Company's policies for expense payment and reimbursement,
in effect from time to time.
3.4
FRINGE BENEFITS.
DURING THE EMPLOYMENT PERIOD, IN ADDITION TO ANY
AMOUNTS TO WHICH THE EXECUTIVE MAY BE ENTITLED PURSUANT TO THE OTHER PROVISIONS
OF THIS SECTION 3 OR ELSEWHERE HEREIN, THE EXECUTIVE SHALL BE ENTITLED TO
PARTICIPATE IN, AND TO RECEIVE BENEFITS UNDER, (A) ANY BENEFIT PLANS,
ARRANGEMENTS OR POLICIES MADE AVAILABLE BY THE COMPANY TO ITS EMPLOYEES
GENERALLY, SUBJECT TO AND ON A BASIS CONSISTENT WITH THE TERMS, CONDITIONS AND
OVERALL ADMINISTRATION OF EACH SUCH PLAN, ARRANGEMENT OR POLICY AND (B) WITHOUT
LIMITING THE FOREGOING, THE BENEFITS SET FORTH ON EXHIBIT B ATTACHED HERETO.
3.5
STOCK OPTIONS.
(A)
THE COMPANY SHALL RECOMMEND TO THE OPTION COMMITTEE OF HOLDING, AS
DEFINED IN THE LINENS HOLDING CO. STOCK OPTION PLAN (THE "PLAN"), THAT THE
EXECUTIVE BE GRANTED NONQUALIFIED OPTIONS TO PURCHASE A TOTAL OF 10,000 SHARES
OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, OF HOLDING (THE "COMMON STOCK") WITH
A PER SHARE EXERCISE PRICE EQUAL TO THE FAIR MARKET VALUE OF THE COMMON STOCK ON
THE DATE OF GRANT, AS DETERMINED BY THE OPTION COMMITTEE, WHICH IS EXPECTED TO
BE $50.00 PER SHARE (THE "OPTIONS").
THE OPTIONS SHALL HAVE A TERM OF SEVEN
(7) YEARS FROM THE DATE OF GRANT AND BE EQUALLY DIVIDED BETWEEN A "TIME OPTION"
AND A "PERFORMANCE OPTION."
THE TIME OPTION SHALL BECOME VESTED AND EXERCISABLE
IN FOUR EQUAL ANNUAL INSTALLMENTS ON EACH OF THE FIRST FOUR ANNIVERSARIES OF THE
DATE OF GRANT, SUBJECT TO THE EXECUTIVE'S CONTINUED EMPLOYMENT WITH THE COMPANY,
AND THE PERFORMANCE OPTION SHALL BECOME VESTED AND EXERCISABLE UPON SATISFACTION
OF THE PERFORMANCE CRITERIA SET FORTH IN THE GRANT LETTER.
EXCEPT AS OTHERWISE
PROVIDED HEREIN, THE OPTIONS SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF THE
PLAN AND THE FORM OF GRANT LETTER APPLICABLE FOR OTHER SENIOR EXECUTIVES OF THE
COMPANY APPROVED BY THE OPTION COMMITTEE.
(B)
DURING THE EMPLOYMENT PERIOD AND SUBJECT TO THE APPROVAL OF THE
OPTION COMMITTEE, THE EXECUTIVE SHALL BE ELIGIBLE TO PARTICIPATE IN AND BE
GRANTED ADDITIONAL STOCK OPTIONS UNDER THE PLAN.
4.
TERMINATION.
4.1
GENERAL.
THE EMPLOYMENT OF THE EXECUTIVE HEREUNDER (AND THE
EMPLOYMENT PERIOD) SHALL TERMINATE AS PROVIDED IN SECTION 2 HEREOF, UNLESS
EARLIER TERMINATED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION 4.
4.2
DEATH OR DISABILITY OF THE EXECUTIVE.
(A)
THE EMPLOYMENT OF THE EXECUTIVE HEREUNDER (AND THE EMPLOYMENT
PERIOD) SHALL TERMINATE UPON (I) THE DEATH OF THE EXECUTIVE AND (II) AT THE
OPTION OF THE COMPANY, UPON NOT LESS THAN FIFTEEN (15) DAYS' PRIOR WRITTEN
NOTICE TO THE EXECUTIVE OR THE EXECUTIVE'S PERSONAL REPRESENTATIVE OR GUARDIAN,
IF THE EXECUTIVE SUFFERS A "TOTAL DISABILITY" (AS DEFINED IN SECTION 4.2(B)
HEREOF).
UPON TERMINATION FOR DEATH OR TOTAL DISABILITY, SUBJECT TO REDUCTION
BY ANY BENEFITS PAID OR PAYABLE TO THE EXECUTIVE, THE EXECUTIVE'S BENEFICIARIES
OR ESTATE UNDER ANY COMPANY-SPONSORED DISABILITY BENEFIT PLAN PROGRAM OR POLICY
FOR THE PERIOD FOLLOWING SUCH DATE OF TERMINATION, (A) THE COMPANY SHALL PAY TO
THE EXECUTIVE,