Exhibit 10H
QUALITY DINING, INC.
1997 STOCK OPTION AND INCENTIVE PLAN
1. Plan Purpose. The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by providing a means for
attracting and retaining officers and key employees of the Company and its
Affiliates.
2. Definitions. The following definitions are applicable to the Plan:
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"Affiliate" -- means any "parent corporation" or "subsidiary corporation" of
the Company as such terms are defined in Code Sections 424(e) and (f),
respectively.
"Affiliated SAR" -- means a SAR that is granted in connection with a related
Option, and which automatically will be deemed to be exercised at the same time
that the related Option is exercised. The deemed exercise of an Affiliated SAR
shall not necessitate a reduction in the number of Shares subject to the related
Option.
"Award" -- means the grant by the Committee of Incentive Stock Options, Non-
Qualified Stock Options, SARs, Restricted Shares, Performance Shares or any
combination thereof, as provided in the Plan.
"Award Agreement" -- means the written agreement setting forth the terms and
provisions applicable to each Award granted under the Plan.
"Base Price" -- means the amount over which the appreciation in value of a
Share will be measured upon exercise of an SAR.
"Board" -- means the Board of Directors of the Company.
"Change in Control" -- means each of the events specified in the following
clauses (i) through (iii): (i) any third person, including a "group" as defined
in Section 13(d)(3) of the Exchange Act after the date of the adoption of the
Plan by the Board, first becomes the beneficial owner of shares of the Company
with respect to which 25% or more of the total number of votes for the election
of the Board of Directors of the Company may be cast, (ii) as a result of, or in
connection with, any cash tender offer, exchange offer, merger or other business
combination, sale of assets or contested election, or combination of the
foregoing, the persons who were directors of the Company shall cease to
constitute a majority of the Board of Directors of the Company or (iii) the
shareholders of the Company shall approve an agreement providing either for a
transaction in which the Company will cease to be an independent publicly owned
entity or for a sale or other disposition of all or substantially all the assets
of the Company; provided, however, that the occurrence of any of such events
shall not be deemed a Change in Control if, prior to such occurrence, a
resolution specifically approving such occurrence shall have been adopted by at
least a majority of the Board of Directors of the Company.
"Code" -- means the Internal Revenue Code of 1986, as amended.
"Committee" -- means the Committee appointed by the Board pursuant to Section
3 of the Plan.
"Company" -- means Quality Dining, Inc., an Indiana corporation.
"Continuous Service" -- means the absence of any interruption or termination
of service as an Employee of the Company or an Affiliate. Service shall not be
considered interrupted in the case of sick leave, military leave or any other
leave of absence approved by the Company or in the case of any transfer between
the Company and an Affiliate or any successor to the Company.
"Director" -- means any individual who is a member of the Board.
"Disability" -- means total and permanent disability as determined by the
Committee pursuant to Code Section 22(e)(3).
"Employee" -- means any person, including an officer or Director, who is
employed by the Company or any Affiliate.
"Exchange Act" -- means the Securities Exchange Act of 1934, as amended.
"Exercise Price" -- means the price per Share at which the Shares subject to
an Option may be purchased upon exercise of the Option.
"Freestanding SAR" -- means a SAR that is granted independently of any Option.
"Incentive Stock Option" -- means an option to purchase Shares granted by the
Committee pursuant to the terms of the Plan which is intended to qualify under
Code Section 422.
"Market Value" -- means the last reported sale price on the date in question
(or, if there is no reported sale on such date, on the last preceding date on
which any reported sale occurred) of one Share on the principal exchange on
which the Shares are listed for trading, or if the Shares are not listed for
trading on any exchange, on the Nasdaq National Market or any similar system
then in use, or, if the Shares are not listed on the Nasdaq National Market, the
mean between the closing high bid and low asked quotations of one Share on the
date in question as reported by Nasdaq or any similar system then in use, or, if
no such quotations are available, the fair market value on such date of one
Share as the Committee shall determine.
"Non-Qualified Stock Option" -- means an option to purchase Shares granted by
the Committee pursuant to the terms of the Plan, which option is not intended to
qualify under Code Section 422.
"Option" -- means an Incentive Stock Option or a Non-Qualified Stock Option.
"Participant" -- means any Employee of the Company or any Affiliate who is
selected by the Committee to receive an Award.
"Performance Cycle" -- means the period of time, designated by the Committee,
over which Performance Shares may be earned.
"Performance Shares" -- means Shares awarded pursuant to Section 12 of the
Plan.
"Plan" -- means the Quality Dining, Inc. 1997 Stock Option and Incentive Plan.
"Reorganization" -- means the liquidation or dissolution of the Company or any
merger, consolidation or combination of the Company (other than a merger,
consolidation or combination in which the Company is the continuing entity and
which does not result in the outstanding Shares being converted into or
exchanged for different securities, cash or other property or any combination
thereof).
"Restricted Period" -- means the period of time selected by the Committee for
the purpose of determining when restrictions are in effect under Section 10 of
the Plan with respect to Restricted Shares.
"Restricted Shares" -- means Shares which have been contingently awarded to a
Participant by the Committee subject to the restrictions referred to in Section
10 of the Plan, so long as such restrictions are in effect.
"Retirement" -- means a Participant's cessation of Continuous Service on or
after age 65 or such other age as is set forth in the Company's retirement
policy as in effect from time to time.
"Stock Appreciation Right" or "SAR" -- means an Award, granted alone or in
connection with a related Option, pursuant to Section 11 of the Plan.
"Securities Act" -- means the Securities Act of 1933, as amended.
"Shares" -- means the shares of common stock, no par value, of the Company.
"Tandem SAR" -- means a SAR that is granted in connection with a related
Option, the exercise of which shall require forfeiture of the right to purchase
an equal number of Shares under the related Option (and when a Share is
purchased under the Option, the SAR shall be canceled to the same extent).
3. Administration. The Plan shall be administered by the Committee, which
shall consist of two or more members of the Board, each of whom shall be a "non-
employee director" as provided under Rule 16b-3 of the Exchange Act, and an
"outside director" as provided under Code Section 162(m). The members of the
Committee shall be appointed by the Board. Except as limited by the express
provisions of the Plan, the Committee shall have sole and complete authority and
discretion to (a) select Participants and grant Awards; (b) determine the number
of Shares to be subject to types of Awards generally, as well as to individual
Awards granted under the Plan; (c) determine the terms and conditions upon which
Awards shall be granted under the Plan; (d) prescribe the form and terms of
Award Agreements; (e) establish procedures and regulations for the
administration of the Plan; (f) interpret the Plan; and (g) make all
determinations deemed necessary or advisable for the administration of the Plan.
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all members of the Committee without a meeting,
shall be acts of the Committee. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan shall be final, conclusive, and
binding on all persons, and shall be given the maximum deference permitted by
law.
4. Participants. The Committee may select from time to time Participants in
the Plan from those officers and key Employees of the Company or its Affiliates
who, in the opinion of the Committee, have the capacity for contributing in a
substantial measure to the successful performance of the Company or its
Affiliates.
5. Shares Subject to Plan, Limitations on Grants and Exercise Price. Subject
to adjustment by the operation of Section 13 hereof:
(a) The maximum number of Shares which may be issued with respect to Awards
made under the Plan is 1,100,000 Shares. The Shares with respect to which
Awards may be made under the Plan may either be authorized and unissued shares
or unissued shares heretofore or hereafter reacquired and held as treasury
shares. Any Award which expires, terminates or is surrendered for cancellation
or with respect to Restricted Shares which is forfeited (so long as any cash
dividends paid on such Shares are also forfeited), may be subject to new
Awards under the Plan with respect to the number of Shares as to which a
termination or forfeiture has occurred.
(b) The number of Shares which may be granted under the Plan to any
Participant during any calendar year of the Plan under all forms of Awards
shall not exceed 150,000 Shares.
6. General Terms and Conditions of Options. The Committee shall have full and
complete authority and discretion, except as expressly limited by the Plan, to
grant Options and to prescribe the terms and conditions (which need not be
identical among Participants) of the Options. Each Option shall be evidenced by
an Award Agreement that shall specify: (a) the Exercise Price, (b) the number of
Shares subject to the Option, (c) the expiration date of the Option, (d) the
manner, time and rate (cumulative or otherwise) of exercise of the Option, (e)
the restrictions, if any, to be placed upon the Option or upon Shares which may
be issued upon exercise of the Option, (f) the conditions, if any, under which a
Participant may transfer or assign Options, and (g) any other terms and
conditions as the Committee, in its sole discretion, shall determine. The
Committee may, as a condition of granting any Option, require that a Participant
agree to surrender for cancellation one or more Options previously granted to
such Participant.
7. Exercise of Options.
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(a) Except as provided in Section 16, an Option granted under the Plan
shall be exercisable during the lifetime of the Participant to whom such Option
was granted only by such Participant, and except as provided in Section 8 of the
Plan, no Option may be exercised unless at the time the Participant exercises
the Option, the Participant has maintained Continuous Service since the date of
the grant of the Option.
(b) To exercise an Option under the Plan, the Participant must give written
notice to the Company specifying the number of Shares with respect to which
the Participant elects to exercise the Option together with full payment of
the Exercise Price. The date of exercise shall be the date on which the notice
is received by the Company. Payment may be made either (i) in cash (including
check, bank draft or money order), (ii) by tendering Shares already owned by
the Participant and having a Market Value on the date of exercise equal to the
Exercise Price, (iii) by requesting that the Company withhold Shares issuable
upon exercise of the Option having a Market Value equal to the Exercise Price,
or (iv) by any other means determined by the Committee in its sole discretion.
8. Termination of Options. Unless otherwise specifically provided by the
Committee in the Award Agreement or an amendment thereto, Options shall
terminate as provided in this Section.
(a) Unless sooner terminated under the provisions of this Section, Options
shall expire on the earlier of the date specified in the Award Agreement or
the expiration of ten (10) years from the date of grant.
(b) If the Continuous Service of a Participant is terminated for cause, or
voluntarily by the Participant for any reason other than death, Disability or
Retirement, all rights under any Options granted to the Participant shall
terminate immediately upon the Participant's cessation of Continuous Service.
(c) If the Continuous Service of a Participant is terminated by reason of
Retirement or terminated by the Company without cause, the Participant may
exercise outstanding Options to the extent that the Participant was entitled
to exercise the Options at the date of cessation of Continuous Service, but
only within the period of three (3) months immediately succeeding the
Participant's cessation of Continuous Service, and in no event after the
applicable expiration dates of the Options.
(d) In the event of the Participant's death or Disability, the Participant or
the Participant's beneficiary, as the case may be, may exercise outstanding
Options to the extent that the Participant was entitled to exercise the
Options at the date of cessation of Continuous Service, but only within the
one-year period immediately succeeding the Participant's cessation of
Continuous Service by reason of death or Disability, and in no event after the
applicable expiration date of the Options.
9. Incentive Stock Options. Incentive Stock Options may be granted only to
Participants who are Employees. Any provisions of the Plan to the contrary
notwithstanding, (a) no Incentive Stock Option shall be granted more than ten
years from the earlier of the date the Plan is adopted by the Board of Directors
of the Company or approved by the Company's Shareholders, (b) no Incentive Stock
Option shall be exercisable more than ten years from the date the Incentive
Stock Option is granted, (c) the Exercise Price of any Incentive Stock Option
shall not be less than the Market Value per Share on the date such Incentive
Stock Option is granted, (d) any Incentive Stock Option shall not be
transferable by the Participant to whom such Incentive Stock Option is granted
other than by will or the laws of descent and distribution and shall be
exercisable during such Participant's lifetime only by such Participant, (e) no
Incentive Stock Option shall be granted which would permit a Participant to
acquire, through the exercise of Incentive Stock Options in any calendar year,
under all plans of the Company and its Affiliates, Shares having an aggregate
Market Value (determined as of the time any Incentive Stock Option is granted)
in excess of $100,000 (determined by assuming that the Participant will exercise
each Incentive Stock Option on the date that such Option first becomes
exercisable), and (f) no Incentive Stock Option may be exercised more than three
(3) months after the Participant's cessation of Continuous Service (one (1) year
in the case of Disability) for any reason other than death. Notwithstanding the
foregoing, in the case of any Participant who, at the date of grant, owns shares
possessing more than 10% of the total combined voting power of all classes of
capital stock of the Company or any Affiliate, the Exercise Price of any
Incentive Stock Option shall not be less than 110% of the Market Value per Share
on the date such Incentive Stock Option is granted and such Incentive Stock
Option shall not be exercisable more than five years from the date such
Incentive Stock Option is granted.
10. Terms and Conditions of Restricted Shares. The Committee shall have
full and complete authority, subject to the limitations of the Plan, to grant
Awards of Restricted Shares and to prescribe the terms and conditions (which
need not be identical among Participants) in respect of the Awards. Unless the
Committee otherwise specifically provides in the Award Agreement, an Award of
Restricted Shares shall be subject to the following provisions:
(a) At the time of an Award of Restricted Shares, the Committee shall
establish for each Participant a Restricted Period during which, or at the
expiration of which, the Restricted Shares shall vest. Subject to paragraph (e)
of this Section, the Participant shall have all the rights of a shareholder
with respect to the Restricted Shares, including but not limited to, the right
to receive all dividends paid on the Restricted Shares and the right to vote
the Restricted Shares. The Committee shall have the authority, in its
discretion, to accelerate the time at which any or all of the restrictions
shall lapse with respect to any Restricted Shares prior to the expiration of
the Restricted Period, or to remove any or all restrictions, whenever it may
determine that such action is appropriate by reason of changes in applicable
tax or other laws or other changes in circumstances occurring after the
commencement of the Restricted Period.
(b) If a Participant ceases Continuous Service for any reason, including
death, before the Restricted Shares have vested, a Participant's rights with
respect to the unvested portion of the Restricted Shares shall terminate and be
returned to the Company.
(c) Each certificate issued in respect to Restricted Shares shall be
registered in the name of the Participant and deposited by the Participant,
together with a stock power endorsed in blank, with the Company and shall bear
the following (or a similar) legend:
"The transferability of this certificate and the shares represented hereby
are subject to the terms and conditions (including forfeiture) contained in
the 1997 Stock Option and Incentive Plan of Quality Dining, Inc. and an Award
Agreement entered into between the registered owner and Quality Dining, Inc.
Copies of the Plan and Award Agreement are on file in the office of the
Secretary of the Company."
(d) At the time of an Award of Restricted Shares, the Participant shall
enter into an Award Agreement with the Company in a form specified by the
Committee agreeing to the terms and conditions of the Award.
(e) At the time of an Award of Restricted Shares, the Committee may, in its
discretion, determine that the payment to the Participant of dividends declared
or paid on the Restricted Shares by the Company, or a specified portion
thereof, shall be deferred until the earlier to occur of (i) the lapsing of the
restrictions imposed with respect to the Restricted Shares, or (ii) the
forfeiture of such Restricted Shares under paragraph (b) of this Section, and
shall be held by the Company for the account of the Participant until such
time. In the event of deferral, there shall be credited at the end of each year
(or portion thereof) interest on the amount of the account at the beginning of
the year at a rate per annum as the Committee, in its discretion, may
determine. Payment of deferred dividends, together with accrued interest, shall
be made upon the earlier to occur of the events specified in (i) and (ii) of
this paragraph.
(f) At the expiration of the restrictions imposed by this Section, the
Company shall redeliver to the Participant the certificate(s) and stock power
deposited with the Company pursuant to paragraph (c) of this Section and the
Shares represented by the certificate(s) shall be free of all restrictions.
(g) No Award of Restricted Shares may be assigned, transferred or
encumbered.
11. Grant of SARs. Subject to the terms and conditions of the Plan, a SAR
Award may be made to Participants at any time and from time to time as shall be
determined by the Committee, in its sole discretion. The Committee may grant
Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof as
follows:
(a) The Committee, subject to the limitations of the Plan, shall have
complete discretion to determine the Exercise Price and other terms and
conditions of SARs granted under the Plan. Each SAR Award shall be evidenced by
an Award Agreement specifying the terms and conditions of the Award, including
its term, the Base Price and the conditions of exercise.
(b) The Base Price of Shares with respect to a Tandem or Affiliated SAR
Award shall equal the Exercise Price of the Shares under the related Option.
(c) Tandem SARs may be exercised for all or part of the Shares subject to
the related Option upon the surrender of the right to exercise the equivalent
portion of the related Option. A Tandem SAR may be exercised only with respect
to the Shares for which its related Option is then exercisable. With respect to
a Tandem SAR granted in connection with an Incentive Stock Option:
(i) the Tandem SAR shall expire no later than the expiration of the
underlying Incentive Stock Option; (ii) the value of the payout with respect to
the Tandem SAR shall be for no more than one hundred percent (100%) of the
difference between the Exercise Price of the underlying Incentive Stock Option
and the Market Value of the Shares subject to the underlying Incentive Stock
Option at the time the Tandem SAR is exercised; and (iii) the Tandem SAR shall
be exercisable only when the Market Value of the Shares subject to the
Incentive Stock Option exceeds the Exercise Price of the Incentive Stock
Option.
(d) Upon exercise of a SAR, a Participant shall be entitled to receive
payment from the Company in an amount determined by multiplying:
(i) The difference between the Market Value of a Share on the date of
exercise over the Base Price; times
(ii) The number of Shares with respect to which the SAR Award is
exercised.
At the discretion of the Committee, payment for a SAR may be in cash,
Shares or a combination thereof.
12. Performance Shares. The Committee, in its sole discretion, may from
time to time authorize the grant of Performance Shares upon the achievement of
performance goals (which may be cumulative and/or alternative) as may be
established, in writing, by the Committee based on any one or any combination of
the following criteria: (a) earnings per Share; (b) return on equity; (c) return
on assets; (d) operating income; (e) earnings before interest, taxes,
depreciation and amortization; and (f) number of restaurants operated or
franchised. At the time as it is certified, in writing, by the Committee that
the performance goals established by the Committee have been attained or
otherwise satisfied within the Performance Cycle, the Committee shall authorize
the payment of cash in lieu of Performance Shares or the issuance of Performance
Shares registered in the name of the Participant, or a combination of cash and
Shares. The grant of an Award of Performance Shares shall be evidenced by an
Award Agreement containing the terms and conditions of the Award as determined
by the Committee.
If the Participant ceases Continuous Service before the end of a
Performance Cycle for any reason other than Retirement, Disability, or death,
the Participant shall forfeit all rights with respect to any Performance Shares
that were being earned during the Performance Cycle. The Committee, in its sole
discretion, may establish guidelines providing that if a Participant ceases
Continuous Service before the end of a Performance Cycle by reason of
Retirement, Disability, or death, the Participant shall be entitled to a
prorated payment with respect to any Performance Shares that were being earned
during the Performance Cycle.
13. Adjustments Upon Changes in Capitalization. In the event of any change
in the outstanding Shares subsequent to the effective date of the Plan by reason
of any reorganization, recapitalization, stock split, stock dividend,
combination or exchange of stock, merger, consolidation or any change in the
corporate structure or Shares of the Company, the maximum aggregate number and
class of shares as to which Awards may be granted under the Plan and the number
and class of shares with respect to which Awards theretofore have been granted
under the Plan shall be appropriately adjusted by the Committee to prevent the
dilution or diminution of Awards. The Committee's determination with respect to
any adjustments shall be conclusive. Any shares or other securities received, as
a result of any of the foregoing, by a Participant with respect to Restricted
Shares shall be subject to the same restrictions and the certificate(s) or other
instruments representing or evidencing the shares or other securities shall be
legended and deposited with the Company in the manner provided in Section 10 of
this Agreement.
14. Effect of Reorganization. Unless otherwise provided by the Committee
in the Award Agreement, Awards will be affected by a Reorganization as follows:
(a) If the Reorganization is a dissolution or liquidation of the Company
then (i) the restrictions on Restricted Shares shall lapse and (ii) each
outstanding Option or SAR Award shall terminate, but each Participant to whom
the Option or SAR was granted shall have the right, immediately prior to the
dissolution or liquidation to exercise the Option or SAR in full,
notwithstanding the provisions of Section 9, and the Company shall notify
each Participant of such right within a reasonable period of time prior to
any dissolution or liquidation.
(b) If the Reorganization is a merger or consolidation, other than a Change
in Control subject to Section 15 of this Plan, upon the effective date of the
Reorganization (i) each Participant shall be entitled, upon exercise of an
Option in accordance with all of the terms and conditions of the Plan, to
receive in lieu of Shares, shares or other securities or consideration as the
holders of Shares shall be entitled to receive pursuant to the terms of the
Reorganization; and (ii) each holder of Restricted Shares shall receive
shares or other securities as the holders of Shares received which shall be
subject to the restrictions set forth in Section 10 unless the Committee
accelerates the lapse of such restrictions and the certificate(s) or other
instruments representing or evidencing the shares or other securities shall
be legended and deposited with the Company in the manner provided in Section
10 of this Plan.
The adjustments contained in this Section and the manner of application of
such provisions shall be determined solely by the Committee.
15. Effect of Change in Control. If the Continuous Service of any
Participant of the Company or any Affiliate is involuntarily terminated, for
whatever reason, at any time within twelve months after a Change in Control,
unless the Committee shall have otherwise provided in the Award Agreement, (a)
any Restricted Period with respect to an Award of Restricted Shares shall lapse
upon the Participant's termination of Continuous Service and all Restricted
Shares shall become fully vested in the Participant to whom the award was made;
and (b) with respect to Performance Shares, the Participant shall be entitled to
receive a prorata payment of Shares to the same extent as if the Participant
ceases Continuous Service by reason of Retirement under Section 12 of the Plan.
If a tender offer or exchange offer for Shares (other than such an offer by the
Company) is commenced, or if the event specified in clause (iii) of the
definition of a Change in Control contained in Section 2 shall occur, unless the
Committee shall have otherwise provided in the Award Agreement, all Option and
SAR Awards theretofore granted and not fully exercisable shall become
exercisable in full upon the happening of such event and shall remain
exercisable in accordance with their terms; provided, however, that no Option or
SAR shall be exercisable by a director or officer of the Company within six
months of the date of grant of the Option or SAR and no Option or SAR which has
previously been exercised or otherwise terminated shall become exercisable.
16. Assignments and Transfers. Except as otherwise expressly authorized by
the Committee in the Award Agreement or an amendment thereto, during the
lifetime of a Participant no Award nor any right or interest of a Participant in
any Award under the Plan may be assigned, encumbered or transferred otherwise
than by will or the laws of descent and distribution.
17. Employee Rights Under the Plan. No officer, Employee or other person
shall have a right to be selected as a Participant nor, having been so selected,
to be selected again as a Participant and no officer, Employee or other person
shall have any claim or right to be granted an Award under the Plan or under any
other incentive or similar plan of the Company or any Affiliate. Neither the
Plan nor any action taken under the Plan shall be construed as giving any
Employee any right to be retained in the employ of the Company or any Affiliate.
18. Delivery and Registration of Shares. The Company's obligation to
deliver Shares with respect to an Award shall, if the Committee requests, be
conditioned upon the receipt of a representation as to the investment intention
of the Participant to whom such Shares are to be delivered, in such form as the
Committee shall determine to be necessary or advisable to comply with the
provisions of the Securities Act or any other applicable federal or state
securities laws. It may be provided that any representation requirement shall
become inoperative upon a registration of the Shares or other action eliminating
the necessity of the representation under the Securities Act or other state
securities laws. The Company shall not be required to deliver any Shares under
the Plan prior to (i) the admission of such Shares to listing on any stock
exchange or system on which Shares may then be listed, and (ii) the completion
of any registration or other qualification of the Shares under any state or
federal law, rule or regulation, as the Company shall determine to be necessary
or advisable.
19. Withholding Tax. Prior to the delivery of any Shares or cash pursuant
to an Award, the Company shall have the right and power to deduct or withhold,
or require the Participant to remit to the Company, an amount sufficient to
satisfy all applicable tax withholding requirements. The Committee, in its sole
discretion and pursuant to such procedures as it may specify from time to time,
may permit or require a Participant to satisfy all or part of the tax
withholding obligations in connection with an Award by (a) having the Company
withhold otherwise deliverable Shares, or (b) delivering to the Company Shares
already owned having a Market Value equal to the amount required to be withheld.
The amount of the withholding requirement shall be deemed to include any amount
which the Committee determines, not to exceed the amount determined by using the
maximum federal, state or local marginal income tax rates applicable to the
Participant with respect to the Award on the date that the amount of tax to be
withheld is
to be determined for these purposes. For these purposes, the value of the Shares
to be withheld or delivered shall be equal to the Market Value as of the date
that the taxes are required to be withheld.
20. Termination, Amendment and Modification of Plan. The Board may at any
time terminate, and may at any time and from time to time and in any respect
amend or modify, the Plan; provided however, that to the extent necessary and
desirable to comply with Rule 16b-3 under the Exchange Act or Code Section 422
(or any other applicable law or regulation, including requirements of any stock
exchange or quotation system on which the Company's common stock is listed or
quoted) shareholder approval of any Plan amendment shall be obtained in the
manner and to the degree as is required by the applicable law or regulation; and
provided further, that no termination, amendment or modification of the Plan
shall in any manner affect any Award theretofore granted pursuant to the Plan
without the consent of the Participant to whom the Award was granted or
transferee of the Award.
21. Effective Date and Term of Plan. The Plan shall become effective upon its
adoption by the Board of Directors, subject to ratification by the shareholders
of the Company at the next annual meeting, and shall continue in effect for a
term of ten years from the date of adoption by the Board of Directors unless
sooner terminated under Section 20 of the Plan.
22. Governing Law. The Plan and Award Agreements shall be construed in
accordance with and governed by the laws of the State of Indiana.
ADOPTED BY THE BOARD OF DIRECTORS OF
QUALITY DINING, INC.
AS OF FEBRUARY 14, 1997
ADOPTED BY THE SHAREHOLDERS OF
QUALITY DINING, INC.
AS OF _________________, 1997