EXHIBIT 10.4
CKE RESTAURANTS, INC.
STOCK APPRECIATION RIGHTS AWARD AGREEMENT
UNDER
2005 OMNIBUS INCENTIVE COMPENSATION PLAN
THIS STOCK APPRECIATION RIGHTS AWARD AGREEMENT (the "Agreement") is
entered into as of ____________, 2005 (the "Grant Date"), by CKE Restaurants,
Inc., a Delaware corporation (the "Company"), and _____________ (the "Grantee")
pursuant to the Company's 2005 Omnibus Incentive Compensation Plan (the "Plan").
Any capitalized term not defined herein shall have the same meaning ascribed to
it in the Plan.
R E C I T A L S:
A. Grantee is an employee or director, and in connection therewith has
rendered services for and on behalf of the Company or its Affiliates.
B. The Company desires to issue Stock Appreciation Rights to Grantee to
provide an incentive for Grantee to remain a Service Provider of the Company and
to exert added effort towards its growth and success.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the parties agree as
follows:
1. GRANT OF STOCK APPRECIATION RIGHTS. The Company hereby grants to the
Grantee under the Plan and on the terms and on conditions set forth in this
Agreement stock appreciation rights with respect to ______________
(_____________) shares of the Company's Common Stock at the "Base Value" per
share set forth in Section 2 below (the "SARs").
2. BASE VALUE AND BENEFIT. The Base Value of each SAR is _______, which is
equal to the Fair Market Value of a share of the Company's Common Stock on the
Grant Date. Each SAR entitles Grantee to receive from the Company upon the
settlement of the SAR an amount, payable in cash, equal to the excess, if any,
of (a) the Fair Market Value of one share of Stock on the date of settlement,
over (b) the Base Value per share.
3. VESTING OF SARS.
(a) The SARs shall vest as follows:
[INSERT VESTING SCHEDULE, EITHER TIME-BASED OR PERFORMANCE-BASED]
As used herein, the term "Continuous Service" means (i) employment by
either the Company or any parent or subsidiary corporation of the Company, or by
any successor entity following a Change in Control, which is uninterrupted
except for vacations, illness, or leaves of absence which are approved in
writing by the Company or any of such other employer corporations, if
applicable, or (ii) service as a member of the Board of Directors of the Company
until Grantee resigns, is removed from office, or Grantee's term of office
expires and he or she is not reelected.
(b) Notwithstanding the vesting schedule, if Grantee's employment
terminates by reason of his or her death or Disability at any time the SARs
shall become fully vested as of such date of termination.
(c) If Grantee holds SARs at the time a Change in Control occurs,
all of the SARs shall become immediately and unconditionally vested and
exercisable, and the restrictions with respect to all of the SARs shall lapse,
effective immediately prior to the occurrence of a Triggering Event (as defined
below) occurring within the twelve (12) month period beginning with such Change
in Control.
(d) For purposes of this Section 3, the following terms shall have
the meanings set forth below:
(i) "Triggering Event" shall mean (i) the termination of
Continuous Service of Grantee by the Company or an Affiliate (or any
successor thereof) other than on account of death, Disability or
Cause, (ii) the occurrence of a Constructive Termination or (iii)
any failure by the Company (or a successor entity) to assume,
replace, convert or otherwise continue this Agreement in connection
with the Change in Control (or another corporate transaction or
other change effecting the Common Stock) on the same terms and
conditions as applied immediately prior to such transaction, except
for equitable adjustments to reflect changes in the Common Stock
pursuant to Section 4.3 of the Plan.
(ii) "Cause" shall mean a determination by the Committee that
Grantee (i) has been convicted of, or entered a plea of nolo
contendere to, a crime that constitutes a felony under Federal or
state law, (ii) has engaged in willful gross misconduct in the
performance of the Grantee's duties to the Company or an Affiliate
or (iii) has committed a material breach of any written agreement
with the Company or any Affiliate with respect to confidentiality,
noncompetition, nonsolicitation or similar restrictive covenant. In
the event that the Grantee is a party to an employment agreement
with the Company or any Affiliate that defines a termination on
account of "Cause" (or a term having similar meaning), such
definition shall apply as the definition of a termination on account
of "Cause" for purposes hereof, but only to the extent that such
definition provides the Grantee with greater rights. A termination
on account of Cause shall be communicated by written notice to the
Grantee, and shall be deemed to occur on the date such notice is
delivered to the Grantee.
(iii) "Constructive Termination" shall mean a termination of
employment by Grantee within sixty (60) days following the
occurrence of any one or more of the following events without the
Grantee's written consent (i) any reduction in position, title (for
Vice Presidents or above), overall responsibilities, level of
authority, level of reporting (for Vice Presidents or above), base
compensation, annual incentive
compensation opportunity, aggregate employee benefits or (ii) a
request that Grantee's location of employment be relocated by more
than fifty (50) miles. In the event that the Grantee is a party to
an employment agreement with the Company or any Affiliate (or a
successor entity) that defines a termination on account of
"Constructive Termination," "Good Reason" or "Breach of Agreement"
(or a term having a similar meaning), such definition shall apply as
the definition of "Constructive Termination" for purposes hereof in
lieu of the foregoing, but only to the extent that such definition
provides the Grantee with greater rights. A Constructive Termination
shall be communicated by written notice to the Committee, and shall
be deemed to occur on the date such notice is delivered to the
Committee, unless the circumstances giving rise to the Constructive
Termination are cured within five (5) days of such notice.
4. TERM OF SARS AND LIMITATIONS ON RIGHT TO EXERCISE. The term of the SARs
is a period of [five] years, expiring on the [fifth] anniversary of the Grant
Date (the "Expiration Date"). To the extent not previously exercised, the SARs
will lapse three months after the termination of the Grantee's employment with
the Company for any reason. The Committee may, subject to Section 9(c) below,
prior to the lapse of the SARs under the circumstances described in this
Section, extend the time to exercise the SARs. If the Grantee or his or her
beneficiary exercises a SAR after termination of employment, the SARs may be
exercised only with respect to the shares that were otherwise vested as of such
termination.
5. VALUE AND SETTLEMENT OF SARS.
(a) The value due upon exercise or settlement of the SARs is
calculated as follows: the number of SARs being exercised or settled, times the
excess, if any, of (i) the Fair Market Value of one share of Stock on the date
of exercise or settlement, over (ii) the Base Value of the SAR.
(b) SARs subject to this Agreement that vest in accordance with the
conditions set forth herein shall result in payment to Grantee of an amount
calculated pursuant to Section 5(a) promptly on or as soon as practicable after
the vesting date of such SARs. Such payment shall be subject to the tax
withholding provisions of Section 9, and shall be in complete satisfaction of
such vested SARs.
6. DIVIDEND EQUIVALENTS. No dividend equivalent rights shall attach to the
SARs granted hereby.
7. ADJUSTMENTS TO SARS. Upon or in contemplation of any reclassification,
recapitalization, stock split, reverse stock split or stock dividend; any
merger, combination, consolidation or other reorganization; any split-up,
spin-off, or similar extraordinary dividend distribution in respect of the
Common Stock (whether in the form of securities or property); any exchange of
Common Stock or other securities of the Company, or any similar, unusual or
extraordinary corporate transaction in respect of the Common Stock; or a sale of
substantially all the assets of the Company as an entirety; then the Company
shall, in such manner, to such extent (if any) and at such time as it deems
appropriate and equitable in the circumstances, make adjustments if appropriate
in the number or terms of the SARs as provided in Section 4.3 of the Plan .
8. LIMITATION OF RIGHTS. The SARs do not confer to Grantee or Grantee's
beneficiary any rights of a shareholder of the Company unless and until shares
of Stock are in fact issued to such person in connection with the exercise of
the SARs. Nothing in this Agreement shall interfere with or limit in any way the
right of the Company or any affiliate to terminate Grantee's employment at any
time, nor confer upon Grantee any right to continue in the employment of the
Company or any affiliate.
9. INCOME TAX MATTERS.
(a) In order to comply with all applicable federal or state income
tax laws or regulations, the Company may take such action as it deems
appropriate to ensure that all applicable federal or state payroll, withholding,
income or other taxes, which are the sole and absolute responsibility of
Grantee, are withheld or collected from Grantee.
(b) The Company shall reasonably determine the amount of any
federal, state, local or other income, employment, or other taxes which the
Company or any of its affiliates may reasonably be obligated to withhold with
respect to the grant, vesting, or other event with respect to the SARs. The
Company may, in its sole discretion, withhold an amount from the proceeds of the
SARs upon exercise or settlement sufficient to satisfy the amount of any such
withholding obligations that arise with respect to the vesting of such SARs. The
Company may take such action(s) without notice to the Grantee and shall remit to
the Grantee the balance of any proceeds from withholding such proceeds in excess
of the amount reasonably determined to be necessary to satisfy such withholding
obligations. The Grantee shall have no discretion as to the satisfaction of tax
withholding obligations in such manner. If, however, any withholding event
occurs with respect to the SARs other than upon the vesting of such SARs, or if
the Company for any reason does not satisfy the withholding obligations with
respect to the vesting of the SARs as provided above in this Section 9(b), the
Company shall be entitled to require a cash payment by or on behalf of the
Grantee and/or to deduct from other compensation payable to the Grantee the
amount of any such withholding obligations.
(c) The SARs evidenced by this Agreement, and the related payments
to Grantee in settlement of vested SARs, is intended to be taxed under the
provisions of Section 83 of the Internal Revenue Code of 1986, as amended (the
"Code"), and is not intended to provide and does not provide for the deferral of
compensation within the meaning of Section 409A(d) of the Code. Therefore, the
Company intends to report as includible in the Grantee's gross income for any
taxable year an amount equal to the Fair Market Value of the shares of Common
Stock covered by the SARs that vest (if any) during such taxable year,
determined as of the date such SARs vest. In furtherance of this intended tax
treatment, all vested Units shall be automatically settled and payment to the
Grantee shall be made as provided in Section 1(c) hereof, but in no event later
than March 15th of the year following the calendar year in which such Units
vest. The Grantee shall have no power to affect the timing of such settlement or
payment. The Company reserves the right to amend this Agreement, without the
Grantee's consent, to the extent it reasonably determines from time to time that
such amendment is necessary in order to achieve the purposes of this Section.
10. NOTICES. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given and effective (i) when delivered by hand, (ii)
when otherwise delivered against receipt therefor, or (iii) three (3) business
days after being mailed if sent by registered or certified mail, postage
prepaid,
return receipt requested. Any notice shall be addressed to the parties as
follows or at such other address as a party may designate by notice given to the
other party in the manner set forth herein:
(a) if to the Company:
CKE Restaurants, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇. ▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
(b) if to the Grantee, at the address shown on the signature page of
this Agreement or at his most recent address as shown in the employment or stock
records of the Company.
11. BINDING OBLIGATIONS. All covenants and agreements herein contained by
or on behalf of any of the parties hereto shall bind and inure to the benefit of
the parties hereto and their permitted successors and assigns.
12. CAPTIONS AND SECTION HEADINGS. Captions and section headings used
herein are for convenience only, and are not part of this Agreement and shall
not be used in construing it.
13. AMENDMENT. This Agreement may not be amended, waived, discharged, or
terminated other than by written agreement of the parties.
14. ENTIRE AGREEMENT. This Agreement and the Plan constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior or contemporaneous written or oral agreements and
understandings of the parties, either express or implied.
15. CONFLICT OF PROVISIONS. The terms contained in the Plan are
incorporated into and made a part of this Agreement and this Agreement shall be
governed by and construed in accordance with the Plan. In the event of any
actual or alleged conflict between the provisions of the Plan and the provisions
of this Agreement, the provisions of the Plan shall be controlling and
determinative.
16. ASSIGNMENT. Grantee shall have no right, without the prior written
consent of the Company, to (i) sell, assign, mortgage, pledge or otherwise
transfer any interest or right created hereby, or (ii) delegate his or her
duties or obligations under this Agreement. This Agreement is made solely for
the benefit of the parties hereto, and no other person, partnership, association
or corporation shall acquire or have any right under or by virtue of this
Agreement.
17. SEVERABILITY. Should any provision or portion of this Agreement be
held to be unenforceable or invalid for any reason, the remaining provisions and
portions of this Agreement shall be unaffected by such holding.
18. APPLICABLE LAW. This Agreement shall be construed in accordance with
the laws of the State of California without reference to choice of law
principles, as to all matters, including, but not limited to, matters of
validity, construction, effect or performance.
19. NO AGREEMENT TO EMPLOY. Nothing in this Agreement shall affect any
right with respect to continuance of employment by the Company or any of its
subsidiaries. The right of the
Company or any of its subsidiaries to terminate at will the Grantee's employment
at any time (whether by dismissal, discharge or otherwise), with or without
cause, is specifically reserved, subject to any other written employment
agreement to which the Company and Grantee may be a party.
20. "MARKET STAND-OFF" AGREEMENT. Grantee agrees that, if requested by the
Company or the managing underwriter of any proposed public offering of the
Company's securities (including any acquisition transaction where Company
securities will be used as all or part of the purchase price), Grantee will not
sell or otherwise transfer or dispose of any Shares held by Grantee without the
prior written consent of the Company or such underwriter, as the case may be,
during such period of time, not to exceed 180 days following the effective date
of the registration statement filed by the Company with respect to such
offering, as the Company or the underwriter may specify.
21. ATTORNEYS' FEES. If any party shall bring an action in law or equity
against another to enforce or interpret any of the terms, covenants and
provisions of this Agreement, the prevailing party in such action shall be
entitled to recover reasonable attorneys' fees and costs.
22. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one agreement and any
party hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be binding upon Grantee and the Company at such time as the
Agreement, in counterpart or otherwise, is executed by Grantee and the Company.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY: GRANTEE:
CKE RESTAURANTS, INC.
By:
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Name:
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(Print Name)
Title:
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Address:
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EXHIBIT 10.4
CONSENT AND RATIFICATION OF SPOUSE
The undersigned, the spouse of _____________________, a party to the
attached Stock Appreciation Rights Award Agreement (the "Agreement"), dated as
of _______________, hereby consents to the execution of said Agreement by such
party; and ratifies, approves, confirms and adopts said Agreement, and agrees to
be bound by each and every term and condition thereof as if the undersigned had
been a signatory to said Agreement, with respect to the Stock Appreciation
Rights (as defined in the Agreement) made the subject of said Agreement in which
the undersigned has an interest, including any community property interest
therein.
I also acknowledge that I have been advised to obtain independent counsel
to represent my interests with respect to this Agreement but that I have
declined to do so and I hereby expressly waive my right to such independent
counsel.
Date:
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(Signature)
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(Print Name)