EXHIBIT 10.16

 

CINTAS CORPORATION

2003 DIRECTORS’ STOCK OPTION PLAN
AMENDED AND RESTATED APRIL 28, 2004

 

The purpose of this 2003 Directors’ Stock Option Plan is to advance the
interests of Cintas Corporation and its shareholders by affording non-employee
members of the Company’s Board of Directors an opportunity to increase their
proprietary interest in the Company through the grant of options to purchase
Common Stock of Cintas.  Cintas believes that this Plan will benefit Cintas by
serving as an incentive to the attraction, retention and motivation of its
non-employee directors.

 

1.                                               EFFECTIVE DATE OF THE PLAN. 
THIS PLAN BECAME EFFECTIVE OCTOBER 14, 2003 AS A RESULT OF APPROVAL BY
SHAREHOLDERS ON THAT DATE.

 

2.                                               SHARES SUBJECT TO THE PLAN. 
THE SHARES TO BE ISSUED UPON THE EXERCISE OF THE OPTIONS GRANTED UNDER THE PLAN
SHALL BE SHARES OF COMMON STOCK, NO PAR VALUE, OF THE COMPANY.  EITHER TREASURY
OR AUTHORIZED AND UNISSUED SHARES OF COMMON STOCK, OR BOTH, AS THE BOARD OF
DIRECTORS SHALL FROM TIME TO TIME DETERMINE, MAY BE SO ISSUED.  NO SHARES OF
COMMON STOCK WHICH ARE THE SUBJECT OF ANY LAPSED, EXPIRED OR TERMINATED OPTIONS
MAY BE MADE AVAILABLE FOR REOFFERING UNDER THE PLAN.

 

Subject to the provisions of Section 4, the aggregate number of shares of Common
Stock for which options may be granted under the Plan shall be 100,000 shares.

 

3.                                               ADMINISTRATION.  THE PLAN SHALL
BE ADMINISTERED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS, MEMBERS
OF WHICH MAY ALSO BE ELIGIBLE TO PARTICIPATE IN THE PLAN.

 

Subject to the express provisions of the Plan, the Committee shall have the
authority to establish the terms and conditions of such option agreements,
consistent with this Plan.  Such agreements need not be uniform.

 

4.                                               ADJUSTMENTS TO COMMON STOCK AND
OPTION PRICE.

 

4.1                                 IN THE EVENT OF CHANGES IN THE OUTSTANDING
COMMON STOCK OF THE COMPANY AS A RESULT OF STOCK DIVIDENDS, SPLIT-UPS,
RECAPITALIZATIONS, COMBINATIONS OR EXCHANGES, THE NUMBER AND CLASS OF SHARES OF
COMMON STOCK AUTHORIZED TO BE THE SUBJECT OF OPTIONS UNDER THIS PLAN AND THE
NUMBER AND CLASS OF SHARES OF COMMON STOCK AND OPTION PRICE FOR EACH OPTION
WHICH IS OUTSTANDING UNDER THE PLAN SHALL BE CORRESPONDINGLY ADJUSTED BY THE
COMMITTEE.

 

4.2                                 THE COMMITTEE SHALL MAKE APPROPRIATE
ADJUSTMENTS IN THE OPTION PRICE TO REFLECT ANY SPIN-OFF OF ASSETS, EXTRAORDINARY
DIVIDENDS OR OTHER DISTRIBUTIONS TO SHAREHOLDERS.

 

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4.3                                 IN THE EVENT OF THE DISSOLUTION OR
LIQUIDATION OF THE COMPANY OR ANY MERGER, CONSOLIDATION, EXCHANGE, COMBINATION
OR OTHER TRANSACTION IN WHICH THE COMPANY IS NOT THE SURVIVING CORPORATION OR IN
WHICH THE OUTSTANDING SHARES OF COMMON STOCK OF THE COMPANY ARE CONVERTED INTO
CASH, OTHER SECURITIES OR OTHER PROPERTY, EACH OUTSTANDING OPTION ISSUED
HEREUNDER SHALL TERMINATE AS OF A DATE FIXED BY THE COMMITTEE PROVIDED THAT NOT
LESS THAN 20 DAYS’ WRITTEN NOTICE OF THE DATE OF EXPIRATION SHALL BE GIVEN TO
EACH HOLDER OF AN OPTION.  EACH SUCH HOLDER SHALL HAVE THE RIGHT DURING SUCH
PERIOD FOLLOWING NOTICE TO EXERCISE THE OPTION AS TO ALL OR ANY PART OF THE
OPTION FOR WHICH IT IS EXERCISABLE AT THE TIME OF SUCH NOTICE.

 

5.                                               ELIGIBLE DIRECTORS; GRANT OF
OPTIONS.  AN ELIGIBLE DIRECTOR SHALL BE EACH DIRECTOR OF THE COMPANY, NOW
SERVING AS A DIRECTOR OR ELECTED HEREAFTER, WHO IS NOT ALSO AN EMPLOYEE OF THE
COMPANY.

 

Each Eligible Director elected as such at the 2003 Annual Meeting of
Shareholders shall be granted an option for the purchase of 1,000 shares of
Common Stock and, upon each subsequent election as a director, another option
for 1,000 shares.  Persons who become Eligible Directors after the effective
date of the Plan shall be granted an option for 1,000 shares as a result of
their election, whether by shareholders or directors, and upon each subsequent
election as a director, another option for 1,000 shares.  All grants shall be
made on the date of the event giving rise to the option.  Such grants shall
continue until the number of shares provided for in this Plan in Section 2 are
exhausted.

 

6.                                               PRICE.  THE PURCHASE PRICE OF
THE SHARES OF COMMON STOCK WHICH MAY BE ACQUIRED PURSUANT TO THE EXERCISE OF ANY
OPTION GRANTED PURSUANT TO THE PLAN SHALL BE THE LAST CLOSING SALE PRICE
REPORTED ON THE DATE OF GRANT (“OPTION PRICE”).

 

7.                                               PERIOD OF OPTION.  THE TERM OF
EACH OPTION SHALL BE TEN YEARS FROM THE DATE OF GRANT.  SUBJECT TO THE
PROVISIONS OF SECTION 3, EACH OPTION SHALL BECOME EXERCISABLE IN FOUR EQUAL
ANNUAL INSTALLMENTS COMMENCING ON THE FIRST ANNIVERSARY OF THE DATE OF GRANT OF
THE OPTION.  THIS RIGHT OF EXERCISE SHALL BE CUMULATIVE AND SHALL BE EXERCISABLE
IN WHOLE OR IN PART.

 

8.                                               EXERCISE OF OPTIONS.  AN OPTION
MAY BE EXERCISED BY AN ELIGIBLE DIRECTOR AS TO ALL OR PART OF THE SHARES COVERED
THEREBY BY GIVING WRITTEN NOTICE TO THE COMPANY AT ITS PRINCIPAL OFFICE,
DIRECTED TO THE ATTENTION OF ITS CHIEF FINANCIAL OFFICER, ACCOMPANIED BY PAYMENT
OF THE OPTION PRICE IN FULL FOR SHARES BEING PURCHASED.  THE PAYMENT OF THE
OPTION PRICE SHALL BE IN CASH OR SUCH OTHER METHOD OF PAYMENT AS MAY BE
DETERMINED BY THE COMMITTEE.

 

9.                                               CONDITIONS OF EXERCISE.  EXCEPT
AS PROVIDED BELOW, THE HOLDER OF AN OPTION MUST BE SERVING AS AN ELIGIBLE
DIRECTOR AT THE TIME THE OPTION IS EXERCISED.  AN OPTIONEE WHO CEASES TO BE AN
ELIGIBLE DIRECTOR FOR ANY REASON OTHER THAN DEATH, DISABILITY, RETIREMENT OR
REMOVAL FOR CAUSE, MAY EXERCISE THE OPTION AT ANY TIME WITHIN THREE MONTHS AFTER
THE DATE OF CESSATION, BUT ONLY DURING THE TEN YEAR OPTION PERIOD AND ONLY TO
THE EXTENT THAT THE OPTION HOLDER WAS ENTITLED TO EXERCISE THE OPTION AT THE
TIME OF SUCH CESSATION.

 

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Options may be exercised at any time during their ten year option period by a
director (or a director’s heirs in the event of death) who retires pursuant to
the Company’s mandatory retirement policy for directors or who otherwise retires
with Board approval or who dies or who ceases to be an Eligible Director by
reason of disability in accordance with the vesting schedule provided in
Section 7 as if the Eligible Director’s service had not terminated. 
“Disability” is a condition which causes the director to be unable, by reason of
any medically determinable physical or mental impairment expected to last for at
least 12 months, to engage in essential activities required by a director.

 

An option held by an Eligible Director who is removed for cause shall terminate
immediately upon removal as a director.

 

The Committee, at its sole discretion, may permit particular holders of options
to exercise an option to a greater extent than provided herein.

 

10.                                         NONTRANSFERABILITY OF OPTIONS.  NO
OPTION GRANTED UNDER THE PLAN SHALL BE TRANSFERABLE OTHERWISE THAN BY WILL OR BY
THE LAWS OF DESCENT AND DISTRIBUTION, AND AN OPTION MAY BE EXERCISED DURING THE
LIFETIME OF THE HOLDER ONLY BY HIM.  NOTWITHSTANDING THE ABOVE, THE COMMITTEE
MAY ESTABLISH OR MODIFY THE TERMS OF AN OPTION TO ALLOW THE OPTION TO BE
TRANSFERRED AT THE REQUEST OF THE GRANTEE OF THE OPTION TO TRUSTS ESTABLISHED BY
THE GRANTEE OR AS TO WHICH THE GRANTEE IS A GRANTOR OR TO FAMILY MEMBERS OF THE
GRANTEE OR OTHERWISE FOR PERSONAL AND TAX PLANNING PURPOSES OF THE GRANTEE.  IF
THE COMMITTEE ALLOWS SUCH TRANSFER, SUCH OPTION SHALL NOT BE EXERCISABLE FOR A
PERIOD OF SIX MONTHS FOLLOWING THE ACTION OF THE COMMITTEE.

 

11.                                         RIGHTS AS A STOCKHOLDER.  THE HOLDER
OF AN OPTION SHALL NOT HAVE ANY OF THE RIGHTS OF A STOCKHOLDER OF THE COMPANY
WITH RESPECT TO THE SHARES SUBJECT TO AN OPTION UNTIL A CERTIFICATE OR
CERTIFICATES FOR SUCH SHARES SHALL HAVE BEEN ISSUED UPON THE EXERCISE OF THE
OPTION.

 

12.                                         AMENDMENT AND TERMINATION.

 

12.1                           THE PLAN SHALL TERMINATE OCTOBER 13, 2013 AND
THEREAFTER NO OPTIONS SHALL BE GRANTED HEREUNDER.  ALL OPTIONS OUTSTANDING AT
THE TIME OF TERMINATION OF THE PLAN SHALL CONTINUE IN FULL FORCE AND EFFECT IN
ACCORDANCE WITH AND SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN.  THE BOARD
OF DIRECTORS OF THE COMPANY AT ANY TIME PRIOR TO THAT DATE MAY TERMINATE THE
PLAN OR MAKE SUCH AMENDMENTS TO IT AS THE BOARD OF DIRECTORS SHALL DEEM
ADVISABLE; PROVIDED, HOWEVER, THAT EXCEPT AS PROVIDED IN SECTION 4, THE BOARD OF
DIRECTORS MAY NOT, WITHOUT SHAREHOLDER APPROVAL, INCREASE THE MAXIMUM NUMBER OF
SHARES AS TO WHICH OPTIONS MAY BE GRANTED UNDER THE PLAN OR CHANGE THE CLASS OF
PERSONS ELIGIBLE TO RECEIVE OPTIONS UNDER THE PLAN.  NO TERMINATION OR AMENDMENT
OF THE PLAN MAY, WITHOUT THE CONSENT OF THE HOLDER OF AN OPTION THEN EXISTING,
TERMINATE HIS OR HER OPTION OR MATERIALLY AND ADVERSELY AFFECT RIGHTS UNDER THE
OPTION.

 

12.2                           THIS PLAN MAY NOT BE AMENDED MORE THAN ONCE EVERY
SIX MONTHS OTHER THAN TO CONFORM WITH CHANGES IN THE INTERNAL REVENUE CODE, THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT, OR THE RULES THEREUNDER.

 

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13.                                         AUTOMATIC TERMINATION OF OPTION. 
NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, IF AT ANY TIME A
HOLDER OF AN OPTION GRANTED UNDER THIS PLAN BECOMES AN EMPLOYEE, OFFICER OR
DIRECTOR OF OR A CONSULTANT TO AN ENTITY WHICH THE COMMITTEE DETERMINES IS A
COMPETITOR OF THE COMPANY, SUCH OPTION SHALL AUTOMATICALLY TERMINATE AS OF THE
DATE SUCH CONFLICTING RELATIONSHIP WAS ESTABLISHED REGARDLESS OF WHETHER SUCH
OPTION IS EXERCISABLE IN WHOLE OR IN PART AT SUCH TIME.

 

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