Exhibit 10.4

 

Pathmark Stores, Inc.
200 Milik Street
Carteret, New Jersey 07008

 

August 23, 2005

 

Mr. John T. Standley
2849 Myrtle Drive
Mechanicsburg, PA 17055

 

Award Agreement

 

Dear Mr. Standley:

 

Pursuant to and subject to the terms and conditions set forth in this award
agreement (“Award Agreement”), Pathmark Stores, Inc. (the “Company”) hereby
grants you effective as of the Effective Date an award of restricted stock
(“Award”) consisting of the number of restricted shares of Common Stock set
forth below.  Terms not defined in this Award Agreement, but defined in the
Employment Agreement dated August 23, 2005, between you and the Company
(the “Employment Agreement”), shall have the meaning set forth in the Employment
Agreement.

 

1.                                       Award.  Your Award shall consist of
500,000 shares of Common Stock (the “Award Shares”), which shall be subject to
the forfeiture and transfer restrictions set forth in this Award Agreement.  The
Award is granted without the approval of the Company’s stockholders in reliance
on Nasdaq Marketplace Rule 4350(i)(1)(A)(iv) and shall not be subject to the
Company’s 2000 Employee Equity Plan.  Except as otherwise expressly provided
herein, you shall possess all incidents of ownership of the Award Shares granted
hereunder.

 

2.                                       Vesting.  Subject to the other terms
and conditions of the Award Agreement and your continued employment with the
Company on the applicable vesting date, your Award Shares shall vest and the
restrictions under the Award shall lapse as to (a) 41,850 shares on the
three-month anniversary of the Effective Date and (b) 458,150 shares in eleven,
equal quarterly installments of 41,650 shares commencing on the six-month
anniversary of the Effective Date.

 

3.                                       Termination of Employment; Change in
Control.

 

(a)                                  In the event that your employment with the
Company is terminated by reason of your Involuntary Termination, your Award
shall be considered fully vested and, to the extent previously unvested, the
restrictions shall lapse in full.  Upon termination of your employment for any
reason other than your Involuntary Termination, the unvested portion of your
Award shall be forfeited, except that, in the event of your death or Disability,
you shall vest

 

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pro rata in the portion of the Award Shares that are scheduled to vest on the
last day of the vesting quarter in which your employment ends as a result of
your death or Disability.

 

(b)                                 In the event of a Change in Control, your
Award shall become fully vested immediately prior thereto.

 

(c)                                  In the event of a transaction described in
clause (vii) of the definition of Good Reason in the Employment Agreement
(whether or not Yucaipa has a controlling interest within the meaning of such
clause), your Award shall become fully vested immediately prior to such
transaction.

 

4.                                       Compliance with Securities Laws.

 

(a)                                  The sale or disposition of Award Shares
must comply with all applicable laws and regulations governing your Award, and
such shares may not be sold or disposed of if the Company reasonably determines
in good faith that it would not be in material compliance with such laws and
regulations.

 

(b)                                 The Company represents and warrants to you
that on or prior to the Effective Date all actions necessary to exempt the grant
of your Award under Rule 16b-3(d) under the Exchange Act have been taken by the
Company.

 

5.                                       Transferability.  Award Shares are not
transferable by you prior to the lapsing of restrictions on the applicable Award
Shares otherwise than (i) to or from a Permitted Transferee, (ii) to a
designated beneficiary upon death or (iii) by will or the laws of descent and
distribution.  No other assignment or transfer of all or any part of the Award
Shares, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise, shall vest in the assignee or transferee any
interest or right herein whatsoever and no assignment or transfer of all or any
part of the Award Shares to a Permitted Transferee shall be given effect unless
such Permitted Transferee acknowledges in a writing satisfactory to the Company
that the applicable Award Shares remains subject to the provisions of this Award
Agreement and the Employment Agreement.  For purposes of this Award Agreement,
“Permitted Transferee” shall mean (i) any member of your immediate family and
(ii) any living trust or other entity established by your or any Permitted
Transferee for estate planning purposes.  By way of clarification, transfers of
the Award Shares shall be permitted from any Permitted Transferee to you or
between Permitted Transferees.

 

6.                                       Not a Service Contract.  Your Award is
not an employment or service contract, and nothing therein shall be deemed to
create in any way whatsoever any obligation on your part to continue in the
employ of the Company or one of its subsidiaries, or of the Company or any of
its subsidiaries to continue your employment.  In addition, nothing herein shall
obligate you or the Company or any of its subsidiaries, their respective
shareholders, Boards of Directors, officers or employees to continue any
relationship that you might have as a director, advisor or consultant for the
Company or its subsidiaries.

 

7.                                       Withholding.  You may satisfy any
applicable tax withholding obligation relating to the vesting of your Award by
any of the following means or by a combination of such means:  (a) tendering a
cash payment; (b) authorizing the Company to sell shares subject to your

 

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Award (but no more than the minimum required withholding liability); or
(c) delivering to the Company owned and unencumbered shares of Common Stock
that, in the case of shares acquired previously from the Company, you have owned
for at least six months prior to such delivery.

 

8.                                       Notices.  Any notices in connection
herewith shall be given in the manner contemplated under the Employment
Agreement.

 

9.                                       Employment Agreement.  Your Award is
subject to and conditional in all respects on the effectiveness of the
Employment Agreement and shall be void ab initio and without force and effect in
the event that any condition to such effectiveness is not met.  In the event of
any conflict between the provisions of this Award Agreement and those of the
Employment Agreement, the provisions of this Award Agreement shall control.

 

10.                                 Governing Law.  The validity,
interpretation, construction and performance of this Award Agreement shall be
governed by the laws of the State of Delaware applicable to contracts entered
into and performed in such state.

 

11.                                 Section 409A.  Your Award is intended not to
provide for a “deferral of compensation” within the meaning of Section 409A, and
this Award Agreement shall be interpreted consistent with such intent.  If any
provision of this Award Agreement causes your Award to be subject to the
requirements of Section 409A, or could otherwise cause you to be subject to tax
or the interest and penalties under Section 409A, such provision shall be
modified to maintain, to the maximum extent practicable, the original intent of
the applicable provision without violating the requirements of Section 409A and
the Company agrees to modify such provisions in such manner.

 

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Please indicate your acceptance of the foregoing by signing and dating where
indicated below.

 

 

 

Sincerely,

 

 

 

/s/ James L. Moody, Jr.

 

 

 

 

James L. Moody, Jr.

 

Chairman of the Board of Directors

 

 

Acknowledged and Agreed as of this 23rd day of August 2005.

 

 

/s/ John T. Standley

 

John T. Standley

 

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