Agreement

Exhibit 10.1

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

December 14, 2005

Mr. Kenneth Martindale
5 South 500 West, Unit 1115
Salt Lake City, Utah 84101

Employment Agreement

Dear Mr. Martindale:

     The following sets forth the agreement (“ Agreement ”) between Pathmark Stores, Inc. (the “ Company ”) and you regarding the terms and provisions of your employment as Co-President and Chief Marketing and Merchandising Officer of the Company. Capitalized words not otherwise defined herein shall have the meanings set forth in Section 7 below.

          1. Term of Employment . The term of your employment under this Agreement, including extensions hereof (the “ Term ”), shall commence on January 1, 2006 (the “ Effective Date ”) and shall continue until December 31, 2008. The Term shall automatically renew for successive one-year periods, subject to written notice of non-renewal by either party at least 90 days prior to expiration of the then Term. Subject to the provisions of Section 4 below, either party may terminate your employment under this Agreement at any time.

          2. Title and Duties . During the Term, you shall be employed as the Co-President and Chief Marketing and Merchandising Officer of the Company and shall report directly to the Chief Executive Officer of the Company. Your duties and responsibilities to the Company shall be consistent in all respects with the position of Co-President and Chief Marketing and Merchandising Officer. You shall devote substantially all of your business time, attention, skills and efforts exclusively to the business and affairs of the Company; provided that, to the extent consistent with performing your duties hereunder, you may spend a reasonable amount of time in Utah to manage your personal finances and your real estate related businesses, and can engage in charitable or community services, serve on industry, civic or charitable boards and committees, serve as nonexecutive Chairman of Intesource, Inc. and, subject to the prior written approval of the Chief Executive Officer (which approval will not be unreasonably withheld), serve on the boards of corporations and other for-profit entities. Your principal place of employment shall be the executive offices of the Company in the Carteret, New Jersey area, although you understand and agree that you will be required to travel from time to time for business purposes.

          3. Compensation and Benefits .

          (a) Annual Salary . As compensation to you for all services rendered to the Company, the Company will pay you an annual base salary ( “ Annual Salary ”) during the Term at the rate of $500,000 per annum. Your Annual Salary shall be reviewed annually by the Board of Directors of the Company, or appropriate Committee thereof (the “Board”) and may be increased but not decreased by the Board on the basis of such review. Your Annual Salary will be paid to you in accordance with the Company’s regular payroll practices applicable to its executive officers (but in no event less frequently than monthly). For no additional consideration, you shall serve as an officer and/or director of any of the Company’s subsidiaries consistent with your position as Co-President and Chief Marketing and Merchandising Officer.

          (b) Annual Bonus . During the Term, you shall be eligible to earn an annual bonus (“ Annual Bonus ”) pursuant to the Company’s Executive Incentive Plan. For each full fiscal year of the Company during the Term your target Annual Bonus shall equal 100% of your Annual Salary, at the rate in effect at the beginning of the fiscal year (except that your average annual rate of Annual Salary for the fiscal year shall be substituted for the rate in effect at the start of the fiscal year to the extent that the use of such average rate will not, in the reasonable, good faith judgment of the Company, prevent such Annual Bonus from qualifying as performance-based compensation under Section 162(m) of the Code). Annual Bonus targets and adjustments for performance above and below the target will be reasonably set by the Board in good faith after consultation with the Chief Executive Officer, such matrix to provide that the Annual Bonus will increase above the target of 100% for performance above target. Your target Annual Bonus for each partial fiscal year during the Term shall be prorated based on the number of days in such fiscal year occurring during the Term (including any partial fiscal year ending at the expiration of the Term due to a non-renewal by either party, in which case the Annual Bonus shall be calculated based on performance through the Date of Termination). The Annual Bonus for each year, if earned, shall be paid to you in cash within 75 days of the end of the applicable fiscal year.

          (c) Equity Awards . The Company shall grant you the following equity awards (“ Equity Awards”):

The Company shall be under no obligation to grant any additional equity awards to you. The Company shall promptly register with the Securities and Exchange Commission on Form S-8 the shares of Common Stock issued or issuable as part of the Equity Awards and shall list such shares on the Nasdaq Stock Market; provided that such shares shall be so registered and so listed no later than the first date any Equity Award vests or any restriction thereon lapses. The Company agrees to use commercially reasonable efforts to maintain the effectiveness of such registration on Form S-8 and such listing on the Nasdaq Stock Market.

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          (d) Benefits . During the Term, you shall be eligible to participate in all of the pension, welfare and fringe benefit programs and any other employee benefit plan made available generally to executives of the Company, in accordance with the terms and provisions thereof provided, however, that the Company shall not be obligated to provide you any non-qualified retirement plan (except pursuant to the election by you described in Section 3(g) below. You shall participate in the Company’s car program on the same basis as other Company executive officers. You shall receive life insurance and disability coverage in accordance with the Company’s policies on the same basis as other executive officers. You shall be entitled to five weeks’ vacation per each twelve-month period during the Term and otherwise in accordance with the Company’s policies on the same basis as other executive officers.

          (e) Relocation . The Company shall provide you with the following relocation benefits; provided that the Company shall not be required to pay to you or reimburse you the following amounts in excess, in the aggregate, of $200,000 (provided, however, that the Company will reimburse you for an additional $50,000 above and beyond the $200,000 above (after such amount is exhausted) for costs during the original three years of the Agreement for commuting from your primary residence in Utah to your housing in New Jersey):

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All payments and reimbursements under this Section 3(e) shall be subject to presentation to the Company of appropriate documentation of the costs incurred.

          (f) Business Expenses . The Company shall reimburse you upon presentation by you of appropriate documentation, in accordance with the Company’s regular practice, for business expenses reasonably incurred by you in connection with the performance of your duties under this Agreement.

          (g) Deferred Compensation . On the Effective Date and on each anniversary of the Effective Date during the Term, the Company shall credit an amount of $50,000 to your account under a deferred compensation plan to be established by the Company. With respect to such amounts, your account balance shall vest and shall be non-forfeitable on the day before the first anniversary of the date such amount was first credited or, if earlier, immediately prior to the date of a Change in Control; provided , however , that if your Involuntary Termination occurs within six months prior to a Change in Control, you will receive at the time of the Change in Control an amount equal to any unvested portion of your account balance that was forfeited as a result of such termination. Upon termination of your employment with the Company as a result of a Termination Event (other than a Termination Event resulting from your death or Disability, in which case your account shall vest pro rata in accordance with Section 4(b)(iv) below), you shall forfeit your account balance with respect to any such amounts that are unvested on the Date of Termination. Promptly following the Effective Date, the Company and you shall negotiate in good faith and agree upon the specific terms of the deferred compensation plan, including the applicable investment vehicle(s) and terms and schedule of payments. In addition, you will be permitted to defer some or all of your Annual Salary and/or Annual Bonus pursuant to the deferred compensation plan, as to which amounts you will be fully vested immediately. Any amounts deferred under the plan will be credited to a bookkeeping account established on the books and records of the Company for this purpose and the value of your account, allocated among vested and unvested balances, will be adjusted to reflect the performance of a nominal investment in accordance with the terms of the plan. The plan shall comply in all respects with the requirements of Section 409A. Notwithstanding Section 3(d) above, on or prior to March 31, 2006, you may elect to participate, in lieu of participating in the Company’s deferred compensation plan, in the Company’s other non-qualified retirement plans; provided that you shall not be eligible to receive the supplemental retirement benefits from the Company provided to certain current officers of the Company in their individual retirement agreements.

          (h) Indemnification . The Company shall (i) indemnify, defend and hold you harmless, to the full extent permitted under applicable law, for, from and against any and all losses, claims, costs, expenses, damages, liabilities or actions (including security holder actions) related to or arising out of your employment with and service as an officer of the Company and/or its subsidiaries (including with respect to the appointment of officers and other employees), and (ii) pay as incurred all reasonable costs, expenses and attorneys’ fees incurred by you in connection with or relating to the defense of any such losses, claims, costs, expenses, damages, liabilities or actions or the enforcement of any indemnification right hereunder. You shall be entitled to coverage under any director and officer liability insurance policies of the Company to the extent of any other officer of the Company.

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          4. Effect of Termination of Employment .

          (a) Involuntary Termination . In the event of your Involuntary Termination during the Term, the Company shall pay you in cash:

The Severance Amount shall be payable in cash in 24 equal monthly installments commencing on the date 30 days after the Date of Termination (such 24-month period being referred to as the “ Severance Period ”); provided that, to the extent required under Section 409A to avoid the imposition of additional tax under that section to you, any payment of the Severance Amount shall commence on the six-month anniversary of your separation from service with the Company (or, if earlier, the date of your death) and continue in equal monthly installments over the remainder of the Severance Period; provided further that, to the extent permitted under Section 409A without the imposition of additional tax under that section to you, the Severance Amount shall be paid (A) in an immediate lump-sum in the event such Involuntary Termination occurs on or after a Change in Control or (B) in an immediate lump sum at the time of a Change in Control (less any amounts previously paid to you) in the event that your Involuntary Termination occurs within six months prior to a Change in Control. In addition, medical coverage shall continue to be provided by the Company to you and your family to the same extent as if you remained employed with the Company, or, in the alternative, COBRA premiums for such coverage shall be paid for by the Company, for one year following the Date of Termination. Except as otherwise provided by the provisions of any pension, welfare or fringe benefit program and any other employee benefit plan in which you are a participant or this Agreement, in the event of your Involuntary Termination, as of the Date of Termination, you shall not have any right to any additional payments or benefits from the Company under this Agreement or otherwise. The Company agrees that, in the event that your employment with the Company terminates as a result of the Company’s delivering a notice of non-renewal in accordance with Section 1 above within six months prior to a Change in Control, such termination will be treated as an Involuntary Termination for purposes of this Section 4(a).

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          (b) Termination Event . In the event your employment ends at any time during the Term as a result of a Termination Event, the Company shall pay you in the same applicable manner described in Section 4(a) above:

If the Termination Event is death or Disability, medical coverage shall continue to be provided by the Company to you and/or your family to the same extent as if you remained employed with the Company, or, in the alternative, COBRA premiums for such coverage shall be paid for by the Company, for one year following the Date of Termination. Except as otherwise provided by the provisions of any pension, welfare or fringe benefit program and any other employee benefit plan in which you are a participant or this Agreement, in the event of a Termination Event, as of the Date of Termination, you shall not have any right to any additional payments or benefits from the Company under this Agreement or otherwise.

          (c) Treatment of Equity Awards . The treatment of your Equity Awards in connection with the termination of your employment with the Company shall be as set forth in the award agreements described in Section 3(c) above.

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          (d) Date and Notice of Termination . Any termination of your employment by the Company or by you during the Term shall be communicated by a notice of termination to the other party hereto (the “ Notice of Termination ”). The Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. The date of your termination of employment with the Company (the “ Date of Termination ”) shall be determined as follows: (i) if your employment is terminated for Disability, 30 days after a Notice of Termination is given ( provided that you shall not have returned to the full-time performance of your duties during such 30-day period); (ii) if your employment is terminated by the Company in an Involuntary Termination, the date specified in the Notice of Termination (or if no date is specified in the Notice of Termination, the date the Notice of Termination is delivered to you); (iii) if your employment is terminated by the Company for Cause, the later of (A) the date specified in the Notice of Termination and (B) the expiration of the applicable period set forth in the definition of Cause during which you may effect a cure or meet with the Company if such period expires without such cure being effected by you and without a reversal on the part of the Company regarding its decision to terminate you for Cause; (iv) if your employment is terminated by a non-renewal notice by either you or the Company, the last day of the then Term; (v) if the basis for your Involuntary Termination is your resignation for Good Reason, the Date of Termination shall be the later of (A) the date specified in the Notice of Termination and (B) the expiration of the applicable cure period set forth in the definition of Good Reason if such period expires without such cure being effected by the Company; (vi) if your employment is terminated by your resignation other than for Good Reason, the Date of Termination shall be the date set forth in the applicable notice, which shall be 30 days after the date such notice is received by the Company; and (vii) if your employment is terminated as a result of your death, the Date of Termination shall be the date of your death.

          (e) Other Positions . You agree that, if requested in connection with any termination of your employment with the Company, you shall resign from any or all positions with the Company, including, if applicable, as a member of the Board, or with any subsidiary of the Company.

          (f) Mitigation . You shall not be required to mitigate the Severance Amount or other payments hereunder by seeking other employment or otherwise, and the Severance Amount and such other amounts will not be reduced if such other employment is obtained.

          (g) Breach of Restrictive Covenants . If, following the Effective Date, you breach any of the provisions of Section 5 below without curing said breach, you shall not be eligible, as of the date of such breach, for any Severance Amount thereafter, and all obligations of the Company hereunder to pay any Severance Amount for any period thereafter shall thereupon cease.

          5. Reduction Of Payments If Reduction Would Result In Greater After-Tax Amount. Notwithstanding anything herein to the contrary, if the payment of the Severance Amount and any other payments made to you in connection with this Agreement or otherwise (together, the “Payments”) constitute a “parachute payment or payments” (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)), and the net after-tax amount of the parachute payment or payments payable to you is less than the net after-tax amount if the aggregate Payments to be made to you were three times your “base amount” (as defined in Section 280G(b)(3) of the Code), less $1.00, then the aggregate of the amounts of parachute payment or payments payable to you (as determined in accordance with Section 280G of the Code and the regulations) shall be reduced to an amount that will equal three times your base amount, less $1.00.

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          6. Restrictive Covenants .

          (a) No Competing Employment . During the period beginning on the Effective Date and ending on the later of (i) the last day of the Term, but in no event more than one year after the Date of Termination; or (ii) to the extent that you are being paid Severance Amounts, the last day of the Severance Period (the “Restricted Period ”), you shall not, without the prior written consent of the Company, directly or indirectly, whether as owner, consultant, employee, partner, venturer, or agent, through stock ownership, investment of capital, lending of money or property, rendering of services, or otherwise (except ownership of less than 5% of the number of shares outstanding of any securities which are publicly traded), (i) compete in any Excluded Location with the Business or (ii) provide services to, whether as an employee or consultant, own, manage, operate, control, participate in or be connected with (as a stockholder, partner, or any similar ownership interest) any corporation, firm, partnership, joint venture, sole proprietorship or other entity that competes with the Business in any Excluded Location, except for the aforementioned 5% ownership of publicly traded securities. Notwithstanding the foregoing provisions of this Section 6(a), (i) an entity will be treated as competing with the Business in an Excluded Location only if such entity operates (A) a store that is typically considered to be a “supermarket” or “supercenter” or (B) a “wholesale grocery business” (as such terms are reasonably and customarily understood in the Business) in such Excluded Location; and (ii) you will not be in violation of this Section 6(a) if you are employed by or providing services to a regional chain of stores that is affiliated with another entity that competes with the Business in an Excluded Location, so long as (A) such regional chain does not compete with the Business in any Excluded Location and (B) you do not render services in any capacity to such other entity other than the services rendered to such regional chain.

          (b) No Solicitation of Employees and Certain Other Persons . During the period beginning on the Effective Date and ending on the later of (i) the last day of the Term, but in no event more than one year after the Date of Termination; or (ii) to the extent that you are being paid Severance Amounts, the last day of the Severance Period (the “Non-Solicitation Period”), you shall not, without the prior written consent of the Board, other than in furtherance of the business of the Company, directly or indirectly (i) solicit or recruit, directly or indirectly, any Key Employee (as defined below) or any independent contractor of the Company or any of its subsidiaries for the purpose of being employed or retained by you, directly or indirectly, or by any person on behalf of which you are acting as an agent, representative or employee; (ii) solicit, influence, or attempt to influence, for a purpose or in a manner that would likely be detrimental in any material respect to the business of the Company, any provider of services or products to the Company with respect to its relationship therewith, including, without limitation, any person or entity which has been a provider of services or products to the Company and its subsidiaries during your employment with the Company, or take any action detrimental in any material respect to the existing relationships between the Company and any provider of services or products; or (iii) assist or encourage any other person in carrying out, directly or indirectly, any activity that would be prohibited by the provisions of this Section 6(b) if such activity were carried out by you. In particular, you agree that, other than in furtherance of the business of the Company, you will not, directly or indirectly, during the Non-Solicitation Period carry out any activity or take any action, or induce any employee of the Company and its subsidiaries to carry out any activity or take any action, that would be reasonably likely to result in any employee or independent contractor of the Company ceasing to perform services for the Company or any subsidiary thereof. Notwithstanding the foregoing provisions of this Section 6(b), you will not have violated this Section 6(b) if the person or entity with which you are then employed or to which you are otherwise providing services solicits or recruits employees, independent contractors or providers of services or products through the placing of advertisements in a newspaper, on the internet or similar searches for employees not targeted specifically at employees, independent contractors or other providers of services or products to the Company or its subsidiaries. For purposes of this Section 6(b), “ Key Employee ” means any employee of the Company or its subsidiaries with the title of store manager or above. The Company agrees to give you prompt written notice if it becomes aware that you violated the provisions of this Section 6(b) with respect to a Key Employee whose base salary is less than $100,000 per annum and that the first such violation shall not be considered to be a violation if the act in question was not directly undertaken by you.

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          (c) Confidentiality . You recognize that the services you perform for the Company are special, unique and extraordinary in that you may acquire confidential information and trade secrets concerning the operations of the Company and its subsidiaries, the use or disclosure of which could cause the Company and its subsidiaries substantial loss and damages which could not be readily calculated, and for which no remedy at law would be adequate. Accordingly, you covenant and agree with the Company that you will not at any time, except in performance of your obligations to the Company hereunder or with the prior written consent of the Board, directly or indirectly, disclose any secret or confidential information that you may learn by reason of your association with the Company, except as required by law, regulation, legal process or the rules of any self-regulatory organization. The term “ confidential information ” means confidential and proprietary information of the Company or its subsidiaries not previously disclosed or known to the public or to the trade (other than through a disclosure by you in breach of this Section 6(c)) with respect to business plans, prospects and opportunities, the identity of any suppliers, proprietary information regarding customers, operational strengths and weaknesses, trade secrets, know-how and other intellectual property, systems