Exhibit 10.18
LINENS 'N THINGS
June 14, 2004
STOCK OPTION AGREEMENT
To: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.,
On, June 14, 2004 you were awarded an option to purchase 100,000 shares (this
"Option") of the common stock $.01 par value per share (the "Shares") of Linens
'n Things, Inc. (the "Company") pursuant to the Company's New Hire Authorization
(the " Authorization"). It is the Company's philosophy that an enhanced sense of
ownership by employees is an important element of our long-term success. This
stock option grant allows you to share in the continued success of the Company
under the Authorization.
By signing a copy of this Stock Option Agreement (this "Agreement"), you hereby
agree to the following terms and conditions:
1. INCORPORATION BY REFERENCE OF PLAN. The provisions of the
Authorization are incorporated by reference herein and shall govern as to all
matters not expressly provided for in this Agreement. Terms not defined in this
Agreement have the meanings set forth in the Authorization. In the event of any
conflict between the terms of this Agreement and the Authorization, the terms of
the Authorization shall govern.
2. OPTION EXERCISE PRICE. The option exercise price of the 100,000
shares awarded to you is $27.01 per share, based on the "Fair Market Value" as
of June 14, 2004.
3. VESTING. Except as provided elsewhere in this Agreement, this
Option shall not be exercisable until the dates shown below:
Percentage Of Shares Which First Date On Which Such
May Be Purchased Hereunder Shares May Be Purchased
-------------------------- -----------------------
20% June 14, 2005
40% June 14, 2006
60% June 14, 2007
80% June 14, 2008
100% June 14, 2009
4. VESTING ON DEATH OR RETIREMENT.
(a) Upon your death, all shares granted as part of the Option shall
become immediately exercisable without regard to the vesting schedule contained
in Section 3 of this Agreement for a period of one year after the date of your
death.
(b) Upon your "Retirement," you will be entitled to Continued
vesting of this Option or the remainder of the exercise period of such Options
as provided in Section 6 of this Agreement. For the purposes of this Agreement,
"Retirement" shall mean the earlier of (i) termination of employment with the
Company at or after attaining age 55 and 15 years of service with the Company Or
(ii) attaining age 60.
5. VESTING ON TERMINATION OF EMPLOYMENT. Upon the termination of
your employment by the Company by reason other than by your death or Retirement,
you will be entitled to exercise only the percentage of this Option which has
vested as of your termination date and the following restrictions shall apply:
(a) If your employment by the Company is terminated by the Company
for any reason other than by "Cause" (as defined below), by reason of "Cause"
(as defined below), or if you resign from your employment with the Company, no
portion of this Option (regardless of vesting) shall be exercisable after such
termination date.
(b) For the purposes of the Agreement, "Cause" shall include (i)
engaging in gross misconduct, fraud, dishonesty, gross negligence or
insubordination, (ii) willful misconduct, (iii) an indictment (or similar
criminal proceeding) being brought against you for the alleged commission of
felony, (iv) becoming subject to a judgment, order, consent decree, consent
order, ruling or finding in connection with any federal or state government
proceeding, including without limitation, an enforcement, cease and desist,
inquiry or other proceeding before the Securities and Exchange Commission, in
which you are sanctioned (whether or not denying or admitting the underlying
violation or liability) for any violation of the securities laws and/or enjoined
from any future violation of the securities laws; or (v) "cause" as defined in
your employment agreement with the Company, if applicable.
6. EXPIRATION OF OPTIONS. Notwithstanding anything to the contrary
set forth in Sections 3, 4, 5 of this Agreement, under no circumstances shall
this Option be exercisable after seven years or such shorter period as is
prescribed in the Authorization or this Agreement.
7. DESIGNATED BENEFICIARY. You may designate a Beneficiary who will
have the right to exercise this Option after your death according to the terms
and conditions of this Agreement and the Authorization. The form which may be
used for this purpose is attached to this Agreement. IF YOU DO NOT DESIGNATE A
BENEFICIARY BY COMPLETING THE ATTACHED FORM AND RETURNING IT TO THE COMPANY, THE
COMPANY WILL AUTOMATICALLY DEFAULT PAYMENT TO YOUR ESTATE.
8. EXERCISE. This Option shall be exercised by notice to the
Company, accompanied by (i) full payment in cash or check (or Shares), or (ii)
an election to exercise this Option by means of a "cashless exercise." The
procedure and form for any such "cashless exercise" will be provided to you.
However, any "cashless exercise" is subject to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ rules under
the federal securities laws and you are prohibited by such securities laws from
selling or otherwise trading in the Company's common stock at a time when you
are in possession of material information which has not been publicly disclosed.
You agree that you will be subject to the Company's "black-out" policy and to
the Company's "blackout" period(s) during the term of your employment with the
Company.
9. RIGHTS AS A SHAREHOLDER. You shall have no rights as a
shareholder with respect to any shares which may be purchased by exercise of
this Option unless and until a certificate representing such shares is duly
issued and delivered to you. No adjustment shall be made for dividends or other
rights for which the record date is prior to the date such stock certificate is
issued except as may be determined in accordance with Section (c) of the
Authorization.
10. WITHHOLDING TAXES. The Company's obligation to deliver shares
upon the exercise of this Option shall be subject to your satisfaction of all
applicable federal, state and local income tax, employment tax and withholding
requirements.
11. RESTRICTIONS ON TRANSFER. This Option shall not be transferred,
assigned, pledged or hypothecated and shall not be subject to execution,
attachment or similar process. In the event the terms of this paragraph are not
complied with by you or if this Option is subject to execution, attachment or
similar process, this Option shall immediately become null and void.
12. ANTI-DILUTION PROVISIONS. If prior to expiration of this Option,
there shall occur any change in the outstanding shares of the Company's common
stock by reason of any stock dividend, stock split, combination or exchange of
such shares of common stock, merger, consolidation, recapitalization,
reorganization, liquidation, dissolution, or similar event, and as often as the
same shall occur, then the kind and number of shares subject to this Option, or
the purchase price per share of such common stock, or both, may be adjusted by
the Compensation Committee of the Board of Directors (the "Committee") in such
manner as it may deem equitable, the determination of which shall be binding and
conclusive. Failure of the Committee to provide for any such adjustment shall be
conclusive evidence that no adjustment is required.
13. ACCEPTANCE OF PROVISIONS. The execution of this Agreement by you
shall constitute your acceptance of and agreement to all of the terms and
conditions of the Authorization and this Agreement.
14. CHANGE IN CONTROL. This Option shall become immediately
exercisable and fully vested upon a Change in Control (as such term is defined
in the Authorization) and shall remain exercisable and vested for a 90-day
period following a Change in Control without regard to any termination of
employment.
15. CONFIDENTIALITY AND RESTRICTIVE COVENANT PROVISIONS. In
consideration of the grant of stock options to you and the compensation now and
hereafter paid to you, you hereby acknowledge and agree as follows:
(a) CONFIDENTIALITY
(i) You are aware that the Company owns proprietary and confidential
information and materials covering or related to the Company's
finances, business and operations which from time to time may be
disclosed to you or to which you may obtain access or develop or
create on behalf of the Company. Such information and materials
may include, but are not limited to, sales information, plans
and projections, trade secrets, marketing
plans, product plans, margin information, vendor compensation,
store plans and information, pricing techniques and plans,
training programs, strategies, statistical data, forecasts,
replenishment programs and systems and other information
concerning the Company and its past, present or future
operations, financing, sales, marketing or business
(collectively "Confidential Information"). Confidential
Information does not include information which is or becomes
known generally by the public other than through your breach of
this Agreement. You acknowledge the confidential and secret
character of the Confidential Information and agree that the
Confidential Information is the sole, exclusive and extremely
valuable property of the Company which gives the Company an
advantage over its competitors and is critical to the success of
the Company and its business.
(ii) All Confidential Information is the property of the Company and
neither your employment nor the disclosure of such information
to you should be construed to grant any right, license or
authorization to you to use the Confidential Information except
in connection with the performance by you of the services for
which you are employed by the Company. You will not during your
employment by the Company or at any time thereafter exploit,
reproduce or use for yourself or any third parties, or divulge
or convey to any third parties, any Confidential Information
except to the extent that Confidential Information shall be
required to be used and/or divulged in order to enable you to
perform in the ordinary course the services for which you are
then currently employed by the Company.
(iii) You will comply with all regulations established by the Company
to maintain the confidentiality of the Confidential Information
and will not remove Confidential Information from your place of
employment without the express consent of the Company.
(iv) On termination of your employment with the Company or at any
other time as the Company may request, you shall end all use of
any Confidential Information and return to the Company all
originals and copies of any Confidential Information then in or
thereafter coming into your possession (in whatever form and
however such Confidential Information might be obtained or
recorded). You shall not thereafter retain a copy of any such
Confidential Information.
(b) RESTRICTIVE COVENANT
(i) During your employment by the Company and for a period of two
(2) calendar years thereafter (the "Restriction Period"), you
will not, alone or with others, directly or indirectly, induce
or attempt to induce any person who, during the term of your
employment with the Company, was an employee or representative
of the Company, to terminate his or her employment or
relationship with the Company or to violate the terms of any
agreement between such employee or representative and the
Company, or hire or attempt to hire any employee of the Company
within one hundred eighty (180) after the termination of such
employee's relationship with the Company.
(ii) During your employment by the Company and for a period of two
(2) calendar years thereafter, You will not accept any
employment or related position, or act as a consultant (either
directly or indirectly) with the following competitors of the
Company: Bed Bath & Beyond, Party City, ▇▇▇▇▇▇▇ Gifts, ▇.▇.
▇▇▇▇▇'▇, Target, ▇▇▇▇ stores, TJ Maxx Corp, or Federated
Department stores. In the
case of a termination of employment by the Company for any other
reason than by "Cause" (as defined in Section 5(b)), the
Restriction Period shall terminate immediately upon the
employee's termination of employment.
(iii) You agree that the above restrictions are reasonable and
necessary in light of your position and responsibilities with
the Company.
(c) REMEDIES
(i) You acknowledge that the Company will not have an adequate
remedy at law for your breach of any provision of this Section
15. You consent to the entry of injunctive or other appropriate
equitable relief against you with respect to any such breach
(without proof of monetary or immediate damage and without any
bond or other security being required), in addition to any other
remedies which might be available to the Company at law or in
equity.
(II) UPON YOUR BREACH OF THIS SECTION 15, (A) ALL OUTSTANDING OPTIONS
GRANTED TO YOU TO PURCHASE COMMON STOCK OF THE COMPANY, WHETHER
GRANTED PURSUANT TO THIS AGREEMENT OR ANY EARLIER AGREEMENT,
REGARDLESS OF, WHETHER VESTED OR NOT VESTED, IN WHOLE OR IN
PART, SHALL BE CANCELLED AND/OR (B) IF SUCH CONDUCT OR ACTIVITY
OCCURS WITHIN TWO YEARS FOLLOWING THE EXERCISE OF ANY SUCH
OPTION, YOU SHALL BE REQUIRED TO REPAY TO THE COMPANY ANY GAIN
REALIZED UPON THE EXERCISE OF SUCH OPTION (WITH SUCH GAIN VALUED
AS OF THE DATE OF EXERCISE). ANY REPAYMENT OBLIGATION MAY BE
SATISFIED IN THE COMPANY'S COMMON STOCK OR CASH OR A COMBINATION
THEREOF (BASED UPON THE FAIR MARKET VALUE OF COMMON STOCK ON THE
DAY PRIOR TO THE DATE OF PAYMENT) AND THE COMMITTEE OR THE BOARD
IS HEREBY PERMITTED AND EXPRESSLY AUTHORIZED BY YOU TO OFFSET
AGAINST ANY FUTURE PAYMENTS OWED BY THE COMPANY OR OF ITS
SUBSIDIARIES TO YOU (INCLUDING ANY SALARY, BONUS, SEVERANCE OR
OTHER COMPENSATION) TO SATISFY THE REPAYMENT OBLIGATION. THE
DETERMINATION OF WHETHER YOU HAVE BREACHED THIS SECTION 15 SHALL
BE DETERMINED BY THE COMMITTEE OR THE BOARD IN GOOD FAITH. THIS
SECTION 15 SHALL HAVE NO APPLICATION FOLLOWING A TERMINATION OF
EMPLOYMENT FOLLOWING A CHANGE IN CONTROL (AS DEFINED IN THE
AUTHORIZATION).
(iii) You agree to reimburse the Company for all costs and expenses
(including, without limitation, court costs and the reasonable
fees and expenses of attorneys) incurred by the Company in
connection with any action by the Company seeking to enforce
this Section 15.
(iv) If any court of competent jurisdiction determines that any
provision of this Section 15, as written, is too broad in scope
or duration to be enforceable, such provision should be narrowed
in scope and duration to the extent (and only to such extent)
necessary to make such provision enforceable. The invalidity or
unenforceability of any provision or provisions of this Section
15 shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force
and effect.
16. Venue and Jurisdiction; Waiver of Jury Trial. Any claim brought
by you arising out of or in connection with this Agreement or the Authorization
(as incorporated herein by reference), the subject matter thereof, or the
performance or non-performance of any obligation thereunder
(other than a counterclaim maintained by you in an action originally brought by
the Company), shall be brought in either the state or federal courts located in
the State of New Jersey. You hereby irrevocably submit to the jurisdiction of
each of the state or federal courts located in the State of New Jersey for the
purposes of any suit, civil action or other proceeding ("Suit") arising out of
or in connection with this Agreement or the Authorization, the subject matter
thereof, or the performance or non-performance of any obligation thereunder. You
hereby waive and agree not to assert by way of motion, as a defense or otherwise
in any such Suit, any claim that you are not subject to the jurisdiction of the
state or federal courts located in the State of New Jersey, that such Suit is
brought in an inconvenient forum, or that the venue of such Suit is improper.
You hereby consent to service of process by first-class mail with respect to any
action brought by the Company against you arising out of or in connection with
this Agreement or the Authorization.
YOU HEREBY WAIVE ANY TRIAL BY JURY WITH RESPECT TO ANY CLAIM ARISING OUT OF OR
IN CONNECTION WITH THIS AGREEMENT OR THE AUTHORIZATION, THE SUBJECT MATTER
THEREOF, OR THE PERFORMANCE OR NON-PERFORMANCE OF ANY OBLIGATION THEREUNDER.
17. MISCELLANEOUS. This Agreement and the Authorization contain a
complete statement of all the arrangements between the parties with respect to
their subject matter, and this Agreement cannot be changed except in a writing
executed by both parties. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to agreements
made and to be performed exclusively in New Jersey. The headings in this
Agreement are solely for the convenience of reference and shall not affect its
meaning or interpretation.
Please indicate your acceptance of the foregoing terms and conditions by signing
a copy of this Agreement and returning it to the Company to the attention of the
Compensation Department.
Linens 'n Things, Inc. Employee:
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------- ------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Senior Vice President, Human
Resources, Administration
and Corporate Secretary
Date: July 10, 2004 Date: July 10, 2004
------------- -------------