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Exhibit 10.17  

 
 

LINENS HOLDING CO.
  STOCK OPTION PLAN    
    

        Section 1.    Purpose    

        The
Plan authorizes the Option Committee to provide employees or directors of the Company or its subsidiaries, who are in a position to contribute to the long-term success of
the Company or its subsidiaries, with Options to acquire Shares in the Company. The Company believes that this incentive program will cause those persons to increase their interest in the welfare of
the Company and its subsidiaries, and aid in attracting, retaining and motivating persons of outstanding ability. 

        Section 2.    Definitions    

        Capitalized
terms used herein shall have the meanings set forth in this Section. 

	(a)
	"Affiliate"
shall mean any person or entity that, either directly or indirectly through one or more intermediaries, (i) controls the Company, or (ii) is controlled by
the Company or a person described in clause (i).

	(b)
	"Board"
means the Board of Directors of the Company.

	(c)
	"Cause"
shall have the meaning ascribed thereto in any effective employment agreement between the Company or subsidiaries and the Grantee, or if no employment agreement is in effect
that contains a definition of cause, then Cause shall mean a finding by the Option Committee that the Grantee has (i) committed a felony or a crime involving moral turpitude,
(ii) committed any act of gross negligence or fraud, (iii) failed, refused or neglected to substantially perform his duties (other than by reason of a physical or mental impairment) or
to implement the reasonable directives of the Company (which, if curable, is not cured within 30 days after notice thereof to the Grantee by the Option Committee), (iv) materially
violated any policy of the Company (which, if curable, is not cured within 30 days after notice thereof to the Grantee by the Option Committee), or (v) engaged in conduct that is
materially injurious to the Company, monetarily or otherwise.

	(d)
	"Company"
shall mean Linens Holding Co., a corporation organized under the laws of the State of Delaware.

	(e)
	"Disability"
shall have the meaning ascribed thereto in any effective employment agreement between the Company and the Grantee, or if no employment agreement is in effect that
contains a definition of disability, then Disability shall mean any physical or mental incapacitation which results in a Grantee's inability to perform his duties and responsibilities hereunder, as
determined by the Option Committee in its good faith judgment, for a period of 180 consecutive days.

	(f)
	"Employee"
shall mean any person or entity that is providing services to the Company or any of its subsidiaries as an employee or director.

	(g)
	"Grant
Letter" shall mean a letter, certificate or other agreement accepted by the Grantee, evidencing the grant of an Option hereunder and containing such terms and conditions, not
inconsistent with the express provisions of the Plan, as the Option Committee shall approve.

	(h)
	"Grantee"
shall mean an Employee granted an Option under the Plan. 

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	(i)
	"ISO"
shall mean any Option or portion thereof that meets the requirements of an incentive stock option under Section 422 of the Internal Revenue Code of 1986, and that is
designated by the Option Committee to be an ISO.

	(j)
	"Linens
Investors" shall mean Linens Investors, LLC, a limited liability company organized under the laws of Delaware, and its successors or assigns.

	(k)
	"Nonqualified
Option" shall mean any Option or portion thereof that is not an ISO.

	(l)
	"Option
Committee" shall mean the individuals appointed by the Board to serve as the Option Committee with responsibility for the administration of the Plan, or if no such individuals
are appointed, then the Option Committee shall consist of all of the members of the Board.

	(m)
	"Options"
shall refer to options issued under and subject to the Plan.

	(n)
	"Plan"
shall mean this Option Plan as set forth herein and as amended from time to time.

	(o)
	"Share"
shall mean a share of common stock of the Company.

	(p)
	"Stockholders
Agreement" shall mean the Stockholders' Agreement, dated as of February 14, 2006, among the Company, Linens Investors, and the Company's other stockholders, as
the same may thereafter be amended from time to time. 

        Section 3.    Shares Available under the Plan    

        Subject
to the provisions of Section 7, the total number of Shares with respect to which Options may be granted under the Plan shall not exceed 1,157,298. If, prior to exercise,
any Options are forfeited, lapse or terminate for any reason, the Shares covered thereby may again be available for Option grants under the Plan. 

        Section 4.    Administration of the Plan    

        (a)    Authority of the Option Committee.    The Plan shall be administered by the Option Committee. The Option
Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan: 

        (i)    to
select the Employees to whom Options may be granted; 

        (ii)   to
determine the number of Shares subject to each such Option; 

        (iii)  to
determine the terms and conditions of any Option granted under the Plan, including the exercise price, conditions relating to exercise, and termination of the right
to exercise; 

        (iv)  to
determine whether any Option shall be an ISO or a Nonqualified Option; 

        (v)   to
determine the restrictions or conditions related to the delivery, holding and disposition of Shares acquired upon exercise of an Option; 

        (vi)  to
prescribe the form of each Grant Letter; 

        (vii) to
adopt, amend, suspend, waive and rescind such rules and regulations and appoint such agents as the Option Committee may deem necessary or advisable to administer
the Plan; 

        (viii) to
correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and any Option, Grant Letter or other
instrument hereunder; and 

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        (ix)  to
make all other decisions and determinations as may be required under the terms of the Plan or as the Option Committee may deem necessary or advisable for the
administration of the Plan. 

        (b)    Manner of Exercise of Option Committee Authority.    Any action of the Option Committee with respect to the
Plan shall be final, conclusive and binding on all persons, including the Company, its Affiliates, Grantees, or any person claiming any rights under the Plan from or through any Grantee, except to the
extent the Option Committee may subsequently modify, or take further action not consistent with, its prior action. If not specified in the Plan, the time at which the Option Committee must or may make
any determination shall be determined by the Option Committee, and any such determination may thereafter be modified by the Option Committee. The express grant of any specific power to the Option
Committee, and the taking of any action by the Option Committee, shall not be construed as limiting any power or authority of the Option Committee. The Option Committee may delegate to officers or
managers of the Company or any Affiliate of the Company the authority, subject to such terms as the Option Committee shall determine, to perform such functions as the Option Committee may determine,
to the extent permitted under applicable law. 

        (c)    Limitation of Liability.    Each member of the Option Committee shall be entitled to, in good faith, rely or
act upon any report or other information furnished to him by any officer or other employee of the Company or any of its Affiliates, the Company's independent certified public accountants or any
executive compensation consultant, legal counsel or other professional retained by the Company to assist in the administration of the Plan. To the fullest extent permitted by applicable law, no member
of the Option Committee, nor any officer or employee of the Company acting on behalf of the Option Committee, shall be personally liable for any action, determination or interpretation taken or made
in good faith with respect to the Plan, and all members of the Option Committee and any officer or employee of the Company acting on its behalf shall, to the extent permitted by law, be fully
indemnified and protected by the Company with respect to any such action, determination or interpretation. 

        Section 5.    Option Termination.    

        Unless
otherwise determined by the Option Committee and set forth in a Grant Letter, Options shall terminate on the earliest of: 

        (a)   the
91st day following the date the Grantee ceases to be an Employee for any reason (except if such cessation is on account of death or Disability, the
181st day following such cessation); provided, however, that (i) in all cases the
portion of any Option that did not vest prior to or upon the date of termination of employment or engagement for any reason shall terminate immediately upon such termination, and (ii) if such
termination is for Cause, the vested portion shall terminate as well; 

        (b)   the
seventh anniversary of the date of grant as set forth in the Grant Letter; and 

        (c)   cancellation,
termination or expiration of the Options pursuant to action taken by the Option Committee in accordance with Section 7. 

        Section 6.    Exercise of Options    

        (a)   Only
the vested portion of any Option may be exercised. A Grantee shall exercise an Option by delivery of written notice to the Company setting forth the number of
Shares with respect to which the Option is to be exercised, together with cash, a certified check or bank draft payable to the order of the Company, in amount equal to the sum of the exercise price
for such Shares and any withholding tax obligation arising in connection with such exercise. The Option 

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Committee
may, in its sole discretion, permit other forms of payment, including notes or other contractual obligations of a Grantee to make payment on a deferred basis. 

        (b)   Before
the Company issues any Shares to a Grantee pursuant to the exercise of an Option, the Company shall have the right to require that the Grantee make such
provision, or furnish the Company such authorization, necessary or desirable so that the Company may satisfy its obligation under applicable tax laws to withhold for income or other taxes due upon or
incident to such exercise. The Option Committee, may, in its discretion, permit such withholding obligation to be satisfied through the withholding of Shares that would otherwise be delivered upon
exercise of the Option. 

        (c)   As
a condition to the grant of an Option or delivery of any Shares upon exercise of an Option, the Company shall have the right to require that the Grantee become party
to the Stockholders Agreement, or any similar or successor agreement. 

        Section 7.    Adjustment Upon Changes in Capitalization    

        In
the event any recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, exchange or issuance of Shares or other
securities, any stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar
transactions or events, affects the Shares, then the Option Committee shall make such equitable adjustment as it determines in its discretion is appropriate in order to prevent dilution or enlargement
of the rights of Grantees under the Plan, including adjustment in (i) the number and kind of Shares deemed to be available thereafter for grants of Options under Section 3,
(ii) the number and kind of Shares that may be delivered or deliverable in respect of outstanding Options, and (iii) the exercise price. In addition, the Option Committee is authorized
to make such adjustments as it shall in its sole discretion determine are appropriate in the terms and conditions of, and the criteria included in, Options (including, without limitation, cancellation
of Options in exchange for the in-the-money value, if any, of the vested portion thereof, cancellation of unvested and/or out-of-the-money
options for no consideration, substitution of Options using securities of a successor or other entity, acceleration of the time that Options expire, or adjustment of performance targets) in
recognition of unusual or nonrecurring events (including, without limitation, an event described in the preceding sentence) affecting the Company, Linens Investors or any other Affiliate of the
Company or the financial statements of the Company, Linens Investors or any Affiliate of the Company, or in response to changes in applicable laws, regulations or accounting principles. 

        Section 8.    Restrictions on Shares.    

        (a)    Restrictions on Issuing Shares.    No Shares shall be issued or transferred to an Employee under the Plan
unless and until all applicable legal requirements have been complied with to the satisfaction of the Option Committee. The Option Committee shall have the right to condition the exercise of any
Option on the Grantee's undertaking in writing to comply with such restrictions on any subsequent disposition of the Shares issued or transferred thereunder as the Option Committee shall deem
necessary or advisable as a result of any applicable law, regulation, official interpretation thereof, or any underwriting agreement. 

        (b)    ISO Notice.    A Grantee shall notify the Company of any disposition of Shares acquired upon exercise of an ISO
if such disposition occurs within one year of the date of such exercise or within two years of the date of grant of such ISO. The Company may impose such procedures as it determines may be necessary
to ensure that such notification is made. 

        (c)    Repurchase Right.    Unless otherwise determined in a Grant Letter, the Company shall have the right (but not
the obligation) to repurchase any or all of the Shares acquired upon exercise of the Options upon a Grantee's ceasing to be an Employee for any reason. Such right 

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shall
be exercisable by the Company during the one year period following the later of the date of such cessation or the date the Option is exercised. The price per Share to be paid by the Company
should it choose to exercise its repurchase right shall equal the fair market value per share, as determined by the Board in good faith; provided,  however,
if the Shares are to be repurchased following a termination for Cause, then the price per Share to be paid by the Company shall not exceed the
price per Share paid by the Grantee. The price per Share to be paid by the Company should it choose to exercise its repurchase right shall be paid in cash or by plain check against delivery of
certificates representing the repurchased shares. Notwithstanding the foregoing, if at the time of the exercise of the repurchase right or payment for the Shares pursuant thereto, such exercise or
repurchase would result in a default or breach on the part of the Company or any subsidiary under any loan or other agreement, or if the repurchase would not be permitted under any applicable state
law, then the Company shall take possession of the Shares to be repurchased and payment shall be deferred until the first business day that it may occur without any such event existing or resulting.
The Company may offset against the payment of the repurchase price any amounts owed by the Grantee to the Company or any Affiliate of the Company. Should the Company choose not to exercise its
repurchase right, Linens Investors or its controlling Affiliates may exercise such right as if it were the Company, and Linens Investors and its controlling Affiliates shall be a third party
beneficiary of the Plan with respect to the exercise of such right. The provisions of this Section 8(c) shall cease to be applicable with respect to any termination of employment occurring on
or after an initial public offering of the Company's common stock. 

        Section 9.    General Provisions    

        (a)    Grant Letter.    Each Option shall be evidenced by a Grant Letter. The terms and provisions of such Grant
Letters may vary among Grantees and among different Options granted to the same Grantee. 

        (b)    No Right to Employment.    The grant of an Option in any year shall not give the Grantee any right to similar
grants in future years, any right to continue such Grantee's employment relationship with the Company or its Affiliates, or, until such Option is exercised and Shares are issued, any rights as a
stockholder of the Company. All Grantees shall remain subject to discharge to the same extent as if the Plan were not in effect. For purposes of the Plan, a Grantee shall cease to be an Employee upon
a sale of any subsidiary of the Company that employs or engages such Grantee, unless the Grantee shall otherwise continue to provide services to the Company or another subsidiary of the Company as an
employee or director. 

        (c)    No Funding.    No Grantee, and no beneficiary or other persons claiming under or through the Grantee, shall
have any right, title or interest by reason of any Option to any particular assets of the Company or Affiliates of the Company, or any Shares allocated or reserved for the purposes of the Plan or
subject to any Option except as set forth herein. The Company shall not be required to
establish any fund or make any other segregation of assets to assure satisfaction of the Company's obligations under the Plan. 

        (d)    No Transfers.    No Option may be sold, transferred, assigned, pledged or otherwise encumbered, except by will
or the laws of descent and distribution, and an Option shall be exercisable during the Grantee's lifetime only by the Grantee. Upon a Grantee's death, the estate or other beneficiary of such deceased
Grantee shall be subject to all the terms and conditions of the Plan and Grant Letter, including the provisions relating to the termination of the right to exercise the Option. 

        (e)    Governing Law; Jurisdiction.    The Plan shall be governed by and construed in accordance with the laws of the
State of New Jersey, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New Jersey or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of New Jersey, except to 

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the
extent that the Delaware General Corporation Law applies as a result of the Company being incorporated in the State of Delaware, in which case the Delaware General Corporation Law shall apply.
Each Grantee, and each beneficiary or other person claiming under or through the Grantee by accepting the grant of an Option consents to the exclusive jurisdiction of any state or federal court
located within the State of New Jersey, agrees that all actions or proceedings relating to the Plan shall be litigated in such courts, waives any
defense of forum non conveniens, and agrees to be bound by any final and nonappealable judgment rendered thereby in connection with the Plan. To the
extent the Grantee is a party to an employment agreement with the Company or any of its subsidiaries that provides for binding arbitration of employment disputes, then any disputes between the Company
and such Grantee arising under the Plan shall be arbitrated in accordance with the procedures set forth in such employment agreement. 

        Section 10.    Amendment or Termination    

        In
addition to its authority elsewhere in the Plan, the Option Committee may, at any time, amend or terminate the Plan or any Grant Letter;  provided, however,
that, no such action shall adversely affect the rights of Grantees with respect to
Options previously granted hereunder. 

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LINENS HOLDING CO. STOCK OPTION PLANExhibit 10.18  

LNT Option Grant Letter-Employees (Updated 3/26/06)

(Any variations to the form must be reviewed by

LNT Legal Dept. or outside legal counsel)  

LINENS HOLDING CO.

6 Brighton Road

Clifton, NJ 07015  

                 ,
200  

[Name
of Grantee]

[Address] 

	Re:
	Grant of Stock Options

Dear                        :

        We
are pleased to inform you that you have been granted options to purchase                        shares of common stock of Linens
Holding Co. (the "Company"). As further described below, the
options have varying features
relating to vesting and are denominated as a "Time Option" and a "Performance Option", and are collectively referred to as the "Options". The Options have been granted pursuant to the Company's Stock
Option Plan (the "Plan"), a copy of which is attached, and are subject in all respects to the provisions of the Plan. Capitalized terms not otherwise defined in the text are defined in the Plan. 

	1.
	Time Option:    The key terms of the Time Option are as follows:

	(a)
	Number of Shares.                

	(b)
	Exercise Price per Share.    $                  

	(c)
	Vesting.    The Time Option will vest and become exercisable in four equal annual installments
on                        
    , 200    , 200    , 200    and 20    , provided that the Time Option will become fully vested and exercisable immediately prior to a "Change of
Control" (as defined in paragraph 2(d) below).

	2.
	Performance Option:    The key terms of the Performance Option are as follows:

	(a)
	Number of Shares.                

	(b)
	Exercise Price per Share.    $                  

	(c)
	Vesting.

	(i)
	If
on any Measurement Date, the Value Per Share equals or exceeds the Target Stock Price (the "Performance Goal"), then (1) if such Measurement Date is other than the date of a
Linens Investors Liquidity Event, the Performance Option will vest and become exercisable in two equal annual installments on each of the first two anniversaries of such Measurement Date, provided
that if a Change of Control occurs after any such Measurement Date, any unvested installment shall become fully vested immediately prior to the Change of Control, and (2) if such Measurement
Date is the date of a Linens Investors Liquidity Event, the Performance Option will become fully vested and immediately exercisable at such time.

	(ii)
	If,
on any Measurement Date prior to a Qualified IPO, the Performance Goal would be satisfied by disregarding in the calculation of Net Equity Value, some portion, but not all, of
your Performance Option as well as similar performance options granted to other employees, then a portion of your Performance Option shall vest, as determined by the Option Committee in a fair and
equitable manner. 

 

	(d)
	Definitions.

	(i)
	"Apollo"
means Apollo Management V, L.P. and its affiliates or any entity controlled thereby or any of the partners thereof.

	(ii)
	"Capital
Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in, however designated,
equity of such Person, including any Preferred Stock, but excluding any debt securities convertible into such equity.

	(iii)
	"Change
in Control" means:

	(1)
	any
event occurs the result of which is that any "Person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act, other than one or more Permitted Holders or their
Related Parties, becomes the beneficial owner, as defined in Rules l3d-3 and l3d-5 under the Exchange Act (except that a Person shall be deemed to have "beneficial ownership"
of all shares that any such Person has the right to acquire within one year) directly or indirectly, of more than 50% of the Voting Stock of the Company or any successor company, including, without
limitation, through a merger or consolidation or purchase of Voting Stock of the Company; provided that none of the Permitted Holders or their Related
Parties have the right or ability by voting power, contract or otherwise to elect or designate for election a majority of the Board; provided further
that the transfer of 100% of the Voting Stock of the Company to a Person that has an ownership structure identical to that of the Company prior to such transfer, such that the Company becomes a wholly
owned Subsidiary of such Person, shall not be treated as a Change of Control;

	(2)
	after
an initial public offering of Capital Stock of the Company, during any period of two (2) consecutive years, individuals who at the beginning of such period constituted
the Board, together with any new directors whose election by such Board or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a
majority of the Board then in office;

	(3)
	the
sale, lease, transfer, conveyance or other disposition, in one or a series of related transactions other than a merger or consolidation, of all or substantially all of the assets
of the Company and its Subsidiaries taken as a whole to any Person or group of related Persons other than a Permitted Holder or a Related Party of a Permitted Holder; or

	(4)
	the
adoption of a plan relating to the liquidation or dissolution of the Company.

	(iv)
	"Exchange
Act" means the Securities Exchange Act of 1934, as amended.

	(v)
	"Fully
Diluted Shares" means, on any Measurement Date, the number of Shares outstanding, plus the number of Shares subject to all outstanding options, warrants and rights to acquire
Shares, whether or not exercisable.

	(vi)
	"Linens
Investors Liquidity Event" means any transaction (including, without limitation, a stock sale, redemption or buy back, merger, consolidation or otherwise) immediately
following which all of the Shares held by Linens Investors have been exchanged for or converted into consideration, all or substantially all of which consists of cash or readily marketable securities
that Linens Investors can 

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immediately
resell for cash at prevailing quoted prices without legal, contractual or market restrictions. 

	(vii)
	"Measurement
Date" means (1) prior to a Qualified IPO, the last day of any fiscal quarter, starting with the last day of the fiscal quarter ending coincident with or next
following December 31, 2007, (2) following a Qualified IPO, each trading day, starting with the 90th trading day following the Qualified IPO, or (3) the date of a Linens Investors
Liquidity Event, whether before or after a Qualified IPO.

	(viii)
	"Net
Equity Value" means (1) 7.5 multiplied by the Company's consolidated operating earnings, before interest, income taxes, depreciation and amortization ("EBITDA") for the
four fiscal quarters ending upon a Measurement Date, plus (2) the sum of cash, cash equivalents, and the aggregate exercise price of all outstanding options or warrants to purchase Shares,
whether or not exercisable, in each case as of the Measurement Date, less (3) debt as of the Measurement Date. EBITDA, cash and debt shall be determined by the Option Committee based on the
Company's financial statements for such period, subject to such adjustments to reflect unusual, nonrecurring or extraordinary events as the Option Committee shall deem equitable and appropriate.

	(ix)
	"Permitted
Holder" means any of Apollo, NRDC Real Estate Advisors I, LLC or Silver Point Capital Fund Investments, LLC.

	(x)
	"Person"
means any individual, corporation, partnership, limited liability company, joint venture, association, business trust, joint-stock company, estate, trust, unincorporated
organization, government or other agency or political subdivision thereof or any other legal or commercial entity.

	(xi)
	"Preferred
Stock" as applied to the Capital Stock of any corporation means Capital Stock of any class or classes, however designated, that is preferred as to the payment of
dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such corporation.

	(xii)
	"Related
Party" means (1) any controlling stockholder, 50% (or more) owned Subsidiary, or immediate family member (in the case of an individual) of any Permitted Holder; or
(2) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, members, owners or Persons beneficially holding an 50% or more
controlling interest of which consist of any one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (1).

	(xiii)
	"Qualified
IPO" means a sale by the Company of Shares in an underwritten (firm commitment) public offering registered under the Securities Act of 1933, with gross proceeds to the
Company of not less than $150 million, resulting in the listing of the Shares on a nationally recognized stock exchange, including without limitation the Nasdaq National Market System.

	(xiv)
	"Subsidiary"
means, with respect to any specified Person, (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares
of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders' agreement that effectively transfers voting power) to
vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or
more of the 

3

 

other
Subsidiaries of that Person (or a combination thereof); and (2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of
such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof). 

	(xv)
	"Target
Stock Price" means $50, compounded at an annual rate of 25% from February 14, 2006 to the Measurement Date, provided that the Option Committee shall make such
adjustment to the Target Stock Price as it determines is equitable and appropriate to reflect changes to the outstanding Shares or capital structure of the Company, including contributions and
distributions of capital.

	(xvi)
	"Value
Per Share" means (1) prior to a Qualified IPO, the Net Equity Value divided by the Fully Diluted Shares, (2) following a Qualified IPO, the average closing
price of a Share for the period of 90 consecutive trading days ending on the Measurement Date, or (3) upon a Linens Investors Liquidity Event, the price per Share realized by Linens Investors.

	(xvii)
	"Voting
Stock" of an entity means all classes of Capital Stock of such entity then outstanding and normally entitled to vote in the election of directors or all interests in such
entity with the ability to control the management or actions of such entity. 

	3.
	Termination of the Options:    Whether or not exercisable or scheduled to become exercisable, the Options will terminate as
provided in Section 5 of the Plan. In addition, the Performance Option will terminate no later than a Linens Investors Liquidity Event to the extent the Performance Goal is not achieved at such
time, or was not previously achieved.

	4.
	Federal Taxes:    The Options granted to you are treated as "nonqualified options" for federal tax purposes, which means that
when you exercise, the excess of the value of the Shares issued on exercise over the exercise price paid for the Shares is income to you, subject to wage-based withholding and reporting.
When you sell the Shares acquired upon exercise, the excess (or shortfall) between the amount you receive upon the sale and the value of the shares at the time of exercise is treated as capital gain
(or loss). State and local taxes may also apply. You should consult your personal tax advisor for more information concerning the tax treatment of your Options. 

        We
are excited to give you this opportunity to share in our future success. Please indicate your acceptance of this option grant and the terms of the Plan by signing and returning a copy
of this letter. 

Sincerely,

	LINENS HOLDING CO.	 
	

By:	

    
	

 
	Name:	    
	 
	Title:	    
	 
	

Agreed to and Accepted by:	

 
	

    
 Name:	

 

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