and further agrees to your retirement on the
Retirement Date. You agree to provide transition services as the Company may
request. The Company agrees that the provisions of Section 10 of the Agreement
shall apply to your retirement.
Commencing May 21, 2002, per the terms of Section 10 of the Agreement, your 18
months of severance benefits pursuant to Section 10 shall commence (the
"Severance Period"). In addition to and without in any way diminishing the
benefits provided for in Section 10 of the Agreement, the Company agrees at its
cost to provide you with executive medical coverage, as the same may be in
effect for executives of the Company from time to time, until the third
anniversary of the Retirement Date.
Lastly, the options granted to you on March 20, 2001, under the Company's 1998
Long Term Incentive and Share Award Plan, to purchase up to a total of 110,000
shares of the Company's $1.00 par value common stock, are hereby immediately
vested and shall remain exercisable until the third anniversary of the
Retirement Date. No other options that you have been granted pursuant to the
Agreement or otherwise shall be affected by the foregoing change. Such options
shall continue to be governed by their respective grant terms.
Except as amended by this Letter Agreement, the terms of the Agreement shall
remain in full force and effect.
Sincerely,
The Great Atlantic & Pacific Tea Company, Inc.
By: /s/Christian Haub
-----------------
Christian Haub
Chairman, President & Chief Executive Officer
AGREED TO AND ACCEPTED BY:
/s/Fred Corrado
----------------------
Fred Corrado
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>6
<FILENAME>b319220ex_10-7.txt
<DESCRIPTION>AMEND TO EMPLOYMENT AGREEMENT
<TEXT>
Exhibit 10.7
April 8, 2002
William P. Costantini, Esq.
64 Bouton Road
South Salem, NY 10590
Re: Amendment to Employment Agreement of William P. Costantini
Dear Bill:
The Employment Agreement (the "Agreement"), made and entered into as of
the 1st day of November 2000, by and between The Great Atlantic & Pacific Tea
Company, Inc. (the "Company") and William P. Costantini (the "Employee") is
hereby amended as follows:
1.) Effective as of October 1, 2001, your base salary was increased from
$335,000 to $355,000; and
2.) Effective February 25, 2002, all references in the Agreement to the
Employee reporting to the "Vice Chairman and Chief Financial Officer" are
hereby amended to read "the Chairman and Chief Executive Officer."
Except as indicated above, the Agreement, its terms and conditions, shall
remain in full force and effect.
If the terms outlined above, and the changes to your Agreement are
acceptable, please sign below, and return an original executed copy of this
letter agreement. Upon execution of this letter agreement, the Agreement shall
be deemed amended in accordance with Section 28 thereof.
Sincerely,
The Great Atlantic & Pacific Tea Company, Inc.
By: /s/Christian Haub
-----------------
Christian Haub
Agreed to and accepted this 30th day
of April, 2002
/s/ William P. Costantini
- -----------------------------------
William P. Costantini
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>7
<FILENAME>b319220ex_10-8.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>
Exhibit 10.8
EMPLOYMENT AGREEMENT
AGREEMENT, made and entered into as of the 24th day of
February, 2002, by and between THE GREAT ATLANTIC & PACIFIC TEA COMPANY, INC.
(the "Company"), and Mitchell P. Goldstein (the "Employee").
W I T N E S S E T H
WHEREAS, the Company and the Employee (the "Parties") have
agreed to enter into this agreement (the "Agreement) relating to the employment
of the Employee by the Company;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
Parties, intending to be legally bound, agree as follows:
1. Term of Employment.
(a) The Company agrees to continue to employ the Employee, and the Employee
agrees to remain in the employment of the Company, in accordance with the terms
and provisions of this Agreement, for the period set forth below (the
"Employment Period").
(b) The Employment Period under this Agreement shall commence as of February 24,
2002 and, subject only to the provisions of Sections 7, 8 and 9 below relating
to termination of employment, shall continue until (i) the close of business on
February 23, 2005 or (ii) such later date as shall result from the operation of
subparagraph (c) below (the "Terminal Date").
(c) Commencing on August 24, 2004, and on the first business day of each month
thereafter (such date and each such first business day, the "Renewal Date") the
Terminal Date set forth in subparagraph (b) above shall be extended so as to
occur eighteen months from the Renewal Date unless either the Company or the
Employee shall have given written notice to the other Party on or before such
Renewal Date that the Terminal Date is not to be extended.
2. Duties.
It is the intention of the Parties that during the term of his
employment under this Agreement, the Employee will serve as Senior Vice
President, Chief Financial Officer. The Employee will devote his full business
time and attention to the affairs of the Company and his duties as its Senior
Vice President, Chief Financial Officer. The Employee will have such duties as
are appropriate to his position as Senior Vice President, Chief Financial
Officer, and will have such authority as required to enable him to perform these
duties. Consistent with the foregoing, the Employee shall comply with all
reasonable instructions of the Chief Executive Officer of the Company. The
Employee will be based in Montvale, New Jersey and his services will be rendered
there except insofar as travel may be involved in connection with his regular
duties. The Employee will report directly to the Chief Executive Officer of the
Company.
3. Salary and Bonus.
3.1 Salary. The Company will pay the Employee a base salary at an initial
annual rate of not less than $340,000, which base salary as in effect from time
to time will not be reduced and will be reviewed periodically (at intervals of
not more than eighteen (18) months) by the Compensation Committee of the Board
of Directors (the "Board") for the purpose of considering increases thereof. In
evaluating increases in the Employee's base salary, the Compensation Committee
of the Board will take into account such factors as corporate performance,
individual merit and such other considerations as it deems appropriate. The
Employee's base salary will be paid in accordance with the standard practices
for other corporate executives of the Company.
3.2 Bonuses.
The Employee will be eligible to receive annually or otherwise
any bonus awards, whether payable in cash, shares of common stock of the Company
or otherwise, which the Company, the Compensation Committee of the Board or such
other authorized committee of the Board determines to award or grant.
4. Benefit Programs.
The Employee will receive such benefits and awards, including
without limitation stock options and restricted share awards, as the
Compensation Committee of the Board shall determine and will be eligible to
participate in all employee benefit plans and programs of the Company from time
to time in effect for the benefit of senior executives of the Company,
including, but not limited to, pension and other retirement plans, group life
insurance, hospitalization and surgical and major medical coverages, sick leave,
salary continuation arrangements, vacations and holidays, long-term disability
and such other benefits as are or may be made available from time to time to
senior executives of the Company.
5. Business Expenses and Perquisites.
The Employee will be reimbursed for all reasonable expenses
incurred by [him] in connection with the conduct of the business of the Company,
provided he properly accounts therefor in accordance with the Company's
policies. He will also be entitled to such other perquisites as are customary
for senior executives of the Company.
6. Office and Services Furnished.
The Company shall furnish the Employee with office
space, secretarial assistance and such other facilities and services as
shall be suitable to the Employee's position and adequate for the performance
of his duties hereunder.
7. Termination of Employment by the Company.
7.1 Involuntary Termination by the Company Other Than For Permanent and Total
Disability or For Cause.
The Company may terminate the Employee's employment at
any time and for any reason by giving him a written notice of termination to
that effect at least 45 days before the date of termination. In the event the
Company terminates the Employee's employment for any reason other than for
Permanent and Total Disability, as provided in Section 7.2, below, or for Cause,
as provided in Section 7.3, below, the Employee shall be entitled to the
benefits described in Section 10 or Section 11, whichever is applicable.
7.2 Termination Due to Permanent and Total Disability. If the Employee incurs a
Permanent and Total Disability, as defined below, the Company may terminate the
Employee's employment by giving him written notice of termination at least 45
days before the date of such termination. In the event of such termination of
the Employee's employment because of Permanent and Total Disability, the
Employee shall be entitled to receive (i) his base salary pursuant to Section
3.1 and any other compensation and benefits to the extent actually earned by the
Employee pursuant to this Agreement or any benefit plan or program of the
Company as of the date of such termination of employment at the normal time for
payment of such salary, compensation or benefits, and (ii) any reimbursement
amounts owing under Section 5. For purposes of this Agreement, the Employee
shall be considered to have incurred a Permanent and Total Disability if he is
unable to substantially carry out his duties under this Agreement by reason of
any medically determinable physical or mental impairment which can be expected
to result in death or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The existence of such Permanent
and Total Disability shall be evidenced by such medical certification as the
Secretary of the Company shall require and shall be subject to the approval of
the Compensation Committee of the Board of Directors of the Company.
7.3 Termination for Cause. The Company may terminate the Employee's employment
for Cause if (i) the Employee willfully, substantially and continually fails to
perform the duties for which he is employed by the Company, (ii) the Employee
willfully fails to comply with the reasonable instructions of the Chief
Executive Officer of the Company, (iii) the Employee willfully engages in
conduct which is or would reasonably be expected to be materially and
demonstrably injurious to the Company, (iv) the Employee willfully engages in an
act or acts of dishonesty resulting in material personal gain to the Employee at
the expense of the Company, (v) the Employee is convicted of a felony, (vi) the
Employee engages in an act or acts of gross malfeasance in connection with his
employment hereunder, (vii) the Employee commits a material breach of the
confidentiality