EXHIBIT 10.2
FORM OF OPTION AGREEMENT
RELATING TO THE SECOND AMENDED AND RESTATED
1996 EMPLOYEE STOCK OPTION PLAN
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Coinmach Laundry Corporation
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Name
Address
Re: Coinmach Laundry Corporation
Grant of Non-Qualified Stock Option
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Dear ________:
In consideration of your continued employment with Coinmach Laundry
Corporation and/or its wholly-owned subsidiaries (collectively, the "Company"),
the Company is pleased to advise you (the "Optionee") that its Board of
Directors has granted to you a non-qualified stock option (an "Option"), subject
to the terms and conditions of the Company's Second Amended and Restated 1996
Employee Stock Option Plan (the "Plan"), a copy of which is attached hereto.
1. Definitions. Capitalized terms used in this Agreement and not
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otherwise defined herein shall have the meanings given to such terms in the
Plan.
2. Option.
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(a) Term. Your Option is to purchase up to _______ shares of Class A
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common stock, par value $.01 per share, of the Company (the "Option Shares") at
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an exercise price per share of $_____ (the "Exercise Price"), payable upon
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exercise as set forth in paragraph 2(b) below. Your Option will expire at the
close of business on August 8, 2006, subject to earlier expiration in connection
with the termination or ending of your employment for any reason as provided in
paragraph 4(b) below and as provided in the Plan (such date of such event, the
"Expiration Date").
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(b) Payment of Option Price. Subject to paragraph 3 below, your Option may
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be exercised in whole or in part upon payment of an amount (the "Option Price")
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equal to the product of (i) the Exercise Price multiplied by (ii) the number of
Option Shares to be acquired. Payment of the exercise price shall be made as
provided in the Plan.
(c) Non-Qualified Stock Option. Your Option is a non-qualified stock
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option and is not intended to be an Incentive Stock Option.
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3. Exercisability/Vesting.
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(a) Normal Vesting. Your Option may be exercised only to the extent it has
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vested. Except as otherwise provided below, your Option will fully vest and
become exercisable with respect to all of your Option Shares in accordance with
the vesting schedule set forth below, if and
only if you are, and have been, continuously employed by the Company from the
date of this Agreement through and including the date on which your Option is
fully exercised; provided that if you voluntarily retire from the Company prior
to such date, such Option may still vest in accordance with the schedule set
forth below, subject to the terms and conditions covering retirement in the
Plan:
Number of Options Vesting
Vesting Date on the Vesting Date
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August 8, 1996 [ 20% ]
August 8, 1997 [ 20% ]
August 8, 1998 [ 20% ]
August 8, 1999 [ 20% ]
August 8, 2000 [ 20% ]
(b) Death. If you die while still employed by the Company, then the right
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to exercise all unexpired installments of your Option which have not yet become
vested shall be accelerated and the Option shall become fully vested and
exercisable as of the date of your death; provided, however, that your estate or
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the person (or persons) to whom your rights under the Option pass by reason of
your death, shall have the right to exercise the Option for a period of 90 days
after the date of your death and your Option shall expire at the earlier of (i)
the end of such 90 day period or (ii) the Expiration Date.
(c) Permanent Disability. If you suffer a Permanent Disability while still
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employed by the Company, then the right to exercise all unexpired installments
of your Option which have not yet become vested shall be accelerated and the
Option shall become exercisable as of the date on which you suffer a Permanent
Disability; provided, however, that you shall have the right to exercise such
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Option for one year after the date on which you suffer a Permanent Disability,
and the Option shall expire at the earlier of (i) the end of such one year
period or (ii) the Expiration Date.
4. Expiration of Option.
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(a) Normal Expiration. In no event shall any part of your Option be
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exercisable after the Expiration Date set forth in paragraph 2(a) above.
(b) Expiration Upon Termination of Employment. In the event that your
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employment with the Company is terminated or ends for any reason other than
voluntary retirement on or prior to the date on which your Option is fully
exercised, your Option shall immediately expire and not be exercisable under any
circumstance; provided, however, that any portion of your Option that was vested
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and exercisable on the date your employment with the Company terminated or ended
(for any reason other than for Cause, Permanent Disability, death or voluntary
retirement) shall expire 30 days from the date of such termination, but in no
event later than the Expiration Date. If your employment with the Company is
terminated for Cause, any vested and exercisable portion of your Option will be
forfeited as of the date of your termination. If your employment with the
Company is terminated due to voluntary retirement, your Option may continue to
be vested and become exercisable, subject to the terms and conditions covering
retirement in the Plan, for a period of up to three years following the date of
your retirement. By your acceptance of this Option, you acknowledge and agree
that the Plan provides that if, at any time during your retirement, you engage
in conduct that the Committee determines to be detrimental to the Company, your
Option is subject to immediate forfeiture without prior notice.
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5. Procedure for Exercise. You may exercise all or any portion of your
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Option, to the extent it has vested and is outstanding, at any time and from
time to time prior to its expiration, by delivering written notice to the
Company as provided in the Plan.
6. Securities Laws Restrictions and Other Restrictions on Transfer of
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Option Shares. You represent that when you exercise your Option you will be
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purchasing Option Shares for your own account and not on behalf of others. You
understand and acknowledge that federal and state securities laws govern and
restrict your right to offer, sell or otherwise dispose of any Option Shares
unless your offer, sale or other disposition thereof is registered under the
Securities Act of 1933, as amended (the "Securities Act") and state securities
laws, or in the opinion of the Company's counsel, such offer, sale or other
disposition is exempt from registration or qualification thereunder. You agree
that you will not offer, sell or otherwise dispose of any Option Shares in any
manner which would: (i) require the Company to file any registration statement
with the Securities and Exchange Commission (or any similar filing under state
law) or to amend or supplement any such filing or (ii) violate or cause the
Company to violate the Securities Act, the rules and regulations promulgated
thereunder or any other state or federal law. You further understand that the
certificates for any Option Shares you purchase will bear such legends as the
Company deems necessary or desirable in connection with the Securities Act or
other rules, regulations or laws.
7. Transfer Limitations. Your Option is personal to you and may only be
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transferred as a result of your death, testate or intestate, by will or the laws
of descent and distribution. It shall be a condition precedent to transfer of
your Option that the transferee executes and delivers an agreement acknowledging
that such Option has been acquired for investment and not for distribution and
is and shall remain subject to this Agreement and the Plan.
8. Waiver of Tax Responsibility. You understand that the Company has
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assumed no responsibility for advising you as to the tax consequences to you
under the Option granted by this Agreement. You should consult with your
individual tax advisor concerning the applicability of Federal, state and local
tax laws to the Option and to your personal tax circumstances.
9. Withholding Tax. Not later than the date as of which an amount first
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must be included in your gross income for Federal income tax purposes with
respect to the Option, you may be required to pay the Company or make
arrangements satisfactory to the Company regarding the payment of, any Federal,
state and local taxes of any kind required by law to be withheld or paid with
respect to such amount. The obligations of the Company pursuant to this
Agreement shall be conditioned upon such payments or arrangements with the
Company, if such payments or arrangements are required, and the Company shall,
to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind (including salary or any other compensation) otherwise due
you from the Company.
10. Conformity with Plan. Your Option is intended to conform in all
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respects with, and is subject to all applicable provisions of, the Plan, which
is incorporated herein by reference. Inconsistencies between this Agreement and
the Plan shall be resolved in accordance with the terms of the Plan. By
executing and returning the enclosed copy of this Agreement, you acknowledge
your receipt of this Agreement and the Plan and agree to be bound by all of the
terms of this Agreement and the Plan.
11. Rights of Participants. Nothing in this Agreement shall confer upon
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you any right or obligation to continue in the employ of the Company or any
Subsidiary or shall affect in any
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way the right of the Company or any Subsidiary to terminate your employment with
the Company or any Subsidiary at any time, for any reason, with or without
Cause.
12. Additional Restrictions on Transfer.
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(a) Restricted Legend. Unless the Option Shares are covered by an
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effective registration statement under the Securities Act, the certificates
representing the Option Shares will bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON __________ __, 199 AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE
SECURITIES LAWS AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAW OR AN EXEMPTION FROM REGISTRATION THEREUNDER."
(b) Opinion of Counsel. You may not sell, transfer or dispose of any
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Option Shares (except pursuant to an effective registration statement under the
Securities Act) without first delivering to the Company an opinion of counsel
reasonably acceptable in form and substance to the Company that registration
under the Securities Act or any applicable state securities law is not required
in connection with such transfer.
13. Remedies. Each party to this Agreement will be entitled to
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enforce its rights under this Agreement, specifically, to recover damages and
costs (including attorney's fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto acknowledge and agree that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party hereto
may, in its sole discretion, apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
14. Amendment. Any provision of this Agreement may be amended or
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waived only with the prior written consent of the holder of the Option and the
Company.
15. Severability. Whenever possible, each provision of this
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Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
16. Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, each of which shall constitute an original, but all of
which taken together shall constitute one and the same Agreement.
17. Descriptive Headings. The descriptive headings of this Agreement
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are inserted for convenience only and do not constitute a part of this
Agreement.
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18. Governing Law. All questions concerning the construction,
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validity and interpretation of this Agreement will be governed by the internal
law, and not the law of conflicts, of the State of Delaware.
19. Notices. All notices, demands or other communications to be
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given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
or mailed by certified or registered mail, return receipt requested and postage
prepaid, to the recipient. Such notices, demands and other communications shall
be sent to you and to the Company at the addresses indicated below:
(a) If to the Optionee:
(b) If to the Company:
Coinmach Laundry Corporation
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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.
20. Entire Agreement. This Agreement, together with the Plan,
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constitutes the entire understanding between you and the Company and supersedes
all other agreements, whether written or oral, with respect to the acquisition
by you of Common Stock of the Company.
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Please execute each of the two enclosed copies of this Agreement in
the space below to confirm your understanding and acceptance of the agreements
contained in this Agreement.
Very truly yours,
COINMACH LAUNDRY CORPORATION
By: _________________________
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Senior Vice President
Attachments: 1. Additional Copy of this Agreement
2. Copy of the Plan
The undersigned hereby acknowledges having read this Agreement and the
Plan and hereby agrees to be bound by all provisions set forth herein and in the
Plan.
Dated as of August 8, 1996
OPTIONEE
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