This Stock Purchase Agreement involves
Title: Award Agreement
Governing Law: Delaware Date: 12/19/2005
Industry: Retail (Grocery) Sector: Services
December 14, 2005
Mr. Kenneth Martindale
5 South 500 West, Unit 1115
Salt Lake City, Utah 84101
Dear Mr. Martindale:
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 December 14, 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 200,000 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) 16,674 shares on March 31, 2006, and (b) 183,326 shares in eleven equal quarterly installments of 16,666 shares commencing on June 30, 2006 and each September 30 th , December 31 st , March 31 st and June 30 th thereafter until the Award Shares are fully vested.
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 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.