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Exhibit 10.15  

 
 

McCormick & Schmick's
  Termination of Covenant Not to Compete    
    

        This Termination of Covenant Not to Compete ("Termination") is effective as of June 25, 2004 between McCormick & Schmick Acquisition Corp., a
Delaware corporation ("MSAC"), McCormick & Schmick Holdings LLC, a Delaware limited liability company ("Holdings"), McCormick & Schmick's Seafood Restaurants, Inc. ("MSSR") and
Douglas L. Schmick ("Executive"). 

Recitals  

        A.    MSAC and Executive are parties to a Covenant Not to Compete, effective as of January 1, 2004 (the "Covenant Not to
Compete"), under which MSAC pays Executive $175,000 annually in consideration of Executive's agreement not to compete with MSAC. 

        B.    MSSR, a wholly owned subsidiary of Holdings which is the indirect parent of MSAC and MSRC, has filed a registration
statement on Form S-1 to register with the Securities and Exchange Commission shares of common stock in an underwritten initial public offering (the "IPO"). 

        C.    In connection with the IPO, the parties have determined that it is in their mutual best interest to terminate the Covenant
Not to Compete. 

Agreement  

        1.     Termination. Effective as of June 25, 2004 (the "Termination Date"), the Covenant Not to Compete is terminated;  provided, however, that if MSSR determines not to proceed with the IPO, Executive and MSAC shall enter
into a covenant not to compete with terms substantially similar to the Covenant Not to Compete. 

        2.     Consideration. In consideration of Executive's termination of the Covenant Not to Compete, Holdings agrees to pay to
Executive $286,712 (the "Termination Fee"), which shall be paid within 30 days of the Termination Date; provided,  however, that if MSSR determines not
to proceed with the IPO and the parties enter into a new covenant not to compete, Executive shall return the
Termination Fee to MSSR. 

        3.     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, with the
same effect as if the signatures thereto were upon one instrument. 

[Signature
page follows.] 

        In witness whereof, the Parties have executed this Termination of Covenant Not to Compete as of the date first written above. 

	 	 	McCormick & Schmick Acquisition Corp.
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
McCormick & Schmick Holdings LLC
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	

 Douglas L. Schmick

 
 

McCormick & Schmick's
  Termination of Covenant Not to Compete    
    

        This Termination of Covenant Not to Compete ("Termination") is effective as of June 25, 2004 between McCormick & Schmick Acquisition Corp., a
Delaware corporation ("MSAC"), McCormick & Schmick Holdings LLC, a Delaware limited liability company ("Holdings"), McCormick & Schmick's Seafood Restaurants, Inc. ("MSSR") and
William P. McCormick ("Executive"). 

Recitals  

        A.    MSAC and Executive are parties to a Covenant Not to Compete, effective as of January 1, 2004 (the "Covenant Not to
Compete"), under which MSAC pays Executive $175,000 annually in consideration of Executive's agreement not to compete with MSAC. 

        B.    MSSR, a wholly owned subsidiary of Holdings which is the indirect parent of MSAC and MSRC, has filed a registration
statement on Form S-1 to register with the Securities and Exchange Commission shares of common stock in an underwritten initial public offering (the "IPO"). 

        C.    In connection with the IPO, the parties have determined that it is in their mutual best interest to terminate the Covenant
Not to Compete. 

Agreement  

        1.     Termination. Effective as of June 25, 2004 (the "Termination Date"), the Covenant Not to Compete is terminated;  provided, however, that if MSSR determines not to proceed with the IPO, Executive and MSAC shall enter
into a covenant not to compete with terms substantially similar to the Covenant Not to Compete. 

        2.     Consideration. In consideration of Executive's termination of the Covenant Not to Compete, Holdings agrees to pay to
Executive $286,712 (the "Termination Fee"), which shall be paid within 30 days of the Termination Date; provided,  however, that if MSSR determines not
to proceed with the IPO and the parties enter into a new covenant not to compete, Executive shall return the
Termination Fee to MSSR. 

        3.     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, with the
same effect as if the signatures thereto were upon one instrument. 

[Signature
page follows.] 

        In witness whereof, the Parties have executed this Termination of Covenant Not to Compete as of the date first written above. 

	 	 	McCormick & Schmick Acquisition Corp.
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	
McCormick & Schmick Holdings LLC
	

 	
 	

By:	

 
	 	 	 	

	 	 	Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	

 	
 	

 William P. McCormick

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Exhibit 10.16  

 
 

McCormick & Schmick's Seafood Restaurants, Inc.
  
    2004 Stock Incentive Plan    
    

1.    Purpose. The purpose of this 2004 Stock Incentive Plan (the "Plan") is to enable McCormick & Schmick's
Seafood Restaurants, Inc. (the "Company") to attract and retain the services of (i) selected employees, officers and directors of the Company or any parent or
subsidiary of the Company and (ii) selected nonemployee agents, consultants, advisers and independent contractors of the Company or any parent or subsidiary of the Company. For purposes of this
Plan, a person is considered to be employed by or in the service of the Company if the person is employed by or in the service of any entity (the "Employer") that is either the Company or a parent or
subsidiary of the Company. 

2.    Shares Subject to the Plan. Subject to adjustment as provided below and in Section 10, the shares to be offered under the Plan
shall consist of Common Stock of the Company, and the total number of shares of Common Stock that may be issued under the Plan shall be 1,800,000 shares. If an option, stock appreciation right or
Performance-Based Award granted under the Plan expires, terminates or is canceled, the unissued shares subject to that option, stock appreciation right or Performance-Based Award shall again be
available under the Plan. If shares awarded as a bonus pursuant to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to or repurchased by the Company, the number of shares
forfeited or repurchased shall again be available under the Plan. 

3.    Effective Date and Duration of Plan.

        3.1    Effective Date.    The Plan shall become effective as of June 16, 2004.
No
Incentive Stock Option (as defined in Section 5 below) granted under the Plan shall become exercisable and no payments shall be made under a Performance-Based Award, however, until the Plan is
approved by the affirmative vote of the holders of a majority of the shares of Common Stock represented at a shareholders meeting at which a quorum is present or by means of unanimous consent
resolutions, and the exercise of any Incentive Stock Options granted under the Plan before stockholder approval shall be conditioned on and subject to that approval. Subject to this limitation,
options, stock appreciation rights and
Performance-Based Awards may be granted and shares may be awarded as bonuses or sold under the Plan at any time after the effective date and before termination of the Plan. 

        3.2    Duration.    The Plan shall continue in effect until the earlier of
(i) 10 years from the effective date or (ii) the date when all shares available for issuance under the Plan have been issued and all restrictions on the shares have lapsed. The
Board of Directors may suspend or terminate the Plan at any time except with respect to options, Performance-Based Awards and shares subject to restrictions then outstanding under the Plan.
Termination shall not affect any outstanding options, any outstanding Performance-Based Awards or any right of the Company to repurchase shares or the forfeitability of shares issued under the Plan. 

4.    Administration.

        4.1    Board of Directors.    The Plan shall be administered by the Board of
Directors of the
Company, which shall determine and designate the individuals to whom awards shall be made, the amount of the awards and the other terms and conditions of the awards. Subject to the provisions of the
Plan, the Board of Directors may adopt and amend rules and regulations relating to administration of the Plan, advance the lapse of any waiting period, accelerate any exercise date, waive or modify
any restriction applicable to shares (except those restrictions imposed by law) and make all other determinations in the judgment of the Board of Directors necessary or desirable for the
administration of the Plan. The interpretation and construction of the provisions of the Plan and related agreements by the Board of Directors shall be final and conclusive. The Board of Directors may
correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any related agreement in the manner and to the extent it deems expedient to carry the Plan into effect, and
the Board of Directors shall be the sole and final judge of such expediency. 

 

        4.2    Committee.    The Board of Directors may delegate to any committee of the
Board of
Directors (the "Committee") any or all authority for administration of the Plan. If authority is delegated to the Committee, all references to the Board of Directors in the Plan shall mean and relate
to the Committee, except (i) as otherwise provided by the Board of Directors and (ii) that only the Board of Directors may amend or terminate the Plan as provided in Sections 3 and 11. 

        4.3    Officers.    The Board of Directors may delegate to any officer or officers of
the
Company authority to grant awards under the Plan, subject to any restrictions imposed by the General Corporation Law of the state of Delaware or by the Board of Directors. 

5.    Types of Awards, Eligibility, Limitations. The Board of Directors may, from time to time, take the following actions, separately or in
combination, under the Plan: (i) grant Incentive Stock Options, as defined in Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as provided in Sections 6.1 and
6.2; (ii) grant options other than Incentive Stock Options ("Non-Statutory Stock Options") as provided in Sections 6.1 and 6.3; (iii) grant stock appreciation rights as
provided in Section 6.4; (iv) award stock bonuses as provided in Section 7; (v) sell shares subject to restrictions as provided in Section 8; and (vi) award
Performance-Based Awards as provided in Section 9. Awards may be made to employees, including employees who are officers or directors, and to other individuals described in Section 1
selected by the Board of Directors; provided, however, that only employees of the Company or any parent or subsidiary of the Company (as defined in subsections 424(e) and 424(f) of the Code) are
eligible to receive Incentive Stock Options under the Plan. The Board of Directors shall select the individuals to whom awards shall be made and shall specify the action taken with respect to each
individual to whom an award is made. At the discretion of the Board of Directors, an individual may be given an election to surrender an award in exchange for the grant of a new award. No employee may
be granted options or stock appreciation rights for more than an aggregate of 500,000 shares of Common Stock in the calendar year in which the employee is hired or 200,000 shares of Common Stock in
any other calendar year. 

6.    Stock Options; Stock Appreciation Rights.

        6.1    General Rules Relating to Options.    

        6.1-1 Terms of Grant. The Board of Directors may grant options under the Plan. With respect to each option grant,
the Board of Directors shall determine the number of shares subject to the option, the exercise price, the period of the option, the time or times at which the option may be exercised and whether the
option is an Incentive Stock Option or a Non-Statutory Stock Option. At the time of the grant of an option or at any time thereafter, the Board of Directors may provide that an optionee
who exercised an option with Common Stock of the Company shall automatically receive a new option to purchase additional shares equal to the number of shares surrendered and may specify the terms and
conditions of such new options. 

        6.1-2 Nontransferability. Each Incentive Stock Option and, unless otherwise determined by the Board of Directors,
each other option granted under the Plan by its terms (i) shall be nonassignable and nontransferable by the optionee, either voluntarily or by operation of law, except by will or by the laws of
descent and distribution of the state or country of the optionee's domicile at the time of death, and (ii) during the optionee's lifetime, shall be exercisable only by the optionee. 

        6.1-3 Payment on Exercise. Unless the Board of Directors determines otherwise, on or before the date specified
for completion of the purchase of shares pursuant to an option exercise, the optionee must pay the Company the full purchase price of those shares in cash or by check or, with the consent of the Board
of Directors, in whole or in part, in Common Stock of the Company valued at fair market value, restricted stock or other contingent awards denominated in either stock or cash, promissory notes and
other forms of consideration. Unless otherwise determined by the Board of Directors, any Common Stock provided in payment of the purchase price must have 

2

 

been
previously acquired and held by the optionee for at least six months. The fair market value of Common Stock provided in payment of the purchase price shall be the closing price of the Common
Stock last reported before the time payment in Common Stock is made or, if earlier, committed to be made, if the Common Stock is publicly traded, or another value of the Common Stock as specified by
the Board of Directors. No shares shall be issued until full payment for the shares has been made, including all amounts owed for tax withholding. With the consent of the Board of Directors, an
optionee may request the Company to apply automatically the shares to be received upon the exercise of a portion of a stock option (even though stock certificates have not yet been issued) to satisfy
the purchase price for additional portions of the option. 

        6.1-4 Limitations on Grants to Non-Exempt Employees. Unless otherwise determined by the Board of
Directors, if an employee of the Company or any parent or subsidiary of the Company is a non-exempt employee subject to the overtime compensation provisions of Section 7 of the Fair
Labor Standards Act (the "FLSA"), any option granted to that employee shall be subject to the following restrictions: (i) the option price shall be at least 85 percent of the fair market
value, as described in Section 6.2-4, of the Common Stock subject to the option on the date it is granted; and (ii) the option shall not be exercisable until at least six
months after the date it is granted; provided, however, that this six-month restriction on exercisability will cease to apply if the employee dies, becomes disabled or retires, there is a
change in ownership of the Company, or in other circumstances permitted by regulation, all as prescribed in Section 7(e)(8)(B) of the FLSA. 

        6.2    Incentive Stock Options.    Incentive Stock Options shall be subject to the
following
additional terms and conditions: 

        6.2-1 Limitation on Amount of Grants. If the aggregate fair market value of stock (determined as of the date the
option is granted) for which Incentive Stock Options granted under this Plan (and any other stock incentive plan of the Company or its parent or subsidiary corporations, as defined in subsections
424(e) and 424(f) of the Code) are exercisable for the first time by an employee during any calendar year exceeds $100,000, the portion of the option or options not exceeding $100,000, to the extent
of whole shares, will be treated as an Incentive Stock Option and the remaining portion of the option or options will be treated as a Non-Statutory Stock Option. The preceding sentence
will be applied by taking options into account in the order in which they were granted. If, under the $100,000 limitation, a portion of an option is treated as an Incentive Stock Option and the
remaining portion of the option is treated as a Non-Statutory Stock Option, unless the optionee designates otherwise at the time of exercise, the optionee's exercise of all or a portion of
the
option will be treated as the exercise of the Incentive Stock Option portion of the option to the full extent permitted under the $100,000 limitation. If an optionee exercises an option that is
treated as in part an Incentive Stock Option and in part a Non-Statutory Stock Option, the Company will designate the portion of the stock acquired pursuant to the exercise of the
Incentive Stock Option portion as Incentive Stock Option stock by issuing a separate certificate for that portion of the stock and identifying the certificate as Incentive Stock Option stock in its
stock records. 

        6.2-2 Limitations on Grants to 10 percent Shareholders. An Incentive Stock Option may be granted under the
Plan to an employee possessing more than 10 percent of the total combined voting power of all classes of stock of the Company or any parent or subsidiary (as defined in subsections 424(e) and
424(f) of the Code) only if the option price is at least 110 percent of the fair market value, as described in Section 6.2-4, of the Common Stock subject to the option on the
date it is granted and the option by its terms is not exercisable after the expiration of five years from the date it is granted. 

        6.2-3 Duration of Options. Subject to Sections 6.5-1, 6.5-2 and 6.2-2,
Incentive Stock Options granted under the Plan shall continue in effect for the period fixed by the Board of Directors, 

3

 

except
that by its terms no Incentive Stock Option shall be exercisable after the expiration of 10 years from the date it is granted. 

        6.2-4 Option Price. The option price per share shall be determined by the Board of Directors at the time of
grant. Except as provided in Section 6.2-2, the option price shall not be less than 100 percent of the fair market value of the Common Stock covered by the Incentive Stock
Option at the date the option is granted. The fair market value shall be the closing price of the Common Stock last reported before the time the option is granted, if the stock is publicly traded, or
another value of the Common Stock as specified by the Board of Directors. 

        6.2-5 Limitation on Time of Grant. No Incentive Stock Option shall be granted on or after the tenth anniversary
of the last action by the Board of Directors adopting the Plan or approving an increase in the number of shares available for issuance under the Plan, which action was subsequently approved within
12 months by the shareholders. 

        6.2-6 Early Dispositions. If within two years after an Incentive Stock Option is granted or within
12 months after an Incentive Stock Option is exercised, the optionee sells or otherwise disposes of Common Stock acquired on exercise of the Option, the optionee shall within 30 days of
the sale or disposition notify the Company in writing of (i) the date of the sale or disposition, (ii) the amount realized on the sale or disposition and (iii) the nature of the
disposition (e.g., sale, gift, etc.). 

        6.3    Non-Statutory Stock Options.    Non-Statutory Stock Options
shall be subject to the following terms and conditions, in addition to those set forth in Section 6.1 above: 

        6.3-1 Option Price. The option price for Non-Statutory Stock Options shall be determined by the Board
of Directors at the time of grant and may be any amount determined by the Board of Directors. 

        6.3-2 Duration of Options. Non-Statutory Stock Options granted under the Plan shall continue in
effect for the period fixed by the Board of Directors. 

        6.4    Stock Appreciation Rights.    

        6.4-1 Grant. Stock appreciation rights may be granted under the Plan by the Board of Directors, subject to such
rules, terms, and conditions as the Board of Directors prescribes. With respect to each grant, the Board shall determine the number of shares subject to the stock appreciation right, the period of the
stock appreciation right, and the time or times at which the stock appreciation right may be exercised. Stock appreciation rights shall continue in effect for the period fixed by the Board of
Directors. The Board of Directors may provide that at a later date stock appreciation rights may be granted in substitution for stock options granted under the Plan. 

        6.4-2 Stock Appreciation Rights Granted in Connection with Options. If a stock appreciation right is granted in
connection with an option, the stock appreciation right shall be exercisable only to the extent and on the same conditions that the related option could be exercised. Upon exercise of a stock
appreciation right, any option or portion thereof to which the stock appreciation right relates terminates. If a stock appreciation right is granted in connection with an option, upon exercise of the
option, the stock appreciation right or portion thereof to which the grant relates terminates. 

        6.4-3 Exercise. Each stock appreciation right shall entitle the holder, upon exercise, to receive from the
Company in exchange therefor an amount equal in value to the excess of the fair market value on the date of exercise of one share of Common Stock of the Company over its fair market value on the date
of grant (or, in the case of a stock appreciation right granted in connection with an option, the option price per share under the option to which the stock appreciation right relates), multiplied by
the number of shares covered by the stock appreciation right or the option, 

4

 

or
portion thereof, that is surrendered. No stock appreciation right shall be exercisable at a time that the amount determined under this subparagraph is negative. Payment by the Company upon exercise
of a stock appreciation right may be made in Common Stock valued at fair market value, in cash, or partly in Common Stock and partly in cash, all as determined by the Board of Directors. For this
purpose, the fair market value of the Common Stock shall be the closing price of the Common Stock last reported before the time of exercise, or such other value of the Common Stock as specified by the
Board of Directors. 

        6.4-4 Fractional Shares. No fractional shares shall be issued upon exercise of a stock appreciation right. In
lieu thereof, cash may be paid in an amount equal to the value of the fraction or, if the Board of Directors shall determine, the number of shares may be rounded downward to the next whole share. 

        6.4-5 Nontransferability. Each stock appreciation right granted in connection with an Incentive Stock Option and,
unless otherwise determined by the Board of Directors, each other stock appreciation right granted under the Plan by its terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and distribution of the state or country of the holder's domicile at the time of death, and each stock appreciation right
by its terms shall be exercisable during the holder's lifetime only by the holder. 

        6.5    Exercise of Options and Stock Appreciation Rights.    

        6.5-1 Exercise. Except as provided in Section 6.5-2 or as determined by the Board of
Directors, no option or stock appreciation right granted under the Plan may be exercised unless at the time of exercise the holder is employed by or in the service of the Company and shall have been
so employed or provided such service continuously since the date the option or stock appreciation right was granted. Except as provided in Sections 6.5-2 and 10, options and stock
appreciation rights granted under the Plan may be exercised from time to time over the period stated in each option or stock appreciation right in amounts and at times prescribed by the Board of
Directors, provided that options and stock appreciation rights may not be exercised for fractional shares. Unless otherwise determined by the Board of Directors, if a holder does not exercise an
option or stock appreciation right in any one year for the full number of shares to which the holder is entitled in that year, the holder's rights shall be cumulative and the holder may acquire those
shares in any subsequent year during the term of the option or stock appreciation right. 

        6.5-2 Termination of Employment or Service.

        6.5-2(a) General Rule. Unless otherwise determined by the Board of Directors, if a holder's employment or service
with the Company terminates for any reason other than because of total disability, death or, in the case of Non-statutory Stock Options or stock appreciation rights, bona fide early
retirement, as provided in Sections 6.5-2(b), (c) and (d), his or her option or stock appreciation right may be exercised at any time before the expiration date of the option or
stock appreciation right or the expiration of 3 months (6 months in the case of Non-statutory Stock Options or stock appreciation rights) after the date of termination,
whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right at the date of termination. 

        6.5-2(b) Termination Because of Total Disability. Unless otherwise determined by the Board of Directors, if a
holder's employment or service with the Company terminates because of total disability, his or her option or stock appreciation right may be exercised at any time before the expiration date of the
option or stock appreciation right or before the date 3 months after the date of termination (6 months in the case of Non-statutory Stock Options or stock appreciation
rights), whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right at the date of 

5

 

termination.
The term "total disability" means a medically determinable mental or physical impairment that is expected to result in death or has lasted or is expected to last for a continuous period
of 12 months or more and that, in the opinion of the Company and two independent physicians, causes the holder to be unable to perform his or her duties as an employee, director, officer or
consultant of the Employer and unable to be engaged in any substantial gainful activity. Total disability shall be deemed to have occurred on the first day after the two independent physicians have
furnished their written opinion of total disability to the Company and the Company has reached an opinion of total disability. 

        6.5-2(c) Termination Because of Death. Unless otherwise determined by the Board of Directors, if a holder dies
while employed by or providing service to the Company, his or her option or stock appreciation right may be exercised at any time before the expiration date of the option or stock appreciation right
or before the date 12 months after the date of death, whichever is the shorter period, but only if and to the extent the holder was entitled to exercise the option or stock appreciation right
at the date of death and only by the person or persons to whom the holder's rights under the option or stock appreciation right shall pass by the holder's will or by the laws of descent and
distribution of the state or country of domicile at the time of death. 

        6.5-2(d) Termination Upon Retirement at Normal Retirement Age or at Bona Fide Early Retirement. In the event the
employment of a holder by the Company or by any subsidiary of the Company is terminated by retirement at normal retirement age as defined under the provisions of the Company's Retirement Plan or under
conditions of bona fide early retirement, any Non-Statutory Stock Option or stock appreciation right may be exercised at any time
prior to its expiration date or the expiration of twelve months after the date of such termination of employment, whichever is the shorter period, but only if and to the extent the holder was entitled
to exercise the option or stock appreciation right on the date of such termination. 

        6.5-2(e) Amendment of Exercise Period Applicable to Termination. The Board of Directors may at any time extend
the 3-month, 6-month and 12-month exercise periods any length of time not longer than the original expiration date of the option or stock appreciation right. The
Board of Directors may at any time increase the portion of an option or stock appreciation right that is exercisable, subject to terms and conditions determined by the Board of Directors. 

        6.5-2(f) Failure to Exercise Option or Stock Appreciation Right. To the extent that the option or stock
appreciation right of any deceased holder or any holder whose employment or service terminates is not exercised within the applicable period, all further rights to purchase shares pursuant to the
option or stock appreciation right shall cease and terminate. 

        6.5-2(g) Leave of Absence. Absence on leave approved by the Employer or on account of illness or disability shall
not be deemed a termination or interruption of employment or service. Unless otherwise determined by the Board of Directors, vesting of options and stock appreciation rights shall continue during a
medical, family or military leave of absence, whether paid or unpaid, and vesting of options and stock appreciation rights shall be suspended during any other unpaid leave of absence. 

        6.5-3 Notice of Exercise. Unless the Board of Directors determines otherwise, shares may be acquired pursuant to
an option or stock appreciation right granted under the Plan only upon the Company's receipt of written notice from the holder of the holder's binding commitment to purchase shares, specifying the
number of shares the holder desires to acquire under the option or stock appreciation right and the date on which the holder agrees to complete the transaction, and, if required to comply with the
Securities Act of 1933, containing a representation that it is the holder's intention to acquire the shares for investment and not with a view to distribution. 

6

 

        6.5-4 Tax Withholding. Each holder who has exercised an option or stock appreciation right shall, immediately
upon notification of the amount due, if any, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If additional
withholding is or becomes required (as a result of exercise of an option or stock appreciation right or as a result of disposition of shares acquired pursuant to exercise of an option or stock
appreciation right) beyond any amount deposited before delivery of the certificates, the holder shall pay such amount, in cash or by check, to the Company on demand. If the holder fails to pay the
amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the holder, including salary, subject to applicable law. With the consent of the Board of
Directors, a holder may satisfy this obligation, in whole or in part, by instructing the Company to withhold from the shares to be issued upon exercise or by delivering to the Company other shares of
Common Stock; provided, however, that the number of shares so withheld or delivered in connection with an option exercise shall not exceed the minimum amount necessary to satisfy the required
withholding obligation. 

        6.5-5 Reduction of Reserved Shares. Upon the exercise of an option or stock appreciation right, the number of
shares reserved for issuance under the Plan shall be reduced by the number of shares issued upon exercise of the option or stock appreciation right (less the number of any shares surrendered in
connection with the exercise or withheld to satisfy withholding requirements). Cash payments of stock appreciation rights shall not reduce the number of shares of Common Stock reserved for issuance
under the Plan. 

7.    Stock Bonuses. The Board of Directors may award shares under the Plan as stock bonuses. Shares awarded as a bonus shall be subject to
the terms, conditions and restrictions determined by the Board of Directors. The restrictions may include restrictions concerning transferability and forfeiture of the shares awarded, together with
any other restrictions determined by the Board of Directors. The Board of Directors may require the recipient to sign an agreement as a condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to satisfy tax withholding requirements. The agreement may contain any terms, conditions, restrictions, representations and warranties required
by the Board of Directors. The certificates representing the shares awarded shall bear any legends required by the Board of Directors. The Company may require any recipient of a stock bonus to pay to
the Company in cash or by check upon demand amounts necessary to satisfy any applicable federal, state or local tax withholding requirements. If the recipient fails to pay the amount demanded, the
Company or the Employer may withhold that amount from other amounts payable to the recipient, including salary, subject to applicable law. With the consent of the Board of Directors, a recipient may
satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common Stock; provided, however, that
the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required withholding obligation. Upon the issuance of a stock bonus, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares issued, less the number of shares withheld or delivered to satisfy withholding obligations. 

8.    Restricted Stock. The Board of Directors may issue shares under the Plan for any consideration (including promissory notes and services)
determined by the Board of Directors. Shares issued under the Plan shall be subject to the terms, conditions and restrictions determined by the Board of Directors. The restrictions may include
restrictions concerning transferability, repurchase by the Company and forfeiture of the shares issued, together with any other restrictions determined by the Board of Directors. All Common Stock
issued pursuant to this Section 8 shall be subject to a purchase agreement, which shall be executed by the Company and the prospective purchaser of the shares before the delivery of
certificates representing the shares to the purchaser. The purchase agreement may contain any terms, conditions, restrictions, representations and warranties required by the Board of Directors. The
certificates representing the shares shall bear any legends required by the Board of 

7

 

Directors.
The Company may require any purchaser of restricted stock to pay to the Company in cash or by check upon demand amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the purchaser fails to pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the purchaser, including salary, subject
to applicable law. With the consent of the Board of Directors, a purchaser may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by
delivering to the Company other shares of Common Stock; provided, however, that the number of shares so withheld or delivered shall not exceed the minimum amount necessary to satisfy the required
withholding obligation. Upon the issuance of restricted stock, the number of shares reserved for issuance under the Plan shall be reduced by the number of shares issued, less the number of shares
withheld or delivered to satisfy withholding obligations. 

9.    Performance-Based Awards. The Board of Directors may grant awards intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code and the regulations thereunder ("Performance-Based Awards"). Performance-Based Awards shall be denominated at the time of grant either in Common Stock ("Stock
Performance Awards") or in dollar amounts ("Dollar Performance Awards"). Payment under a Stock Performance Award or a Dollar Performance Award shall be made, at the discretion of the Board of
Directors, in Common Stock ("Performance Shares"), or in cash or in any combination thereof. Performance-Based Awards shall be subject to the following terms and conditions: 

        9.1    Award Period.    The Board of Directors shall determine the period of time for
which a
Performance-Based Award is made (the "Award Period"). 

        9.2    Performance Goals and Payment.    The Board of Directors shall establish in
writing
objectives ("Performance Goals") that must be met by the Company or any subsidiary, division or other unit of the Company ("Business Unit") during the Award Period as a condition to payment being made
under the Performance-Based Award. The Performance Goals for each award shall be one or more targeted levels of performance with respect to one or more of the following objective measures with respect
to the Company or any Business Unit: earnings, earnings per share, stock price increase, total shareholder return (stock price increase plus dividends), return on equity, return on assets, return on
capital, economic value added, revenues, operating income, inventories, inventory turns, cash flows or any of the foregoing before the effect of acquisitions, divestitures, accounting changes, and
restructuring and
special charges (determined according to criteria established by the Board of Directors). The Board of Directors shall also establish the number of Performance Shares or the amount of cash payment to
be made under a Performance-Based Award if the Performance Goals are met or exceeded, including the fixing of a maximum payment (subject to Section 9.4). The Board of Directors may establish
other restrictions to payment under a Performance-Based Award, such as a continued employment requirement, in addition to satisfaction of the Performance Goals. Some or all of the Performance Shares
may be issued at the time of the award as restricted shares subject to forfeiture in whole or in part if Performance Goals or, if applicable, other restrictions are not satisfied. 

        9.3    Computation of Payment.    During or after an Award Period, the performance of
the
Company or Business Unit, as applicable, during the period shall be measured against the Performance Goals. If the Performance Goals are not met, no payment shall be made under a Performance-Based
Award. If the Performance Goals are met or exceeded, the Board of Directors shall certify that fact in writing and certify the number of Performance Shares earned or the amount of cash payment to be
made under the terms of the Performance-Based Award. 

        9.4    Maximum Awards.    No participant may receive in any fiscal year Stock
Performance
Awards under which the aggregate amount payable under the Awards exceeds the equivalent of 200,000 shares of Common Stock or Dollar Performance Awards under which the aggregate amount payable under
the Awards exceeds $500,000. 

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        9.5    Tax Withholding.    Each participant who has received Performance Shares shall,
 upon
notification of the amount due, pay to the Company in cash or by check amounts necessary to satisfy any applicable federal, state and local tax withholding requirements. If the participant fails to
pay the amount demanded, the Company or the Employer may withhold that amount from other amounts payable to the participant, including salary, subject to applicable law. With the consent of the Board
of Directors, a participant may satisfy this obligation, in whole or in part, by instructing the Company to withhold from any shares to be issued or by delivering to the Company other shares of Common
Stock; provided, however, that the number of shares so delivered or withheld shall not exceed the minimum amount necessary to satisfy the required withholding obligation. 

        9.6    Effect on Shares Available.    The payment of a Performance-Based Award in
cash shall
not reduce the number of shares of Common Stock reserved for issuance under the Plan. The number of shares of Common Stock reserved for issuance under the Plan shall be reduced by the number of shares
issued upon payment of an award, less the number of shares delivered or withheld to satisfy withholding obligations. 

10.    Changes in Capital Structure.

        10.1    Stock Splits, Stock Dividends.    If the outstanding Common Stock of the
Company is
hereafter increased or decreased or changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any stock split, combination of shares, dividend
payable in shares, recapitalization or reclassification, appropriate adjustment shall be made by the Board of Directors in the number and kind of shares available for grants under the Plan and in all
other share amounts set forth in the Plan. In addition, the Board of Directors shall make appropriate adjustment in the number and kind of shares as to which outstanding options and stock appreciation
rights, or portions thereof then unexercised, shall be exercisable, so that the holder's proportionate interest before and after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to effect any adjustment that would or might result in the issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by the Board of Directors. Any such adjustments made by the Board of Directors shall be conclusive. 

        10.2    Mergers, Reorganizations, Etc.    In the event of a merger, consolidation,
plan of
exchange, acquisition of property or stock, split-up, split-off, spin-off, reorganization or liquidation to which the Company is a party or any sale, lease,
exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company (each, a "Transaction"), the Board of Directors shall, in
its sole discretion and to the extent possible under the structure of the Transaction, select one or more of the following alternatives for treating outstanding options and stock appreciation rights
under the Plan: 

        10.2-1 Outstanding options and stock appreciation rights shall remain in effect in accordance with their terms. 

        10.2-2 Outstanding options and stock appreciation rights shall be converted into options and stock appreciation
rights to purchase stock in one or more of the corporations, including the Company, that are the surviving or acquiring corporations in the Transaction. The amount, type of securities subject thereto
and exercise price of the converted options and stock appreciation rights shall be determined by the Board of Directors of the Company, taking into account the relative values of the companies
involved in the Transaction and the exchange rate, if any, used in determining shares of the surviving corporation(s) to be held by holders of shares of the Company following the Transaction. Unless
otherwise determined by the Board of Directors, the converted options and stock appreciation rights shall be vested only to the extent that the vesting requirements relating to options granted
hereunder have been satisfied. 

9

 

        10.2-3 The Board of Directors shall provide a period of 30 days or less before the completion of the
Transaction during which outstanding options and stock appreciation rights may be exercised to the extent then exercisable, and upon the expiration of that period, all unexercised options and stock
appreciation rights shall immediately terminate. The Board of Directors may, in its sole
discretion, accelerate the exercisability of options and stock appreciation rights so that they are exercisable in full during that period. 

        10.3    Dissolution of the Company.    In the event of the dissolution of the Company,
 options
and stock appreciation rights shall be treated in accordance with Section 10.2-3. 

        10.4    Rights Issued by Another Corporation.    The Board of Directors may also
grant
options, stock appreciation rights, stock bonuses and Performance-Based Awards and issue restricted stock under the Plan with terms, conditions and provisions that vary from those specified in the
Plan, provided that any such awards are granted in substitution for, or in connection with the assumption of, existing options, stock appreciation rights, stock bonuses, Performance-Based Awards,
restricted stock granted, awarded or issued by another corporation and assumed or otherwise agreed to be provided for by the Company pursuant to or by reason of a Transaction. 

11.    Amendment of the Plan. The Board of Directors may at any time modify or amend the Plan in any respect. Except as provided in Sections
6.4 and 10, however, no change in an award already granted shall be made without the written consent of the holder of the award if the change would adversely affect the holder. 

12.    Approvals. The Company's obligations under the Plan are subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company will use its best efforts to take steps required by state or federal law or applicable regulations, including rules and regulations of the Securities and
Exchange Commission and any stock exchange on which the Company's shares may then be listed, in connection with the grants under the Plan. The foregoing notwithstanding, the Company shall not be
obligated to issue or deliver Common Stock under the Plan if such issuance or delivery would violate state or federal securities laws. 

13.    Employment and Service Rights. Nothing in the Plan or any award pursuant to the Plan shall (i) confer upon any employee any
right to be continued in the employment of an Employer or interfere in any way with the Employer's right to terminate the employee's employment at will at any time, for any reason, with or without
cause, or to decrease the employee's compensation or benefits, or (ii) confer upon any person engaged by an Employer any right to be retained or employed by the Employer or to the continuation,
extension, renewal or modification of any compensation, contract or arrangement with or by the Employer. 

14.    Rights as a Shareholder. The recipient of any award under the Plan shall have no rights as a shareholder with respect to any shares of
Common Stock until the date the recipient becomes the holder of record of those shares. Except as otherwise expressly provided in the Plan, no adjustment shall be made for dividends or other rights
for which the record date occurs before the date the recipient becomes the holder of record. 

Adopted:
June 16, 2004 

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QuickLinks

McCormick & Schmick's Seafood Restaurants, Inc. 2004 Stock Incentive Plan

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