Document:

Exhibit 10.3

 

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 date first set forth above a stock option (“Stock Option”) to purchase the number of
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.                                       Stock
Option.  Your Stock Option shall
entitle you to purchase an aggregate of 1,500,000 shares of Common Stock (“Option Shares”) at an exercise price per
share (“Exercise Price”) equal to
$10.39.  The Stock Option 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.  The
Stock Option is a not an “incentive stock option” within the meaning of Section 422
of the Code.  The number of Option Shares
and the Exercise Price shall be subject to adjustment as provided in Section 8
below.  The Company shall reserve for
issuance a sufficient number of shares of Common Stock to permit exercise of
the Stock Option in full.

 

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 Stock Option shall vest and become exercisable in
three equal, annual installments of 500,000 Option Shares each on each of the
first three anniversaries of the Effective Date.  Vesting of your Stock Option may be
accelerated in accordance with the Section 5 below.

 

3.                                       Compliance
with Securities Laws.

 

(a)                                  The
exercise of your Stock Option must comply with all applicable laws and
regulations governing the Stock Option, and the Stock Option may not be
exercised if the

 

A-1

 

Company reasonably
determines in good faith that the exercise 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 Stock Option under Rule 16b-3(d) under
the Exchange Act have been taken by the Company.

 

4.                                       Option
Term.  Subject to the other terms and
conditions of this Award Agreement, the term of your Stock Option shall
commence on the Grant Date and shall expire on the tenth anniversary thereof
(the “Expiration Date”).

 

5.                                       Termination
of Employment; Change in Control.

 

(a)                                  In
the event that your employment with the Company is terminated by reason of your
Involuntary Termination, except as otherwise expressly provided in this Section 5,
your Stock Option shall be considered vested and shall remain exercisable as
set forth below:

 

(i)  if the Date of Termination occurs prior
to the first anniversary of the Effective Date, your Stock Option shall be
considered vested as to 1,000,000 shares of Common Stock and unvested as to
500,000 shares of Common Stock, the vested portion of your Stock Option shall
remain exercisable until the third anniversary of the Date of Termination and
the unvested portion of your Stock Option shall be forfeited;

 

(ii)  if the Date of Termination occurs on
or after the first anniversary of the Effective Date and prior to the second
anniversary of the Effective Date, your Stock Option shall be fully vested and
shall remain exercisable (to the extent not previously exercised) as to 500,000
shares of Common Stock until the Expiration Date and as to 1,000,000 shares of
Common Stock until the third anniversary of the Date of Termination;

 

(iii)  if the Date of Termination occurs on
or after the second anniversary of the Effective Date and prior to the third
anniversary of the Effective Date, your Stock Option shall be fully vested and
shall remain exercisable (to the extent not previously exercised) as to
1,000,000 shares of Common Stock until the Expiration Date and as to 500,000
shares of Common Stock until the third anniversary of the Date of Termination;
and

 

(iv)  if the Date of Termination occurs (A) on
or after the third anniversary of the Effective Date, (B) on or after a
Change in Control, or (C) within six months prior to a Change in Control
and such Involuntary Termination prior to the Change in Control was requested
by a party to, or was otherwise in connection with, the Change in Control, your
Stock Option shall be fully vested and shall remain exercisable (to the extent
not previously exercised) until the Expiration Date.

 

In the event that you
resign from your employment with the Company without Good Reason and the Date
of Termination is prior to the third anniversary of the Effective Date, the
vested portion of your Stock Option shall remain exercisable until the end of
the 90-day period following the Date of Termination and the unvested portion of
your Stock Option shall be forfeited.  In
the event that your employment with the Company is terminated by reason of your
death or

 

A-2

 

Disability and the Date
of Termination is prior to the third anniversary of the Effective Date, except
as otherwise expressly provided in this Section 5, the vested portion of
your Stock Option on the Date of Termination shall remain exercisable until the
Expiration Date, and the unvested portion of your Stock Option shall be
forfeited.  In the event that your
employment with the Company is terminated for any reason other than your
termination for Cause and the Date of Termination is on or following the third
anniversary of the Effective Date, your Stock Option shall be fully vested and,
except as otherwise expressly provided in this Section 5, shall remain
exercisable until the Expiration Date. 
Upon termination of your employment by the Company for Cause, the vested
and unvested portion of your Stock Option shall be forfeited.

 

(b)                                 In
the event of a Change in Control, your Stock Option shall become fully vested
immediately prior thereto; provided,
however, that the Compensation Committee of the Board (the “Committee”) may elect in its sole
discretion prior to a Change in Control not to vest your Stock Option in
connection with such Change in Control if (i) it reasonably determines in
good faith that not accelerating the unvested portion of your Stock Option is
necessary or advisable to consummate the Change in Control, (ii) immediately
following the Change in Control you are the Chief Executive Officer and you are
the most senior officer of the surviving corporation in the Change in Control
(other than any non-executive chairman of the surviving corporation’s board of
directors), which surviving corporation is at least comparable in size to the
Company immediately prior to the Change in Control and any related
transactions, (iii) such surviving corporation has a publicly traded class
of common stock and (iv) either (A) the Company is the surviving
corporation in the Change in Control or (B) your Stock Option is assumed
or replaced by such surviving corporation; provided
further that if the Committee so elects not to vest the unvested
portion of your Stock Option in connection with a Change in Control, subject to
the other terms and conditions of this Award Agreement and your continued
employment with the Company on the applicable vesting date, the portion of your
Stock Option that is unvested after the date of the Change in Control shall
become fully vested on the six-month anniversary of the Change in Control or,
if earlier, in accordance with the other, applicable vesting provisions of this
Award Agreement.

 

(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 Stock Option
shall become fully vested immediately prior to such transaction.

 

(d)                                 Notwithstanding
anything in this Award Agreement or the Employment Agreement to the contrary,
in the event of any merger or consolidation of the Company or other transaction
following which either the Company is not the surviving corporation or the
Common Stock ceases to be publicly traded, the Committee shall provide for:

 

(i)  the substitution by the surviving
corporation or the Company’s parent corporation for your outstanding Stock
Option of stock option(s) on the same terms as your Stock Option, and which
preserve(s) the economic value to you of your outstanding Stock Option; or

 

(ii)  where all of the holders of the then
outstanding Common Stock (other than Yucaipa) receive payment in cash or cash
equivalents in consideration for such Common

 

A-3

 

Stock,
the cancellation of your Stock Option upon payment to you of a per share amount
in cash or cash equivalents equal to (A) the highest price paid for a
share of Common Stock in such transaction, minus (B) the exercise price of
your Stock Option.

 

6.                                       Exercise
of Stock Option.  You may exercise
your Stock Option, to the extent vested, in whole or in part during its term by
delivering a written notice of exercise (in a form designated by or otherwise
reasonably acceptable to the Company) together with the exercise price to the
Secretary of the Company, or to such other person as the Company may designate,
during regular business hours, together with such additional documents as the
Company may then require.  The Stock
Option may be exercised for whole shares of Common Stock only.  Payment of the exercise price is due in full
upon exercise of all or any part of your Stock Option.  You may elect to make payment of the exercise
price to the Company (i) by cash or check, (ii) by delivery of other
shares of Common Stock with a value equal to the exercise price that, in the
case of shares acquired previously from the Company, have been owned by you for
at least six months on the date of delivery, or (iii) a combination of any
of (i) and (ii).  At your
discretion, subject to reasonable procedures adopted by the Committee, the
Stock Option may also be exercised on a cashless basis through a broker,
whereby irrevocable instructions are delivered to the broker to sell that
number of shares equal in value to the aggregate Exercise Price of the Option
Shares with respect to which the Stock Option is then being exercised and pay
the proceeds to the Company.  As soon as
reasonably practicable after receipt of such notice of exercise and full
payment of the applicable Exercise Price and any required tax withholding,
consistent with the regular settlement policy and procedures of the Company,
the Company shall issue or transfer to you the number of Option Shares with
respect to which your Stock Option is exercised, less any Option Shares
withheld in accordance with Section 10 below.

 

7.                                       Transferability.  Your Stock Option is not transferable by you
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, and is exercisable during your lifetime only by you or a
Permitted Transferee (or, in the event of your or a Permitted Transferee’s
adjudicated incapacity, your or Permitted Transferee’s personal
representative).  No other assignment or
transfer of all or any part of the Stock Option, 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 Stock Option
to a Permitted Transferee shall be given effect unless such Permitted
Transferee acknowledges in a writing satisfactory to the Company that the Stock
Option (and any Option Shares acquired pursuant thereto) 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 Stock Option shall be permitted from any Permitted Transferee to
you or between Permitted Transferees.

 

8.                                       Adjustments.  In the event of any change in the outstanding
Common Stock by reason of any stock dividend or split, reverse stock split,
recapitalization, reorganization, merger, consolidation, spin-off, combination,
exchange of shares or other corporate change, or any distributions to common
shareholders other than regular cash dividends, the Committee shall make such
substitutions in or adjustments to the number and/or kind of

 

A-4

 

shares or Option Shares or other property subject to,
and the Exercise Price of, your Stock Option as the Committee shall reasonably
determine in good faith to be equitable under the circumstances of such change
to maintain the benefit to you of your Stock Option.

 

9.                                       Not
a Service Contract.  Your Stock
Option 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
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.

 

10.                                 Withholding.  You may satisfy any applicable tax
withholding obligation relating to the exercise or acquisition of Common Stock
under your Stock Option by any of the following means or by a combination of
such means:  (a) tendering a cash
payment; (b) authorizing the Company to withhold shares from the shares of
Common Stock otherwise deliverable to you as a result of the exercise of your
Stock Option (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.

 

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

 

12.                                 Employment
Agreement.  Your Stock Option 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.

 

13.                                 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.

 

14.                                 Section 409A.  Your Stock Option 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 Stock Option 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.

 

A-5

 

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

  
				

 

A-6Exhibit 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

 

B-1

 

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

 

B-2

 

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.

 

B-3

 

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

  
				

 

B-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]