Document:

exv4w1

 

Exhibit 4.1

FAMOUS DAVE’S OF AMERICA, INC.

2005 STOCK INCENTIVE PLAN

      1. Purpose. The purpose of the 2005 Stock Incentive Plan (the “Plan”) of Famous Dave’s of
America, Inc. (the “Company”) is to increase stockholder value and to advance the interests of the
Company by furnishing a variety of economic incentives (“Incentives’”) designed to attract, retain
and motivate employees, certain key consultants and directors of the Company. Incentives may
consist of opportunities to purchase or receive shares of Common Stock, $0.01 par value per share,
of the Company (“Common Stock”) on terms determined under this Plan.

      2. Administration. The Plan shall be administered by the board of directors of the
Company (the “Board of Directors”) or by a stock option or compensation committee (the “Committee”)
of the Board of Directors. The Committee shall consist of not less than two directors of the
Company and shall be appointed from time to time by the Board of Directors. Each member of the
Committee shall be (i) a “non-employee director” within the meaning of Rule 16b-3 of the Securities
Exchange Act of 1934 (including the regulations promulgated thereunder, the “1934 Act”) (a
“Non-Employee Director”), and (ii) shall be an “outside director” within the meaning of Section
162(m) under the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations
promulgated thereunder. The Committee shall have complete authority to award Incentives under the
Plan, to interpret the Plan, and to make any other determination which it believes necessary and
advisable for the proper administration of the Plan. The Committee’s decisions and matters
relating to the Plan shall be final and conclusive on the Company and its participants. If at any
time there is no stock option or compensation committee, the term “Committee”, as used in the Plan,
shall refer to the Board of Directors.

      3. Eligible Participants. Officers of the Company, employees of the Company or its
subsidiaries, members of the Board of Directors, and consultants or other independent contractors
who provide services to the Company or its subsidiaries shall be eligible to receive Incentives
under the Plan when designated by the Committee. Participants may be designated individually or by
groups or categories (for example, by pay grade) as the Committee deems appropriate. Participation
by officers of the Company or its subsidiaries and any performance objectives relating to such
officers must be approved by the Committee. Participation by others and any performance objectives
relating to others may be approved by groups or categories (for example, by pay grade) and
authority to designate participants who are not officers and to set or modify such targets may be
delegated.

      4. Types of Incentives. Incentives under the Plan may be granted in any one or a
combination of the following forms: (a) performance shares (section 6); (b) incentive stock
options and non-statutory stock options (section 7); (c) stock appreciation rights (“SARs”)
(section 8); (d) stock awards (section 9); (e) restricted stock (section 9).

 

 

      5. Shares Subject to the Plan.

            5.1. Number of Shares. Subject to adjustment as provided in Section 10.6, the
number of shares of Common Stock which may be issued under the Plan shall not exceed 450,000
shares of Common Stock. Shares of Common Stock that are issued under the Plan or are
subject to outstanding Incentives will be applied to reduce the maximum number of shares of
Common Stock remaining available for issuance under the Plan.

            5.2. Cancellation. To the extent that cash in lieu of shares of Common Stock is
delivered upon the exercise of a SAR pursuant to Section 8.4, the Company shall be deemed,
for purposes of applying the limitation on the number of shares, to have issued the greater
of the number of shares of Common Stock which it was entitled to issue upon such exercise or
on the exercise of any related option. In the event that a stock option or SAR granted
hereunder expires or is terminated or canceled unexercised as to any shares of Common Stock,
such shares may again be issued under the Plan either pursuant to stock options, SARs or
otherwise. In the event that shares of Common Stock are issued as performance shares,
restricted stock or pursuant to a stock award and thereafter are forfeited or reacquired by
the Company pursuant to rights reserved upon issuance thereof, such forfeited and reacquired
shares may again be issued under the Plan, either as performance shares, restricted stock,
pursuant to stock awards or otherwise.

            5.3. Type of Common Stock. Common Stock issued under the Plan in connection
with stock options, SARs, performance shares, restricted stock or stock awards, may be
authorized and unissued shares or treasury stock, as designated by the Committee.

      6. Performance Shares. A performance share consists of an award which shall be paid in
shares of Common Stock, as described below. The grant of a performance share shall be subject to
such terms and conditions as the Committee deems appropriate, including the following:

            6.1. Performance Objectives. Each performance share will be subject to
performance objectives for the Company or one of its operating units to be achieved by the
end of a specified period, which period shall be at least one year in length unless the
Committee determines in its discretion that a shorter period warranted. The number of
performance shares granted shall be determined by the Committee and may be subject to such
terms and conditions, as the Committee shall determine. If the performance objectives are
achieved, each participant will be paid in shares of Common Stock. If such objectives are
not met, each grant of performance shares may provide for lesser payments in accordance with
formulas established in the award.

            6.2. Not Stockholder. The grant of performance shares to a participant shall
not create any rights in such participant as a stockholder of the Company, until the payment
of shares of Common Stock with respect to an award.

            6.3. No Adjustments. No adjustment shall be made in performance shares granted
on account of cash dividends which may be paid or other rights which may be issued to the
holders of Common Stock prior to the end of any period for which performance objectives were
established.

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            6.4. Expiration of Performance Share. If any participant’s employment or
consulting engagement with the Company is terminated for any reason other than normal
retirement, death or disability prior to the achievement of the participant’s stated
performance objectives, all the participant’s rights on the performance shares shall expire
and terminate unless otherwise determined by the Committee. In the event of termination of
employment or consulting by reason of death, disability, or normal retirement, the
Committee, in its own discretion may determine what portions, if any, of the performance
shares should be paid to the participant.

      7. Stock Options. A stock option is a right to purchase shares of Common Stock from
the Company. Each stock option granted by the Committee under this Plan shall be subject to the
following terms and conditions:

            7.1. Price. The option price per share shall be determined by the Committee,
subject to adjustment under Section 10.6.

            7.2. Number. The number of shares of Common Stock subject to the option shall
be determined by the Committee, subject to adjustment as provided in Section 10.6. The
number of shares of Common Stock subject to a stock option shall be reduced in the same
proportion that the holder thereof exercises a SAR if any SAR is granted in conjunction with
or related to the stock option. Notwithstanding the foregoing, no person shall receive
grants of Stock Options under the Plan that exceed 75,000 shares during any one fiscal year
of the Company.

            7.3. Duration and Time for Exercise. Subject to earlier termination as provided
in Section 10.4, the term of each stock option shall be determined by the Committee but
shall not exceed ten years and one day from the date of grant. Each stock option shall
become exercisable at such time or times during its term as shall be determined by the
Committee at the time of grant, but shall not become exercisable more quickly than ratably
over three years unless the Committee determines in its discretion that a faster schedule is
warranted. The Committee may accelerate the exercisability of any stock option. Subject to
the foregoing and with the approval of the Committee, all or any part of the shares of
Common Stock with respect to which the right to purchase has accrued may be purchased by the
Company at the time of such accrual or at any time or times thereafter during the term of
the option at such price and on such terms as the Company and the optionee shall mutually
agree; provided, however, that any shares so repurchased shall not be available for
re-issuance under the Plan.

            7.4. Manner of Exercise. A stock option may be exercised, in whole or in part,
by giving written notice to the Company, specifying the number of shares of Common Stock to
be purchased and accompanied by the full purchase price for such shares. The option price
shall be payable (a) in United States dollars upon exercise of the option and may be paid by
cash, uncertified or certified check or bank draft; (b) at the discretion of the Committee,
by delivery of shares of Common Stock in payment of all or any part of the option price,
which shares shall be valued for this purpose at the Fair Market Value on the date such
option is exercised; or (c) at the discretion of the Committee,
by instructing the Company to withhold from the shares of Common
Stock issuable upon exercise of the stock option shares of Common Stock in
payment

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of all or any part of the exercise price and/or any
related withholding tax obligations, which shares shall be valued for this purpose at the
Fair Market Value or in such other manner as may be authorized from time to time by the
Committee. The shares of Common Stock delivered by the participant pursuant to Section
6.4(b) must have been held by the participant for a period of not less than six months prior
to the exercise of the option, unless otherwise determined by the Committee. Prior to the
issuance of shares of Common Stock upon the exercise of a stock option, a participant shall
have no rights as a stockholder.

            7.5. Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, the following additional provisions shall apply to the grant of stock options
which are intended to qualify as Incentive Stock Options (as such term is defined in Section
422 of the Code):

      (a) The aggregate Fair Market Value (determined as of the time the option is
granted) of the shares of Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by any participant during any calendar year
(under all of the Company’s plans) shall not exceed $100,000. The determination will
be made by taking incentive stock options into account in the order in which they
were granted. If such excess only applies to a portion of an Incentive Stock
Option, the Committee, in its discretion, will designate which shares will be
treated as shares to be acquired upon exercise of an Incentive Stock Option.

      (b) Any Incentive Stock Option certificate authorized under the Plan shall
contain such other provisions as the Committee shall deem advisable, but shall in
all events be consistent with and contain all provisions required in order to
qualify the options as Incentive Stock Options.

      (c) All Incentive Stock Options must be granted within ten years from the
earlier of the date on which this Plan was adopted by Board of Directors or the date
this Plan was approved by the stockholders.

      (d) Unless sooner exercised, all Incentive Stock Options shall expire no later
than 10 years after the date of grant.

      (e) The option price for Incentive Stock Options shall be not less than the
Fair Market Value of the Common Stock subject to the option on the date of grant.

      (f) If Incentive Stock Options are granted to any participant who, at the time
such option is granted, would own (within the meaning of Section 422 of the Code)
stock possessing more than 10% of the total combined voting power of all classes of
stock of the employer corporation or of its parent or subsidiary corporation, (i)
the option price for such Incentive Stock Options shall be not less than 110% of the
Fair Market Value of the Common Stock subject to the option on the date of grant and
(ii) such Incentive Stock Options shall expire no later than five years after the
date of grant.

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      8. Stock Appreciation Rights. A SAR is a right to receive, without payment to the
Company, a number of shares of Common Stock, cash or any combination thereof, the amount of which
is determined pursuant to the formula set forth in Section 8.4. A SAR may be granted (a) with
respect to any stock option granted under this Plan, either concurrently with the grant of such
stock option or at such later time as determined by the Committee (as to all or any portion of the
shares of Common Stock subject to the stock option), or (b) alone, without reference to any related
stock option. Each SAR granted by the Committee under this Plan shall be subject to the following
terms and conditions:

            8.1. Number. Each SAR granted to any participant shall relate to such number of
shares of Common Stock as shall be determined by the Committee, subject to adjustment as
provided in Section 10.6. In the case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains shall be reduced in the same
proportion that the holder of the option exercises the related stock option.

            8.2. Duration. Subject to earlier termination as provided in Section 10.4, the
term of each SAR shall be determined by the Committee but shall not exceed ten years and one
day from the date of grant. Unless otherwise provided by the Committee, each SAR shall
become exercisable at such time or times, to such extent and upon such conditions as the
stock option, if any, to which it relates is exercisable. The Committee may in its
discretion accelerate the exercisability of any SAR.

            8.3. Exercise. A SAR may be exercised, in whole or in part, by giving written
notice to the Company, specifying the number of SARs which the holder wishes to exercise.
Upon receipt of such written notice, the Company shall, within 90 days thereafter, deliver
to the exercising holder certificates for the shares of Common Stock or cash or both, as
determined by the Committee, to which the holder is entitled pursuant to Section 8.4.

            8.4. Payment. Subject to the right of the Committee to deliver cash in lieu of
shares of Common Stock (which, as it pertains to officers and directors of the Company,
shall comply with all requirements of the 1934 Act), the number of shares of Common Stock
which shall be issuable upon the exercise of a SAR shall be determined by dividing:

      (a) the number of shares of Common Stock as to which the SAR is exercised
multiplied by the amount of the appreciation in such shares (for this purpose, the
“appreciation” shall be the amount by which the Fair Market Value of the shares of
Common Stock subject to the SAR on the exercise date exceeds (1) in the case of a
SAR related to a stock option, the purchase price of the shares of Common Stock
under the stock option or (2) in the case of a SAR granted alone, without reference
to a related stock option, an amount which shall be determined by the Committee at
the time of grant, subject to adjustment under Section 10.6); by

      (b) the Fair Market Value of a share of Common Stock on the exercise date.

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            In lieu of issuing shares of Common Stock upon the exercise of a SAR, the Committee may
elect to pay the holder of the SAR cash equal to the Fair Market Value on the exercise date
of any or all of the shares which would otherwise be issuable. No fractional shares of
Common Stock shall be issued upon the exercise of a SAR; instead, the holder of the SAR
shall be entitled to receive a cash adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the exercise date or to purchase the portion necessary
to make a whole share at its Fair Market Value on the date of exercise.

      9. Stock Awards and Restricted Stock. A stock award consists of the transfer by the
Company to a participant of shares of Common Stock, without other payment therefor, as additional
compensation for services to the Company. A share of restricted stock consists of shares of Common
Stock which are sold or transferred by the Company to a participant at a price determined by the
Committee (which price shall be at least equal to the minimum price required by applicable law for
the issuance of a share of Common Stock) and subject to restrictions on their sale or other
transfer by the participant. The transfer of Common Stock pursuant to stock awards and the
transfer and sale of restricted stock shall be subject to the following terms and conditions:

            9.1. Number of Shares. The number of shares to be transferred or sold by the
Company to a participant pursuant to a stock award or as restricted stock shall be
determined by the Committee.

            9.2. Sale Price. The Committee shall determine the price, if any, at which
shares of restricted stock shall be sold to a participant, which may vary from time to time
and among participants and which may be below the Fair Market Value of such shares of Common
Stock at the date of sale.

            9.3. Restrictions. All shares of restricted stock transferred or sold hereunder
shall be subject to such restrictions as the Committee may determine, including, without
limitation any or all of the following:

      (a) a prohibition against the sale, transfer, pledge or other encumbrance of
the shares of restricted stock, such prohibition to lapse at such time or times as
the Committee shall determine (whether in annual or more frequent installments, at
the time of the death, disability or retirement of the holder of such shares, or
otherwise);

      (b) a requirement that the holder of shares of restricted stock forfeit, or (in
the case of shares sold to a participant) resell back to the Company at his or her
cost, all or a part of such shares in the event of termination of his or her
employment or consulting engagement during any period in which such shares are
subject to restrictions;

      (c) such other conditions or restrictions as the Committee may deem advisable.

            9.4. Escrow. In order to enforce the restrictions imposed by the Committee
pursuant to Section 9.3, the participant receiving restricted stock shall enter into an
agreement with the Company setting forth the conditions of the grant. Shares of restricted stock shall be registered

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in the name of the participant and deposited, together with a
stock power endorsed in blank, with the Company. Each such certificate shall bear a legend
in substantially the following form:

The transferability of this certificate and the shares of Common Stock
represented by it are subject to the terms and conditions (including
conditions of forfeiture) contained in the 2005 Stock Incentive Plan of
Famous Dave’s of America, Inc. (the “Company”), and an agreement entered
into between the registered owner and the Company. A copy of the Plan and
the agreement is on file in the office of the secretary of the Company.

            9.5. End of Restrictions. Subject to Section 10.5, at the end of any time
period during which the shares of restricted stock are subject to forfeiture and
restrictions on transfer, such shares will be delivered free of all restrictions to the
participant or to the participant’s legal representative, beneficiary or heir.

            9.6. Stockholder. Subject to the terms and conditions of the Plan, each
participant receiving restricted stock shall have all the rights of a stockholder with
respect to shares of stock during any period in which such shares are subject to forfeiture
and restrictions on transfer, including without limitation, the right to vote such shares.
Dividends paid in cash or property other than Common Stock with respect to shares of
restricted stock shall be paid to the participant currently.

      10. General.

            10.1. Effective Date. The Plan will become effective upon its approval by the
Company’s stockholders. Unless approved by the stockholders within one year after the date
of the Plan’s adoption by the Board of Directors, the Plan shall not be effective for any
purpose.

            10.2. Duration. The Plan shall remain in effect until all Incentives granted
under the Plan have either been satisfied by the issuance of shares of Common Stock or the
payment of cash or been terminated under the terms of the Plan and all restrictions imposed
on shares of Common Stock in connection with their issuance under the Plan have lapsed. No
Incentives may be granted under the Plan after the tenth anniversary of the date the Plan is
approved by the stockholders of the Company.

            10.3. Non-transferability of Incentives. No stock option, SAR, restricted stock
or performance award may be transferred, pledged or assigned by the holder thereof (except,
in the event of the holder’s death, by will or the laws of descent and distribution to the
limited extent provided in the Plan or the Incentive), or pursuant to a qualified domestic
relations order as defined by the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder, and the Company shall not be required to recognize any
attempted assignment of such rights by any participant. Notwithstanding the preceding
sentence, stock options may be transferred by the holder thereof to Employee’s spouse,
children, grandchildren or parents (collectively, the “Family Members”), to trusts for the
benefit of Family Members, to partnerships or limited liability companies in which Family
Members

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are the only partners or shareholders, or to entities exempt from federal
income taxation pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended. During a participant’s lifetime, a stock option may be exercised only by him or
her, by his or her guardian or legal representative or by the transferees permitted by the
preceding sentence.

            10.4. Effect of Termination or Death. In the event that a participant ceases to
be an employee of or consultant to the Company for any reason, including death or
disability, any Incentives may be exercised or shall expire at such times as may be
determined by the Committee.

            10.5. Additional Condition. Notwithstanding anything in this Plan to the
contrary: (a) the Company may, if it shall determine it necessary or desirable for any
reason, at the time of award of any Incentive or the issuance of any shares of Common Stock
pursuant to any Incentive, require the recipient of the Incentive, as a condition to the
receipt thereof or to the receipt of shares of Common Stock issued pursuant thereto, to
deliver to the Company a written representation of present intention to acquire the
Incentive or the shares of Common Stock issued pursuant thereto for his or her own account
for investment and not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or qualification (or any
updating of any such document) of any Incentive or the shares of Common Stock issuable
pursuant thereto is necessary on any securities exchange or under any federal or state
securities or blue sky law, or that the consent or approval of any governmental regulatory
body is necessary or desirable as a condition of, or in connection with the award of any
Incentive, the issuance of shares of Common Stock pursuant thereto, or the removal of any
restrictions imposed on such shares, such Incentive shall not be awarded or such shares of
Common Stock shall not be issued or such restrictions shall not be removed, as the case may
be, in whole or in part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not acceptable to the
Company.

            10.6. Adjustment. In the event of any recapitalization, stock dividend, stock
split, combination of shares or other change in the Common Stock, the number of shares of
Common Stock then subject to the Plan, including shares subject to restrictions, options or
achievements of performance shares, shall be adjusted in proportion to the change in
outstanding shares of Common Stock. In the event of any such adjustments, the purchase
price of any option, the performance objectives of any Incentive, and the shares of Common
Stock issuable pursuant to any Incentive shall be adjusted as and to the extent appropriate,
in the discretion of the Committee, to provide participants with the same relative rights
before and after such adjustment.

            10.7. Incentive Plans and Agreements. Except in the case of stock awards, the
terms of each Incentive shall be stated in a plan or agreement approved by the Committee.
The Committee may also determine to enter into agreements with holders of options to
reclassify or convert certain outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-statutory stock options and in order to eliminate SARs
with respect to all or part of such options and any other previously issued options.

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            10.8. Withholding.

      (a) The Company shall have the right to withhold from any payments made under
the Plan or to collect as a condition of payment, any taxes required by law to be
withheld. At any time when a participant is required to pay to the Company an
amount required to be withheld under applicable income tax laws in connection with a
distribution of Common Stock or upon exercise of an option or SAR, the participant
may satisfy this obligation in whole or in part by electing (the “Election”) to have
the Company withhold from the distribution shares of Common Stock having a value up
to the minimum amount of withholding taxes required to be collected on the
transaction. The value of the shares to be withheld shall be based on the Fair
Market Value of the Common Stock on the date that the amount of tax to be withheld
shall be determined (“Tax Date”).

      (b) Each Election must be made prior to the Tax Date. The Committee may
disapprove of any Election, may suspend or terminate the right to make Elections, or
may provide with respect to any Incentive that the right to make Elections shall not
apply to such Incentive. An Election is irrevocable.

            10.9. No Continued Employment, Engagement or Right to Corporate Assets. No
participant under the Plan shall have any right, because of his or her participation, to
continue in the employ of the Company for any period of time or to any right to continue his
or her present or any other rate of compensation. Nothing contained in the Plan shall be
construed as giving an employee, a consultant, such persons’ beneficiaries or any other
person any equity or interests of any kind in the assets of the Company or creating a trust
of any kind or a fiduciary relationship of any kind between the Company and any such person.

            10.10. Deferral Permitted. Payment of cash or distribution of any shares of
Common Stock to which a participant is entitled under any Incentive shall be made as
provided in the Incentive. Payment may be deferred at the option of the participant if
provided in the Incentive.

            10.11. Amendment of the Plan. The Board may amend or discontinue the Plan at
any time. However, no such amendment or discontinuance shall adversely change or impair,
without the consent of the recipient, an Incentive previously granted. Further, no such
amendment shall, without approval of the shareholders of the Company, (a) increase the
maximum number of shares of Common Stock which may be issued to all participants under the
Plan, (b) change or expand the types of Incentives that may be granted under the Plan, (c)
change the class of persons eligible to receive Incentives under the Plan, or (d) materially
increase the benefits accruing to participants under the Plan.

            10.12 Sale, Merger, Exchange or Liquidation. Unless otherwise provided in the
agreement for an Incentive, in the event of an acquisition of the Company through the sale
of substantially all of the Company’s assets or through a merger, exchange, reorganization
or liquidation of the Company or a similar event as determined by the Committee
(collectively a “transaction”), the Committee shall be
authorized, in its sole discretion, to take any and all action it deems
equitable under the circumstances,
including but not limited to any one or more of the following:

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      (1) providing that the Plan and all Incentives shall terminate and the holders of (i)
all outstanding vested options shall receive, in lieu of any shares of Common Stock they
would be entitled to receive under such options, such stock, securities or assets, including
cash, as would have been paid to such participants if their options had been exercised and
such participant had received Common Stock immediately prior to such transaction (with
appropriate adjustment for the exercise price, if any), (ii) performance shares and/or SARs
that entitle the participant to receive Common Stock shall receive, in lieu of any shares of
Common Stock each participant was entitled to receive as of the date of the transaction
pursuant to the terms of such Incentive, if any, such stock, securities or assets, including
cash, as would have been paid to such participant if such Common Stock had been issued to
and held by the participant immediately prior to such transaction, and (iii) any Incentive
under this Agreement which does not entitle the participant to receive Common Stock shall be
equitably treated as determined by the Committee.

      (2) providing that participants holding outstanding vested Common Stock based
Incentives shall receive, with respect to each share of Common Stock issuable pursuant to
such Incentives as of the effective date of any such transaction, at the determination of
the Committee, cash, securities or other property, or any combination thereof, in an amount
equal to the excess, if any, of the Fair Market Value of such Common Stock on a date within
ten days prior to the effective date of such transaction over the option price or other
amount owed by a participant, if any, and that such Incentives shall be cancelled, including
the cancellation without consideration of all options that have an exercise price below the
per share value of the consideration received by the Company in the transaction.

      (3) providing that the Plan (or replacement plan) shall continue with respect to
Incentives not cancelled or terminated as of the effective date of such transaction and
provide to participants holding such Incentives the right to earn their respective
Incentives on a substantially equivalent basis (taking into account the transaction and the
number of shares or other equity issued by such successor entity) with respect to the equity
of the entity succeeding the Company by reason of such transaction.

      (4) providing that all unvested, unearned or restricted Incentives, including but not
limited to restricted stock for which restrictions have not lapsed as of the effective date
of such transaction, shall be void and deemed terminated, or, in the alternative, for the
acceleration or waiver of any vesting, earning or restrictions on any Incentive.

      The Board may restrict the rights of participants or the applicability of this Section
10.12 to the extent necessary to comply with Section 16(b) of the Securities Exchange Act of
1934, the Internal Revenue Code or any other applicable law or regulation. The grant of an
Incentive award pursuant to the Plan shall not limit in any way the right or power of the
Company to make adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge, exchange or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.

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      10.13. Definition of Fair Market Value. For purposes of this Plan, the “Fair
Market Value” of a share of Common Stock at a specified date shall, unless otherwise
expressly provided in this Plan, be the amount which the Committee or the Board of Directors
determines in good faith to be 100% of the fair market value of such a share as of the date
in question; provided, however, that notwithstanding the foregoing, if such shares are
listed on a U.S. securities exchange or are quoted on the Nasdaq National Market or Nasdaq
Small-Cap Market (“Nasdaq”), then Fair Market Value shall be determined by reference to the
last sale price of a share of Common Stock on such U.S. securities exchange or Nasdaq on the
applicable date. If such U.S. securities exchange or Nasdaq is closed for trading on such
date, or if the Common Stock does not trade on such date, then the last sale price used
shall be the one on the date the Common Stock last traded on such U.S. securities exchange
or Nasdaq.

Approved by the Board of Directors on February 25, 2005.

Approved by the shareholders on May 12, 2005.

11exv10w1

 

Exhibit 10.1

			
	
	 	Restricted Stock

2003 Plan

FY 2005 Award

Dear [Name]:

      Effective May ___, 2005 you have been awarded ___shares of the common stock, par value
$.25 per share, of Centex Corporation (the “Company”). This award (the “Award”) is made pursuant
to, and subject to the terms and conditions of, the Centex Corporation 2003 Equity Incentive Plan
(as such plan may be amended from time to time, the “Plan”). The Shares awarded hereby constitute
Shares of Restricted Stock under the Plan. A copy of the Plan is available to you upon request to
the Law Department.

      This Award will vest at the rate of 81/4% per quarter in fiscal year 2006, 81/4% per quarter in
fiscal year 2007 and 81/2% per quarter in fiscal year 2008. The amounts and dates are shown below:

	 	 	 	 	 
	___shares on 06/30/2005

	 	___shares on 06/30/2006
	 	___shares on 06/30/2007
	 
	 	 	 	 
	___shares on 09/30/2005

	 	___shares on 09/30/2006
	 	___shares on 09/30/2007
	 
	 	 	 	 
	___shares on 12/31/2005

	 	___shares on 12/31/2006
	 	___shares on 12/31/2007
	 
	 	 	 	 
	___shares on 03/31/2006

	 	___shares on 03/31/2007
	 	___shares on 03/31/2008

      The restrictions set forth in the Plan and this Award will terminate coterminously with the
vesting described above, unless earlier terminated as described in the Plan or this Award. The
date on which the restrictions terminate as to vested shares is called the “Lapse Date”. Vested
Shares of Restricted Stock will become freely transferable on the day following the related Lapse
Date.

      You will forfeit all unvested Shares of Restricted Stock if, prior to the Lapse Date, you
cease for any reason to be an employee of at least one of the employers in the group of employers
consisting of the Company and its Affiliates. However, the restrictions set forth in the Plan and
this Award will terminate immediately and all of the shares covered by this Award will immediately
vest (i) in the event of your death or permanent disability or (ii) if you retire from employment
at the Company prior to the Lapse Date and at retirement you satisfy the definition of Vested
Retirement, i.e., you are a Full Time Employee at least 55 years old, have at least 10 Years of
Service and the sum of your age and Years of Service equals at least 70. Whether you have suffered
a permanent disability will be determined by the Committee, in its sole and absolute discretion.
In the event of your death, the person or persons to whom the Shares of Restricted Stock have been
validly transferred pursuant to will or the laws of descent and distribution will have all rights
to the Shares of Restricted Stock.

      The Company may cancel and revoke this Award and/or replace it with a revised award at any
time if the Company determines, in its good faith judgment, that this Award was granted in error or
that this Award contains an error. In the event of such determination by the Company, and written
notice thereof to you at your business or home address, all of your rights and all of the Company’s
obligations as to any unvested portion of this Award shall immediately terminate. If the Company
replaces this Award with a revised award, then you will have all of the benefits conferred under
the revised award, effective as of such time as the revised award goes into effect.

      This Award is subject to the Plan, and the Plan will govern where there is any inconsistency
between the Plan and this Award. The provisions of the Plan are also provisions of this Award, and
all terms, provisions and definitions set forth in the Plan are incorporated in this Award and made
a part of this Award for all purposes. Capitalized terms used but not defined in this Award will
have the meanings assigned to such terms in the Plan. This Award has been signed in duplicate by
the Company and delivered to you, and (when you sign below) has been accepted by you effective as
of May ___, 2005.

	 	 	 
	ACCEPTED

	 	CENTEX CORPORATION
	as of May___, 2005
	 	 
	 
	 	 
	 
	 	 
	 

	 	 
	[Name]

	 	[Name]
	

	 	[Title]

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