EXHIBIT 10.1
O’CHARLEY’S INC.
2008 EQUITY AND INCENTIVE PLAN
Section 1. Purpose.
     This plan shall be known as the “O’Charley’s, Inc. 2008 Equity and
Incentive Plan” (the “Plan”). The purpose of the Plan is to promote the
interests of O’Charley’s, Inc. (the “Company”) and its stockholders by
(i) attracting and retaining key officers, employees, advisory board members and
directors of, and consultants to, the Company and its Subsidiaries and
Affiliates; (ii) motivating such individuals by means of performance-related
incentives to achieve long-range performance goals; (iii) enabling such
individuals to participate in the long-term growth and financial success of the
Company; (iv) encouraging ownership of stock in the Company by such individuals;
and (v) linking their compensation to the long-term interests of the Company and
its stockholders. With respect to any awards granted under the Plan that are
intended to comply with the requirements of “performance-based compensation”
under Section 162(m) of the Code, the Plan shall be interpreted in a manner
consistent with such requirements.
Section 2. Definitions.
     As used in the Plan, the following terms shall have the meanings set forth
below:
     (a) “Affiliate” shall mean (i) any entity that, directly or indirectly, is
controlled by the Company, (ii) any entity in which the Company has a
significant equity interest, (iii) an affiliate of the Company, as defined in
Rule 12b-2 promulgated under Section 12 of the Exchange Act, and (iv) any entity
in which the Company has at least twenty percent (20%) of the combined voting
power of the entity’s outstanding voting securities, in each case as designated
by the Board as being a participating employer in the Plan.
     (b) “Award” shall mean any Option, Stock Appreciation Right, Restricted
Share Award, Restricted Share Unit, Performance Award, Other Stock-Based Award
or other award granted under the Plan, whether singly, in combination or in
tandem, to a Participant by the Committee (or the Board) pursuant to such terms,
conditions, restrictions and/or limitations, if any, as the Committee (or the
Board) may establish.
     (c) “Award Agreement” shall mean any written agreement, contract or other
instrument or document evidencing any Award, which may, but need not, be
executed or acknowledged by a Participant.
     (d) “Board” shall mean the Board of Directors of the Company.
     (e) “Cause” shall mean, unless otherwise defined in the applicable Award
Agreement, (i) a felony conviction of a Participant or the failure of a
Participant to contest prosecution of a felony or (ii) a Participant’s willful
misconduct or dishonesty that is directly and materially harmful to the business
or reputation of the Company or its Subsidiaries or Affiliates. For purposes of
this paragraph, no act, or failure to act, on the Participant’s part shall be
considered “willful” unless done, or omitted to be done, by the Participant not
in good faith and without reasonable belief that the Participant’s action or
omission was in the best interest of the Company. Any determination of Cause for
purposes of the Plan or any Award shall be made by the Committee in its sole
discretion. Any such determination shall be final and binding on a Participant.
     (f) “Change in Control” shall mean, unless otherwise defined in the
applicable Award Agreement, any of the following events:
     (i) An acquisition (other than directly from the Company) of any voting
securities of the Company (the “Voting Securities”) by any “Person” (as the term
Person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) immediately after which such
Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than thirty percent (30%) of the combined voting
power of the then outstanding Voting Securities; provided, however, that in
determining whether a Change in Control has occurred, Voting Securities which
are acquired in a “Non-Control Acquisition” (as hereinafter defined) shall not

 

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constitute an acquisition which would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a
trust forming a part thereof) maintained by (A) the Company or (B) any
Subsidiary, or (ii) the Company.
     (ii) During any period of two consecutive years, individuals who at the
beginning of such period were members of the Board cease for any reason to
constitute at least a majority thereof (unless the election, or the nomination
for election by the Company’s stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of such period); provided, however, that no
individual shall be considered a member of the Board if (1) such individual
initially assumed office as a result of either an actual or threatened
solicitation by a person or group of persons with respect to the election or
removal of directors at any meeting of shareholders (an “Election Contest”) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest or
(2) such individual was designated by a Person who has entered into an agreement
with the Company to effect a transaction described in clause (i) or (iii) of
this paragraph; or
     (iii) Approval by stockholders of the Company of:
     (A) A merger, consolidation or reorganization involving the Company,
unless,
     (1) The stockholders of the Company, immediately before such merger,
consolidation or reorganization, own, directly or indirectly immediately
following such merger, consolidation or reorganization, more than fifty percent
(50%) of the combined voting power of the outstanding Voting Securities of the
corporation (the “Surviving Corporation”) in substantially the same proportion
as their ownership of the Voting Securities immediately before such merger,
consolidation or reorganization; and
     (2) The individuals who were members of the Incumbent Board immediately
prior to the execution of the agreement providing for such merger, consolidation
or reorganization constitute more than one-half of the members of the board of
directors of the Surviving Corporation;
     (B) A complete liquidation or dissolution of the Company; or
     (C) An agreement for the sale or other disposition of all or substantially
all of the assets of the Company to any Person (other than a transfer to a
Subsidiary).
     Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the “Subject Person”) acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increased the proportional
number of shares Beneficially Owned by the Subject Person, provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional Voting Securities Beneficially Owned by the Subject
Person, then a Change in Control shall occur.
     (g) “Code” shall mean the Internal Revenue Code of 1986, as amended from
time to time.
     (h) “Committee” shall mean a committee of the Board composed of not less
than two Non-Employee Directors, each of whom shall be (i) a “non-employee
director” for purposes of Exchange Act Section 16 and Rule 16b-3 thereunder,
(ii) an “outside director” for purposes of Section 162(m) and the regulations
promulgated

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under the Code, and (iii) “independent” within the meaning of the listing
standards of the NASDAQ Global Select Market, or any other exchange on which the
Company’s Shares are traded.
     (i) “Consultant” shall mean any consultant to the Company or its
Subsidiaries or Affiliates.
     (j) “Covered Officer” shall mean at any date (i) any individual who, with
respect to the previous taxable year of the Company, was a “covered employee” of
the Company within the meaning of Section 162(m); provided, however, that the
term “Covered Officer” shall not include any such individual who is designated
by the Committee, in its discretion, at the time of any Award or at any
subsequent time, as reasonably expected not to be such a “covered employee” with
respect to the taxable year of the Company in which any applicable Award will be
paid or vested and (ii) any individual who is designated by the Committee, in
its discretion, at the time of any Award or at any subsequent time, as
reasonably expected to be such a “covered employee” with respect to the current
taxable year of the Company or with respect to the taxable year of the Company
in which any applicable Award will be paid or vested.
     (k) “Director” shall mean a member of the Board.
     (l) “Disability” shall mean, unless otherwise defined in the applicable
Award Agreement, a disability that would qualify as a total and permanent
disability under the Company’s then current long-term disability plan.
     (m) “Early Retirement” means the retirement of an employee, with the
express consent of the Company at or before the time of such retirement, from
active employment with the Company and any Subsidiary or Affiliate prior to age
65, in accordance with any applicable early retirement policy of the Company
then in effect or as may be approved by the Committee.
     (n) “Employee” shall mean a current or prospective officer or employee of
the Company or of any Subsidiary or Affiliate.
     (o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time.
     (p) “Fair Market Value” with respect to the Shares, shall mean, for
purposes of a grant of an Award as of any date, (i) the closing sales price of
the Shares on the NASDAQ Global Select Market, or any other such exchange on
which the Shares are traded, on such date, or in the absence of reported sales
on such date, the closing sales price on the immediately preceding date on which
sales were reported or (ii) in the event there is no public market for the
Shares on such date, the fair market value as determined, in good faith, by the
Committee in its sole discretion, and for purposes of a sale of a Share as of
any date, the actual sales price on that date.
     (q) “Good Reason” means (i) a material reduction in Participant’s base
salary or a material reduction in the health and welfare insurance, retirement
and other benefits available to Participant from that in effect immediately
prior to a Change in Control, except for reductions in such benefits as shall
become in effect for employees of the Company generally; (ii) the reassignment
of Participant to a position resulting in a material diminution in Participant’s
authority, duties or responsibilities; or (iii) the relocation of the office at
which the Participant is to perform a majority of his or her duties to a
location more than fifty (50) miles from the location at which the Participant
performed such duties prior to a Change in Control.
     (r) “Incentive Stock Option” shall mean an option to purchase Shares from
the Company that is granted under Section 6 of the Plan and that is intended to
meet the requirements of Section 422 of the Code or any successor provision
thereto.
     (s) “Non-Qualified Stock Option” shall mean an option to purchase Shares
from the Company that is granted under Sections 6 or 10 of the Plan and is not
intended to be an Incentive Stock Option.
     (t) “Non-Employee Director” shall mean a member of the Board who is not an
officer or employee of the Company or any Subsidiary or Affiliate.

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     (u) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.
     (v) “Option Price” shall mean the purchase price payable to purchase one
Share upon the exercise of an Option.
     (w) “Other Stock-Based Award” shall mean any Award granted under Sections 9
or 10 of the Plan. For purposes of the share counting provisions of Section 4.1
hereof, an Other Stock-Based Award shall be treated as (i) an Option Award if
the amounts payable thereunder will be determined by reference to the
appreciation of a Share, and (ii) a Restricted Share Award if the amounts
payable thereunder will be determined by reference to the full value of a Share.
     (x) “Outside Director” means, with respect to the grant of an Award, a
member of the Board then serving on the Committee.
     (y) “Participant” shall mean any Employee, Director, Consultant or other
person who receives an Award under the Plan.
     (z) “Performance Award” shall mean any Award granted under Section 8 of the
Plan.
     (aa) “Person” shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization, government or political subdivision thereof or other entity.
     (bb) “Restricted Share” shall mean any Share granted under Sections 7 to 10
of the Plan.
     (cc) “Restricted Share Unit” shall mean any unit granted under Sections 7
to 10 of the Plan.
     (dd) “Retirement” shall mean, unless otherwise defined in the applicable
Award Agreement, retirement of a Participant from the employ or service of the
Company or any of its Subsidiaries or Affiliates in accordance with the terms of
the applicable Company retirement plan or, if a Participant is not covered by
any such plan, retirement on or after such Participant’s 65th birthday.
     (ee) “SEC” shall mean the Securities and Exchange Commission or any
successor thereto.
     (ff) “Section 16” shall mean Section 16 of the Exchange Act and the rules
promulgated thereunder and any successor provision thereto as in effect from
time to time.
     (gg) “Section 162(m)” shall mean Section 162(m) of the Code and the
regulations promulgated thereunder and any successor provision thereto as in
effect from time to time.
     (hh) “Shares” shall mean shares of the common stock, no par value, of the
Company.
     (ii) “Stock Appreciation Right” or “SAR” shall mean a stock appreciation
right granted under Sections 6 or 10 of the Plan that entitles the holder to
receive, with respect to each Share encompassed by the exercise of such SAR, the
amount determined by the Committee and specified in an Award Agreement. In the
absence of such a determination, the holder shall be entitled to receive, with
respect to each Share encompassed by the exercise of such SAR, the excess of the
Fair Market Value on the date of exercise over the Fair Market Value on the date
of grant.
     (jj) “Subsidiary” shall mean any Person (other than the Company) of which a
majority of its voting power or its equity securities or equity interest is
owned directly or indirectly by the Company.
     (kk) “Substitute Awards” shall mean Awards granted solely in assumption of,
or in substitution for, outstanding awards previously granted by a company
acquired by the Company or with which the Company combines.

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Section 3. Administration.
     3.1 Authority of Committee. The Plan shall be administered by the
Committee, which shall be appointed by and serve at the pleasure of the Board;
provided, however, with respect to Awards to Outside Directors, all references
in the Plan to the Committee shall be deemed to be references to the Board.
Subject to the terms of the Plan and applicable law, and in addition to other
express powers and authorizations conferred on the Committee by the Plan, the
Committee shall have full power and authority in its discretion to:
(i) designate Participants; (ii) determine the type or types of Awards to be
granted to a Participant; (iii) determine the number of Shares to be covered by,
or with respect to which payments, rights or other matters are to be calculated
in connection with Awards; (iv) determine the timing, terms, and conditions of
any Award; (v) accelerate the time at which all or any part of an Award may be
settled or exercised; (vi) determine whether, to what extent, and under what
circumstances Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or suspended
and the method or methods by which Awards may be settled, exercised, canceled,
forfeited or suspended; (vii) determine whether, to what extent, and under what
circumstances cash, Shares, other securities, other Awards, other property, and
other amounts payable with respect to an Award shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
(viii) interpret and administer the Plan and any instrument or agreement
relating to, or Award made under, the Plan; (ix) except to the extent prohibited
by Section 6.2, amend or modify the terms of any Award at or after grant with
the consent of the holder of the Award; (x) establish, amend, suspend or waive
such rules and regulations and appoint such agents as it shall deem appropriate
for the proper administration of the Plan; and (xi) make any other determination
and take any other action that the Committee deems necessary or desirable for
the administration of the Plan, subject to the exclusive authority of the Board
under Section 14 hereunder to amend or terminate the Plan.
     3.2 Committee Discretion Binding. Unless otherwise expressly provided in
the Plan, all designations, determinations, interpretations, and other decisions
under or with respect to the Plan or any Award shall be within the sole
discretion of the Committee, may be made at any time and shall be final,
conclusive, and binding upon all Persons, including the Company, any Subsidiary
or Affiliate, any Participant and any holder or beneficiary of any Award.
     3.3 Action by the Committee. The Committee shall select one of its members
as its Chairperson and shall hold its meetings at such times and places and in
such manner as it may determine. A majority of its members shall constitute a
quorum. All determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by all of the members of the Committee shall be fully effective as if it
had been made by a majority vote at a meeting duly called and held. The exercise
of an Option or receipt of an Award shall be effective only if an Award
Agreement shall have been duly executed and delivered on behalf of the Company
following the grant of the Option or other Award. The Committee may appoint a
Secretary and may make such rules and regulations for the conduct of its
business, as it shall deem advisable.
     3.4 Delegation. Subject to the terms of the Plan and applicable law, the
Committee may delegate to one or more officers or managers of the Company or of
any Subsidiary or Affiliate, or to a Committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to or to cancel, modify or waive rights with respect
to, or to alter, discontinue, suspend or terminate Awards held by Participants
who are not officers or directors of the Company for purposes of Section 16 or
who are otherwise not subject to such Section.
     3.5 No Liability. No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with respect to the Plan or
any Award granted hereunder.
Section 4. Shares Available For Awards.
     4.1 Shares Available. Subject to the provisions of Section 4.2 hereof, the
maximum aggregate number of Shares that may be issued pursuant to Awards shall
not exceed 1,500,000 Shares (the “Share Reserve”). Each Share issued pursuant to
an Option shall reduce the Share Reserve by one (1) share. Each Share subject to
a redeemed portion of a SAR (whether the distribution upon redemption is made in
cash, stock or a combination of the two) shall reduce the Share Reserve by one
(1) share. Each Share issued pursuant to a Restricted Stock Award, a Restricted
Stock

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Unit Award or a Performance Award shall reduce the Share Reserve by one and
fifty-three one-hundreths (1.53) shares. To the extent that a distribution
pursuant to an Award is made in cash, the Share Reserve shall be reduced by the
number of Shares subject to the redeemed or exercised portion of the Award.
Notwithstanding the foregoing and subject to adjustment as provided in
Section 4.2, (i) each Option or SAR granted under this Plan, or outstanding
under the 2000 Stock Incentive Plan or the 1990 Employee Stock Plan, (the
“Previous Plans”), as of the effective date of this Plan, but which terminate,
expire unexercised, are forfeited or cancelled without the delivery of cash or
Shares under the terms of the applicable Award or Previous Plan, shall increase
the Share Reserve by one (1) share; and (ii) each Restricted Stock Award,
Restricted Stock Unit Award or Performance Award (denominated in Shares) granted
under this Plan, or outstanding under any Previous Plan as of the effective date
of this Plan, but which terminate, expire unexercised, are forfeited or
cancelled without the delivery of cash or Shares under the terms of the
applicable Award or Previous Plan, shall increase the Share Reserve by one and
fifty-three one-hundreths (1.53) shares. Notwithstanding the foregoing and
subject to adjustment as provided in Section 4.2 hereof, no Participant may
receive Options or SARs under the Plan in any calendar year that, taken
together, relate to more than 400,000 Shares.
     4.2 Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, Shares, other securities or other property and
other than regular, recurring dividends), recapitalization, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase or exchange of Shares or other securities of the
Company, issuance of warrants or other rights to purchase Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Shares, then the Committee shall, in such manner as it deems
equitable and proportionate (and in such manner as is consistent with any
provisions of the Code applicable to such Award): (i) adjust any or all of
(1) the aggregate number of Shares or other securities of the Company or its
successor (or number and kind of other securities or property) with respect to
which Awards may be granted under the Plan; (2) the number of Shares or other
securities of the Company or its successor (or number and kind of other
securities or property) subject to outstanding Awards under the Plan; (3) the
grant or exercise price with respect to any Award under the Plan, provided that
the number of shares subject to any Award shall always be a whole number; and
(4) the limits on the number of Shares that may be granted to Participants under
the Plan in any calendar year; (ii) subject to Section 13, provide for an
equivalent award in respect of securities of the surviving entity of any merger,
consolidation or other transaction or event having a similar effect; or
(iii) make provision for a cash payment to the holder of an outstanding Award.
     4.3 Substitute Awards. Any Shares issued by the Company as Substitute
Awards in connection with the assumption or substitution of outstanding grants
from any acquired corporation shall not reduce the Shares available for Awards
under the Plan.
     4.4 Sources of Shares Deliverable Under Awards. Any Shares delivered
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of issued Shares which have been reacquired by the Company.
Section 5. Eligibility.
     Any Employee, Director or Consultant shall be eligible to be designated a
Participant; provided, however, that Outside Directors shall only be eligible to
receive Awards granted consistent with Section 10.
Section 6. Stock Options And Stock Appreciation Rights.
     6.1 Grant. Subject to the provisions of the Plan, the Committee shall have
sole and complete authority to determine the Participants to whom Options and
SARs shall be granted, the number of Shares subject to each Award, the exercise
price and the conditions and limitations applicable to the exercise of each
Option and SAR. An Option may be granted with or without a related SAR. An SAR
may be granted with or without a related Option. The Committee shall have the
authority to grant Incentive Stock Options, or to grant Non-Qualified Stock
Options, or to grant both types of Options. In the case of Incentive Stock
Options, the terms and conditions of such grants shall be subject to and comply
with such rules as may be prescribed by Section 422 of the Code, as from time to
time amended, and any regulations implementing such statute. A person who has
been granted an Option or SAR under this Plan may be granted additional Options
or SARs under the Plan if the Committee shall so determine; provided, however,
that to the extent the aggregate Fair Market Value (determined at the time the
Incentive Stock Option is granted) of the Shares with respect to which all
Incentive Stock Options are exercisable for the first time by an Employee during
any calendar

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year (under all plans described in subsection (d) of Section 422 of the Code of
the Employee’s employer corporation and its parent and Subsidiaries) exceeds
$100,000, such Options shall be treated as Non-Qualified Stock Options.
     6.2 Price. The Committee in its sole discretion shall establish the Option
Price at the time each Option is granted. Except in the case of Substitute
Awards, the Option Price of an Option may not be less than one hundred percent
(100%) of the Fair Market Value of the Shares with respect to which the Option
is granted on the date of grant of such Option. Except in connection with a
corporate transaction involving the Company (including, without limitation, any
stock dividend, stock split, extraordinary cash dividend, recapitalization,
reorganization, merger, consolidation, split-up, spin-off, combination, or
exchange of shares), the terms of outstanding Awards may not be amended to
reduce the exercise price of outstanding Options or SARs or cancel outstanding
Options or SARS in exchange for cash, other Awards or Options or SARs with an
exercise price that is less than the exercise price of the original Options or
SARs without stockholder approval. Except with respect to Substitute Awards,
SARs may not be granted at a price less than the Fair Market Value of a Share on
the date of grant.
     6.3 Term. Subject to the Committee’s authority under Section 3.1 and the
provisions of Section 6.6, each Option and SAR and all rights and obligations
thereunder shall expire on the date determined by the Committee and specified in
the Award Agreement. The Committee shall be under no duty to provide terms of
like duration for Options or SARs granted under the Plan. Notwithstanding the
foregoing, no Option or SAR shall be exercisable after the expiration of ten
(10) years from the date such Option or SAR was granted.
     6.4 Exercise.
     (a) Each Option and SAR shall be exercisable at such times and subject to
such terms and conditions as the Committee may, in its sole discretion, specify
in the applicable Award Agreement or thereafter. The Committee shall have full
and complete authority to determine, subject to Section 6.6 herein, whether an
Option or SAR will be exercisable in full at any time or from time to time
during the term of the Option or SAR, or to provide for the exercise thereof in
such installments, upon the occurrence of such events and at such times during
the term of the Option or SAR as the Committee may determine.
     (b) The Committee may impose such conditions with respect to the exercise
of Options, including without limitation, any relating to the application of
federal, state or foreign securities laws or the Code, as it may deem necessary
or advisable. The exercise of any Option granted hereunder shall be effective
only at such time as the sale of Shares pursuant to such exercise will not
violate any state or federal securities or other laws.
     (c) An Option or SAR may be exercised in whole or in part at any time, with
respect to whole Shares only, within the period permitted thereunder for the
exercise thereof, and shall be exercised by written notice of intent to exercise
the Option or SAR, delivered to the Company at its principal office, and payment
in full to the Company at the direction of the Committee of the amount of the
Option Price for the number of Shares with respect to which the Option is then
being exercised.
     (d) Payment of the Option Price shall be made in cash or cash equivalents,
or, at the discretion of the Committee, (i) by transfer, either actually or by
attestation, to the Company of Shares, valued at the Fair Market Value of such
Shares on the date of exercise (or next succeeding trading date, if the date of
exercise is not a trading date), together with any applicable withholding taxes,
such transfer to be upon such terms and conditions as determined by the
Committee, (ii) by a combination of such cash (or cash equivalents) and such
Shares; provided, however, that the optionee shall not be entitled to tender
Shares pursuant to successive, substantially simultaneous exercises of an Option
or any other stock option of the Company, or (iii) by withholding from optionee
sufficient Shares, subject to such Option, having an aggregate Fair Market Value
at the time of exercise equal to the total Option Price. Subject to applicable
securities laws and Company policy, the Company may permit an Option to be
exercised by delivering a notice of exercise of the Option and simultaneously
selling the Shares thereby acquired, pursuant to a brokerage or similar
agreement approved in advance by proper officers of the Company, using the
proceeds of such sale as payment of the Option Price, together with any
applicable withholding taxes. Until the optionee has been issued the Shares
subject to such exercise, he or she shall possess no rights as a stockholder
with respect to such Shares.

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     (e) At the Committee’s discretion, the amount payable as a result of the
exercise of an SAR may be settled in cash, Shares or a combination of cash and
Shares. A fractional Share shall not be deliverable upon the exercise of a SAR
but a cash payment will be made in lieu thereof.
     6.6 Ten Percent Stock Rule. Notwithstanding any other provisions in the
Plan, if at the time an Option is otherwise to be granted pursuant to the Plan,
the optionee or rights holder owns directly or indirectly (within the meaning of
Section 424(d) of the Code) Shares of the Company possessing more than ten
percent (10%) of the total combined voting power of all classes of Stock of the
Company or its parent or Subsidiary or Affiliate corporations (within the
meaning of Section 422(b)(6) of the Code), then any Incentive Stock Option to be
granted to such optionee or rights holder pursuant to the Plan shall satisfy the
requirement of Section 422(c)(5) of the Code, and the Option Price shall be not
less than one hundred ten percent (110%) of the Fair Market Value of the Shares
of the Company, and such Option by its terms shall not be exercisable after the
expiration of five (5) years from the date such Option is granted.
Section 7. Restricted Shares And Restricted Share Units.
     7.1 Grant.
     (a) Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the Participants to whom Restricted Shares
and Restricted Share Units shall be granted, the number of Restricted Shares
and/or the number of Restricted Share Units to be granted to each Participant,
the duration of the period during which, and the conditions under which, the
Restricted Shares and Restricted Share Units may be forfeited to the Company,
and the other terms and conditions of such Awards. The Restricted Share and
Restricted Share Unit Awards shall be evidenced by Award Agreements in such form
as the Committee shall from time to time approve, which agreements shall comply
with and be subject to the terms and conditions provided hereunder and any
additional terms and conditions established by the Committee that are consistent
with the terms of the Plan.
     (b) Each Restricted Share and Restricted Share Unit Award made under the
Plan shall be for such number of Shares as shall be determined by the Committee
and set forth in the Award Agreement containing the terms of such Restricted
Share or Restricted Share Unit Award. Such agreement shall set forth a period of
time during which the grantee must remain in the continuous employment of the
Company in order for the forfeiture and transfer restrictions to lapse. If the
Committee so determines, the restrictions may lapse during such restricted
period in installments with respect to specified portions of the Shares covered
by the Restricted Share or Restricted Share Unit Award. The Award Agreement may
also, in the discretion of the Committee, set forth performance or other
conditions that will subject the Shares to forfeiture and transfer restrictions.
The Committee may, at its discretion, waive all or any part of the restrictions
applicable to any or all outstanding Restricted Share and Restricted Share Unit
Awards.
     7.2 Delivery of Shares and Transfer Restrictions. At the time of a
Restricted Share Award, a certificate representing the number of Shares awarded
thereunder shall be registered in the name of the grantee. Such certificate
shall be held by the Company or any custodian appointed by the Company for the
account of the grantee subject to the terms and conditions of the Plan, and
shall bear such a legend setting forth the restrictions imposed thereon as the
Committee, in its discretion, may determine. Unless otherwise provided in the
applicable Award Agreement, the grantee shall have all rights of a stockholder
with respect to the Restricted Shares, including the right to receive dividends
and the right to vote such Shares, subject to the following restrictions:
(i) the grantee shall not be entitled to delivery of the stock certificate until
the expiration of the restricted period and the fulfillment of any other
restrictive conditions set forth in the Award Agreement with respect to such
Shares; (ii) none of the Shares may be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of during such restricted
period or until after the fulfillment of any such other restrictive conditions;
and (iii) except as otherwise determined by the Committee at or after grant, all
of the Shares shall be forfeited and all rights of the grantee to such Shares
shall terminate, without further obligation on the part of the Company, unless
the grantee remains in the continuous employment of the Company for the entire
restricted period in relation to which such Shares were granted and unless any
other restrictive conditions relating to the Restricted Share Award are met.
Unless otherwise provided in the applicable Award Agreement, any Shares, any
other securities of the Company and any other property (except for cash
dividends) distributed with respect to the Shares subject to Restricted Share
Awards shall be subject to the same restrictions, terms and conditions as such
Restricted Shares.

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     7.3 Termination of Restrictions. At the end of the restricted period and
provided that any other restrictive conditions of the Restricted Share Award are
met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the Award Agreement relating to the Restricted Share
Award or in the Plan shall lapse as to the restricted Shares subject thereto,
and a stock certificate for the appropriate number of Shares, free of the
restrictions and restricted stock legend, shall be delivered to the Participant
or the Participant’s beneficiary or estate, as the case may be.
     7.4 Payment of Restricted Share Units. Each Restricted Share Unit shall
have a value equal to the Fair Market Value of a Share. Restricted Share Units
shall be paid in cash, Shares, other securities or other property, as determined
in the sole discretion of the Committee, upon the lapse of the restrictions
applicable thereto, or otherwise in accordance with the applicable Award
Agreement. Unless otherwise provided in the applicable Award Agreement, a
Participant shall receive dividend rights in respect of any vested Restricted
Stock Units at the time of any payment of dividends to stockholders on Shares.
The amount of any such dividend right shall equal the amount that would be
payable to the Participant as a stockholder in respect of a number of Shares
equal to the number of vested Restricted Stock Units then credited to the
Participant. Any such dividend right shall be paid in accordance with the
Company’s payment practices as may be established from time to time and as of
the date on which such dividend would have been payable in respect of
outstanding Shares. No dividend equivalents shall be paid in respect of
Restricted Share Units that are not yet vested. Except as otherwise determined
by the Committee at or after grant, Restricted Share Units may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of, and all Restricted Share Units and all rights of the grantee to such
Restricted Share Units shall terminate, without further obligation on the part
of the Company, unless the grantee remains in continuous employment of the
Company for the entire restricted period in relation to which such Restricted
Share Units were granted and unless any other restrictive conditions relating to
the Restricted Share Unit Award are met.
Section 8. Performance Awards.
     8.1 Grant. The Committee shall have sole and complete authority to
determine the Participants who shall receive a Performance Award, which shall
consist of a right that is (i) denominated in cash or Shares (including but not
limited to Restricted Shares and Restricted Share Units), (ii) valued, as
determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
     8.2 Terms and Conditions. Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award, and may amend
specific provisions of the Performance Award; provided, however, that such
amendment may not adversely affect existing Performance Awards made within a
performance period commencing prior to implementation of the amendment.
     8.3 Payment of Performance Awards. Performance Awards may be paid in a lump
sum or in installments following the close of the performance period or, in
accordance with the procedures established by the Committee, on a deferred
basis. Termination of employment prior to the end of any performance period,
other than for reasons of death or Disability, will result in the forfeiture of
the Performance Award, and no payments will be made. A Participant’s rights to
any Performance Award may not be sold, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of in any manner, except by
will or the laws of descent and distribution, and/or except as the Committee may
determine at or after grant.
Section 9. Other Stock-Based Awards.
     The Committee shall have the authority to determine the Participants who
shall receive an Other Stock-Based Award, which shall consist of any right that
is (i) not an Award described in Sections 6 and 7 above and (ii) an Award of
Shares or an Award denominated or payable in, valued in whole or in part by
reference to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as deemed by the Committee to
be consistent with the purposes of the Plan. Subject to the terms of the Plan
and any applicable Award Agreement, the Committee shall determine the terms and
conditions of any such Other Stock-Based Award.

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Section 10. Non-Employee Director And Outside Director Awards.
     10.1 The Board may provide that all or a portion of a Non-Employee
Director’s annual retainer, meeting fees and/or other awards or compensation as
determined by the Board, be payable (either automatically or at the election of
a Non-Employee Director) in the form of Non-Qualified Stock Options, Restricted
Shares, Restricted Share Units and/or Other Stock-Based Awards, including
unrestricted Shares. The Board shall determine the terms and conditions of any
such Awards, including the terms and conditions which shall apply upon a
termination of the Non-Employee Director’s service as a member of the Board, and
shall have full power and authority in its discretion to administer such Awards,
subject to the terms of the Plan and applicable law.
     10.2 The Board may also grant Awards to Outside Directors pursuant to the
terms of the Plan, including any Award described in Sections 6, 7 and 9 above.
With respect to such Awards, all references in the Plan to the Committee shall
be deemed to be references to the Board.
Section 11. Provisions Applicable To Covered Officers And Performance Awards.
     11.1 Notwithstanding anything in the Plan to the contrary, unless the
Committee determines that a Performance Award to be granted to a Covered Officer
should not qualify as “performance-based compensation” for purposes of
Section 162(m), Performance Awards granted to Covered Officers shall be subject
to the terms and provisions of this Section 11.
     11.2 The Committee may grant Performance Awards to Covered Officers based
solely upon the attainment of performance targets related to one or more
performance goals selected by the Committee from among the goals specified
below. For the purposes of this Section 11, performance goals shall be limited
to one or more of the following Company, Subsidiary, operating unit, business
segment or division financial performance measures:

  (a)   earnings before interest, taxes, depreciation and/or amortization;    
(b)   operating income or profit;     (c)   operating efficiencies;     (d)  
return on equity, assets, capital, capital employed or investment;     (e)  
after tax operating income;     (f)   net earnings;     (g)   financial ratios,
including those measuring liquidity, activity, profitability or leverage;    
(h)   earnings per Share;     (i)   cash flow(s);     (j)   guest counts,
average check per customer or same restaurant sales;     (k)   stock price or
total shareholder return;     (l)   guest satisfaction;     (m)   dividends;    
(n)   debt reduction;

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  (o)   strategic business objectives, consisting of one or more objectives
based on meeting specified cost targets, business expansion goals, goals
relating to acquisitions or divestitures or goals relating to the performance of
new or remodeled stores; or     (p)   any combination thereof.

Each goal may be expressed on an absolute and/or relative basis, may be based on
or otherwise employ comparisons based on internal targets, the past performance
of the Company or any Subsidiary, operating unit, business segment or division
of the Company and/or the past or current performance of other companies, and in
the case of earnings-based measures, may use or employ comparisons relating to
capital, shareholders’ equity and/or Shares outstanding, or to assets or net
assets. The Committee may appropriately adjust any evaluation of performance
under criteria set forth in this Section 11.2 to exclude any of the following
events that occurs during a performance period: (i) asset impairments and
write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect
of changes in tax law, accounting principles or other such laws or provisions
affecting reported results, (iv) accruals for reorganization and restructuring
programs and (v) any extraordinary non-recurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management’s discussion and
analysis of financial condition and results of operations appearing in the
Company’s annual report to stockholders for the applicable year.
     11.3 With respect to any Covered Officer, the maximum annual number of
Shares in respect of which all Performance Awards may be granted under Section 8
of the Plan is 400,000 and the maximum amount of all Performance Awards that are
settled in cash and that may be granted under Section 8 of the Plan in any year
is $3,000,000.
     11.4 To the extent necessary to comply with Section 162(m), with respect to
grants of Performance Awards, no later than 90 days following the commencement
of each performance period (or such other time as may be required or permitted
by Section 162(m) of the Code), the Committee shall, in writing, (1) select the
performance goal or goals applicable to the performance period, (2) establish
the various targets and bonus amounts which may be earned for such performance
period, and (3) specify the relationship between performance goals and targets
and the amounts to be earned by each Covered Officer for such performance
period. Following the completion of each performance period, the Committee shall
certify in writing whether the applicable performance targets have been achieved
and the amounts, if any, payable to Covered Officers for such performance
period. In determining the amount earned by a Covered Officer for a given
performance period, subject to any applicable Award Agreement, the Committee
shall have the right to reduce (but not increase) the amount payable at a given
level of performance to take into account additional factors that the Committee
may deem relevant in its sole discretion to the assessment of individual or
corporate performance for the performance period.
     11.5 Unless otherwise expressly stated in the relevant Award Agreement,
each Award granted to a Covered Officer under the Plan is intended to be
performance-based compensation within the meaning of Section 162(m).
Accordingly, unless otherwise determined by the Committee, if any provision of
the Plan or any Award Agreement relating to such an Award does not comply or is
inconsistent with Section 162(m), such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements, and no
provision shall be deemed to confer upon the Committee discretion to increase
the amount of compensation otherwise payable to a Covered Officer in connection
with any such Award upon the attainment of the performance criteria established
by the Committee.
Section 12. Termination Of Employment.
     The Committee shall have the full power and authority to determine the
terms and conditions that shall apply to any Award upon a termination of
employment with the Company, its Subsidiaries and Affiliates, including a
termination by the Company with or without Cause, by a Participant voluntarily,
or by reason of death, Disability, Early Retirement or Retirement, and may
provide such terms and conditions in the Award Agreement or in such rules and
regulations as it may prescribe.

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Section 13. Change In Control.
     Unless otherwise provided by the Committee at or after grant, upon a Change
in Control, all outstanding Awards (other than Performance Awards) shall vest,
become immediately exercisable or payable, or have all restrictions lifted.
Section 14. Amendment And Termination.
     14.1 Amendments to the Plan. The Board may amend, alter, suspend,
discontinue or terminate the Plan or any portion thereof at any time; provided
that no such amendment, alteration, suspension, discontinuation or termination
shall be made without stockholder approval if such approval is necessary to
comply with any tax or regulatory requirement for which or with which the Board
deems it necessary or desirable to comply.
     14.2 Amendments to Awards. Subject to the restrictions of Section 6.2, the
Committee may waive any conditions or rights under, amend any terms of or alter,
suspend, discontinue, cancel or terminate, any Award theretofore granted,
prospectively or retroactively; provided that any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant or any holder or
beneficiary of any Award theretofore granted shall not to that extent be
effective without the consent of the affected Participant, holder or
beneficiary.
     14.3 Adjustments of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee shall make equitable and proportionate
adjustments in the terms and conditions of, and the criteria included in, Awards
in recognition of unusual or nonrecurring events (including, without limitation,
the events described in Section 4.2 hereof) affecting the Company, any
Subsidiary or Affiliate, or the financial statements of the Company or any
Subsidiary or Affiliate, or of changes in applicable laws, regulations or
accounting principles in order to prevent the dilution or enlargement of the
benefits or potential benefits intended to be made available under the Plan.
Section 15. General Provisions.
     15.1 Limited Transferability of Awards. Except as otherwise provided in the
Plan, no Award shall be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by a Participant, except by will or the laws
of descent and distribution and/or as may be provided by the Committee in its
discretion, at or after grant, in the Award Agreement or otherwise. No transfer
of an Award by will or by laws of descent and distribution shall be effective to
bind the Company unless the Company shall have been furnished with written
notice thereof and an authenticated copy of the will and/or such other evidence
as the Committee may deem necessary or appropriate to establish the validity of
the transfer.
     15.2 Dividend Equivalents. In the sole and complete discretion of the
Committee, an Award may provide the Participant with dividends or dividend
equivalents, payable in cash, Shares, other securities or other property on a
current or deferred basis. All dividend or dividend equivalents which are not
paid currently may, at the Committee’s discretion, accrue interest, be
reinvested into additional Shares, or, in the case of dividends or dividend
equivalents credited in connection with Performance Awards, be credited as
additional Performance Awards and paid to the Participant if and when, and to
the extent that, payment is made pursuant to such Award. The total number of
Shares available for grant under Section 4 shall not be reduced to reflect any
dividends or dividend equivalents that are reinvested into additional Shares or
credited as Performance Awards.
     15.3. Compliance with Section 409A of the Code. No Award (or modification
thereof) shall provide for deferral of compensation that does not comply with
Section 409A of the Code unless the Committee, at the time of grant,
specifically provides that the Award is not intended to comply with Section 409A
of the Code. Notwithstanding any provision of this Plan to the contrary, if one
or more of the payments or benefits received or to be received by a Participant
pursuant to an Award would cause the Participant to incur any additional tax or
interest under Section 409A of the Code, the Committee may reform such provision
to maintain to the maximum extent practicable the original intent of the
applicable provision without violating the provisions of Section 409A of the
Code.
     15.4 No Rights to Awards. No Person shall have any claim to be granted any
Award, and there is no obligation for uniformity of treatment of Participants or
holders or beneficiaries of Awards. The terms and conditions of Awards need not
be the same with respect to each Participant.

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     15.5 Share Certificates. All certificates for Shares or other securities of
the Company or any Subsidiary or Affiliate delivered under the Plan pursuant to
any Award or the exercise thereof shall be subject to such stop transfer orders
and other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations and other requirements of the SEC or any state securities
commission or regulatory authority, any stock exchange or other market upon
which such Shares or other securities are then listed, and any applicable
Federal or state laws, and the Committee may cause a legend or legends to be put
on any such certificates to make appropriate reference to such restrictions.
     15.6 Withholding. A Participant may be required to pay to the Company or
any Subsidiary or Affiliate and the Company or any Subsidiary or Affiliate shall
have the right and is hereby authorized to withhold from any Award, from any
payment due or transfer made under any Award or under the Plan, or from any
compensation or other amount owing to a Participant the amount (in cash, Shares,
other securities, other Awards or other property) of any applicable withholding
or other tax-related obligations in respect of an Award, its exercise or any
other transaction involving an Award, or any payment or transfer under an Award
or under the Plan and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
The Committee may provide for additional cash payments to holders of Options to
defray or offset any tax arising from the grant, vesting, exercise or payment of
any Award.
     15.7 Award Agreements. Each Award hereunder shall be evidenced by an Award
Agreement that shall be delivered to the Participant and may specify the terms
and conditions of the Award and any rules applicable thereto. In the event of a
conflict between the terms of the Plan and any Award Agreement, the terms of the
Plan shall prevail. The Committee shall, subject to applicable law, determine
the date an Award is deemed to be granted. The Committee or, except to the
extent prohibited under applicable law, its delegate(s) may establish the terms
of agreements or other documents evidencing Awards under this Plan and may, but
need not, require as a condition to any such agreement’s or document’s
effectiveness that such agreement or document be executed by the Participant,
including by electronic signature or other electronic indication of acceptance,
and that such Participant agree to such further terms and conditions as
specified in such agreement or document. The grant of an Award under this Plan
shall not confer any rights upon the Participant holding such Award other than
such terms, and subject to such conditions, as are specified in this Plan as
being applicable to such type of Award (or to all Awards) or as are expressly
set forth in the agreement or other document evidencing such Award.
     15.8 No Limit on Other Compensation Arrangements. Nothing contained in the
Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or
continuing in effect other compensation arrangements, which may, but need not,
provide for the grant of Options, Restricted Shares, Restricted Share Units,
Other Stock-Based Awards or other types of Awards provided for hereunder.
     15.9 No Right to Employment. The grant of an Award shall not be construed
as giving a Participant the right to be retained in the employ of the Company or
any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate
may at any time dismiss a Participant from employment, free from any liability
or any claim under the Plan, unless otherwise expressly provided in an Award
Agreement.
     15.10 No Rights as Stockholder. Subject to the provisions of the Plan and
the applicable Award Agreement, no Participant or holder or beneficiary of any
Award shall have any rights as a stockholder with respect to any Shares to be
distributed under the Plan until such person has become a holder of such Shares.
Notwithstanding the foregoing, in connection with each grant of Restricted
Shares hereunder, the applicable Award Agreement shall specify if and to what
extent the Participant shall not be entitled to the rights of a stockholder in
respect of such Restricted Shares.
     15.11 Governing Law. The validity, construction and effect of the Plan and
any rules and regulations relating to the Plan and any Award Agreement shall be
determined in accordance with the laws of the State of Tennessee without giving
effect to conflicts of laws principles.
     15.12 Severability. If any provision of the Plan or any Award is, or
becomes, or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any Person or Award, or would disqualify the Plan or any
Award under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to the applicable laws, or if it cannot
be construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person or Award and the remainder of the Plan
and any such Award shall remain in full force and effect.

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     15.13 Other Laws. The Committee may refuse to issue or transfer any Shares
or other consideration under an Award if, acting in its sole discretion, it
determines that the issuance or transfer of such Shares or such other
consideration might violate any applicable law or regulation (including
applicable non-U.S. laws or regulations) or entitle the Company to recover the
same under Exchange Act Section 16(b), and any payment tendered to the Company
by a Participant, other holder or beneficiary in connection with the exercise of
such Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.
     15.14 No Trust or Fund Created. Neither the Plan nor any Award shall create
or be construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary or Affiliate and a
Participant or any other Person. To the extent that any Person acquires a right
to receive payments from the Company or any Subsidiary or Affiliate pursuant to
an Award, such right shall be no greater than the right of any unsecured general
creditor of the Company or any Subsidiary or Affiliate.
     15.15 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred in
lieu of any fractional Shares or whether such fractional Shares or any rights
thereto shall be canceled, terminated or otherwise eliminated.
     15.16 Headings. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.
Section 16. Term Of The Plan.
     16.1 Effective Date. The Plan shall be effective as of May 21, 2008
provided it has been approved by the Board and by the Company’s stockholders.
     16.2 Expiration Date. No new Awards shall be granted under the Plan after
the tenth (10th) anniversary of the Effective Date. Unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
hereunder may, and the authority of the Board or the Committee to amend, alter,
adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the tenth (10th)
anniversary of the Effective Date.

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