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Exhibit
10.2
FORM OF NON QUALIFIED
STOCK OPTION AGREEMENT (this “ Agreement ”)
dated as of [DATE] between ARAMARK HOLDINGS
CORPORATION , a Delaware corporation (the “
Company ”), and the Optionee set forth on the
signature page to this Agreement (the “ Optionee
”).
WHEREAS , pursuant to
the Agreement and Plan of Merger (the “ Merger
Agreement ”) made and entered into as of the 8th day of
August, 2006, by and among RMK Acquisition Corporation, a Delaware
corporation (“ MergerCo ”), RMK Finance LLC, a
Delaware limited liability company, and Aramark Corporation,
MergerCo has been merged with and into Aramark Corporation, with
Aramark Corporation surviving the merger as a wholly-owned
subsidiary of the Company (the “ Transaction
”);
WHEREAS, the Company,
acting through the Committee (as such term is defined in the Plan)
with the consent of the Company’s Board of Directors (the
“ Board ”) has agreed to grant to the Optionee,
as of [DATE] (the “ Grant Date ”) an option
under the Aramark Holdings Corporation 2007 Management Stock
Incentive Plan (the “ Plan ”) to purchase a
number of shares of Common Stock on the terms and subject to the
conditions set forth in this Agreement and the Plan; and
WHEREAS , the Optionee
is, in connection with the execution of this Agreement, to become a
party to the Stockholders Agreement (as such term is defined in the
Plan).
NOW, THEREFORE, in
consideration of the promises and of the mutual agreements
contained in this Agreement, the parties hereto hereby agree as
follows:
Section 1. The
Plan . The terms and provisions of the Plan are hereby
incorporated into this Agreement as if set forth herein in their
entirety. In the event of a conflict between any provision of this
Agreement and the Plan, the provisions of the Agreement shall
control. A copy of the Plan has been provided to the Optionee.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings ascribed thereto in the Plan or
the Stockholders Agreement, as the case may be.
Section 2. Option;
Option Price . Effective on the Grant Date, on the terms and
subject to the conditions of the Plan and this Agreement, the
Company hereby grants to the Optionee the option (the “
Option ”) to purchase the number of Shares set forth
on the signature page hereto, at the Option Price equal to $[
the most recent quarterly appraisal price of one share of Common
Stock ]. One-half of the Option consists of options with
time-based vesting (“ Time-Based Options ”), and
one-half of the Option consists of options with performance-based
vesting (“ Performance-Based Options ”). The
payment of the Option Price may be made, at the election of the
Optionee, in any manner authorized under Section 5.5 of
the Plan as such section is in effect on the date of this
Agreement. The Option is not intended to qualify for federal income
tax purposes as an “incentive stock option” within the
meaning of Section 422 of the Code.
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Section 3. Term .
The term of the Option (the “ Option Term ”)
shall commence on the Grant Date and expire on the tenth
anniversary of the Grant Date, unless the Option shall have sooner
been terminated in accordance with the terms of the Plan
(including, without limitation, Article V of the Plan) or
this Agreement.
Section 4.
Vesting . Subject to the Optionee’s not having a
Termination of Relationship and except as otherwise set forth in
Section 7 , the Options shall become non-forfeitable
and exercisable (any Options that shall have become non-forfeitable
and exercisable pursuant to Section 4 , the “
Vested Options ”) according to the following
provisions:
(a) Time-Based Options
.
(i) Twenty-five percent
(25%) of the Time-Based Options shall become Vested Options on
each of the first four anniversaries of the Grant Date (each, a
“ Vesting Date ”), subject to the
Optionee’s continued employment with the Company through the
applicable Vesting Date.
(ii) Notwithstanding
Section 4(a)(i), in the event of (A) a Change of Control,
each outstanding Time-Based Option which has not theretofore become
a Vested Option pursuant to Section 4(a)(i) shall become a
Vested Option concurrently with consummation of such event, and
(B) a Termination of Relationship as a result of the
Optionee’s death, Disability, or Retirement (each, a “
Special Termination ”), the installment of Time-Based
Options scheduled to vest during the 12-month period immediately
following such Special Termination shall become Vested Options, and
the remaining Time-Based Options which are not then Vested Options
shall be forfeited.
(b) Performance-Based
Options .
(i) Twenty-five percent
(25%) of the Performance-Based Options shall become Vested
Options on each Vesting Date, subject to the Optionee’s
continued employment with the Company through the applicable
Vesting Date and the achievement of the applicable EBIT performance
target for the applicable fiscal year of the Company ending
immediately prior to the applicable Vesting Date (each such fiscal
year, a “ Fiscal Year ”, and each such EBIT
performance target, an “ EBIT Target ”, all as
set forth on Schedule 1 to this Agreement).
(ii) Notwithstanding
Section 4(b)(i), but, except as otherwise provided in
Section 4(b)(ii)(E) below, subject to the Optionee’s
continued employment with the Company through the applicable
vesting event:
(A) in the event that the
EBIT Target is not achieved for any particular Fiscal Year set
forth on Schedule 1 to this Agreement (other than the 2010 Fiscal
Year) (any such Fiscal Year, a “ Missed Year ”),
if the cumulative EBIT earned as of the end of any subsequent
Fiscal Year equals or exceeds the Cumulative EBIT Target (as set
forth on Schedule 1 to this Agreement) for such subsequent Fiscal
Year (any such Fiscal Year, a “ Catch-up Year
”), then all installments of Performance-Based Options that
did not become vested in respect of any Missed Year will
nevertheless become Vested Options on the same date that the
installment of Performance-Based Options that otherwise vests in
respect of such Catch-up Year pursuant to this Section 4(b)
(see the attached Schedule 2 for an example hereof);
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(B) upon the consummation of
a Return-Based Vesting Event (as defined below), all then-unvested
Performance-Based Options shall become Vested Options concurrently
with the consummation of such event;
(C) upon the consummation of
a Qualified Partial Liquidity Event (as defined below), a portion
of the then-unvested Performance-Based Options (in the order set
forth below) shall become Vested Options concurrently with the
consummation of such event, such that the total percentage of
Performance-Based Options that have become Vested Options
immediately after the consummation of such Qualified Partial
Liquidity Event shall, after taking into account any
Performance-Based Options that had become Vested Options pursuant
to any other provision of Section 4(b) prior to such Qualified
Partial Liquidity Event, be equal to the Partial Liquidity Vesting
Percentage (as defined below) (see the attached Schedule 2 for an
example hereof);
(D) upon the occurrence,
prior to the conclusion of the Company’s 2010 Fiscal Year, of
a Change of Control that is not a Return-Based Vesting Event, a
percentage of the then-unvested Performance-Based Options which
would have been eligible for vesting based on EBIT performance for
the Fiscal Year during which the Change in Control occurs and those
eligible for any subsequent Fiscal Years, equal to (x) 100%
multiplied by (y) a quotient, the numerator of which is the
aggregate number of Performance-Based Options that previously
became Vested Options prior to the Fiscal Year in which such Change
of Control occurs, and the denominator of which is the aggregate
number of Performance-Based Options that were eligible to become
Vested Options if all EBIT Targets were achieved prior to the
Fiscal Year during with the Change in Control occurs, shall become
Vested Options concurrently with consummation of such a Change of
Control (see the attached Schedule 2 for an example hereof);
and
(E) in the event of a Special
Termination, all installments of unvested Performance-Based Options
that would have vested during the 12-month period immediately
following such Special Termination (the “ Special
Termination Vesting Period ”) in accordance with the
other provisions of this Section 4(b) if no such termination
had occurred during such period (including in the event that any
such installments would have vested based on (x) the
achievement of the Cumulative EBIT Target for the Fiscal Year
immediately following the Fiscal Year in which the Special
Termination occurs in accordance with Section 4(b)(ii)(A), or
(y) the occurrence during the Special Termination Vesting
Period of a Return-Based Vesting Event, a Qualified Partial
Liquidity Event or a Change of Control that is not a Return-Based
Vesting Event, in accordance with Section 4(b)(ii)(B),
Section 4(b)(ii)(C), or Section 4(b)(ii)(D),
respectively) shall become Vested Options on the applicable Vesting
Date(s) that occur during the Special Termination Vesting Period
(see the attached Schedule 2 for an example hereof).
For purposes of
Section 4(b)(ii)(C) above, the then-unvested Performance-Based
Options shall become Vested Options in the manner set forth
therein, in the following order, to the extent
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applicable: first, any then-unvested
Performance-Based Options from any prior Missed Years (beginning
with the earliest Missed Year and each subsequent Missed Year);
second, the then-unvested Performance-Based Options eligible for
vesting based on EBIT performance for the Fiscal Year in which the
Qualified Partial Liquidity Event occurs; and third, any
then-unvested Performance-Based Options eligible for vesting based
on EBIT performance for the Fiscal Year immediately subsequent to
the Fiscal Year in which the Qualified Partial Liquidity Event
occurs and each subsequent Fiscal Year.
(c) Except as otherwise
provided above with respect to a Special Termination, upon a
Termination of Relationship for any reason, the unvested portion of
the Option ( i.e. , that portion which does not constitute
Vested Options) shall terminate and cease to be outstanding on the
date the Termination of Relationship occurs and shall no longer be
eligible to become Vested Options, provided, however, that if upon
the date the Termination of Relationship occurs, the Committee is
unable to determine if the EBIT Target for the Fiscal Year
immediately preceding the year in which the Termination of
Relationship occurs has been met, any unvested portion of the
Option that could vest based upon such determination shall not
terminate until such determination is made (and shall vest if the
applicable EBIT Target is achieved in accordance with
Section 4(6)(ii) above)).
(d) Certain
Definitions .
(i) A “ Return-Based
Vesting Event ” shall be deemed to occur upon the
achievement of either of the following performance goals:
(x) on or after the third anniversary of the Grant Date, the
Sponsor IRR (or, during the Special Termination Vesting Period, the
Special Termination Sponsor IRR) is equal to or exceeds 22% or
(y) the Sponsor Stockholders have, prior to the third
anniversary of the Grant Date, received a Sponsor Return (or,
during the Special Termination Vesting Period, the Special
Termination Sponsor Return) that equals or exceeds 200% of the
Sponsor Investment.
(ii) A “ Qualified
Partial Liquidity Event ” shall mean any disposition,
whether in an IPO or other public offering, or any sale or other
private transaction to any person or entity, of a portion of the
Sponsor Investment (including any Change of Control, transfer from
one Investor Group to another Investor Group, or LP Transfer (as
defined below), but excluding, for the avoidance of doubt, a
Spin-off, unless and until such shares are themselves disposed of
or realized upon for cash and/or liquid or marketable equity or
debt securities), or a recapitalization, resulting in (x) on
or after the third anniversary of the Grant Date, the achievement
by the Sponsor Stockholders of a Sponsor IRR (or, during the
Special Termination Vesting Period, the Special Termination Sponsor
IRR) that would equal or exceed 22%, or (y) prior to the third
anniversary of the Grant Date, the receipt of a Sponsor Return (or,
during the Special Termination Vesting Period, the Special
Termination Sponsor Return) that equals or exceeds 200% of the
Sponsor Investment, in either case, when measured with respect to
such disposed or otherwise realized upon portion (and all
previously liquidated, disposed of or otherwise realized (in cash
or marketable securities, taking into account
Section 4(d)(vi)) upon portions) of the Sponsor
Investment.
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(iii) The “ Partial
Liquidity Vesting Percentage ” shall equal the percentage
of the Sponsor Investment liquidated, disposed of or otherwise
realized upon in a Qualified Partial Liquidity Event; provided
that, if immediately following such event, the Sponsor
Stockholders have liquidated, disposed of or otherwise realized
upon 80% or more of the Sponsor Investment, then the Partial
Liquidity Vesting Percentage shall equal 100%.
(iv) “ Sponsor
IRR ” means the pretax compounded annual internal rate of
return realized by the Sponsor Stockholders on the Sponsor
Investment, based on the aggregate amount invested by the Sponsor
Stockholders for all Sponsor Investment and the aggregate value and
amount of cash and liquid or marketable debt or equity securities
(excluding securities of the Company and, in the event of a
Spin-off, securities of a Subsidiary (“ Subsidiary
Stock ”), unless and until such shares are themselves
disposed of or realized upon for cash and/or liquid or marketable
equity or debt securities) actually received by the Sponsor
Stockholders or in respect of all Sponsor Investment, assuming all
Sponsor Investment were purchased by one Person and were held
continuously by such Person. The Sponsor IRR shall be determined
based on the actual time of each Sponsor Investment and the actual
cash and liquid or marketable debt or equity securities received
(in each case, measured at the time of receipt) by the Sponsor
Stockholders in respect of all Sponsor Investment and including, as
a return on each Sponsor Investment, any cash dividends, cash
distributions or cash sales by the Company or any Affiliate in
respect of such Sponsor Investment during such period, any
transaction fees received in connection with the Transaction, and,
in the event of any distribution of Shares by a Sponsor Stockholder
to its general or limited partners, members, managers or
stockholders (in each such case, other than a distribution by a
Sponsor Stockholder to another member of such Sponsor
Stockholder’s Investor Group) in accordance with such Sponsor
Stockholder’s governing documents (an “ LP
Transfer ”), the Fair Market Value of such Shares on such
distribution date (the “ LP Transfer Value ”),
but excluding a
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