EXHIBIT 10.6
O'CHARLEY'S INC.
RESTRICTED STOCK AGREEMENT
This RESTRICTED STOCK AGREEMENT (the "Agreement") dated as of November
15, 2004 is by and between O'Charley's Inc., a Tennessee corporation (the
"Company"), and Xxxxxxxx X. Xxxxx (the "Grantee"). Capitalized terms used but
not defined in this Agreement shall have the meaning ascribed to such terms in
the O'Charley's 2000 Stock Incentive Plan (the "Plan").
Section 1. Restricted Stock Award. The Grantee is hereby granted the
right to receive 20,000 shares (the "Restricted Stock") of the Company's common
stock, no par value per share (the "Common Stock"), subject to the terms and
conditions of this Agreement.
Section 2. Vesting of the Award. Subject to Sections 5 and 9 hereof,
the shares of Restricted Stock granted pursuant to Section 1 hereof shall vest
at such times (each, a "Vesting Date") and in the amounts set forth below:
(a) (i) none of the shares of Restricted Stock granted hereunder shall
vest on the first anniversary of the date of grant in the event that the
Company's reported diluted earnings per share for the 2005 fiscal year (the
"2005 EPS") is less than $1.22 (the "2005 Minimum Vesting EPS Target"); (ii) 25%
of the total number of shares of Restricted Stock granted hereunder shall vest
on the first anniversary of the date of grant if and only if the Company's 2005
EPS is equal to or exceeds $1.34 (the "2005 Full Vesting EPS Target"); and (iii)
in the event that the Company's 2005 EPS is less than the 2005 Full Vesting EPS
Target but greater than or equal to the 2005 Minimum Vesting EPS Target, the
number of shares of Restricted Stock that shall vest on the first anniversary of
the date of grant shall be determined on a pro rata(1) basis;
(b) (i) none of the shares of Restricted Stock granted hereunder shall
vest on the second anniversary of the date of grant in the event that the
Company's cumulative reported diluted earnings per share for the 2005 and 2006
fiscal years (the "2005-2006 Cumulative EPS") is less than $2.57 (the "2006
Minimum Vesting EPS Target"); (ii) 25% of the total number of shares of
Restricted Stock granted hereunder shall vest on the second anniversary of the
date of grant if and only if the Company's 2005-2006 Cumulative EPS is equal to
or exceeds $2.88 (the "2006 Full Vesting EPS Target"); and (iii) in the event
that the Company's 2005-2006 Cumulative EPS is less than the 2006 Full Vesting
EPS Target but greater than or equal to the 2006 Minimum Vesting EPS
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(1) For purposes of calculating the pro rata number of shares of Restricted
Stock that shall vest on the first anniversary of the date of grant, multiply
the number of shares of Restricted Stock granted hereunder by the result of the
following formula (rounded to four decimal points):
0.25 * [((2005 EPS - 2005 Minimum Vesting EPS Target)/(2005 Full Vesting EPS
Target - 2005 Minimum Vesting EPS Target) * 0.75) + 0.25]
Target, the number of shares of Restricted Stock that shall vest on the second
anniversary of the date of grant shall be determined on a pro rata(2) basis;
(c) (i) none of the shares of Restricted Stock granted hereunder shall
vest on the third anniversary of the date of grant in the event that the
Company's cumulative reported diluted earnings per share for the 2005 through
2007 fiscal years (the "2005-2007 Cumulative EPS") is less than $4.05 (the "2007
Minimum Vesting EPS Target"); (ii) all remaining unvested shares of Restricted
Stock granted hereunder shall vest on the third anniversary of the date of grant
if and only if the Company's 2005-2007 Cumulative EPS is equal to or exceeds
$4.64 (the "2007 Full Vesting EPS Target"); and (iii) in the event that the
Company's 2005-2007 Cumulative EPS is less than the 2007 Full Vesting EPS Target
but greater than or equal to the 2007 Minimum Vesting EPS Target, the number of
shares of Restricted Stock that shall vest on the third anniversary of the date
of grant shall be determined on a pro rata(3) basis.
Any unvested shares of Restricted Stock that do not vest on the third
anniversary of the date of grant pursuant to the provisions of Section 2(d)
hereof shall be immediately forfeited and the Grantee shall have no further
rights with respect to such shares of Restricted Stock.
Notwithstanding anything herein to the contrary, no fractional shares
shall be issuable upon any Vesting Date. In addition, in the event that the
Compensation and Human Resources Committee of the Board of Directors of the
Company (the "Compensation Committee") determines that an event has occurred
during any fiscal year which has impacted the Company's reported diluted
earnings per share for such fiscal year, the Compensation Committee shall have
the right, in its sole and absolute discretion, to increase or decrease the
vesting targets to reflect such event for purposes of calculating the vesting of
shares of Restricted Stock under this Section 2 for such fiscal year and for any
or all future fiscal years.
Section 3. Distribution of Restricted Stock. Certificates representing
the shares of Restricted Stock that have vested under Section 2 will be
distributed to the Grantee as soon as practicable after each Vesting Date.
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(2) For purposes of calculating the pro rata number of shares of Restricted
Stock that shall vest on the second anniversary of the date of grant, multiply
the number of shares of Restricted Stock granted hereunder by the result of the
following formula (rounded to four decimal points):
0.25 * [((2005-2006 Cumulative EPS - 2006 Minimum Vesting EPS Target)/(2006 Full
Vesting EPS Target - 2006 Minimum Vesting EPS Target) * 0.75) + 0.25]
(3) For purposes of calculating the pro rata number of shares of Restricted
Stock that shall vest on the third anniversary of the date of grant, multiply
the number of shares of Restricted Stock granted hereunder that remain unvested
on such date by the result of the following formula (rounded to four decimal
points):
[(2005-2007 Cumulative EPS - 2007 Minimum Vesting EPS Target)/(2007 Full Vesting
EPS Target - 2007 Minimum Vesting EPS Target) * 0.75] + 0.25
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Section 4. Voting Rights and Dividends. Prior to the distribution of
the Restricted Stock, certificates representing shares of Restricted Stock will
be held by the Company (the "Custodian") in the name of the Grantee. The
Custodian will take such action as is necessary and appropriate to enable the
Grantee to vote the Restricted Stock. All cash dividends received by the
Custodian, if any, with respect to the Restricted Stock will be remitted to the
Grantee. Stock dividends issued with respect to the Restricted Stock shall be
treated as additional shares of Restricted Stock that are subject to the same
restrictions and other terms and conditions that apply to the shares of
Restricted Stock. Notwithstanding the foregoing, no voting rights or dividend
rights shall inure to the Grantee following the forfeiture of the Restricted
Stock pursuant to Section 5.
Section 5. Termination/Change of Status. In the event that either: (i)
Grantee's employment by the Company (or any Subsidiary or Affiliate of the
Company) terminates for any reason or (ii) Grantee, for any reason, ceases to
remain employed by the Company (or any Subsidiary or Affiliate of the Company)
in the same position as Grantee holds on the date hereof (or a substantially
equivalent or higher position as determined by the Company in its sole
discretion), all shares of Restricted Stock that have not vested prior to the
date of termination or change of status shall be immediately forfeited and
Grantee shall have no further rights with respect to such shares of Restricted
Stock.
Section 6. No Transfer or Pledge of Restricted Stock. No shares of
Restricted Stock may be sold, assigned, transferred, pledged, hypothecated or
otherwise encumbered or disposed of prior to the date such shares have vested,
if at all, on any Vesting Date.
Section 7. Tax Election. The Grantee may, but is not required to, elect
to apply the tax rules of Section 83(b) of the Internal Revenue Code of 1986, as
amended (the "Code"), to the issuance of the Restricted Stock. If the Grantee
makes an affirmative election under Section 83(b) of the Code, the Grantee shall
deliver a copy of such election to the Company in accordance with the
requirements of the Code and the Regulations promulgated thereunder.
Section 8. Tax Withholding. The Company may withhold from any
distribution of Restricted Stock an amount of Common Stock equal to such
federal, state or local taxes as shall be required to be withheld pursuant to
any applicable law or regulation, unless the Company agrees to accept a payment
of cash (or to withhold from other wages payable to Grantee) in the amount of
such withholding taxes.
Section 9. Change of Control. Upon the occurrence of a Change in
Control or a Potential Change in Control as defined in Section 10 of the Plan,
all Restricted Stock shall be deemed vested and the restrictions under the
Agreement with respect to the Restricted Stock, including the restriction on
transfer set forth in Section 6 hereof, shall automatically expire and shall be
of no further force or effect.
Section 10. Stock Subject to Award. In the event that the shares of
Common Stock of the Company should, as a result of a stock split or stock
dividend or
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combination of shares or any other change, redesignation, merger, consolidation,
recapitalization or otherwise, be increased or decreased or changed into or
exchanged for a different number or kind of shares of stock or other securities
of the Company or of another corporation, the number of shares of Restricted
Stock that have been awarded to Grantee shall be appropriately adjusted to
reflect such action. If any such adjustment shall result in a fractional share,
such fraction shall be disregarded.
Section 11. Stock Power. Concurrently with the execution of this
Agreement, the Grantee shall deliver to the Company a stock power, endorsed in
blank, relating to the shares of Restricted Stock. Such stock power shall be in
the form attached hereto as Exhibit A.
Section 12. Legend. Each certificate representing Restricted Stock
shall bear a legend in substantially the following form:
THIS CERTIFICATE AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT
TO THE TERMS AND CONDITIONS (INCLUDING FORFEITURE AND RESTRICTIONS
AGAINST TRANSFER) CONTAINED IN THE RESTRICTED STOCK AGREEMENT (THE
"AGREEMENT") BETWEEN THE OWNER OF THE RESTRICTED STOCK REPRESENTED
HEREBY AND O'CHARLEY'S INC. (THE "COMPANY"). THE RELEASE OF SUCH STOCK
FROM SUCH TERMS AND CONDITIONS SHALL BE MADE ONLY IN ACCORDANCE WITH
THE PROVISIONS OF THE AGREEMENT, A COPY OF WHICH IS ON FILE AT THE
COMPANY.
Section 13. Restrictive Agreement. As a condition to the receipt of any
vested shares of Restricted Stock upon distribution, the Grantee (or his legal
representative or estate or any third party transferee), if the Company so
requests, will execute an agreement in form satisfactory to the Company in which
the Grantee or such other recipient of the shares represents that he is
acquiring the shares without a view to distribution thereof.
Section 14. No Right to Continued Employment. This Agreement shall not
be construed as giving the Grantee the right to be retained in the employ of the
Company (or any Subsidiary or Affiliate of the Company), and the Company (or any
Subsidiary or Affiliate of the Company) may at any time dismiss the Grantee from
employment, free from any liability or any claim hereunder.
Section 15. Miscellaneous.
15.1 Entire Agreement. This Agreement contains the entire
understanding and agreement between the Company and the Grantee concerning the
Restricted Stock granted hereby, and supersedes any prior or contemporaneous
negotiations and understandings. The Company and the Grantee have made no
promises,
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agreements, conditions, or understandings relating to the Restricted Stock,
either orally or in writing, that are not included in this Agreement.
15.2 Captions. The captions and section numbers appearing in
this Agreement are inserted only as a matter of convenience. They do not define,
limit, construe, or describe the scope or intent of the provisions of this
Agreement.
15.3 Counterparts. This Agreement may be executed in
counterparts, each of which when signed by the Company and the Grantee will be
deemed an original and all of which together will be deemed the same Agreement.
15.4 Notice. Any notice or communication having to do with
this Agreement must be given by personal delivery or by certified mail, return
receipt requested, addressed, if to the Company, to the principal office of the
Company, and, if to the Grantee, to the Grantee's last known address provided by
the Grantee to the Company.
15.5 Amendment. This Agreement may be amended by the Company,
provided that unless the Grantee consents in writing, the Company cannot amend
this Agreement if the amendment will materially change or impair the Grantee's
rights under this Agreement and such change is not to the Grantee's benefit.
15.6 Successors and Assignment. Each and all of the provisions
of this Agreement are binding upon and inure to the benefit of the Company and
the Grantee and their heirs, successors, and assigns. However, neither the
Restricted Stock nor this Agreement may be assigned or transferred except as
otherwise set forth in this Agreement.
15.7 Governing Law. This Agreement shall be governed and
construed exclusively in accordance with the laws of the State of Tennessee
applicable to agreements to be performed in the State of Tennessee.
[Signature page to follow.]
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IN WITNESS WHEREOF, the Company and the Grantee have executed this
Agreement to be effective as of November 15, 2004.
O'CHARLEY'S INC.
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: CEO
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/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
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EXHIBIT A
STOCK POWER
FOR VALUE RECEIVED, the undersigned does hereby sell, assign and
transfer to O'Charley's Inc. (the "Company"), _________ shares of the Company's
common stock represented by Certificate No. ____. The undersigned authorizes the
Secretary of the Company to transfer the stock on the books of the Company in
the event of the forfeiture of any shares issued under the Restricted Stock
Agreement dated November 15, 2004 between the Company and the undersigned.
Dated:
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/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
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