Exhibit 10.3

 

1996 STOCK INCENTIVE PLAN OF BUCA, INC. AND

AFFILIATED COMPANIES

 

Non-Qualified Stock Option Agreement

 

(Non-Employee Directors)

 

Full Name of Optionee:

 

No. of Shares Covered:   Date of Grant: Exercise Price Per Share:   Expiration
Date:

 

Exercise Schedule:

 

Date  

No. of Shares

As to Which Option

Becomes Exercisable

 

This is a Non-Qualified Stock Option Agreement (“Agreement”) between BUCA, Inc.,
a Minnesota corporation (the “Company”), and the optionee identified above (the
“Optionee”) effective as of the date of grant specified above.

 

Recitals

 

WHEREAS, the Company maintains the 1996 Stock Incentive Plan of BUCA, Inc. and
Affiliated Companies, as amended (“Plan”); and

 

WHEREAS, the board of directors of the Company (the “Board”) has determined that
the Optionee is eligible to receive an award under the Plan in the form of a
non-qualified stock option (the “Option”) and has set the terms and conditions
thereof.

 

NOW, THEREFORE, the Company hereby grants this Option to the Optionee under the
terms and conditions set by the Board as follows.

--------------------------------------------------------------------------------

Terms and Conditions*

 

1. Grant. The Optionee is granted this Option to purchase the number of Shares
specified at the beginning of this Agreement.

 

2. Exercise Price. The price to the Optionee of each Share subject to this
Option is the exercise price specified at the beginning of this Agreement.

 

3. Incentive Stock Option. This Option is not intended to be an “incentive stock
option” within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”).

 

4. Exercise Schedule. Subject to the provisions of the Plan and this Agreement,
if this Option has not expired prior thereto, it may be exercised as to the
number of Shares and on the dates specified in the exercise schedule at the
beginning of this Agreement. The exercise schedule is cumulative — that is, if
this Option has not expired prior thereto, the Optionee may at any time purchase
all or any portion of the Shares then available under the exercise schedule to
the extent not previously purchased.

 

This Option may be exercised in full (notwithstanding the exercise schedule)
under the circumstances described in Section 7 of this Agreement if it has not
expired prior thereto.

 

5. Expiration. This Option expires at 4:30 p.m. Central Time on the earliest of:

 

  (a) The expiration date specified at the beginning of this Agreement; or

 

  (b) The date (if any) fixed for cancellation pursuant to Section 7 of this
Agreement.

 

In no event may anyone exercise this Option, in whole or in part, after it has
expired, notwithstanding any other provision of this Agreement.

 

6. Procedure to Exercise Option.

 

Notice of Exercise. This Option may be exercised by delivering written notice of
exercise to the Company. The notice shall state the number of Shares to be
purchased, and shall be signed by the person exercising this Option. If the
person exercising this Option is not the Optionee, he or she also must submit
appropriate proof of his or her right to exercise this Option.

--------------------------------------------------------------------------------

* Unless the context indicates otherwise, capitalized terms that are not defined
in this Agreement have the meanings set forth in the Plan as it currently exists
or as it is amended in the future.

 

2

--------------------------------------------------------------------------------

Tender of Payment. Any notice of exercise hereunder shall be accompanied by
payment of the purchase price of the Shares being purchased through one or a
combination of the following methods:

 

  (a) Check, bank draft or money order payable to the Company;

 

  (b) Certificates for unencumbered Shares having an aggregate Fair Market Value
(as defined below) on the date of exercise equal to the full purchase price of
the Shares being purchased (the Optionee shall duly endorse all such
certificates in blank and shall represent and warrant in writing that he or she
is the owner of the Shares so delivered free and clear of all liens, security
interests and other restrictions or encumbrances); or

 

  (c) To the extent permitted by law, a broker-assisted cashless exercise in
which the Optionee irrevocably instructs a broker to deliver proceeds of a sale
of all or a portion of the Shares to be issued pursuant to the exercise (or a
loan secured by such Shares) to the Company in payment of the purchase price of
such Shares.

 

Notwithstanding the foregoing, the Optionee shall not be permitted to pay any
portion of the purchase price with Shares if, in the opinion of the Board,
payment in such manner could have adverse consequences for the Company.

 

Delivery of Certificates. As soon as practicable after the Company receives the
notice and purchase price provided for above, it shall deliver to the person
exercising the Option, in the name of such person, a certificate or certificates
representing the Shares being purchased. The Company shall pay any original
issue or transfer taxes with respect to the issue or transfer of the Shares and
all fees and expenses incurred by it in connection therewith. All Shares so
issued shall be fully paid and nonassessable.

 

Fair Market Value. For purposes of this Agreement, “Fair Market Value” as of any
date means, unless otherwise expressly provided in the Plan:

 

(i) the closing price of a Share on that date or, if no sale of Shares shall
have occurred on that date, on the next preceding day on which a sale of Shares
occurred,

 

(A) on the composite tape for New York Stock Exchange listed shares, or

 

(B) if the Shares are not quoted on the composite tape for New York Stock
Exchange listed shares, on the principal United States Securities Exchange
registered under the Exchange Act on which the Shares are listed, or

 

(C) if the Shares are not listed on any such exchange, on the Nasdaq National
Market System (the “NASDAQ System”), or

 

3

--------------------------------------------------------------------------------

(ii) if clause (i) is inapplicable, the mean between the closing “bid” and the
closing “asked” quotation of a Share on that date, or, if no closing bid or
asked quotation is made on that date, on the next preceding day on which a
quotation is made, on the NASDAQ System or any system then in use, or

 

(iii) if clauses (i) and (ii) are inapplicable, what the Board determines in
good faith to be 100% of the fair market value of a Share on that date.

 

7. Fundamental Change. In the event of a proposed Fundamental Change (as defined
below), the Board or a committee designated by the board may, but shall not be
obligated to:

 

  (a) if the Fundamental Change is a merger or consolidation or statutory share
exchange, make appropriate provision for the protection of this Option by the
substitution of options and appropriate voting common stock of the corporation
surviving any merger or consolidation or, if appropriate, the parent corporation
of the Company or such surviving corporation to be issuable upon the exercise of
this Option, in lieu of options and capital stock of the Company; or

 

  (b) at least 30 days prior to the occurrence of the Fundamental Change
(including a merger or consolidation or statutory share exchange), declare, and
provide written notice to Optionee of the declaration, that this Option, whether
or not then exercisable, shall be canceled at the time of, or immediately prior
to the occurrence of the Fundamental Change in exchange for payment to Optionee,
within ten days after the Fundamental Change, of cash equal to, for each Share
covered by the canceled Option, the amount, if any, by which the Fair Value (as
hereinafter defined in this Section) per Share exceeds the exercise price per
Share covered by this Option. At the time of the declaration provided for in the
immediately preceding sentence, this Option shall immediately become exercisable
in full and Optionee shall have the right, during the period preceding the time
of cancellation of the Option, to exercise this Option as to all or any part of
the Shares covered by this Option in whole or in part, as the case may be;
provided, however, that if such proposed Fundamental Change does not become
effective, then the declaration pursuant to this subsection 7(b) shall be
rescinded, the acceleration of the exercisability of the Option pursuant to this
subsection 7(b) shall be void, and the Option shall be exercisable in accordance
with its original terms. In the event of a declaration pursuant to this
subsection 7(b), to the extent this Option has not been exercised prior to the
Fundamental Change, the unexercised part of this Option shall be canceled at the
time of, or immediately prior to, the Fundamental Change, as provided in the
declaration. Notwithstanding the foregoing, Optionee shall not be entitled to
the payment provided for in this subsection 7(b) if this Option shall have
expired pursuant to Section 5 above. For purposes of this subsection 7(b) only,
“Fair Value” per Share means the cash plus the fair market value, as determined
in good faith by the Board or a committee designated by the Board, of the
non-cash consideration to be received per Share by the shareholders of the
Company upon the occurrence of the Fundamental Change, notwithstanding anything
to the contrary provided in the Plan, or in this Agreement.

 

4

--------------------------------------------------------------------------------

For purposes of this Agreement, “Fundamental Change” shall mean a dissolution or
liquidation of the Company, a sale of substantially all of the assets of the
Company, a merger or consolidation of the Company with or into any other
corporation, regardless of whether the Company is the surviving corporation, or
a statutory share exchange involving capital stock of the Company.

 

8. Limitation on Transfer. While the Optionee is alive, only the Optionee or his
or her guardian or legal representative may exercise this Option. This Option
may not be assigned or transferred other than by will or the laws of descent and
distribution, and shall not be subject to pledge, hypothecation, execution,
attachment or similar process. Any attempt to assign, transfer, pledge,
hypothecate or otherwise dispose of this Option contrary to the provisions
hereof, and the levy of any attachment or similar process upon this Option,
shall be null and void.

 

9. No Shareholder Rights Before Exercise. No person has any of the rights of a
shareholder of the Company with respect to any Share subject to this Option
until the Share actually is issued to him or her upon exercise of this Option.

 

10. Adjustment. The Board or a committee designated by the Board may, in its
discretion, make appropriate adjustments in the number of Shares subject to this
Option and in the purchase price per Share to give effect to any adjustments
made in the number of outstanding Shares through a recapitalization,
reclassification, stock dividend, stock split, stock combination or other
relevant change; provided that, fractional Shares shall be rounded to the
nearest whole Share.

 

11. Interpretation of This Agreement. All decisions and interpretations made by
the Board with regard to any question arising hereunder or under the Plan shall
be binding and conclusive upon the Company and the Optionee. If there is any
inconsistency between the provisions of this Agreement and the Plan, the
provisions of the Plan shall govern.

 

12. Discontinuance of Relationship. This Agreement shall not give the Optionee a
right to a continued directorship or other relationship with the Company, and
the Company may terminate the directorship relationship with the Optionee and
otherwise deal with the Optionee without regard to the effect it may have upon
him or her under this Agreement.

 

13. Option Subject to Plan, Articles of Incorporation and By-Laws. Optionee
acknowledges that the exercise of the Option is subject to the Plan, the
Articles of Incorporation, as amended from time to time, and the By-Laws, as
amended from time to time, of the Company, and any applicable federal or state
laws, rules or regulations. The Optionee hereby acknowledges having received a
copy of the Plan.

 

5

--------------------------------------------------------------------------------

14. Obligation to Reserve Sufficient Shares. The Company shall at all times
during the term of this Option reserve and keep available a sufficient number of
Shares to satisfy this Agreement.

 

15. Binding Effect. This Agreement shall be binding in all respects on the
heirs, representatives, successors and assigns of the Optionee.

 

16. Choice of Law. This Agreement is entered into under the laws of the State of
Minnesota and shall be construed and interpreted thereunder (without regard to
its conflict of law principles).

 

IN WITNESS WHEREOF, the Optionee and the Company have executed this Agreement as
of the      day of             ,             .

 

OPTIONEE

 

--------------------------------------------------------------------------------

BUCA, INC. By  

 

--------------------------------------------------------------------------------

Its  

 

--------------------------------------------------------------------------------

 

6