Exhibit 10.33
P.F. CHANG’S CHINA BISTRO, INC.
NON-EMPLOYEE DIRECTOR COMPENSATION PLAN
1. Establishment and Objectives of the Plan
P.F. Chang’s China Bistro, Inc., a Delaware corporation (the “Company”), by
action of its Board of Directors (the “Board”), has adopted this P.F. Chang’s
China Bistro, Inc. Non-Employee Director Compensation Plan (the “Plan”) for the
benefit of Non-Employee Directors of the Company, effective April 17, 2008 (the
“Effective Date”). The Plan is a new deferred compensation plan intended to
advance the interests of the Company by providing the Company an advantage in
attracting and retaining Non-Employee Directors and by providing Non-Employee
Directors with additional incentive to serve the Company by increasing their
proprietary interest in the success of the Company. All equity-based awards
under this Plan shall be made pursuant to an Equity Plan.
2. Definitions
As used in the Plan, the following definitions apply to the terms indicated
below.
(a) “Account” means a bookkeeping reserve account to which Restricted Stock
Units shall be credited on behalf of Non-Employee Directors.
(b) “Affiliate” means any entity, whether now or hereafter existing, which
controls, is controlled by, or is under common control with, the Company
(including, but not limited to, joint ventures, limited liability companies and
partnerships), as determined by the Board.
(c) “Annual Meeting” means the annual meeting of stockholders of the Company
held on the relevant Annual Meeting Date.
(d) “Annual Meeting Date” means the date of the Company’s Annual Meeting for the
relevant Plan Year.
(e) “Annual Retainer” means the retainer fee established by the Board in
accordance with Section 4.1 and payable to a Non-Employee Director for services
performed as a member of the Board of Directors.
(f) “Appointment Date” means the date that a New Director first joins the Board
as a Non-Employee Director, provided such date is not an Annual Meeting Date.
(g) “Award” means an Option or Restricted Stock Unit, as applicable, granted
under the Equity Plan as provided in this Plan.
(h) “Board” or “Board of Directors” means the Board of Directors of the Company.

 

 

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(i) “Change in Control” means the occurrence of any of the following:
(1) an Ownership Change Event or a series of related Ownership Change Events
(collectively, a “Transaction”) in which the stockholders of the Company
immediately before the Transaction do not retain immediately after the
Transaction, in substantially the same proportions as their ownership of shares
of the Company’s voting stock immediately before the Transaction, direct or
indirect beneficial ownership of more than fifty percent (50%) of the total
combined voting power of the outstanding voting securities of the Company or, in
the case of an Ownership Change Event, the entity to which the assets of the
Company were transferred (the “Transferee”) as the case may be; or
(2) the liquidation of the Company.
For purposes of the preceding sentence, indirect beneficial ownership shall
include, without limitation, an interest resulting from ownership of the voting
securities of one or more corporations or other business entities which own the
Company or the Transferee, as the case may be, either directly or through one or
more subsidiary corporations or other business entities. The Board shall have
the right to determine whether multiple sales or exchanges of the voting
securities of the Company or multiple Ownership Change Events are related, and
its determination shall be final, binding and conclusive.
(j) “Change in Control Event” shall have the meaning ascribed thereto under Code
Section 409A(a)(2)(A)(v) with respect to a change in the ownership or effective
control of the Company, or in the ownership of a substantial portion of the
assets of the Company.
(k) “Code” means the Internal Revenue Code of 1986, as amended, and the
regulations and guidance promulgated thereunder.
(l) “Common Stock” means the Company’s common stock, par value $0.001 per share.
(m) “Company” means P.F. Chang’s China Bistro, Inc., a Delaware corporation.
(n) “Disability” or “Disabled” means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that is expected to result in death or last for a continuous period
of not less than twelve months, as determined in accordance with Code
Section 409A.
(o) “Effective Date” means April 17, 2008.
(p) “Elected Payment Date” means the date (if any) elected by a Non-Employee
Director pursuant to Section 5 of this Plan for the payment of vested Restricted
Stock Units.
(q) “Election Form” means the form approved by the Board for use by a
Non-Employee Director to select the form of payment of the Annual Retainer and
an Elected Payment Date, if applicable.
(r) “Election” mean a Non-Employee Director’s election as to the form of payment
of the Annual Retainer and Payment Election, if applicable.

 

 

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(s) “Equity Plan” means any equity compensation plan that has been approved by
the Company’s stockholders, from time to time, provided that such equity
compensation plan provides for the applicable Award.
(t) “Fair Market Value” means the closing price of a share of Common Stock as
quoted on such national or regional securities exchange or market system
constituting the primary market for the Common Stock on the last trading day
prior to the day of determination, as reported in The Wall Street Journal or
such other source as the Company deems reliable.
(u) “New Director” means a Non-Employee Director of the Company who first
becomes a member of the Board of Directors on a date that is not an Annual
Meeting Date.
(v) “Non-Employee Director” means a member of the Board who, at the time of his
or her service, is not an employee of the Company or any Affiliate.
(w) “Option” means a nonstatutory stock option to purchase one share of Common
Stock granted pursuant to the Equity Plan as provided under this Plan.
(x) “Ownership Change Event” means any of the following which occurs with
respect to the Company: (i) the direct or indirect sale or exchange in a single
or series of related transactions by the stockholders of the Company of more
than 50% of the voting stock of the Company; (ii) a merger or consolidation in
which the Company is a party; or (iii) the sale, exchange or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets
of the Company.
(y) “Payment Date” means the date on which the first of the events set forth in
Section 4.3(c)(iii) shall occur.
(z) “Payment Election” means a written election made in accordance with the
provisions of Section 5 to select an Elected Payment Date with regard to an
award of Restricted Stock Units.
(aa) “Plan” means this P.F. Chang’s China Bistro, Inc. Non-Employee Director
Compensation Plan.
(bb) “Plan Year” means the twelve-month period coinciding with the calendar
year.
(cc) “Prorated Amount” means, with respect to a New Director, an amount equal
to: (1) the Annual Retainer reduced by the product of (x) the quotient
determined by dividing (i) the Annual Retainer by (ii) 365 days, multiplied by
(y) the number of days between the Appointment Date and the Annual Meeting Date
immediately preceding the New Director’s Appointment Date (excluding the Annual
Meeting Date itself).
(dd) “Restricted Stock Unit” means a unit established on the Company’s books
which is equivalent to one share of Common Stock, which unit is granted pursuant
to the Equity Plan as provided under this Plan.

 

 

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(ee) “Termination Date” means the date on which the Non-Employee Director ceases
to be a member of the Board of Directors of the Company.
(ff) “Vesting Date” means, with respect to each Option or Restricted Stock Unit,
the applicable date upon which such Award vests pursuant to Section 5.
3. Administration of the Plan
Except as otherwise provided herein, the Plan shall be administered by the
Board. The Board shall have full authority to administer the Plan, including
authority to interpret and construe any provision of the Plan and the terms of
any Award granted under it and to adopt such rules and regulations for
administering the Plan as it may deem necessary. Decisions of the Board shall be
final and binding on all parties.
4. Annual Retainer
4.1 Amount of Annual Retainer. Until changed by resolution of the Board, the
amount of the Annual Retainer will be $175,000 for each Non-Employee Director,
plus $20,000 for the Lead Director, $20,000 for the Chair of the Audit
Committee, and $10,000 for each of the Chairs of the Compensation and Executive
Development Committee and the Nominating and Corporate Governance Committee.
4.2 Entitlement to Annual Retainer.
(a) Each Non-Employee Director who is duly elected and qualified as such at the
Annual Meeting or who is otherwise serving as a Non-Employee Director
immediately following the Annual Meeting, shall receive an Annual Retainer, a
portion of which shall be paid in cash and a portion of which shall be paid in
Options and/or Restricted Stock Units, as provided in Section 4.3.
(b) Each New Director shall receive an Annual Retainer equal to the Prorated
Amount on his or her Appointment Date, a portion of which shall be paid in cash
and a portion of which shall be paid in Options and/or Restricted Stock Units,
as provided in Section 4.3.
4.3 Payment of Annual Retainer in Cash, Options and/or Restricted Stock Units.
Each Non-Employee Director shall be permitted, in accordance with the election
provisions set forth in Section 5, to make an Election to receive not less than
50%, nor more than 75%, of the Annual Retainer in the form of (a) Options;
(b) Restricted Stock Units; or (c) 50% Options and 50% Restricted Stock Units.
Any Non-Employee Director who fails to make an Election in accordance with the
provisions set forth in Section 5 shall receive the Annual Retainer paid 50% in
cash and 50% paid in Options.
(a) The portion of the Annual Retainer that is paid in cash shall be paid in
accordance with the Company’s policies for payment of cash retainers.

 

 

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(b) The portion of the Annual Retainer payable in Options shall consist of the
number of Options (rounded down to the nearest whole number) determined in good
faith by the Company using the option valuation model and assumptions thereunder
set forth in the financial statements of the Company most recently filed with
the Securities and Exchange Commission. Such Options shall (i) be granted on the
first date following the Annual Meeting Date or the Appointment Date, as
applicable, on which sales of Common Stock may be made by officers and directors
subject to the Company’s then current Insider Trading Policy; (ii) expire, to
the extent not sooner exercised, terminated or forfeited, on the tenth
anniversary of the grant date; (iii) have an exercise price per share equal to
the Fair Market Value of one share of Common Stock on the grant date;
(iv) become vested and exercisable on the earliest of (I) the first anniversary
of the grant date, (II) the Non-Employee Director’s death or Disability or
(III) a Change in Control; and (v) be subject to such additional terms and
conditions as the Board shall specify and the terms and conditions of the
applicable Equity Plan under which the Options are granted.
(c) The portion of the Annual Retainer payable in Restricted Stock Units shall
be equal to a number of Restricted Stock Units (rounded down to the nearest
whole number) equal to one-third the number of Options that would be granted
pursuant to Section 4.3(b) if such portion of the Annual Retainer were payable
in Options. Such Restricted Stock Units shall (i) be granted on the first date
following the Annual Meeting Date or the Appointment Date, as applicable, on
which sales of Common Stock may be made by officers and directors subject to the
Company’s then current Insider Trading Policy; (ii) vest on the earliest of
(I) the first anniversary of the grant date, (II) the Non-Employee Director’s
death or Disability or (III) a Change in Control; (iii) be paid in one share of
Common Stock for each vested Restricted Stock Unit no later than 30 days
following the earliest of (I) the Non-Employee Director’s Termination Date,
(II) the effective date of a Change in Control Event and (III) the applicable
Elected Payment Date (if any); (iv) be credited with dividend equivalents as
provided in the applicable Equity Plan; and (v) be subject to such additional
terms and conditions as the Board shall specify and the terms and conditions of
the applicable Equity Plan under which the Restricted Stock Units are granted.
5. Elections
5.1 Election Rules. Elections shall be made by filing an Election Form with the
Secretary of the Company in accordance with the following rules.
(a) Elections must be made by December 31st of the Plan Year immediately
preceding the Plan Year for which such Election is effective, provided, however,
that (i) in the initial Plan Year commencing in 2008, a Non-Employee Director
may make an Election on or before the Effective Date, and (ii) Elections by a
New Director may be made prior to the Appointment Date.
(b) Elections may not be revoked or modified with respect to the Annual Retainer
payable during any Plan Year for which the Elections are effective. Elections
will remain in effect from Plan Year to Plan Year unless modified prospectively
by the Non-Employee Director for a subsequent Plan Year. Modifications to a
Non-Employee Director’s current Elections for any subsequent Plan Year may be
made by filing a new Election Form by December 31st of the Plan Year preceding
the Plan Year for which the modified Elections are to become effective.

 

 

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5.2 Change of Elected Payment Date. An Elected Payment Date with regard to an
Award of Restricted Stock Units may be changed only if the following is
satisfied: (i) the subsequent election shall not take effect until at least
12 months after the date on which the subsequent election is made; (ii) the
Elected Payment Date under the subsequent Payment Election must be at least five
years after the Elected Payment Date of the current Payment Election; and
(iii) the subsequent Payment Election is made at least 12 months prior to the
Elected Payment Date under the current Payment Election.
6. Adjustments for Changes in Capital Structure, Etc.
The provisions of the Equity Plan governing changes in capital structure, etc.,
shall apply to Awards granted pursuant to the Equity Plan as provided under this
Plan.
7. Modification and Termination
The Board may at any time and from time to time, alter, amend, modify or
terminate the Plan in whole or in part.
8. Successors
All obligations of the Company under the Plan will be binding on any successor
to the Company, whether the existence of the successor is the result of a direct
or indirect purchase of all or substantially all of the business and/or assets
of the Company, or a merger, consolidation, or otherwise.
9. Reservation of Rights
Nothing in this Plan or in any Award provided under this Plan will be construed
to limit in any way the right of the Board or the stockholders to remove a
Non-Employee Director from the Board of Directors.
10. Miscellaneous
10.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein will also include the feminine; the plural will
include the singular and the singular will include the plural.
10.2 Requirements of Law. The issuance of payments under the Plan will be
subject to all applicable laws, rules, and regulations.
10.3 Tax Law Compliance. To the extent any provision of the Plan or action by
the Board or Plan Administrator would subject any Non-Employee Director to
liability for interest or additional taxes under Code Section 409A, it will be
deemed null and void, to the extent permitted by law and deemed advisable by the
Board. It is intended that the Plan and all Awards granted thereunder will
comply with Section 409A of the Code and any regulations and guidelines issued
thereunder, and the Plan and all Award agreements shall be interpreted and
construed on a basis consistent with such intent. The Plan and all Award
agreements may be amended in any respect deemed necessary (including
retroactively) by the Board in order to preserve compliance with Section 409A of
the Code.

 

 

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10.4 Unfunded Status of the Plan. The Plan is intended to constitute and at all
times shall be interpreted and administered so as to qualify as an unfunded
deferred compensation plan. To the extent that any Non-Employee Director or
other person acquires a right to receive payments from the Company pursuant to
the Plan or any Award made under the Plan, such right shall be no greater than
the right of any unsecured general creditor of the Company.
10.5 Governing Law. The validity, construction and effect of the Plan, of Award
agreements entered into pursuant to the Plan, and of any rules, regulations,
determinations or decisions made by the Plan Administrator relating to the Plan
or such Award agreements, and the rights of any and all persons having or
claiming to have any interest herein or hereunder, shall be determined
exclusively in accordance with applicable federal laws and the laws of the State
of Delaware, without regard to its conflict of laws principles.
10.6 Nontransferability. A Non-Employee Director’s Account and Awards may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. All rights with
respect to an Account and other Awards will be available during the Non-Employee
Director’s lifetime only to the Non-Employee Director or the Non-Employee
Director’s guardian or legal representative. The Board of Directors may, in its
discretion, require a Non-Employee Director’s guardian or legal representative
to supply it with evidence the Board of Directors deems necessary to establish
the authority of the guardian or legal representative to act on behalf of the
Non-Employee Director.
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