EXHIBIT 10.1
NOTICE OF PERFORMANCE-BASED
RESTRICTED STOCK UNIT AWARD
BUFFALO WILD WINGS, INC.
2003 EQUITY INCENTIVE PLAN
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Name of Participant:
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Number of Units: Grant Date:
- ---------------------------------------- ---------------------------------------
Performance Period: _____________, 200X through ____________, 20XX
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Scheduled Vesting Dates Cumulative Vesting Percentage
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_________, 200X 20%
_________, 20XX 50%
_________, 20XX 100%
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This Notice (the "Notice"), dated and effective as of the Grant Date
specified above, is between Buffalo Wild Wings, Inc., a Minnesota corporation
(the "Company"), and the Participant identified above.
Background
A. Participant on the date hereof is a key employee or officer of the
Company or a Subsidiary of the Company.
B. The Company wishes to grant a performance-based restricted stock
unit award to Participant payable in shares of the Company's common stock
pursuant to the Company's 2003 Equity Incentive Plan, as amended (the "Plan").
C. The Administrator of the Plan has determined that the Participant is
eligible to receive such an award and hereby grants an award to the Participant
on the terms and conditions that follow.
Terms and Conditions*
1. Grant of Performance-Based Restricted Stock Units. The Company
hereby grants to Participant on the Grant Date that number of performance-based
restricted stock units ("Units") equal to the "Number of Units" specified in the
table above on the terms and conditions set forth in this Notice and as
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* Any capitalized term used in this Notice shall have the meaning set forth
in this Notice (including in the table at the beginning of this Notice) or,
if not defined in this Notice, the meaning set forth in the Plan as it
currently exists or as it is amended in the future.
otherwise provided in the Plan (the "Award"). Each Unit that vests will entitle
the Participant to receive one share of the Company's Common Stock.
2. Nature of Units. The Units granted pursuant to this Award are
bookkeeping entries only and do not provide the Participant with any dividend,
voting or other rights of a stockholder of the Company. The Units shall remain
forfeitable at all times unless and to the extent the vesting conditions set
forth in Section 3 of this Notice are satisfied. Neither this Award not the
Units may be sold, transferred, assigned, encumbered or otherwise disposed of ,
except by will or the laws of descent and distribution in the event of the
Participant's death. Any attempt to otherwise transfer the Units or this Award
shall be void and without effect.
3. Vesting of Restricted Stock Units. For purposes of this Notice,
"Vesting Date" means any date, including a Scheduled Vesting Date, on which
Units subject to this Award vest as provided in this Section 3.
(a) General. Except as otherwise provided in Paragraphs 3(b)
and 3(c), the Units subject to this Award shall vest in three installments, and
an installment will vest on a Scheduled Vesting Date at the end of each fiscal
year of the Company occurring during the Performance Period only if and to the
extent the Company satisfies the performance-based objectives for that fiscal
year as set forth in Exhibit A to this Notice. If, with respect to any fiscal
year occurring during the Performance Period, the Committee certifies that the
Company achieved at least its minimum performance-based objective for that
fiscal year, then a portion of the Units subject to this Award will vest as of
the Scheduled Vesting Date. The portion of the Units subject to this Award that
will vest as of any Scheduled Vesting Date will be determined according to the
formula specified in Exhibit A, but in no event will the portion of the Number
of Units Awarded that have vested as of the Scheduled Vesting Date exceed the
applicable Cumulative Vesting Percentage. Any Units that do not vest on either
of the first two Scheduled Vesting Dates solely because of the failure to fully
satisfy an applicable performance-based objective shall remain eligible for
vesting on a subsequent Scheduled Vesting Date during the Performance Period.
Any Units that have not vested on the third Scheduled Vesting Date will be
forfeited.
(b) Termination of Employment. Except as provided in the
following sentence and in Paragraph 3(c), if the Participant's employment with
the Company and all of its Subsidiaries ceases at any time during the term of
the Award, this Award shall terminate and all Units subject to this Award that
have not yet vested shall be forfeited by Participant. If, however, the
Participant's employment with the Company and all of its Subsidiaries ceases due
to death or Disability (as defined in Section 5), then a portion of the Units
subject to this Award shall immediately vest. That portion shall be equal to the
number of Units subject to this Award that would vest as of the end of the
fiscal year in which Participant's employment ended if the Company were to
achieve the target level performance-based objective for that fiscal year. It is
understood that if the Participant's employment ceases for any reason during the
period between a Vesting Date and the date shares of Stock are to be issued as
provided in Section 4 in settlement of Units vested as of that most recent
Vesting Date, the Participant shall not forfeit any such Units.
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(c) Change in Control. If a Change in Control (as defined in
Section 5) occurs and the Participant holds Units subject to this Notice at the
time, then one of the following shall occur:
(1) If, pending the Change in Control, the Committee
determines that this Award will not continue after the Change in Control or that
the successor entity (or its parent) will not agree to provide for the
assumption or replacement of this Award with a comparable equity-based award
covering shares of the successor entity (or its parent) that would equitably
preserve the compensation element of the Award at the time of the Change in
Control, then a portion of the Units subject to this Award shall vest and be
settled immediately prior to the consummation of the Change in Control. That
portion shall be equal to the number of Units subject to this Award that would
vest as of the end of the fiscal year in which the Change in Control occurred if
the Company were to achieve the target level performance-based objective for
that fiscal year.
(2) If, in connection with the Change in Control,
subparagraph 3(c)(1) is not applicable and this Notice is continued, assumed or
replaced in the manner described in subparagraph 3(c)(1), and if within one year
after that Change in Control the Participant's employment with the Company and
all of its Subsidiaries (or with any successor entity) is terminated by the
employer for reasons other than Cause (as defined in Section 5), [or is
terminated by the Participant for Good Reason (as defined in Section 5),] then a
portion of the Units subject to this Award shall immediately vest. That portion
shall be equal to the number of Units subject to this Award that would vest as
of the end of the fiscal year in which the Participant's employment ended if the
Company were to achieve the target level performance-based objective for that
fiscal year.
4. Settlement of Units. As soon as practicable after any Vesting Date,
but no later than March 15 of the year following the calendar year in which the
Vesting Date occurs, the Company shall cause to be issued to the Participant (or
his or her beneficiary or personal representative) one share of Stock in payment
and settlement of each vested Unit. The Company may withhold from the number of
such shares to be delivered in settlement of the Units any shares required for
the payment of withholding taxes as provided in Paragraph 6(e) below.
5. Definitions. The following terms used in this Notice will have the
meanings indicated:
(a) "Cause" means what the term is expressly defined to mean
in a then-effective employment agreement between the Participant and the
Company, or in the absence of any such then-effective agreement or definition,
means:
(1) Participant's commission of any act constituting
a felony or Participant's conviction or guilty or no contest plea to any
criminal misdemeanor involving fraud, misrepresentation or theft;
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(2) gross misconduct or any act of fraud, disloyalty
or dishonesty by Participant related to or connected with Participant's
employment by the Company or otherwise likely to cause material harm to the
Company or its reputation;
(3) a material violation by Participant of the
Company's policies or codes of conduct; or
(4) the willful or material breach by Participant of
any agreement between the Participant and the Company.
(b) "Change in Control" means what the term (or a word of like
import) is expressly defined to mean in a then-effective employment agreement
between the Participant and the Company, or in the absence of any such
then-effective agreement or definition, means a change in the ownership or
control of the Company effected through any of the following transactions:
(1) a merger, consolidation or reorganization
approved by the Company's stockholders, unless securities representing more than
fifty percent (50%) of the total combined voting power of the outstanding voting
securities of the successor corporation are immediately thereafter beneficially
owned, directly or indirectly and in substantially the same proportion, by the
persons who beneficially owned the Company's outstanding voting securities
immediately prior to such transaction;
(2) any stockholder-approved sale, transfer or other
disposition of all or substantially all of the Company's assets in complete
liquidation or dissolution of the Company;
(3) any transaction or series of related transactions
pursuant to which any person or any group of persons comprising a "group" within
the meaning of Rule 13d-5(b)(1) under the Securities Exchange Act of 1934, as
amended (other than the Company or a person that, prior to such transaction or
series of related transactions, directly or indirectly controls, is controlled
by or is under common control with, the Company) becomes directly or indirectly
the beneficial owner (within the meaning of Rule 13d-3 of the Securities
Exchange Act of 1934, as amended) of securities possessing (or convertible into
or exercisable for securities possessing) thirty percent (30%) or more of the
total combined voting power of the Company's securities (determined by the power
to vote with respect to the elections of Board members) outstanding immediately
after the consummation of such transaction or series of related transactions,
whether such transaction involves a direct issuance from the Company or the
acquisition of outstanding securities held by one or more of the Company's
stockholders; or
(4) a change in the composition of the Board
over a period of eighteen (18) consecutive months or less such that a majority
of the Board members ceases to be comprised of individuals who have been Board
members continuously since the beginning of such period.
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(c) "Disability" means what the term is expressly defined to
mean in a then-effective employment agreement between the Participant and the
Company, or in the absence of any such then-effective agreement or definition,
means any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than six months, where such impairment causes the Participant to be
unable to perform the duties of Participant's position of employment or any
substantially similar position of employment.
(d) "Good Reason" means what the term is expressly defined to
mean in a then-effective employment agreement between the Participant and the
Company, or in the absence of any such then-effective agreement or definition,
means any of the following conditions arising without the consent of
Participant, provided that Participant has first given written notice to the
Company of the existence of the condition within 90 days of its first
occurrence, and the Company has failed to remedy the condition within 30 days
thereafter:
(1) a material diminution in the Participant's base
salary;
(2) a material diminution in the Participant's
authority, duties, or responsibilities;
(3) relocation of Participant's principal office more
than 50 miles from its current location; or
(4) any other action or inaction that constitutes a
material breach by the Company of any terms or conditions of any agreement
between the Company and the participant, which breach has not been caused by
Participant.
(e) "Performance Period" means the period of three consecutive
fiscal years of the Company beginning on the Performance Period Commencement
Date and ending on the Performance Period Expiration Date specified in the table
at the beginning of this Notice.
6. General Provisions.
(a) Employment. This Notice shall not confer on Participant
any right with respect to continuance of employment by the Company or any of its
Affiliates, nor will it interfere in any way with the right of the Company to
terminate such employment. Nothing in this Notice shall be construed as creating
an employment contract for any specified term between Participant and the
Company or any Affiliate.
(b) Securities Law Compliance. No shares of Stock issuable
pursuant to this Notice shall be issued and delivered unless the issuance of the
shares complies with all applicable legal requirements, including compliance
with the provisions of applicable state securities laws, the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended, and the
requirements of the exchanges on which the Company's Stock may, at the time, be
listed.
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(c) Mergers, Recapitalizations, Stock Splits, Etc. Pursuant
and subject to Section 12 of the Plan, certain changes in the number of shares
or character of the Stock of the Company (through merger, consolidation,
exchange, reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an
equitable adjustment to avoid dilution or enlargement of Participant's rights
with respect to any Units subject to this Award which have not yet been settled
as provided in Section 4.
(d) Shares Reserved. The Company shall at all times during the
term of this Award reserve and keep available such number of shares of Stock as
will be sufficient to satisfy the requirements of this Award.
(e) Withholding Taxes. The Company shall have the right to (i)
withhold from any cash payment under the Plan or any other compensation owed to
the Participant an amount sufficient to cover any required withholding taxes in
connection with the settlement of Units subject to this Award, and (ii) require
a Participant or other person receiving shares of Stock under this Award to pay
a cash amount sufficient to cover any required withholding taxes before actual
receipt of those shares. In lieu of all or any part of a cash payment from the
Participant as provided above, the Committee may permit the Participant to cover
all or any part of the required withholdings (up to the Participant's minimum
required tax withholding rate or such other rate that will not trigger a
negative accounting impact) through a reduction in the number of shares
delivered or a delivery or tender to the Company of shares of Stock held by the
Participant, in each case valued in the same manner as used in computing the
withholding taxes under applicable laws.
(f) 2003 Equity Incentive Plan. The Award evidenced by this
Notice is granted pursuant to the Plan, a copy of which Plan has been made
available to Participant and is hereby incorporated into this Notice. This
Notice is subject to and in all respects limited and conditioned as provided in
the Plan. The Plan governs this Notice and, in the event of any questions as to
the construction of this Notice or in the event of a conflict between the Plan
and this Notice, the Plan shall govern, except as the Plan otherwise provides.
(g) Scope of Notice. This Notice shall bind and inure to the
benefit of the Company, its Affiliates and their successors and assigns, and
shall bind and inure to the benefit of Participant and any successor or
successors of Participant permitted herein. This Award is expressly subject to
all terms and conditions contained in the Plan and in this Notice, and
Participant shall comply with all such terms and conditions.
(h) Arbitration. Any dispute arising out of or relating to
this Notice or the alleged breach of it, or the making of this Notice, including
claims of fraud in the inducement, shall be discussed between the disputing
parties in a good faith effort to arrive at a mutual settlement of any such
controversy. If, notwithstanding, such dispute cannot be resolved, such dispute
shall be settled by binding arbitration. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall be a retired state or federal judge or an attorney who has
practiced securities or business litigation for at least 10 years. If the
parties cannot agree on an arbitrator within 20 days, any party may request that
the chief judge of the District Court of Hennepin County, Minnesota, select an
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arbitrator. Arbitration will be conducted pursuant to the provisions of this
Notice, and the commercial arbitration rules of the American Arbitration
Association, unless such rules are inconsistent with the provisions of this
Notice. Limited civil discovery shall be permitted for the production of
documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys' fees. Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be Hennepin
County, Minnesota.
(i) Delay in Payment for Specified Employee. In the event this
Award is subject to Code Section 409A and the Administrator determines that the
Participant is a "specified employee" within the meaning of Code Section 409A,
then the issuance of any shares of Stock due to the Participant's separation
from service (as defined in Code Section 409A) shall not be issued earlier than
the date that is six months after such separation from service, but shall be
issued during the calendar year following the year in which the Participant's
separation from service occurs and within thirty (30) days after the earliest
possible date permitted under Code Section 409A.
(j) Choice of Law. This Notice is subject to the laws of the
State of Minnesota and shall be construed and interpreted thereunder (without
regard to its conflicts of laws principles).
BUFFALO WILD WINGS, INC.
By:
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Its:
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Exhibit A to
Notice of Performance-Based Restricted Unit Award
Performance-Based Objectives
Performance Period: ___________, 200X through _________, 20XX
The determination of the number of Units that will vest on each Scheduled
Vesting Date during the Performance Period specified above as provided in
Section 3(a) of the Notice will be determined as follows:
1. The Company's Cumulative Net Income for the period beginning on the first day
of the Performance Period and ending on the applicable Scheduled Vesting Date
(the "relevant period") will be determined.
2. Based on that actual Cumulative Net Income, the Performance Factor for the
relevant period will be determined from the following table by determining where
the Company's actual Cumulative Net Income falls relative to the goals specified
in the applicable column of the table, and then selecting the corresponding
Performance Factor. If the Company's actual Cumulative Net Income for any
relevant period is between two amounts shown in the applicable column of the
table, the corresponding Performance Factor will be determined by linear
interpolation between the two relevant Performance Factors shown in the table.
If actual Cumulative Net Income for the relevant period is less than the Minimum
Goal specified, the Performance Factor is zero, and if it greater than the
Maximum Goal, the Performance Factor is 100%.
Company's Cumulative Net Income Goals During the Portion of the
Performance Period Ending:
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Performance Factor [Sch Vesting Date 1] [Sch Vesting Date 2] [Sch Vesting Date 3]
------------------ -------------------- -------------------- --------------------
100% (Maximum Goal) $ $ $
50% (Target Goal) $ $ $
37.5% (Minimum Goal) $ $ $
3. The number of Units that will vest as of the Scheduled Vesting Date will be
calculated using the following formula:
(Performance Factor x Cumulative Vesting Percentage x Number of Units
Awarded) - Number of Previously Vested Units
where:
o "Performance Factor" is the percentage determined as provided in item
2 above;
o "Cumulative Vesting Percentage" is the percentage in the table at the
beginning of the Notice that corresponds to the Scheduled Vesting Date
marking the end of the relevant period;
o "Number of Units Awarded" is the number in the table at the beginning
of the Notice; and
o "Number of Previously Vested Units" is the number of Units subject to
the Award that had already vested during the Performance Period prior
to the applicable Scheduled Vesting Date.
4. For purposes of this Exhibit A, the Company's "Cumulative Net Income" for any
period shall mean the Company's net income for that period as calculated under
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U.S. generally accepted accounting principles, subject to adjustment as set
forth in the "Exception Guidelines for 2008 Long-Term Incentive Program
Measures," dated February 16, 2008.
5. As an example, to compute the number of Units that will vest on the second
Scheduled Vesting Date, assume the following facts: (i) the Number of Units
Awarded was 10,000; (ii) the Number of Previously Vested Units was 1,000 (vested
on the first Scheduled Vesting Date); (iii) the Company's actual Cumulative Net
Income for the relevant period ending on the second Scheduled Vesting Date was
half-way between the Minimum Goal and the Target Goal. Under these facts, the
Performance Factor would be 43.75% (half-way between 37.5% and 50%), the
Cumulative Vesting Percentage would be 50%, and the number of Units vesting on
the second Scheduled Vesting Date would be:
(43.75% x 50% x 10,000) - 1,000 = 1,187 Units
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