Ex-10.1






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



 









 





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.



13









 





     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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