Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “ Agreement ”) is made as of
this 17 th day of April, 2007, and was originally
made and entered into as of September 7, 2005, by and between RED
ROBIN GOURMET BURGERS, INC., a Delaware corporation (the “
Company ”), and DENNIS B. MULLEN (the “
Executive ”).
RECITAL
WHEREAS, the Company, for itself and
its wholly owned subsidiary, Red Robin International, Inc., a
Nevada corporation (“ RRI ”), entered into an
Employment Agreement with the Executive dated September 7, 2005
(the “ Original Agreement ”) that established
the Company’s right to the services of the Executive in the
capacities described below, on the terms and conditions hereinafter
set forth, and the Executive accepted such employment on such terms
and conditions;
WHEREAS, the Company, for itself and
RRI, desires to amend certain terms and conditions of the Original
Agreement.
AGREEMENT
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
1.
Employment Period
. The Company, through RRI,
hereby employs the Executive, and the Executive hereby accepts such
employment, upon the terms and conditions hereinafter set
forth. The term of the Executive’s employment hereunder
shall be deemed to have commenced on August 11, 2005 (the “
Effective Date ”), and shall continue through and
including December 31, 2010, subject to earlier termination as
provided herein (such term being referred to herein as the “
Employment Period ”). RRI shall be the
“employer” for tax, legal reporting, payroll processing
and similar purposes.
2.
Position and Duties
.
(a)
During the Employment Period, the
Executive shall be the Chairman and Chief Executive Officer of the
Company, with such duties and responsibilities as are assigned to
him by the Board of Directors of the Company (the “
Board ”) consistent with his position as Chairman and
Chief Executive Officer of the Company. Notwithstanding the
foregoing, if, during the Employment Period, a majority of the
Board determines that the Executive should relinquish his position
as Chief Executive Officer in connection with the hiring or
promotion of another individual into such position, and the
Executive remains in his position as Chairman of the Board, this
Agreement shall remain in full force and effect (with such
modifications, including appropriate modifications to
Section 2(b) and (c) and Section 3 as are mutually agreed
upon) and such change in officer position shall not constitute a
termination under Section 4 hereof.
(b)
During the Employment Period, the
Executive shall devote substantially all of his skill, knowledge
and working time to the business and affairs of the
Company
and its subsidiaries; provided,
however, that the Executive may continue to serve in his current
positions as trustee and/or chairman of certain of the Janus
Funds. The Executive shall perform his services primarily at
the Company’s headquarters in Denver, Colorado. The
Executive shall use his best efforts to carry out his
responsibilities under this Agreement faithfully and
efficiently.
(c)
In his position as Chairman and
Chief Executive Officer, the Executive shall, subject to the
oversight of the Board and the “Authorization Limits”
established from time to time by the Board, have full authority and
responsibility to manage the operation of the Company’s
restaurants and franchise system, including the hiring and
discharge of employees of the Company and its subsidiaries,
closing, selling, developing and opening restaurants as
contemplated by the annual budget approved by the Board (the
“ Annual Plan ”), establishing and administering
the Company’s marketing plan, making improvements in and
refurbishing the Company’s restaurants consistent with the
capital expenditure budget in the Annual Plan, administering and
managing the day-to-day operation of the restaurants, granting new
franchises and administering and managing the franchise operations
consistent with the Annual Plan; provided that without the
approval of the Board, the Executive shall not take any major
action not contemplated by or consistent with the Annual Plan and
the Authority Limits.
3.
Compensation
.
(a)
Base Salary
. During the Employment
Period, the Executive shall receive from the Company an annual base
salary (“ Annual Base Salary ”) at the rate of
$675,000, payable in accordance with the Company’s and
RRI’s normal payroll policy. The Executive’s
Annual Base Salary shall be subject to annual review by the Board
of Directors during the Employment Term; provided ,
however , subject to the following sentence, that so long as
the Executive holds both the office of Chief Executive Officer and
Chairman of the Board, the Executive’s Annual Base Salary may
not be reduced below $675,000. In the event that the
Executive no longer serves as Chief Executive Officer but remains
Chairman of the Board as contemplated above in Section 2(a), his
Annual Base Salary will be modified to an amount mutually agreed
upon by the Company and the Executive at such time, but in no
event, without the consent of the Executive, shall such amount be
less than 50% of the Annual Base Salary in effect immediately prior
to the change in position.
(b)
Annual Incentive
Compensation . In
addition to the Annual Base Salary, the Executive shall be eligible
to receive a cash bonus each fiscal year during the Employment
Period as determined in accordance with the Company’s annual
incentive plan and as approved by the compensation committee of the
Board. In the event that the Executive no longer serves as
Chief Executive Officer but remains Chairman of the Board as
contemplated above, his target cash bonus will be modified to an
amount mutually agreed upon by the Company and the Executive at
such time, but in no event, without the consent of the Executive,
shall such amount be less than 50% of the target cash bonus in
effect immediately prior to the change in position.
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(c)
Other Benefits
. During the Employment
Period: (i) the Executive shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies
and programs of the Company and RRI to the same extent as other
senior executive employees, and (ii) the Executive and/or the
Executive’s family, as the case may be, shall be eligible to
participate in, and shall receive all benefits under, all welfare
benefit plans, practices, policies and programs provided by the
Company and RRI (including, to the extent provided, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life insurance, group life insurance,
accidental death and travel accident insurance plans and programs)
to the same extent as other senior executive employees.
(d)
Expenses . During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable travel and other expenses incurred by the Executive in
carrying out the Executive’s duties under this Agreement,
provided that the Executive complies with the policies, practices
and procedures of the Company and RRI for submission of expense
reports, receipts or similar documentation of the incurrence and
purpose of such expenses (collectively referred to herein as
“ Expense Policies ”).
(e)
Commuting Expenses
. During the Employment
Period, the Company and RRI shall pay or reimburse the Executive
for travel expenses actually incurred by the Executive in commuting
between Arizona and Denver, Colorado; provided that the Executive
complies with the Expense Policies, and provided further that such
expenses shall be subject to review for reasonableness at least
quarterly by the chairman of the compensation committee of the
Board.
(f)
Air Travel
. The Executive may fly on
charter or private aircraft to commute from Arizona to Denver,
Colorado and otherwise for appropriate business use, subject in
each case to the Executive’s compliance with the Expense
Policies and the Company’s policy for non-commercial air
travel as established by the Board.
(g)
Automobile Allowance
. During the Employment
Period, the Executive shall be paid a car allowance in the gross
amount of $1,000 per month.
(h)
Grant of Restricted
Stock . Effective
as of the date of this Agreement, the Company granted to the
Executive Seventy-Five Thousand (75,000) shares of restricted
Common Stock under the Company’s 2004 Performance Incentive
Plan, and otherwise on the terms and conditions set forth in the
Restricted Stock Award Agreement between the Company and the
Executive.
(i)
The Company reserves the right to
modify, suspend or discontinue any and all of the above-referenced
employee benefit plans, practices, policies and programs at any
time without recourse by the Executive so long as such action is
taken with respect to senior executives generally and does not
single out the Executive.
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4.
Termination
.
(a)
Death or Disability
. The Executive’s
employment shall terminate automatically upon the Executive’s
death. If the Company determines in good faith that the
Disability of the Executive has occurred, it may give to the
Executive written notice of its intention to terminate the
Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive, provided that, within the 30 days after such receipt,
the Executive shall not have returned to full-time performance of
his duties.
(b)
Cause . The Company may terminate the
Executive’s employment at any time for Cause.
(c)
Transition Event
. With the mutual approval of
the Executive and a majority of the Board, the Company may
terminate the Executive’s employment as Chief Executive
Officer and Chairman of the Board in connection with the hiring or
promotion of another individual into such positions (a “
Transition Event ”), by delivery of not less than
thirty (30) days’ advance written notice to the Executive of
the effective date of termination.
(d)
By the Company without
Cause . The Company
may terminate the Executive’s employment at any time without
Cause by delivery of not less than thirty (30) days’ advance
written notice to the Executive of the effective date of
termination. In the event the Board determines that Executive
should relinquish his position as Chief Executive Officer as
contemplated by Section 2(a) hereof, but the parties are
unable to agree on appropriate modification to this Agreement, then
so long as the modifications proposed by the Board comply with the
minimum requirements set forth in Sections 3(a) and (b) hereof, the
subsequent termination of the Executive’s employment shall
have the same effect under only this Agreement as a resignation of
Executive (and shall not be deemed a resignation under any other
agreement between the Company and Executive, including the
Restricted Stock Grant Agreements dated February 27, 2007 and April
17, 2007).
(e)
Change in Control
. Executive’s employment
shall terminate upon the occurrence of a Change in Control
Event.
(f)
Expiration of Stated
Term . Unless
earlier terminated pursuant to the preceding subparagraphs of this
Section 4 or by the Executive’s earlier resignation, the
Executive’s employment shall otherwise terminate
automatically upon the expiration of the stated term of this
Agreement.
(g)
Obligations of the Company Upon
Termination .
(i)
Death, Disability or
Resignation . If
the Executive’s employment is terminated by reason of the
Executive’s Death, Disability or resignation, this Agreement
shall terminate without further obligations to the Executive or his
legal representatives under this Agreement, other than for
(A) payment of the sum of (1) the Executive’s
Annual Base Salary through the date of termination to
the
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extent not theretofore paid, and
(2) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any
accrued vacation pay, in each case to the extent not theretofore
paid (the sum of the amounts described in clauses (1) and (2)
shall be hereinafter referred to as the “ Accrued
Obligations ”), which Accrued Obligations shall be paid
to the Executive or his estate or beneficiary, as applicable, in a
lump sum in cash within 30 days of the date of termination;
(B) payment on the next bonus payment date immediately
following the effective date of termination of a pro rata share
(determined on the basis of the number of days during which the
Executive was employed by the Company during the applicable fiscal
year prior to the effective date of termination) of the bonus that
would otherwise be payable pursuant to Section 3(b) hereof had
the Executive continued to be employed by the Company on such bonus
payment date; and (C) payment to the Executive or his estate
or beneficiary, as applicable, of any amounts due pursuant to the
terms of any applicable welfare benefit plans; provided ,
however , that as conditions precedent to receiving the
payments and benefits provided for in this Section 4(e)(i) in the
event of Executive’s resignation (other than payment of the
Accrued Obligations), the Executive shall first execute and deliver
to the Company and RRI a general release agreement substantially in
the form attached hereto as Exhibit A , and all rights of
the Executive thereunder or under applicable law to rescind or
revoke the release shall have expired.
(ii)
Cause . If the Executive’s employment is
terminated by the Company for Cause, this Agreement shall terminate
without further obligations to the Executive other than for the
timely payment of Accrued Obligations through the date of
termination. If it is subsequently determined that the
Company did not have Cause for termination pursuant to
Section 4(b) hereof, then the Company’s decision to
terminate shall be deemed to have been made under Section 4(c)
hereof, and the amounts payable under Section 4(e)(iv) hereof
shall be the only amounts the Executive may receive on account of
his termination.
(iii)
Transition Event
. If, prior to the expiration
of the stated term of this Agreement, the Company terminates the
Executive’s employment in connection with a Transition Event,
this Agreement shall terminate without further obligations to the
Executive under this Agreement, other than for (A) timely
payment of Accrued Obligations through the effective date of
termination, (B) on the next bonus payment date immediately
following the effective date of termination, payment of the pro
rata share (determined on the basis on the number of days during
which the Executive served the Company during the applicable fiscal
year prior to the effective date of termination) of the bonus that
would otherwise have been payable had the Executive continued to be
employed by the Company on such bonus payment date; and
(C) payment to the Executive of any amounts due pursuant to
the terms of any applicable welfare benefit plans; provided
, however , that as conditions precedent to receiving the
payments and benefits provided for in this Section 4(e)(iii) (other
than payment of the Accrued Obligations), the Executive shall first
execute and deliver to the Company and RRI a general release
agreement substantially in the form attached
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hereto as Exhibit B , and all
rights of the Executive thereunder or under applicable law to
rescind or revoke the release shall have expired.
(iv)
By the Company upon Change in
Control Event or without Cause . If, prior to the expiration of the
stated term of this Agreement, the Company terminates the
Executive’s employment upon the occurrence of a Change in
Control Event or for any reason other than for Cause or other than
in connection with a Transition Event, this Agreement shall
terminate without further obligations to the Executive other than:
(1) timely payment of Accrued Obligations through the effective
date of termination; (2) continued payment of the Executive’s
Annual Base Salary as in effect immediately prior to the date of
termination (such payments to be made in accordance with the
Company’s normal payroll practices) for a period consisting
of the lesser of (A) twelve (12) months following the effective
date of termination or (B) the remainder of the existing Employment
Period (the applicable period, being referred to herein as the
“ Severance Period ”); (3) on the next bonus
payment date immediately following the effective date of
termination, payment of the pro rata share (determined on the basis
on the number of days during which the Executive served the Company
during the applicable fiscal year prior to the effective date of
termination) of the bonus that would otherwise have been payable
had the Executive continued to be employed by the Company on such
bonus payment date, subject in each case of the benefits in clauses
(1), (2) and (3) to standard withholdings and other authorized
deductions; and (4) payment (or reimbursement to the Executive) of
the cost of continuing coverage for the Executive and his spouse
under the Company’s and RRI’s then existing medical,
dental and prescription insurance plans for the Severance Period
(provided that during any period when the Executive is eligible to
receive such benefits under any employer-provided plan or through
any government-sponsored program such as Medicare, the benefits
provided under this clause (4) may be made secondary to those
provided under such other plan); provided , however ,
that as conditions precedent to receiving the payments and benefits
provided for in this Section 4(e)(iv) (other than payment of the
Accrued Obligations), the Executive shall first execute and deliver
to the Company and RRI a general release agreement substantially in
the form attached hereto as Exhibit A , and all rights of
the Executive thereunder or under applicable law to rescind or
revoke the release shall have expired.
(v)
Expiration of Stated
Term . In the event
that the Executive’s employment is otherwise terminated by
reason of the expiration of the term of this Agreement, the Company
shall have no further obligations to the Executive other than for
(A) the timely payment of Accrued Obligations through the date
of termination; (B) payment on the next bonus payment date
immediately following the effective date of termination of a pro
rata share (determined on the basis of the number of days during
which the Executive was employed by the Company during the
applicable fiscal year prior to the effective date of termination)
of the bonus that would otherwise be payable pursuant to
Section 3(b) hereof had the Executive continued to be employed
by the Company on such bonus payment
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date; and (C) payment to the
Executive of any amounts due pursuant to the terms of any
applicable welfare benefit plans.
(vi)
Exclusive Remedy
. The Executive agrees that
the payments contemplated by this Section 4(e) shall
constitute the exclusive and sole remedy for any termination of his
employment, and the Executive covenants not to assert or pursue any
other remedies, at law or in equity, with respect to any
termination of employment; provided, however, that
nothing contained in this Section 4(e)(vi) shall prevent the
Executive from otherwise challenging in a subsequent arbitration
proceeding a determination by the Company that it was entitled to
terminate the Executive’s employment hereunder for
Cause.
(h)
Survival of Certain Obligations
Following Termination . Notwithstanding any other provision
contained in this Agreement, the prov
