Exhibit 10.4

Performance Shares

Management Grant

CORE-MARK HOLDING COMPANY, INC.

July 2, 2007

 

 

              

 

              

 

              

 

              

 

  Re: Grant of Performance Shares

Dear                     :

Core-Mark Holding Company, Inc., a Delaware corporation (the “Company”), is
pleased to advise you that, pursuant to the Company’s 2007 Long-Term Incentive
Plan (the “Plan”), the Board has granted to you an award (the “Maximum Award”)
of                      performance share units (the “Performance Shares”),
effective as of July 2, 2007 (the “Date of Grant”), subject to the terms and
conditions set forth in this letter agreement (the “Grant Agreement”). Any
capitalized terms used herein and not defined herein have the meanings set forth
in the Plan.

1. Vesting; Determining the Number of Performance Shares Earned.

(a) The Performance Shares are unearned and unvested as of the Date of Grant.
You may earn and be entitled to a percentage (up to 100%) of your Maximum Award
based on the Company’s achievement of performance goals, as determined by the
Committee, for the six month period commencing on the Date of Grant and ending
on December 31, 2007 (the “Performance Period”). The number of Performance
Shares that will vest at the end of the Performance Period shall be equal to
(i) your Maximum Award multiplied by (ii) the corresponding percentage listed
under each of the highest performance goals achieved for Revenue, New Business
and Return On Net Assets (RONA), respectively, as set forth on Exhibit A
attached hereto. If none of the performance goals set forth on Exhibit A are
achieved during the Performance Period, no Performance Shares shall vest.
Notwithstanding the above and except as otherwise provided in Section 1(b)
below, in the event your employment with, or performance of service for, the
Company or any Subsidiary terminates prior to December 31, 2007, your
Performance Shares will be forfeited and terminate automatically upon your date
of termination of employment.

(b) Notwithstanding Section 1(a) above or any other provision hereof to the
contrary:

(i) in the event that you cease to be a director, officer or employee of, or to
perform other services for, the Company or any Subsidiary due to your death,
Disability or Retirement before December 31, 2007, the Performance Shares shall
thereupon vest on a pro-rata basis based on the ratio of (A) the number of
complete months beginning on Date of Grant and ending on the date of your
termination of employment to (B) six (6);

--------------------------------------------------------------------------------

(ii) in the event that there is a Public Change in Control (as defined herein)
following such Public Change in Control, your employment with the Company is
terminated by the Company without Cause or you resign from your employment with
the Company for Good Reason prior to the Delivery Date, your Maximum Award (if
outstanding) shall become fully vested and nonforfeitable on the date of such
termination of employment or resignation; or

(iii) in the event that there is a Non-Public Change in Control (as defined
herein), your Maximum Award shall become fully vested and nonforfeitable on the
date of such Non-Public Change in Control.

For purposes of this Grant Agreement:

“Cause” means as defined in the Plan except that the words “that has caused
demonstrable and serious injury to the Company or a Subsidiary, monetary or
otherwise” shall be added to the end of clauses (iii), (iv) and (v) of such
definition.

“Good Reason” means the resignation of a Participant following the occurrence of
(i) a material reduction in the scope of the Participant’s authorities, duties
or responsibilities, (ii) a material reduction in the Participant’s salary and
benefits (other than benefits under programs that apply to all similarly
situated employees or employees of the Company in general) or (iii) a change in
the principal work location of Participant of more than 50 miles.

“Public Change in Control” means any Change in Control (as defined in the Plan)
if, upon the consummation of such Change in Control, the Shares available for
issuance under the Plan and the Awards issued thereunder (or other securities to
be issued in lieu of Shares as a result of such Change in Control) are publicly
traded on the Toronto Stock Exchange, a U.S. national securities exchange
(including the NASDAQ Stock Market), the OTC Bulletin Board or the OTC Pink
Sheets.

“Non-Public Change in Control” means a Change in Control, as defined in the
Plan, that is not a Public Change in Control as defined above.

2. Dividend Equivalents. You shall have the right to receive accumulated cash
dividends and other distributions paid during the Performance Period with
respect to a corresponding number of shares of Common Stock underlying each
vested Performance Share that is earned during a Performance Period on the date
the underlying shares are issued.

3. Rights as Stockholder. Except as provided in Section 2 above, you shall not
have voting or any other rights as a stockholder of the Company with respect to
the Performance Shares. Upon the conversion of the vested Performance Shares
into shares of Common Stock, you shall obtain full voting and other rights as a
stockholder of the Company.

4. Stock Certificates.

(a) At the end of each Performance Period (the “Delivery Date”), upon
certification by the Committee of the level of performance achieve with respect
to each performance goal you shall be entitled to receive, upon payment by you
to the Company of the aggregate par value of the shares of Common Stock
underlying each vested Performance Share, stock certificates (the
“Certificates”) evidencing the conversion of each vested Performance Shares into
one share of Common Stock. The Certificates shall be issued to you as of the
Delivery Date and registered in your name. Certificates representing the
unrestricted shares of Common Stock will be delivered to you as soon as
practicable after the Delivery Date.

 

2

--------------------------------------------------------------------------------

5. Withholding of Taxes.

(a) Participant Election. Unless otherwise determined by the Committee, you may
elect to deliver shares of Common Stock (or have the Company withhold shares of
Common Stock deliverable in connection with the vested Performance Shares) to
satisfy, in whole or in part, the amount the Company is required to withhold for
taxes in connection with the settlement of the vested Performance Shares
pursuant to this Grant Agreement. Such election must be made on or before the
date the amount of tax to be withheld is determined. Once made, the election
shall be irrevocable. The fair market value of the shares to be withheld or
delivered will be the Fair Market Value as of the date the amount of tax to be
withheld is determined.

(b) Company Requirement. The Company, to the extent permitted or required by
law, shall have the right to deduct from any payment of any kind (including
salary or bonus) otherwise due to you, an amount equal to any federal, state or
local taxes of any kind required by law to be withheld in connection with the
settlement of the vested Performance Shares pursuant to this Grant Agreement
and/or may require you to otherwise make adequate provision for payment to the
Company of such taxes.

6. Transferability of Performance Shares. You may transfer the Performance
Shares granted hereunder only in accordance with the terms of the Plan.

7. Conformity with Plan. The Performance Shares are intended to conform in all
respects with, and are subject to all applicable provisions of, the Plan (which
is incorporated herein by reference). Inconsistencies between this Grant
Agreement and the Plan shall be resolved in accordance with the terms of the
Plan. By executing and returning the enclosed copy of this Grant Agreement, you
acknowledge your receipt of this Grant Agreement and the Plan and agree to be
bound by all of the terms of this Grant Agreement and the Plan.

8. Rights of Participants. Nothing in this Grant Agreement shall interfere with
or limit in any way the right of the Company to terminate your employment or
other performance of services at any time (with or without Cause), nor confer
upon you any right to continue in the employ or as a director or officer of, or
in the performance of other services for, the Company or a Subsidiary for any
period of time, or to continue your present (or any other) rate of compensation
or level of responsibility. Nothing in this Grant Agreement shall confer upon
you any right to be selected again as a Plan Participant, and nothing in the
Plan or this Grant Agreement shall provide for any adjustment to the number of
Performance Shares upon the occurrence of subsequent events except as provided
in the Plan.

9. Amendment. The terms of the Performance Shares may be amended from time to
time by the Committee in its discretion in any manner that it deems appropriate;
provided that, except as otherwise provided in Section 16 (Amendment or
Substitution of Awards under the Plan) of the Plan, no such amendment shall
adversely affect in a material manner any of your rights under this Grant
Agreement without your written consent.

 

3

--------------------------------------------------------------------------------

10. Relation to Other Benefits. Any economic or other benefit to you under this
Grant Agreement or the Plan shall not be taken into account in determining any
benefits to which you may be entitled under any profit-sharing, retirement or
other benefit or compensation plan maintained by the Company or a Subsidiary and
shall not affect the amount of any life insurance coverage available to any
beneficiary under any life insurance plan covering employees of the Company or a
Subsidiary.

11. Successors and Assigns. Except as otherwise expressly provided herein, all
covenants and agreements contained in this Grant Agreement by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and permitted assigns of the parties hereto whether so expressed or
not.

12. Severability. Whenever possible, each provision of this Grant Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Grant Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Grant Agreement.

13. Counterparts. This Grant Agreement may be executed simultaneously in two or
more counterparts, each of which shall constitute an original, but all of which
taken together shall constitute one and the same Grant Agreement.

14. Descriptive Headings. The descriptive headings of this Grant Agreement are
inserted for convenience only and do not constitute a part of this Grant
Agreement.

15. Governing Law. THE VALIDITY, CONSTRUCTION, INTERPRETATION, ADMINISTRATION
AND EFFECT OF THE PLAN, AND OF ITS RULES AND REGULATIONS, AND RIGHTS RELATING TO
THE PLAN AND TO THIS GRANT AGREEMENT, SHALL BE GOVERNED BY THE SUBSTANTIVE LAWS,
BUT NOT THE CHOICE OF LAW RULES, OF THE STATE OF DELAWARE.

16. Notices. All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Grant Agreement shall be
in writing and shall be deemed to have been given when (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent by facsimile or (iv) sent by reputable overnight
courier, to the recipient. Such notices, demands and other communications shall
be sent to you at the address specified in this Grant Agreement and to the
Company at 395 Oyster Point Blvd., Suite 415, South San Francisco, CA 94080,
Attn: Employee and Corporate Services, or to such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party.

17. Entire Agreement. This Grant Agreement and the terms of the Plan constitute
the entire understanding between you and the Company, and supersede all other
agreements, whether written or oral, with respect to your grant of the
Performance Shares.

* * * * *

 

4

--------------------------------------------------------------------------------

Signature Page to Performance Share Grant Agreement

Please execute the extra copy of this Grant Agreement in the space below and
return it to the Company to confirm your understanding and acceptance of the
agreements contained in this Grant Agreement.

 

Very truly yours, CORE-MARK HOLDING COMPANY, INC. By:  

 

Name:   Henry J. Hautau Title:   Vice President, Employee & Corporate Services

 

Enclosures:  

1.      Extra copy of this Grant Agreement

 

2.      Copy of the Plan attached hereto as Exhibit B

The undersigned hereby acknowledges having read this Grant Agreement and the
Plan and hereby agrees to be bound by all provisions set forth herein and in the
Plan.

 

Dated as of     GRANTEE

 

       

 

    Name:

 

5