Exhibit 10.46

 

2016 EMPLOYMENT AGREEMENT

(Chris Jacobsen)

 

THIS 2016 EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the date
of execution by both parties by and between TEXAS ROADHOUSE MANAGEMENT CORP., a
Kentucky corporation (the “Company”), and S. CHRIS JACOBSEN, a resident of the
Commonwealth of Kentucky (“Executive”).

 

RECITALS

 

A.     Executive will be employed as the Chief Marketing Officer of Texas
Roadhouse, Inc.

 

B.     Executive and the Company each desire to formalize Executive’s employment
with this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and the respective
agreements of the Company and Executive set forth below, the Company and
Executive, intending to be legally bound, agree as follows:

 

1.     Effective Date. The terms and conditions of Executive’s employment
hereunder shall become effective February 11, 2016 (the “Effective Date”).

 

2.     Employment. Subject to all the terms and conditions of this Agreement,
Executive’s period of employment under this Agreement shall be the period
commencing on the Effective Date and ending on January 7, 2019 (the
“Third Anniversary Date”), which term, unless otherwise agreed to by the
parties, shall be extended on the Third Anniversary Date and on each anniversary
of that date thereafter, for a period of one year thereafter (which term
together with any such extensions, if any, shall be hereinafter defined as the
“Term”), unless Executive’s employment terminates earlier in accordance with
Section 9 hereof.  Thereafter, if Executive continues in the employ of the
Company, the employment relationship shall be at will, terminable by either
Executive or the Company at any time and for any reason, with or without cause,
and subject to such terms and conditions established by the Company from time to
time.

 

3.     Position and Duties. 

 

(a)     Employment with the Company. While Executive is employed by the Company
during the Term, Executive shall be employed as the Chief Marketing Officer of
Texas Roadhouse, Inc., and such other titles as the Company may designate, and
shall perform such duties and responsibilities as the Company shall assign to
him from time to time, including duties and responsibilities relating to Texas
Roadhouse, Inc.’s wholly-owned and partially owned subsidiaries and other
affiliates.

Page 1 of 17

--------------------------------------------------------------------------------

 

(b)     Performance of Duties and Responsibilities. Executive shall serve the
Company faithfully and to the best of his ability and shall devote his full
working time, attention and efforts to the business of the Company during his
employment with the Company hereunder. While Executive is employed by the
Company during the Term, Executive shall report to the President and to the
Chairman, Chief Executive Officer or to such other person as designated by the
Board of Directors of Texas Roadhouse, Inc. (the “Board”). Executive hereby
represents and confirms that he is under no contractual or legal commitments
that would prevent him from fulfilling his duties and responsibilities as set
forth in this Agreement. During his employment with the Company, Executive shall
not accept other employment or engage in other material business activity,
except as approved in writing by the Board.  Executive may participate in
charitable activities and personal investment activities to a reasonable extent,
and he may serve as a director of business organizations as approved by the
Board, so long as such activities and directorships do not interfere with the
performance of his duties and responsibilities hereunder.

 

4.     Compensation. 

 

(a)     Base Salary. While Executive is employed by the Company during the Term,
the Company shall pay to Executive a base salary at the rate of Three Hundred
Thousand and 00/100 Dollars ($300,000.00)  for each year of the Term.  Base
salary will be subject to deductions and withholdings, and shall be paid in
accordance with the Company’s normal payroll policies and procedures.  If
Executive’s employment is extended beyond the Third Anniversary Date as provided
in Section 2, then on or after the Third Anniversary Date, and annually
thereafter, Executive’s base salary may be reviewed by the Compensation
Committee of the Board to determine whether it should be adjusted.

 

(b)     Incentive Bonus. Commencing with the Company’s 2016 fiscal year and for
each full fiscal year thereafter that Executive is employed by the Company
during the Term, Executive shall be eligible for an annual incentive bonus, to
be paid annually, based upon achievement of defined goals established by the
Compensation Committee of the Board and in accordance with the terms of any
incentive plan of the Company in effect from time to time (the “Incentive
Bonus”).

 

(i)     The level of achievement of the objectives each fiscal year and the
amount payable as Incentive Bonus shall be determined in good faith by the
Compensation Committee of the Board. Any Incentive Bonus earned for a fiscal
year shall be paid to Executive in a single lump sum on or before the date that
is 2 ½ months following the last day of such fiscal year.

 

(ii)     Subject to the achievement of the goals established by the Compensation
Committee, as determined by the Compensation Committee, for each fiscal year of
this Agreement,  Executive shall be eligible for an annual target incentive
bonus of One Hundred Twenty Five Thousand and 00/100 Dollars ($125,000.00) for
the first year of the Term; One Hundred Seventy Five Thousand and 00/100 Dollars
($175,000.00) for the second year of the Term; and Two Hundred Thousand and
00/100 Dollars ($200,000.00) for the third year of the Term.  If Executive’s
employment is extended

Page 2 of 17

--------------------------------------------------------------------------------

 

beyond the Third Anniversary Date as provided in Section 2, then on or after the
Third Anniversary Date, and annually thereafter, Executive’s annual target
incentive bonus may be reviewed by the Compensation Committee of the Board to
determine whether it should be adjusted.

 

(c)     Stock Awards.

 

(i)     Service Stock Award.  Pursuant to Section 6  of the Texas Roadhouse,
Inc. 2013 Long Term Incentive Plan (the “Equity Incentive Plan”) in place on the
Effective Date, Executive shall be granted on the Effective Date a stock bonus
award whereby Executive has the conditional right to receive upon vesting 30,000
shares of the common stock of Texas Roadhouse, Inc. (the “Service Stock Award”),
provided this Agreement has been fully executed by both Executive and the
Company.  If this Agreement has not been fully executed by the Effective Date,
the Service Stock Award shall be granted to Executive on the date it is fully
executed.

 

The Service Stock Award shall vest in installments provided Executive continues
to provide services to the Company as of the date of vesting, as provided in the
Equity Incentive Plan, as follows:

 

January 8, 2017

    

10,000 

 

January 8, 2018

 

10,000 

 

January 8, 2019

 

10,000 

 

 

(ii)     Retention Stock Award.  Executive shall also be granted on the
Effective Date a stock bonus award whereby Executive has the conditional right
to receive upon vesting 5,000 shares of the common stock of Texas Roadhouse,
Inc. (the “Retention Stock Award”), provided this Agreement has been fully
executed by both Executive and the Company.  If this Agreement has not been
fully executed by the Effective Date, the Retention Stock Award shall be granted
to Executive on the date it is fully executed.

 

The Retention Stock Award shall vest on January 8, 2019 provided Executive
continues to provide services to the Company as of the date of vesting, as
provided in the Equity Incentive Plan.

 

(iii)     If Executive’s employment is terminated by the Company without Cause
(as defined below) following a Change in Control (as defined below) and before
the end of the Term of this Agreement, or if Executive’s employment is
terminated by Executive for Good Reason (as defined below) within 12 months
following a Change in Control and before the end of the Term, or prior to a
Change of Control at the direction of a person who has entered into an agreement
with the Company, the consummation of which will constitute a Change of Control,
and contingent upon Executive’s execution of a full release of claims in the
manner set forth in Section 10(h), all options or stock awards granted under any
stock option and stock incentive plans of the Company that are outstanding as of
the date of termination shall become immediately vested, and in the case

Page 3 of 17

--------------------------------------------------------------------------------

 

of stock options, shall immediately become exercisable in full and shall remain
exercisable until the earlier of (A) two years after termination of Executive’s
employment by the Company or (B) the option expiration date as set forth in the
applicable option agreement.

(iv)     A “Change of Control” shall mean that one of the following events has
taken place at any time during the Term:  

(A)     The shareholders of the Company approve one of the following:

(I)     Any merger or statutory plan of exchange involving the Company
(“Merger”) in which the Company is not the continuing or surviving corporation
or pursuant to which the Common Stock, $0.001 par value (“Common Stock”) would
be converted into cash, securities or other property, other than a Merger
involving the Company in which the holders of Common Stock immediately prior to
the Merger have substantially the same proportionate ownership of common stock
of the surviving corporation after the Merger; or

(II)     Any sale, lease, exchange, or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company or the adoption of any plan or proposal for the liquidation or
dissolution;

(B)     During any period of 12 months or less, individuals who at the beginning
of such period constituted a majority of the Board of Directors cease for any
reason to constitute a majority thereof unless the nomination or election of
such new directors was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period;  

(C)     A tender or exchange offer, other than one made by:

(I)     the Company, or by

(II)     W. Kent Taylor or any corporation, limited liability company,
partnership, or other entity in which W. Kent Taylor (x) owns a direct or
indirect ownership of 50% or more or (y) controls 50% or more of the voting
power (collectively, the “Taylor Parties”)

is made for the Common Stock (or securities convertible into Common Stock) and
such offer results in a portion of those securities being purchased and the
offeror after the consummation of the offer is the beneficial owner (as
determined pursuant to Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)), directly or indirectly, of securities
representing in excess of the greater of (a) at least 20 percent of the voting
power of outstanding securities of the Company or (b) the percentage of the

Page 4 of 17

--------------------------------------------------------------------------------

 

voting power of the outstanding securities of the Company collectively held by
all of the Taylor Parties; or

(D)     Any person other than a Taylor Party becomes the beneficial owner of
securities representing in excess of the greater of (i) 20 percent of the
aggregate voting power of the outstanding securities of the Company as disclosed
in a report on Schedule 13D of the Exchange Act or (ii) the percentage of the
voting power of the outstanding securities of the Company collectively held by
all of the Taylor Parties. 

Notwithstanding anything in the foregoing to the contrary, no Change of Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any
transaction which results in Executive, or a group of persons which includes
Executive, acquiring, directly or indirectly, securities representing 20 percent
or more of the voting power of outstanding securities of the Company. 

For purposes of this Section 4(c)(iv), the term “Company” shall mean Texas
Roadhouse, Inc.

(v)     A termination by Executive for “Good Reason” shall mean a termination
based on:

 

(A)     the assignment to Executive of a different title or job responsibilities
that result in a substantial decrease in the level of responsibility from those
in effect immediately prior to the Change of Control;

 

(B)     a reduction by the Company or the surviving company in Executive’s base
pay as in effect immediately prior to the Change of Control;

 

(C)     a significant reduction by the Company or the surviving company in total
benefits available to Executive under cash incentive, stock incentive and other
employee benefit plans after the Change of Control compared to the total package
of such benefits as in effect prior to the Change of Control;

 

(D)     the requirement by the Company or the surviving company that Executive
be based more than 50 miles from where Executive’s office is located immediately
prior to the Change of Control, except for required travel on company business
to an extent substantially consistent with the business travel obligations which
Executive undertook on behalf of the Company prior to the Change of Control; or

 

(E)     the failure by the Company to obtain from any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the

Page 5 of 17

--------------------------------------------------------------------------------

 

Company (“Successor”) the assent to this Agreement contemplated by Section 13(g)
hereof;

 

which is not cured within 30 days after Executive has delivered written notice
of such condition to the Employer.  In each case, Executive must give the
Company notice of the condition within 90 days of the initial existence of the
condition, and the separation from service must occur within a period of time
not to exceed two years (or such shorter period as provided herein) following
the initial existence of one or more of the conditions set forth above, or any
termination will not be considered to be for Good Reason.

 

(d)     Benefits. While Executive is employed by the Company during the Term,
Executive shall be entitled to participate in all employee benefit plans and
programs of the Company that are available to employees generally to the extent
that Executive meets the eligibility requirements for each individual plan or
program. The Company provides no assurance as to the adoption or continuance of
any particular employee benefit plan or program, and Executive’s participation
in any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto.

 

(e)     Expenses. While Executive is employed by the Company during the Term,
the Company shall reimburse Executive for all reasonable and necessary
out-of-pocket business, travel and entertainment expenses incurred by him in the
performance of his duties and responsibilities hereunder, subject to the
Company’s normal policies and procedures for expense verification and
documentation. Any reimbursements made under this Section 4(e) will be paid on
or before the last day of Executive’s taxable year following the taxable year in
which the expense is incurred.

 

(f)     Vacations and Holidays.  Executive shall be entitled to be absent from
his duties for the Company by reason of vacation each fiscal year in accordance
with the Company’s then-current policies in effect during the term.  Executive’s
vacation time each fiscal year will accrue in accordance with the Company’s
normal policies and procedures.  Executive shall coordinate his vacation
schedule with the Company so as not to impose an undue burden on the
Company.  In addition, Executive shall be entitled to such national and
religious holidays as the Company shall approve for all of its employees from
time to time.

 

(g)     Clawback Provisions.  Notwithstanding any other provision in this
Agreement to the contrary, any incentive based compensation, or any other
compensation, paid or payable to Executive pursuant to this Agreement or any
other agreement or arrangement with the Company which is subject to recovery
under any law, government regulation, order or stock exchange listing
requirement, will be subject to such deductions and clawback (recovery) as may
be required to be made pursuant to law, government regulation, order, stock
exchange listing requirement (or any policy of the Company adopted pursuant to
any such law, government, regulation, order or stock exchange listing
requirement).  Executive specifically authorizes the Company to withhold from
his future wages any amounts that may become due under this provision. 
Notwithstanding the

Page 6 of 17

--------------------------------------------------------------------------------

 

foregoing, Executive’s authorization to withhold amounts from future wages that
may become due under this provision does not apply and is specifically rescinded
in the event of a Change in Control.  This section 4(g) shall survive the
termination of this Agreement for a period of three (3) years.

 

5.     Affiliated Entities. As used in this Agreement, “Company” shall include
the Company, Texas Roadhouse, Inc. and each corporation, limited liability
company, partnership, or other entity that is controlled by Texas Roadhouse,
Inc., or is under common control with the Texas Roadhouse, Inc. (in each case
“control” meaning the direct or indirect ownership of 50% or more of all
outstanding equity interests).

 

6.     Confidential Information; Non-Disparagement.

 

(a)     Except as required in the performance of Executive’s duties as an
employee of the Company or as authorized in writing by the Board, Executive
shall not, either during Executive’s employment with the Company or at any time
thereafter, use, disclose or make accessible to any person any confidential
information for any purpose. “Confidential Information” means information
proprietary to the Company or its suppliers or prospective suppliers and not
generally known (including trade secret information) about the Company’s
suppliers, products, services, personnel, customers, recipes, pricing, sales
strategies, technology, computer software code, methods, processes, designs,
research, development systems, techniques, finances, accounting, purchasing, and
plans. All information disclosed to Executive or to which Executive obtains
access, whether originated by Executive or by others, during the period of
Executive’s employment by the Company (whether before, during, or after the
Term), shall be presumed to be Confidential Information if it is treated by the
Company as being Confidential Information or if Executive has a reasonable basis
to believe it to be Confidential Information. Executive acknowledges that the
above-described knowledge and information constitutes a unique and valuable
asset of the Company and represents a substantial investment of time and expense
by the Company, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Company would be wrongful and
would cause irreparable harm to the Company. During Executive’s employment with
the Company, Executive shall refrain from committing any acts that would
materially reduce the value of such knowledge or information to the Company. The
foregoing obligations of confidentiality shall not apply to any knowledge or
information that (i) is now or subsequently becomes generally publicly known, or
(ii) is required to be disclosed by law or legal process, other than as a direct
or indirect result of the breach of this Agreement by Executive.  Executive
acknowledges that the obligations imposed by this Section 6 are in addition to,
and not in place of, any obligations imposed by applicable statutory or common
law, and that nothing in this Section 6 prohibits Executive from reporting
violations of the law to a governmental agency or entity.

 

(b)     Executive shall not at any time during the Term and during the
Restricted Period (as defined below), or after the Term disparage the Company,
any of its affiliates and any of their respective officers and directors, and
shall not, without the prior written consent of the Company, disclose any
information he may have learned during

Page 7 of 17

--------------------------------------------------------------------------------

 

employment with the Company, including, but not limited to, any personal or
financial information about an officer or director or his or her family
member(s).

 

7.     Noncompetition Covenant. 

 

(a)     Agreement Not to Compete. During Executive’s employment with the Company
(whether before, during, or after the Term) and during the Restricted Period,
Executive shall not, directly or indirectly, on his own behalf or on behalf of
any person or entity other than the Company, including without limitation as a
proprietor, principal, agent, partner, officer, director, stockholder, employee,
member of any association, consultant or otherwise, engage in any business that
is directly competitive with the business of the Company, including without
limitation any business that operates one or more full-service, casual dining
steakhouse restaurants, within the 50 United States or any foreign country in
which the Company or its franchisees or its joint venture partners is operating
or in which Executive knows the Company or its franchisees or its joint venture
partners contemplates commencing operations during the Restricted Period.  The
provisions of this Section 7(a) shall also apply to any business which is
directly competitive with any other business which the Company acquires or
develops during Executive’s employment with the Company. 

 

(b)     Agreement Not to Hire. Except as required in the performance of
Executive’s duties as an employee of the Company, during Executive’s employment
with the Company (whether before, during, or after the Term) and during the
Restricted Period, Executive shall not, directly or indirectly, hire, engage or
solicit or induce or attempt to induce to cease working for the Company, any
person who is then an employee of the Company or who was an employee of the
Company during the six (6) month period immediately preceding Executive’s
termination of employment with the Company.

 

(c)     Agreement Not to Solicit. Except as required in the performance of
Executive’s duties as an employee of the Company, during Executive’s employment
with the Company (whether before, during, or after the Term) and during the
Restricted Period, Executive shall not, directly or indirectly, solicit,
request, advise, induce or attempt to induce any vendor, supplier or other
business contact of the Company to cancel, curtail, cease doing business with,
or otherwise adversely change its relationship with the Company.

 

(d)     Restricted Period.  “Restricted Period” hereunder means the period
commencing on the last day of Executive’s employment with the Company and ending
on the date that is two years following the last day of the Term.

 

(i)     In the event Executive’s employment is terminated by the Company without
Cause following a Change in Control as defined in this Agreement, and before the
end of the Term of this Agreement, the Restricted Period will begin on the last
day of Executive’s employment with the Company and end on the date the last
payment of the current base salary is made to Executive pursuant to paragraph
10(c).

Page 8 of 17

--------------------------------------------------------------------------------

 

(e)     Acknowledgment. Executive hereby acknowledges that the provisions of
this Section 7 are reasonable and necessary to protect the legitimate interests
of the Company and that any violation of this Section 7 by Executive shall cause
substantial and irreparable harm to the Company to such an extent that monetary
damages alone would be an inadequate remedy therefor. Therefore, in the event
that Executive violates any provision of this Section 7, the Company shall be
entitled to an injunction, in addition to all the other remedies it may have,
restraining Executive from violating or continuing to violate such provision.

 

(f)     Blue Pencil Doctrine. If the duration of, the scope of or any business
activity covered by any provision of this Section 7 is in excess of what is
determined to be valid and enforceable under applicable law, such provision
shall be construed to cover only that duration, scope or activity that is
determined to be valid and enforceable. Executive hereby acknowledges that this
Section 7 shall be given the construction that renders its provisions valid and
enforceable to the maximum extent, not exceeding its express terms, possible
under applicable law.

 

(g)     Permitted Equity Ownership. Ownership by Executive, as a passive
investment, of less than 2.5% of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 7.

 

8.     Intellectual Property. 

 

(a)     Disclosure and Assignment. As of the Effective Date, Executive hereby
transfers and assigns to the Company (or its designee) all right, title, and
interest of Executive in and to every idea, concept, invention, and improvement
(whether patented, patentable or not) conceived or reduced to practice by
Executive whether solely or in collaboration with others while he is employed by
the Company, and all copyrighted or copyrightable matter created by Executive
whether solely or in collaboration with others while he is employed by the
Company that relates to the Company’s business (collectively, “Creations”).
Executive shall communicate promptly and disclose to the Company, in such form
as the Company may request, all information, details, and data pertaining to
each Creation. Every copyrightable Creation, regardless of whether copyright
protection is sought or preserved by the Company, shall be a “work made for
hire” as defined in 17 U.S.C. § 101, and the Company shall own all rights in and
to such matter throughout the world, without the payment of any royalty or other
consideration to Executive or anyone claiming through Executive.

 

(b)     Trademarks. All right, title, and interest in and to any and all
trademarks, trade names, service marks, and logos adopted, used, or considered
for use by the Company during Executive’s employment (whether or not developed
by Executive) to identify the Company’s business or other goods or services
(collectively, the “Marks”), together with the goodwill appurtenant thereto, and
all other materials, ideas, or other property conceived, created, developed,
adopted, or improved by Executive solely or jointly during Executive’s
employment by the Company and relating to its business shall

Page 9 of 17

--------------------------------------------------------------------------------

 

be owned exclusively by the Company. Executive shall not have, and will not
claim to have, any right, title, or interest of any kind in or to the Marks or
such other property.

 

(c)     Documentation. Executive shall execute and deliver to the Company such
formal transfers and assignments and such other documents as the Company may
request to permit the Company (or its designee) to file and prosecute such
registration applications and other documents it deems useful to protect or
enforce its rights hereunder. Any idea, invention, copyrightable matter, or
other property relating to the Company’s business and disclosed by Executive
prior to the first anniversary of the effective date of Executive’s termination
of employment shall be deemed to be governed by the terms of this Section 8
unless proven by Executive to have been first conceived and made after such
termination date.

 

(d)     Non-Applicability. Executive is hereby notified that this Section 8 does
not apply to any invention for which no equipment, supplies, facility,
Confidential Information, or other trade secret information of the Company was
used and which was developed entirely on Executive’s own time, unless (i) the
invention relates (A) directly to the business of the Company or (B) to the
Company’s actual or demonstrably anticipated research or development, or (ii)
the invention results from any work performed by Executive for the Company.

 

9.     Termination of Employment. 

 

(a)     Executive’s employment with the Company shall terminate immediately
upon:

 

(i)      Executive’s receipt of written notice from the Company of the
termination of his employment;

 

(ii)        the Company’s receipt of Executive’s written or oral resignation
from the Company;

 

(iii)       Executive’s Disability (as defined below); or

 

(iv)       Executive’s death.

 

(b)     The date upon which Executive’s termination of employment with the
Company occurs shall be the “Termination Date.”

 

Provided that, for purposes of the timing of payments triggered by the
Termination Date under Section 10, the Termination Date shall not be considered
to have occurred until the date Executive and the Company reasonably anticipate
that (i) Executive will not perform any further services for the Company or any
other entity considered a single employer with the Company under Section 414(b)
or (c) of the Internal Revenue Code (but substituting 50% for 80% in the
application thereof) (the “Employer Group”), or (ii) the level of bona fide
services Executive will perform for the Employer Group after that date will

Page 10 of 17

--------------------------------------------------------------------------------

 

permanently decrease to less than 20% of the average level of bona fide services
performed over the previous 36 months (or if shorter over the duration of
service).    For this purpose, service performed as an employee or as an
independent contractor is counted, except that service as a member of the board
of directors of an Employer Group entity is not counted unless termination
benefits under this Employment Agreement are aggregated with benefits under any
other Employer Group plan or agreement in which Executive also participates as a
director.  Executive will not be treated as having a termination of his
employment while he is on military leave, sick leave or other bona fide leave of
absence if the leave does not exceed six months or, if longer, the period during
which Executive has a reemployment right under statute or contract.  If a bona
fide leave of absence extends beyond six months, Executive’s employment will be
considered to terminate on the first day after the end of such six month period,
or on the day after Executive’s statutory or contractual reemployment right
lapses, if later.  The Company will determine when Executive’s Termination Date
occurs based on all relevant facts and circumstances, in accordance with
Treasury Regulation Section 1.409A-1(h).

 

10.       Payments upon Termination of Employment. 

 

(a)     If Executive’s employment with the Company is terminated by reason of:

 

(i)

Executive’s abandonment of his employment or Executive’s resignation for any
reason (whether or not such resignation is set forth in writing or otherwise
communicated to the Company);

 

(ii)

termination of Executive’s employment by the Company for Cause (as defined
below); or

 

(iii)

termination of Executive’s employment by the Company without Cause following
expiration of the Term;

 

the Company shall pay to Executive his then-current base salary through the
Termination Date.

 

(b)     Except in the case of a Change in Control, which is governed by Section
10(c) below, if  Executive’s employment with the Company is terminated by the
Company pursuant to Section 9(a)(i) effective prior to the expiration of the
Term for any reason other than for Cause (as defined below), then the Company
shall pay to Executive, subject to Section 10(h) of this Agreement:

 

(i)

his then-current base salary through the Termination Date;

 

(ii)

any earned and unpaid annual Incentive Bonus for the fiscal year immediately
preceding the Termination Date and any annual Incentive Bonus earned on a
prorated basis through the Termination Date, payable after the actual amount of

Page 11 of 17

--------------------------------------------------------------------------------

 

Incentive Bonus is calculated but not later than the date that is 2 ½ months
following the last day of the applicable fiscal year;

 

(iii)

the amount of his then current base salary that Executive would have received
from the Termination Date through the date that is 180 days following such
Termination Date; and

 

(iv)

$62,500.00 with respect to the first year of the Term; $87,500.00 with respect
to the second year of the Term; and $100,000.00 with respect to the third year
of the Term.

 

Any amount payable to Executive pursuant to Section 10(b)(iii) shall be subject
to deductions and withholdings and shall be paid to Executive by the Company in
the same periodic installments in accordance with the Company’s regular payroll
practices commencing on the first normal payroll date of the Company following
the expiration of all applicable rescission periods provided by law; provided,
however, that at the option of the Compensation Committee and if in compliance
with Code Section 409A, amounts payable pursuant to Section 10(b)(iii) may be
paid in a lump sum.  Any amount payable to Executive pursuant to Section
10(b)(ii) shall be paid to Executive by the Company in the same manner and at
the same time that Incentive Bonus payments are made to current named executive
officers of Texas Roadhouse, Inc., as that term is applied by Texas Roadhouse,
Inc. in accordance with the rules and regulations of the U.S. Securities and
Exchange Commission (the “Named Executive Officers”), but no earlier than the
first normal payroll date of the Company following the expiration of all
applicable rescission periods provided by law.  Any amount payable to Executive
pursuant to Section 10(b)(iv) shall be paid in a lump sum.

 

(c)     If Executive’s employment is terminated by the Company without Cause
following a Change in Control as defined in this Agreement and before the end of
the Term of this Agreement, or if Executive’s employment is terminated by
Executive for Good Reason following a Change in Control and before the end of
the Term, then the Company shall pay to Executive, subject to Executive’s
compliance with Section 10(h) of this Agreement, an amount equal to his then
current base salary and incentive bonus through the end of Term of the
Agreement, paid in the same periodic installments in accordance with the
Company’s regular payroll practices following the expiration of all applicable
rescission periods provided by law,  but in no event will the Company pay
Executive less than one year of his current base salary and incentive bonus.  At
the option of the Compensation Committee and if in compliance with Code Section
409A, amounts payable pursuant to Section 10(c) may be paid in a lump sum.

 

(d)     If Executive’s employment with the Company is terminated effective prior
to the expiration of the Term by reason of Executive’s death or Disability, the
Company shall pay to Executive or his beneficiary or his estate, as the case may
be;

 

(i)

his then-current base salary through the Termination Date;

Page 12 of 17

--------------------------------------------------------------------------------

 

(ii)

any earned and unpaid annual Incentive Bonus for the fiscal year immediately
preceding the Termination Date and any annual Incentive Bonus earned on a
prorated basis through the Termination Date, payable after the actual amount of
Incentive Bonus is calculated but not later than the date that is 2 ½ months
following the last day of the applicable fiscal year;

 

(iii)

the amount of his then current base salary that Executive would have received
from the Termination Date through the date that is 180 days following such
Termination Date; and

 

(iv)

$62,500.00 with respect to the first year of the Term; $87,500.00 with respect
to the second year of the Term; and $100,000.00 with respect to the third year
of the Term.

 

Any amount payable to Executive pursuant to Section 10(d)(iii) shall be subject
to deductions and withholdings and shall be paid to Executive or his estate or
beneficiary by the Company in the same periodic installments in accordance with
the Company’s regular payroll practices commencing on the first normal payroll
date of the Company following the expiration of all applicable rescission
periods provided by law; provided, however, that at the option of the
Compensation Committee and if in compliance with Code Section 409A, amounts
payable pursuant to Section 10(d)(iii) may be paid in a lump sum.  Any amount
payable to Executive or his estate or beneficiary pursuant to Section 10(d)(ii)
shall be paid to Executive or his estate or beneficiary by the Company in the
same manner and at the same time that Incentive Bonus payments are made to
current Named Executive Officers, but no earlier than the first normal payroll
date of the Company. Any amount payable to Executive or his estate or
beneficiary pursuant to Section 10(d)(iv) shall be paid in a lump sum on the
first normal payroll date of the Company following the date that the applicable
rescission period is deemed to expire as set forth in subparagraph 10(h).

 

(e)      “Cause” hereunder shall mean:

 

(i)

an act or acts of dishonesty undertaken by Executive and intended to result in
substantial gain or personal enrichment of Executive at the expense of the
Company;

 

(ii)

unlawful conduct or gross misconduct that is willful and deliberate on
Executive’s part and that, in either event, is materially injurious to the
Company;

 

(iii)

the conviction of Executive of a felony;

 

(iv)

material and deliberate failure of Executive to perform his duties and
responsibilities hereunder or to satisfy his obligations as an officer or
employee of the Company, which failure has not been cured by Executive within
ten days after written notice thereof to Executive from the Company; or

Page 13 of 17

--------------------------------------------------------------------------------

 

(v)

material breach of any terms and conditions of this Agreement by Executive not
caused by the Company, which breach has not been cured by Executive within ten
days after written notice thereof to Executive from the Company.

 

(f)     “Disability” hereunder shall mean the inability of Executive to perform
on a full-time basis the duties and responsibilities of his employment with the
Company by reason of his illness or other physical or mental impairment or
condition, if such inability continues for an uninterrupted period of 45 days or
more during any 360-day period. A period of inability shall be “uninterrupted”
unless and until Executive returns to full-time work for a continuous period of
at least 30 days.

 

(g)     In the event of termination of Executive’s employment, the sole
obligation of the Company hereunder shall be its obligation to make the payments
called for by Sections 10(a), 10(b), 10(c) or 10(d) hereof, as the case may be,
and the Company shall have no other obligation to Executive or to his
beneficiary or his estate, except as otherwise provided by law.

 

(h)     Notwithstanding any other provision hereof, the Company shall not be
obligated to make any payments under Section 10(b)(ii) or (iii) or 10(c) of this
Agreement unless Executive has signed a full release of claims against the
Company, in a form and scope to be prescribed by the Board, all applicable
consideration periods and rescission periods provided by law shall have expired,
and Executive is in strict compliance with the terms of this Agreement as of the
dates of the payments.  Executive must execute and deliver such release to the
Company no later than the date specified by the Company and in no event later
than 50 days following Executive’s Termination Date, and the release will be
delivered by the Company to Executive at least 21 days (45 days where Executive
is required to be given 45 days to review and consider the release) before the
deadline set for its return.  For purposes of this Agreement and the
determination of the date on which payments or benefits will commence, the
applicable rescission period of a release shall be deemed to expire on the 60th
day following Executive’s termination of employment unless payment may be made
based on an earlier rescission expiration date in compliance with Code Section
409A.

 

11.     Return of Property. Upon termination of Executive’s employment with the
Company, Executive shall deliver promptly to the Company all records, files,
manuals, books, forms, documents, letters, memoranda, data, customer lists,
tables, photographs, video tapes, audio tapes, computer disks and other computer
storage media, and copies thereof, that are the property of the Company, or that
relate in any way to the business, products, services, personnel, customers,
prospective customers, suppliers, practices, or techniques of the Company, and
all other property of the Company (such as, for example,

Page 14 of 17

--------------------------------------------------------------------------------

 

computers, pagers, credit cards, and keys), whether or not containing
Confidential Information, that are in Executive’s possession or under
Executive’s control.

 

12.     Remedies. Executive acknowledges that it would be difficult to fully
compensate the Company for monetary damages resulting from any breach by him of
the provisions of Sections 6, 7, 8, and 11 hereof. Accordingly, in the event of
any actual or threatened breach of any such provisions, the Company shall, in
addition to any other remedies it may have, be entitled to injunctive and other
equitable relief to enforce such provisions, and such relief may be granted
without the necessity of proving actual monetary damages.

 

13.     Miscellaneous. 

 

(a)     Governing Law. This Agreement shall be governed by, subject to, and
construed in accordance with the laws of the Commonwealth of Kentucky without
regard to conflict of law principles. Any action relating to this Agreement
shall only be brought in a court of competent jurisdiction in the Commonwealth
of Kentucky, and the parties consent to the jurisdiction, venue and convenience
of such courts.

 

(b)      Jurisdiction and Law. Executive and the Company consent to jurisdiction
of the courts of the Commonwealth of Kentucky and/or the federal district
courts, Western District of Kentucky, for the purpose of resolving all issues of
law, equity, or fact, arising out of or in connection with this Agreement. Any
action involving claims of a breach of this Agreement shall be brought in such
courts. Each party consents to personal jurisdiction over such party in the
state and/or federal courts of Kentucky and hereby waives any defense of lack of
personal jurisdiction or forum non conveniens. Venue, for the purpose of all
such suits, shall be in Jefferson County, Commonwealth of Kentucky.

 

(c)     Entire Agreement. Except for any written stock option or stock award
agreement and related agreements between Executive and the Company, this
Agreement contains the entire agreement of the parties relating to Executive’s
employment with the Company and supersedes all prior agreements and
understandings with respect to such subject matter, and the parties hereto have
made no agreements, representations or warranties relating to the subject matter
of this Agreement that are not set forth herein.

 

(d)     No Violation of Other Agreements. Executive hereby represents and agrees
that neither (i) Executive’s entering into this Agreement, (ii) Executive’s
employment with the Company, nor (iii) Executive’s carrying out the provisions
of this Agreement, will violate any other agreement (oral, written or other) to
which Executive is a party or by which Executive is bound.

 

(e)       Amendments. No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by the parties hereto.

 

(f)     No Waiver. No term or condition of this Agreement shall be deemed to
have been waived, except by a statement in writing signed by the party against
whom enforcement of the waiver is sought. Any written waiver shall not be deemed
a continuing

Page 15 of 17

--------------------------------------------------------------------------------

 

waiver unless specifically stated, shall operate only as to the specific term or
condition waived and shall not constitute a waiver of such term or condition for
the future or as to any act other than that specifically waived.

 

(g)     Assignment. This Agreement shall not be assignable, in whole or in part,
by either party without the prior written consent of the other party, except
that the Company may, without the consent of Executive, assign its rights and
obligations under this Agreement (i) to any entity with which the Company may
merge or consolidate, or (ii) to any corporation or other person or business
entity to which the Company may sell or transfer all or substantially all of its
assets. Upon Executive’s written request, the Company will seek to have any
Successor by agreement assent to the fulfillment by the Company of its
obligations under this Agreement. After any assignment by the Company pursuant
to this Section 13(g), the Company shall be discharged from all further
liability hereunder and such assignee shall thereafter be deemed to be the
“Company” for purposes of all terms and conditions of this Agreement, including
this Section 13.

 

(h)    Counterparts. This Agreement may be executed in any number of
counterparts, and such counterparts executed and delivered, each as an original,
shall constitute but one and the same instrument.

 

(i)     Severability. Subject to Section 7(f) hereof, to the extent that any
portion of any provision of this Agreement shall be invalid or unenforceable, it
shall be considered deleted herefrom and the remainder of such provision and of
this Agreement shall be unaffected and shall continue in full force and effect.

 

(j)     Survival. The terms and conditions set forth in Sections 4(g), 5, 6, 7,
8, 9, 10, 11, 12, and 13 of this Agreement, and any other provision that
continues by its terms, shall survive expiration of the Term or termination of
Executive’s employment for any reason.

 

(k)     Captions and Headings. The captions and paragraph headings used in this
Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.

 

(l)     Notices.  Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person or
sent by first class certified or registered mail, postage prepaid, if to the
Company, at the Company's principal place of business, and if to Executive, at
his home address most recently filed with the Company, or to such other address
or addresses as either party shall have designated in writing to the other party
hereto.

 

(m)     Six Month Delay.  Notwithstanding anything herein to the contrary, if
Executive is a “specified employee” within the meaning of Treasury Regulation
Section 1.409A-1(i) (or any successor thereto) on his Termination Date, any
payments hereunder that are triggered by termination of employment and which are
not exempt as separation pay under Treasury Regulation Section 1.409A-1(b)(9) or
as short-term deferral pay, shall

Page 16 of 17

--------------------------------------------------------------------------------

 

not begin to be paid until six months after his  Termination Date, and at that
time, Executive will receive in one lump sum payment of all the payments that
would have otherwise been paid to Executive during the first six months
following Executive's Termination Date.  The Company shall determine, consistent
with any guidance issued under Code Section 409A, the portion of payments that
are required to be delayed, if any.

 

(n)     409A Compliance.   Executive and the Company agree and confirm that this
Employment Agreement is intended by both parties to provide for compensation
that is exempt from Code Section 409A as separation pay (up to the Code Section
409A limit) or as a short-term deferral, and to be compliant with Code Section
409A with respect to additional severance compensation and bonus compensation.
This Agreement shall be interpreted, construed, and administered in accordance
with this agreed intent, provided that the Company does not promise or warrant
any tax treatment of compensation hereunder.  Executive is responsible for
obtaining advice regarding all questions to federal, state, or local income,
estate, payroll, or other tax consequences arising from participation
herein.  This Agreement shall not be amended or terminated in a manner that
would accelerate or delay payment of severance pay or bonus pay except as
permitted under Treasury Regulations under Code Section 409A.

 

IN WITNESS WHEREOF, Executive and the Company have executed this Agreement on
this   11th       day of     February     ,  2016.

 

 

 

 

TEXAS ROADHOUSE MANAGEMENT CORP.

 

 

 

By:

/s/ Celia Catlett

 

Printed Name:

Celia Catlett

 

Title:

General Counsel

 

 

 

S. CHRIS JACOBSEN

 

 

 

/s/ S. Chris Jacobsen

 

Page 17 of 17

--------------------------------------------------------------------------------