Exhibit 10.1

PATHMARK STORES, INC.

 

DEFERRED COMPENSATION PLAN

 

Effective August 29, 2005

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

Page

 

 

 

 

Purpose

1

ARTICLE 1

Definitions

1

ARTICLE 2

Participation

3

 

2.1

Participation in the Plan

3

 

2.2

Enrollment Requirements

3

 

2.3

Subsequent Deferral Election

3

 

2.4

Cancellation of Deferral Election Upon 401(K) Hardship Distribution

3

ARTICLE 3

Crediting

3

 

3.1

Crediting of Deferred Amounts

3

 

3.2

FICA and Other Taxes

3

 

3.3

Crediting of Earnings

3

ARTICLE 4

Vesting

3

ARTICLE 5

Payment of Benefits

3

 

5.1

Withdrawal Payout for Unforeseeable Financial Emergency

3

 

5.2

Payment at Fixed Dates

3

 

5.3

Payment Upon Termination of Employment

3

 

5.4

Payment Upon Death or Disability

3

 

5.5

Payment Upon Change in Control

3

ARTICLE 6

Beneficiary Designation

3

 

6.1

Beneficiary

3

 

6.2

Beneficiary Designation; Change

3

 

6.3

No Beneficiary Designation

3

 

6.4

Doubt As To Beneficiary

3

ARTICLE 7

Termination, Amendment or Modification

3

ARTICLE 8

Administration

3

 

8.1

Committee Duties

3

 

8.2

Agents

3

 

8.3

Indemnification of Committee

3

ARTICLE 9

Other Benefits and Agreements

3

 

9.1

Coordination with Other Benefits

3

ARTICLE 10

Claims Procedures

3

 

10.1

Presentation of Claim

3

 

10.2

Notification of Decision

3

 

10.3

Review of a Denied Claim

3

 

10.4

Decision on Review

3

 

10.5

Legal Action

3

 

i

 

 

ARTICLE 11

Miscellaneous

3

 

11.1

Unsecured General Creditor

3

 

11.2

Company’s Liability

3

 

11.3

Nonassignability

3

 

11.4

Furnishing Information

3

 

11.5

Terms

3

 

11.6

Captions

3

 

11.7

Governing Law

3

 

11.8

Notice

3

 

11.9

Successors

3

 

11.10

Spouse’s Interest

3

 

11.11

Validity; No Waiver

3

 

11.12

Incompetent

3

 

11.13

Distribution in the Event of Taxation

3

 

11.14

Taxes and Withholding

3

 

ii

 

 

PATHMARK STORES, INC.

DEFERRED COMPENSATION PLAN

Effective August 29, 2005

 

PURPOSE

The purpose of this Plan is to provide deferred compensation benefits to a
select group of management and highly compensated employees of Pathmark Stores,
Inc., a Delaware corporation (the “Company”). This Plan is intended to
constitute an unfunded plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees for purposes of ERISA and the Code.

ARTICLE 1

 

DEFINITIONS

For purposes hereof, unless otherwise clearly apparent from the context, the
following phrases or terms shall have the following meanings:

1.1

“Account” of a Participant shall mean such Participant’s Salary Deferral
Account, Bonus Deferral Account or Company Contribution Account. Each Salary
Deferral Account, Bonus Deferral Account and Company Contribution Account of a
Participant shall have a separate subaccount for each calendar or fiscal year
(as applicable) initially consisting of amounts credited to such Participant
under Section 3.1(a), 3.1(b) and 3.1(c), respectively, for such year. Each
Account shall be a bookkeeping entry only and shall be utilized solely for the
measurement and determination of the amounts to be paid to the Participant or
his or her Beneficiary pursuant to this Plan.

1.2

“Annual Bonus” shall mean a Participant’s annual incentive compensation award
under the Pathmark Stores, Inc. Executive Incentive Plan or successor thereto.

1.3

“Beneficiary” shall mean one or more persons, trusts, estates or other entities,
designated in accordance with Article 6, that are entitled to receive benefits
under this Plan upon the death of a Participant.

1.4

“Beneficiary Designation Form” shall mean the form established from time to time
by the Committee that a Participant completes, signs and returns to the
Committee to designate one or more Beneficiaries.

1.5

“Board” shall mean the board of directors of the Company.

1.6

“Bonus Deferral Account” of a Participant shall mean (i) the sum of all of the
deferrals of Annual Bonus credited to such Participant under Section 3.1(b),
plus (ii) such additional amounts as are debited or credited to such Account in
accordance with Section 3.3, less

(iii) all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to such Account.

1.7

“Change in Control” shall mean

 

(i)

the individuals who, as of the effective date of the Plan, constitute the Board,
and subsequently elected members of the Board whose election is approved or
recommended by at least a majority of the members of the Board as of such
effective date or their successors whose election was so approved or recommended
(other than any subsequently elected members whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of any Person (as defined below) other
than the Board), cease for any reason to constitute at least a majority of the
Board;

 

(ii)

the acquisition of beneficial ownership, within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended (the ”Exchange
Act”), of 35% or more of the Company’s common stock then outstanding, by any
person, entity or group (a “Person”), within the meaning of Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, other than (A) the Company or any of its
subsidiaries, (B) an employee benefit plan of the Company or trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such employee benefit plan, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities,
(D) an entity owned, directly or indirectly, by the Company’s stockholders in
substantially the same proportions as their ownership of Common Stock or
(E) Yucaipa Companies, LLC (“Yucaipa”); provided, however, that a reverse
subsidiary merger or similar transaction shall not be a Change in Control under
this Section 1.7(ii) if it would not otherwise be a Change in Control under
Section 1.7(iii) below; or

 

(iii)

the consummation in one or a series of transactions, or the approval of the
Company’s stockholders in the case of clause (A), of either (A) a plan of
complete liquidation or dissolution of the Company or (B) a merger, amalgamation
or consolidation of the Company with any Person, the issuance of voting
securities of the Company or any subsidiary in connection with a merger,
consolidation or recapitalization of the Company or a subsidiary, the sale or
other disposition of all or substantially all of the assets of the Company to
any Person or the acquisition of assets of any Person or other business
combination or transaction (each, a “Business Combination”), unless, in each
case of a Business Combination, immediately following such Business Combination,
all or substantially all of the individuals and entities who were the beneficial
owners of the Common Stock outstanding immediately

 

 

 

2

prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of the then outstanding shares of the Company’s common stock and
50% of the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the entity resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the Company or
all or substantially all of the assets of the Company and its subsidiaries
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Company’s common stock.

Notwithstanding the foregoing, in no event shall a Change in Control result from
(I) any increase in Yucaipa’s beneficial ownership of equity of the Company or
(II) the acquisition by Yucaipa of all or substantially all of the business or
assets of the Company.

1.8

“Claimant” shall have the meaning set forth in Section 10.1.

1.9

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

1.10

“Committee” shall mean the compensation committee of the Board or such other
committee as the Board appoints to administer the Plan.

1.11

“Company” shall mean Pathmark Stores, Inc., a Delaware corporation, and any
successor thereto.

1.12

“Company Contribution” shall mean the amount, if any, determined by the Board or
the Committee to be credited to a Participant’s Company Contribution Account.

1.13

“Company Contribution Account” of a Participant shall mean (i) the sum of all of
the Company Contributions on behalf of such Participant which are credited in
accordance with Section 3.1(c), plus (ii) such additional amounts as are debited
or credited to such Account in accordance with Section 3.3, less (iii) all
distributions made to the Participant or his or her Beneficiary pursuant to this
Plan that relate to such Account.

1.14

“Disability” of a Participant shall mean a medically determinable physical or
mental impairment of the Participant that can be expected to result in death or
last for a continuous period of not less than 12 months and that entitles the
Participant to receive benefits under the Company’s short term or long term
disability plan for a period of not less than 3 months.

1.15

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.

1.16

“Measurement Funds” shall mean the Vanguard Funds or the group of such other
mutual funds or other investment categories, options or indices which the
Committee shall prescribe from time to time in writing by notice given to the
Participants, which shall at all times include a money market fund.

 

 

 

3

1.17

“Participant” shall mean John T. Standley and Kenneth P. Martindale and each
other management and/or highly compensated employee of the Company and its
subsidiaries as the Committee may select to participate in the Plan. The term
“Participant” shall include a former employee with a vested Account balance.

1.18

“Plan” shall mean this Deferred Compensation Plan, as amended from time to time.

1.19

“Salary Deferral Account” of a Participant shall mean (i) the sum of all of the
deferrals of base salary credited to such Participant under Section 3.1(a), plus
(ii) such additional amounts as are debited or credited to such Account in
accordance with Section 3.3, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to such
Account.

1.20

“Termination of Employment” shall mean the ceasing of a Participant’s employment
with the Company and all entities that would be considered a single employer
with the Company under Code Section 414(b) and (c), voluntarily or
involuntarily, for any reason, or “separation from service” as defined for
purposes of Code Section 409A, if earlier.

1.21

“Unforeseeable Financial Emergency” shall mean an unanticipated emergency that
is caused by an event beyond the control of the Participant that would result in
severe financial hardship to the Participant resulting from (i) an illness or
accident of the Participant or the spouse or a dependent of the Participant,
(ii) a loss of the Participant’s property due to casualty, or (iii) such other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant, as determined in good faith by the
Committee taking into account any limitations imposed by Code Section 409A.

ARTICLE 2

PARTICIPATION

2.1          PARTICIPATION IN THE PLAN. Each Participant shall become eligible
to participate in the Plan on the date he or she is selected by the Committee as
a Participant.

2.2

ENROLLMENT REQUIREMENTS.

 

(a)

Deferral Elections. Each Participant desiring to defer base salary and/or an
Annual Bonus shall file an election, in the form specified by the Committee,
specifying the percentage or amount desired to be deferred and the payment date
or dates for amounts deferred pursuant to that deferral election. In the case of
an election to defer base salary, such election must be filed no later than
December 31 of the calendar year preceding the year in which the services for
which the salary is paid are performed. In the case of an election to defer an
Annual Bonus, such election must be filed no later than July 15 of the fiscal
year with respect to which the Annual Bonus is earned. Notwithstanding the
foregoing, in the case of the first year in which the Participant becomes
eligible to participate in the Plan, the Participant may make an election to
defer base salary and/or an Annual Bonus within 30 days of first becoming
eligible to participate, but only with respect to

 

 

 

4

base salary for services performed after the election and only with respect to a
portion of the Annual Bonus determined by multiplying the Annual Bonus by the
ratio of the number of days remaining in the fiscal year to which the Annual
Bonus relates after the election over the total number of days in the fiscal
year. A Participant’s election to defer base salary and/or an Annual Bonus shall
be irrevocable after the applicable deadline for such election under this
Section 2.2(a), except as provided in Section 2.4.

 

(b)

Company Contribution Elections. Each Participant shall file an election, in the
form specified by the Committee, specifying the payment date or dates for any
Company Contributions credited to such Participant. Such election must be filed
no later than December 31 of the calendar year preceding the fiscal year for
which such Company Contribution is credited or, if later, the 30th day after the
Participant first becomes eligible to participate in the Plan.

 

(c)

Permissible Payment Dates. A Participant may elect to have his or her Account
(or subaccount) paid (i) in specified amounts or percentages on specified fixed
dates, and/or (ii) in a lump sum or in five (5), ten (10) or fifteen (15) equal,
consecutive annual installments, commencing at the date of or otherwise at a
specified interval following his or her Termination of Employment (subject to
Section 5.3). Except as provided in Sections 2.3 and 5.1, an election of payment
dates shall be irrevocable with respect to the subaccount established for
amounts subject to that election, but a different payment election may be made
for the subaccount established for any subsequent year. If a Participant fails
to make a payment election for a subsequent year, the most recent payment
election shall continue in effect.

2.3          SUBSEQUENT DEFERRAL ELECTION. Notwithstanding Section 2.2(c), a
Participant may file a new election under Section 2.2(c) that delays a payment
or changes the form of a payment under a prior election provided that: (i) the
new election may not take effect until 12 months after the date of filing; (ii)
a payment under the new election may not be made sooner than five (5) years
after the date such payment would otherwise have been paid (or, in the case of
installment payments treated as a single payment for purposes of Code Section
409A, five (5) years after the date the first amount was scheduled to be paid),
except for payments on account of death, Disability or Unforeseeable Financial
Emergency; and (iii) if the new election is changing a prior election under
Section 2.2(c)(i), the new election must be made at least 12 months prior to the
date such payment would otherwise have been made (or in the case of installment
payments treated as a single payment for purposes of Code Section 409A, 12
months prior to the date the first amount was scheduled to be paid).

2.4          CANCELLATION OF DEFERRAL ELECTION UPON 401(K) HARDSHIP
DISTRIBUTION. A Participant’s deferral election under Section 2.2(a) shall be
cancelled to the extent required in connection with a hardship distribution
under the Company’s qualified defined contribution plan containing a Code
Section 401(k) deferral feature. Such cancellation shall only apply with respect
to elective deferrals under this Plan which have not yet been credited to the
Participant’s Account.

 

 

 

5

ARTICLE 3

 

CREDITING

3.1

CREDITING OF DEFERRED AMOUNTS

 

(a)

A Participant’s Salary Deferral Account shall be credited with the portion of
such Participant’s base salary, if any, which the Participant has elected to
defer as of the date or dates on which such amounts would otherwise be paid to
the Participant.

 

(b)

A Participant’s Bonus Deferral Account shall be credited with the portion of the
Participant’s Annual Bonus, if any, which the Participant has elected to defer
as of the date or dates on which such amount would otherwise be paid to the
Participant.

 

(c)

A Participant’s Company Contribution Account shall be credited with any Company
Contribution with respect to a fiscal year as of the first day of such fiscal
year or such other date as is determined by the Committee.

3.2          FICA AND OTHER TAXES. The Company shall withhold the Participant’s
share of FICA and any other employment taxes or other amounts required to be
withheld from or with respect to deferred amounts in such reasonable manner as
the Company deems appropriate.

3.3          CREDITING OF EARNINGS. In accordance with, and subject to, such
reasonable rules and procedures as may from time to time be established by the
Committee, amounts shall be credited to or debited from each subaccount in a
Participant’s Accounts in accordance with the following rules:

 

(a)

Measurement Funds. Each Participant shall have the right, from time to time, to
select those Measurement Funds in which his or her subaccounts shall be deemed
to be invested. If the Participant has not selected one or more Measurement
Funds, his or her subaccounts shall be deemed to be invested in the Vanguard
Prime Money Market Fund #0030. The Participant shall provide two business days’
notice to the Company prior to making any change in the deemed investment of his
or her subaccounts, but shall not in any event be permitted to make such changes
to the extent the Company would not be able to make corresponding changes to its
actual investment of funds, if any, it being understood that the Company shall
be under no obligation to invest funds in the same manner as any Participant’s
deemed investment of his or her subaccounts.

 

(b)

Crediting or Debiting Method. A Participant’s subaccounts shall be credited or
debited on a daily basis, based on the performance of the selected Measurement
Funds.

 

(c)

No Actual Investment. Notwithstanding any other provision of this Plan, the
Measurement Funds are to be used for measurement purposes only, and the
crediting or debiting of amounts to a Participant’s subaccounts shall not

 

 

 

6

be considered or construed in any manner (i) as an actual investment of his or
her subaccounts in any Measurement Fund, or (ii) as giving rise to the
segregation of funds for the Participant. In the event that the Company, in its
own discretion, decides to invest funds in any Measurement Fund, no Participant
shall have any rights in or to any such Measurement Fund. Without limiting the
foregoing, a Participant’s subaccounts shall at all times be bookkeeping entries
only and shall not represent any investment made on his or her behalf by the
Company; the Participant shall at all times remain an unsecured creditor of the
Company with respect to his or her entitlement to benefits hereunder.

ARTICLE 4

 

VESTING

A Participant shall be 100% vested at all times in his or her Salary Deferral
Account and Bonus Deferral Account. A Participant shall become vested in any
Company Contribution credited to his or her Company Contribution Account under
Section 3.1(c) (and any earnings credited with respect to such Contribution
under Section 3.3) on the earliest of: (i) the day before the first anniversary
of the crediting of such Company Contribution or such other date or dates
specified by the Committee at the time of determining the amount of such Company
Contribution; (ii) the Participant’s death or Disability while in employment
with the Company; (iii) the Participant’s retirement at or after attaining age
65 (or, if earlier, the Participant’s retirement under the Company’s qualified
defined benefit pension plan); or (iv) the occurrence of a Change in Control,
provided that in each case he or she continues in continuous employment with the
Company until such date. The unvested portion of a Participant’s Company
Contribution Account shall be forfeited upon Termination of Employment.

ARTICLE 5

 

PAYMENT OF BENEFITS

5.1          WITHDRAWAL PAYOUT FOR UNFORESEEABLE FINANCIAL EMERGENCY. If a
Participant experiences an Unforeseeable Financial Emergency, the Participant
may petition the Committee to receive a partial or full payout of his or her
Accounts, to the extent vested. The amount of the payout shall not exceed the
lesser of the vested portion of the Participant’s Accounts, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency (plus amounts
necessary to pay taxes reasonably anticipated as a result of the distribution),
after taking into account the extent to which the hardship is or may be relieved
through reimbursement or compensation by insurance or otherwise or by
liquidation of the Participant’s assets (to the extent the liquidation of such
assets would not itself cause severe financial hardship). The Committee shall
consider each such request in good faith. If the petition for a payout is
approved, such payout shall be made as promptly as reasonably practicable.

5.2          PAYMENT AT FIXED DATES. A Participant’s Account (or subaccount), to
the extent vested, shall be paid on the fixed date or dates specified by the
Participant in his or her election under Section 2.2(c)(i), if applicable.

 

 

 

7

5.3          PAYMENT UPON TERMINATION OF EMPLOYMENT. Upon Termination of
Employment, a Participant’s Account (or subaccount), to the extent vested, shall
be paid on the date or dates specified by the Participant in his or her election
under Section 2.2(c)(ii), if applicable; provided, however that if the Company’s
stock is then “publicly traded” within the meaning of Code Section 409A, any
amounts otherwise payable within six months of Termination of Employment (other
than by reason of death) shall be delayed until six months after Termination of
Employment.

5.4          PAYMENT UPON DEATH OR DISABILITY. Notwithstanding any payment
election under Section 2.2(c), upon death or Disability, a Participant’s
Accounts shall be paid in a single lump sum to the Participant or, in the case
of death, to his or her Beneficiary, as soon as practical following the date of
death or Disability.

5.5          PAYMENT UPON CHANGE IN CONTROL. Notwithstanding any payment
election under Section 2.2(c), upon a Change in Control, a Participant’s
Accounts shall be paid in a single lump sum to the Participant as soon as
practical following the date of such Change in Control; provided, however, that
if the Change in Control is not a permissible distribution event under Code
Section 409A, then the Participant’s Accounts (or subaccounts) shall be paid on
the date or dates specified by the Participant in his or her election under
Section 2.2(c) (or upon his or her death or Disability, if earlier).

ARTICLE 6

 

BENEFICIARY DESIGNATION

6.1          BENEFICIARY. Each Participant shall have the right, at any time, to
designate his or her Beneficiary (both primary as well as contingent) to receive
any benefits payable under the Plan upon the death of the Participant.
Designation of a Beneficiary other than a Participant’s surviving spouse or a
Participant’s estate shall not be effective unless consented to by the
Participant’s spouse in the manner required by the Committee. The Beneficiary
designated under this Plan may be the same as or different from the Beneficiary
designation under any other plan of the Company in which the Participant
participates.

6.2          BENEFICIARY DESIGNATION; CHANGE. A Participant shall designate his
or her Beneficiary by completing and signing the Beneficiary Designation Form,
and returning it to the Committee or its designated agent. A Participant shall
have the right to change a Beneficiary by completing, signing and otherwise
complying with the terms of the Beneficiary Designation Form and the Committee’s
rules and procedures, as in effect from time to time. Upon the acceptance by the
Committee of a new Beneficiary Designation Form, all Beneficiary designations
previously filed shall be cancelled. The Committee shall be entitled to rely on
the last Beneficiary Designation Form filed by the Participant and accepted by
the Committee prior to his or her death.

6.3          NO BENEFICIARY. If a Participant fails to designate a Beneficiary
as provided in Sections 6.1 and 6.2 above, or if all designated Beneficiaries
predecease the Participant or die prior to complete distribution of the
Participant’s benefits, then the Participant’s designated Beneficiary shall be
deemed to be his or her surviving spouse. If the Participant has no surviving

 

 

 

8

spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall
be payable to the Participant’s estate or otherwise as directed under any
applicable living trust or similar instrument of the Participant.

6.4          DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the
proper Beneficiary to receive payments pursuant to this Plan, the Committee
shall have the right, exercisable in good faith, to cause the Company to
withhold such payments until this matter is resolved to the Committee’s
satisfaction.

ARTICLE 7

TERMINATION, AMENDMENT OR MODIFICATION

The Committee or the Board may modify, amend or terminate the Plan at any time;
provided, however, that no such modification, amendment or termination shall
cancel, reduce or otherwise adversely affect the amount credited to a
Participant’s Account as of the date of such modification, amendment or
termination without the express written consent of such Participant; and
provided further, however, that the Committee or the Board may adopt such
modifications or amendments as may be necessary or desirable to facilitate the
administration, management or interpretation of the Plan or to conform the Plan
to the requirements of applicable law, including ERISA and the Code. In
connection with any termination of the Plan, the Committee or the Board may, in
its discretion, cause the distribution of the amounts deferred pursuant to the
Plan, subject to and in accordance with the requirements of Code Section 409A.

ARTICLE 8

ADMINISTRATION

8.1          COMMITTEE DUTIES. This Plan shall be administered by the Committee.
The Committee shall have the discretion and authority in good faith to (i) make,
amend, interpret, and enforce all appropriate rules and regulations for the
administration of this Plan and (ii) decide or resolve any and all questions,
including questions of fact and questions as to interpretations of this Plan, as
may arise in connection with the Plan.

8.2          AGENTS. In the administration of this Plan, the Committee may, from
time to time, employ agents and delegate to them such administrative duties as
it sees fit (including acting through a duly appointed representative) and may
from time to time consult with counsel who may be counsel to the Company.

8.3          INDEMNIFICATION OF COMMITTEE. The Company shall indemnify and hold
harmless each member of the Committee against any and all claims, losses,
damages, expenses or liabilities arising from any action or failure to act with
respect to this Plan.

 

 

 

9

ARTICLE 9

OTHER BENEFITS AND AGREEMENTS

9.1          COORDINATION WITH OTHER BENEFITS. The benefits provided for a
Participant and such Participant’s Beneficiary under the Plan are in addition to
any other benefits available to such Participant under any other plan or program
maintained by the Company. The Plan shall supplement and shall not supersede,
modify or amend any other such plan or program, except as may otherwise be
expressly provided.

ARTICLE 10

CLAIMS PROCEDURES

10.1       PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
“Claimant”) may deliver to the Committee a written claim for amounts
distributable to such Claimant under the Plan.

10.2       NOTIFICATION OF DECISION. The Committee shall consider a Claimant’s
claim within a reasonable time, and shall notify the Claimant in writing:

 

(a)

that the Claimant’s claim has been allowed in full; or

 

(b)

that the Committee has denied such claim, in whole or in part, in which case
such notice shall set forth in a manner reasonably calculated to be understood
by the Claimant:

 

(i)

the specific reason(s) for the denial of the claim, or any part of it;

 

(ii)

specific reference(s) to pertinent provisions of the Plan upon which such denial
was based;

 

(iii)

a description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and

 

(iv)

an explanation of the claim review procedure set forth in Section 10.3 below.

10.3       REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice
from the Committee that a claim has been denied, in whole or in part, a Claimant
(or the Claimant’s duly authorized representative) may file with the Committee a
written request for a review of the denial of the claim. Thereafter, but not
later than 60 days after the review procedure began, the Claimant (or the
Claimant’s duly authorized representative):

 

(a)

may review pertinent documents;

 

(b)

may submit written comments or other documents; and/or

 

 

 

10

 

(c)

may request a hearing, which the Committee, in its sole discretion, may grant.

10.4       DECISION ON REVIEW. The Committee shall render its decision on review
promptly, and not later than 60 days after the filing of a written request for
review of the denial, unless a hearing is held or other special circumstances
require additional time, in which case the Committee’s decision must be rendered
within 120 days after such date. Such decision must be written in a manner
calculated to be understood by the Claimant, and it must contain:

 

(a)

specific reasons for the decision;

 

(b)

specific reference(s) to the pertinent Plan provisions upon which the decision
was based; and

 

(c)

such other matters as the Committee deems relevant.

10.5       LEGAL ACTION. A Claimant’s compliance with the foregoing provisions
of this Article 10 is a mandatory prerequisite to a Claimant’s right to commence
any legal action with respect to any claim for benefits under this Plan.

ARTICLE 11

MISCELLANEOUS

11.1       UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
heirs, successors and assigns shall have no legal or equitable rights, interests
or claims in any property or assets of the Company. Any and all of the Company’s
assets shall be, and remain, the general, unpledged unrestricted assets of the
Company. The Company’s obligation under the Plan shall be merely that of an
unfunded and unsecured promise to pay money in the future.

11.2       COMPANY’S LIABILITY. The Company’s liability for the payment of
benefits shall be defined only by the Plan and any elections made by the
Participant pursuant to the Plan. The Company shall have no obligation to a
Participant or any other person under the Plan except as expressly provided in
the Plan and any such election.

11.3       NONASSIGNABILITY. Neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate, alienate or convey in advance of
actual receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be, nonassignable
and non-transferable, except that the foregoing shall not apply to any family
support obligations set forth in a “domestic relations order” under Code Section
414(p)(1)(B). No part of the amounts payable shall, prior to actual payment, be
subject to seizure, attachment, garnishment or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency.

11.4       FURNISHING INFORMATION. A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take

 

 

 

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such other actions as may reasonably be requested in order to facilitate the
administration of the Plan and the payments of benefits hereunder.

11.5       TERMS. Whenever any words are used herein in the masculine, they
shall be construed as though they were in the feminine in all cases where they
would so apply; and whenever any words are used herein in the singular or in the
plural, they shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so apply.

11.6       CAPTIONS. The captions of the articles, sections and paragraphs of
this Plan are for convenience only and shall not control or affect the meaning
or construction of any of its provisions.

11.7       GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
construed and interpreted according to the laws of Delaware without regard to
its conflicts of laws principles.

11.8       NOTICE. Any notice or filing required or permitted to be given to the
Committee under this Plan shall be sufficient if in writing and hand-delivered,
sent by registered or certified mail, or sent by facsimile or e-mail to the
address below:

General Counsel

Pathmark Stores, Inc.

200 Milik Street

Carteret, NJ 07008

Facsimile Number: 732-499-6891

E-mail Address: mstrassler@pathmark.com

Such Notice shall be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark on the receipt for
registration or certification.

Any notice or filing required or permitted to be given to a Participant under
this Plan shall be sufficient if in writing and hand-delivered, sent by mail or
sent by facsimile or e-mail, to the last known address of the Participant.

11.9       SUCCESSORS. This Plan and all rights of each Participant hereunder
shall inure to the benefit of and be enforceable by the Participant’s
Beneficiary, personal or legal representatives, or estate, to the extent any
such person succeeds to the Participant’s interests under this Plan. No rights
or obligations of the Company under this Plan may be assigned or transferred
except that the Company shall use its best efforts to require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company expressly
to assume and agree to perform the Company’s obligations under this Plan in the
same manner and to the same extent that the Company would have been required to
perform them if no such succession had taken place. As used in this Plan, the
“Company” shall mean both the Company as defined above and any successor to its
business and/or assets (by merger, purchase or otherwise) which executes and
delivers the agreement provided for in this Section 11.9 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law or otherwise.

 

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11.10     SPOUSE’S INTEREST. The interest in the benefits hereunder of a spouse
of a Participant who has predeceased the Participant shall automatically pass to
the Participant and shall not be transferable by such spouse in any manner,
including but not limited to such spouse’s will, nor shall such interest pass
under the laws of intestate succession.

11.11     VALIDITY; NO WAIVER. In the event that any provisions of this Plan
shall be illegal or invalid for any reason, said illegality or invalidity shall
not affect the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been inserted herein.
The failure of the Company or any Participant to insist upon strict compliance
with any provisions of, or to assert any right under, this Plan shall not be
deemed to be a waiver of such provision or right or of any other provision of or
right under this Plan.

11.12     INCOMPETENT. If the Committee determines in its discretion that a
benefit under this Plan is to be paid to a minor, a person declared incompetent
or to a person incapable of handling the disposition of that person’s property,
the Committee may direct payment of such benefit to the guardian, legal
representative or person having the care and custody of such minor, incompetent
or incapable person. The Committee may require proof of minority, incompetency,
incapacity or guardianship, as it may deem appropriate, prior to distribution of
the benefit. Any payment of a benefit shall be a payment for the account of the
Participant or the Participant’s Beneficiary, as the case may be, and shall be a
complete discharge of any liability under the Plan for such payment amount.

11.13     DISTRIBUTION IN THE EVENT OF TAXATION. If, for any reason, all or any
portion of a Participant’s benefit under this Plan becomes taxable to the
Participant prior to receipt, the Company shall promptly distribute to the
Participant, to the extent permitted under Code Section 409A, immediately
available funds in an amount equal to the taxable portion of his or her benefit
(which amount shall not exceed the Participant’s unpaid vested Accounts under
the Plan).

11.14     TAXES AND WITHHOLDING. The Company shall withhold from any
distribution or other payment under this Plan any and all employment and income
taxes that are required to be withheld under applicable law.

IN WITNESS WHEREOF, the undersigned has executed this Plan document on behalf of
the Company this 26th day of September, 2006, effective as of August 29, 2005.

 

PATHMARK STORES, INC.

a Delaware corporation

 

By: /s/ Frank G. Vitrano
      Frank G. Vitrano

 

Title: President and Chief Financial Officer

 

 

 

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