Exhibit 10.2


 


CHANGE IN CONTROL
AGREEMENT


 


THIS AGREEMENT, dated as of
the 10th day of March, 2008, is made by and between Red Robin Gourmet Burgers, Inc.,
a Delaware corporation (the “Company”)
and Eric C. Houseman (the “Executive”).


 


WHEREAS, the Company
recognizes that it is difficult to attract and retain highly qualified
executives unless a certain degree of security can be offered to such
individuals against organizational and personnel changes which frequently
follow changes in control of a corporation; and


 


WHEREAS, even rumors of
acquisitions or mergers may cause executives to consider major career changes
in an effort to assure financial security for themselves and their families;
and


 


WHEREAS, the Company desires
to assure continuity of management and fair treatment of its executives in the
event of a Change in Control (as defined below) and to allow them to make
critical career decisions without undue time pressure and financial
uncertainty, thereby increasing their willingness to remain with the Company
notwithstanding the outcome of a possible Change in Control transaction; and


 


WHEREAS, the Company
recognizes that its executives will be involved in evaluating or negotiating
any offers, proposals or other transactions which could result in Changes in
Control of the Company and believes that it is in the best interest of the
Company and its stockholders for such executives to be in a position, free from
personal financial and employment considerations, to be able to assess
objectively and pursue aggressively the interests of the Company’s stockholders
in making these evaluations and carrying on such negotiations; and


 


WHEREAS, the Board of
Directors (the “Board”) of the
Company believes it is essential to provide Executive with compensation arrangements
upon a Change in Control that provide Executive with individual financial
security and that are competitive with those of other corporations, and in
order to accomplish these objectives, the Board has caused the Company to enter
into this Agreement.


 


NOW THEREFORE, the parties,
for good and valuable consideration and intending to be legally bound, agree as
follows:


 


1.             Operation and Term of Agreement.  This Agreement shall be effective as of the
date first set forth above.  This
Agreement may be terminated by the Company upon 24 months’ advance written
notice to Executive; provided, however, that after a Change in
Control of the Company during the term of this Agreement, this Agreement shall
remain in effect until all of the obligations of the parties under the
Agreement are satisfied and the Protection Period has expired.  Prior to a Change in Control, this Agreement
shall immediately terminate upon termination of Executive’s employment or upon
Executive’s ceasing to be an officer of the Company.


 


2.             Certain Definitions.  For purposes of this Agreement, the following
words and phrases shall have the following meanings:


 

















 


(a)           “Cause” means: (i) Executive’s
continual or deliberate neglect in the performance of Executive’s material
duties; (ii) Executive’s failure to devote substantially all of Executive’s
working time to the business of the Company and its subsidiaries (other than as
expressly permitted in a written employment agreement between the Company and
Executive); (iii) Executive’s willful failure to follow the lawful
directives of the Board or the Company’s Chief Executive Officer in any
material respect; (iv) Executive’s engaging willfully in misconduct in
connection with the performance of any of Executive’s duties, including,
without limitation, falsifying or attempting to falsify documents, books or
records of the Company or its subsidiaries, misappropriating or attempting to
misappropriate funds or other property, or securing or attempting to secure any
personal profit in connection with any transaction entered into on behalf of
the Company or its subsidiaries; (v) the violation by Executive, in any
material respect, of any policy or of any code or standard of behavior or
conduct generally applicable to employees of the Company or its subsidiaries; (vi) Executive’s
breach of the material provisions of this Agreement or any other
non-competition, non-interference, non-disclosure, confidentiality or other
similar agreement executed by Executive with the Company or any of its
subsidiaries or other active disloyalty to the Company or any of its
subsidiaries (including, without limitation, aiding a competitor or
unauthorized disclosure of confidential information); or (vii) Executive’s
engaging in conduct which is reasonably likely to result in material injury to
the reputation of the Company or any of its subsidiaries, including, without
limitation, commission of a felony, fraud, embezzlement or other crime
involving moral turpitude, or sexual harassment.


 


(b)           “Change in Control” means:


 


(i)            The acquisition by
any individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act (a “Person”))
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of more than 50% or more of either (1) the
then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (2) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided,
however, that, for purposes of this definition, the following
acquisitions shall not constitute a Change in Control; (A) any acquisition
directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any affiliate of the Company or a successor, or (D) any
acquisition by any entity pursuant to a transaction that complies with
subsections (iii)(A), (B) and (C) below;


 


(ii)           In the event the
Board is a classified board, a majority of the individuals who serve in the
same class of directors that, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of that class of directors, or in the event the
Board is not a classified board, members of the Incumbent Board cease for any
reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board (including for these purposes, the new members whose election
or nomination was so approved, without counting the member and his predecessor
twice) shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption 


 


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of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;


 


(iii)          Consummation of a
reorganization, merger, statutory share exchange or consolidation or similar
corporate transaction involving the Company or any of its Subsidiaries, a sale
or other disposition of all or substantially all of the assets of the Company,
or the acquisition of assets or stock of another entity by the Company or any
of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and entities
that were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of the
then-outstanding shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election
of directors, as the case may be, of the entity resulting from such Business
Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s
assets directly or through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination
of the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination or a Parent or any employee benefit
plan (or related trust) of the Company or such entity resulting from such
Business Combination or Parent) beneficially owns, directly or indirectly, more
than 50% of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that
the ownership in excess of more than 50% existed prior to the Business
Combination, and (C) at least a majority of the members of the board of
directors or trustees of the entity resulting from such Business Combination or
a Parent were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or


 


(iv)          Approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company.


 


(c)           “Change in Control Date” shall be any date
during the term of this Agreement on which a Change in Control occurs.  Anything in this Agreement to the contrary
notwithstanding, if Executive’s employment or status as an officer with the
Company is terminated within six (6) months before the date on which a
Change in Control occurs, and it is reasonably demonstrated that such
termination (i) was at the request of a third party who has taken steps
reasonably calculated or intended to effect a Change in Control or (ii) otherwise
arose in connection with or anticipation of a Change in Control, then for all
purposes of this Agreement the “Change in Control Date” shall mean the date
immediately before the date of such termination.


 


(d)           “Code” shall mean the Internal Revenue Code
of 1986, as amended.


 


(e)           “Disability” means a “permanent and total
disability” within the meaning of Section 22(e)(3) of the Code or as
otherwise determined by the Board.  The
Company reserves 


 


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the
right, in good faith, to make the determination of disability under this
Agreement based upon information supplied by Executive and/or his medical
personnel, as well as information from medical personnel (or others) selected
by the Company or its insurers.


 


(f)            “Good Reason” means the occurrence of any
of the following after the applicable Change in Control: (i) a reduction
in Executive’s compensation; (ii) a relocation of the Company’s
headquarters to a location more than twenty (20) miles from the location of the
Company’s headquarters immediately prior to the Change in Control Date; (iii) a
significant reduction in the then-effective responsibilities of Executive
without Executive’s prior written consent (for this purpose, if the Company ceases to be a
publicly-traded corporation, Executive will not be deemed to have suffered such
a reduction in the nature and scope of his responsibilities solely because of
the change in the nature and scope thereof resulting from the Company no longer
being publicly-traded); or (iv) any failure by the Company to obtain
the assumption of the obligations contained in this Agreement by any successor
as contemplated in Section 11(c) of this Agreement; provided that
Executive gives written notice to the Company 
of the existence of such a condition within ninety (90) days of the
initial existence of the condition and the Company has at least thirty (30)
days from the date when such notice is provided to cure the condition without
being required to make payments under this Agreement.


 


(g)           “Protection Period” means the period
beginning on the Change in Control Date and ending on the last day of the
18-month period following the Change in Control Date.


 


(h)           “Subsidiary” means a company 50 percent or
more of the voting securities of which are owned, directly or indirectly, by
the Company.


 


3.             Vesting Upon Change in Control.  If, during the Protection Period, Executive’s
employment is terminated by the Company other than for Cause or Disability or
other than as a result of Executive’s death or if Executive terminates his
employment for Good Reason,  any and all
Common Shares (as defined in Section 4(c)), options, restricted shares or
other forms of securities issued by the Company and beneficially owned by
Executive (whether granted before or after the date of this Agreement) that are
unvested, restricted, or subject to any similar restriction that would
otherwise require continued employment by Executive beyond the Change in
Control Date in order to be vested in the hands of Executive shall vest
automatically and become exercisable, or such restrictions shall lapse.


 


4.             Benefits Upon Termination Within a Protection Period.  If, during the Protection Period, Executive’s
employment is terminated by the Company other than for Cause or Disability or
other than as a result of Executive’s death or if Executive terminates his
employment for Good Reason, the Company shall, subject to Sections 7 and 8,
make the following payments to Executive:


 


(a)           All earned and
determinable, but unpaid, wages and all earned and determinable, but unused,
vacation through the date of Executive’s termination shall be paid to Executive
in a lump sum in cash within ten (10) days after the termination of
Executive’s employment;


 


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(b)           A severance amount
equal to two times Executive’s “Annual Compensation” shall be paid to Executive
within ten (10) days after the termination of Executive’s employment, to
the extent such amount is less than or equal to two times the lesser of (i) the
sum of Executive’s Annual Compensation during the year prior to the year that
includes the effective date of termination, or (ii) the maximum amount
that may be taken into account under a qualified plan pursuant to Section 401(a)(17)
of the Code ($230,000 in 2008) (“Initial
Amount”).  To the extent that
the severance amount pursuant to this Section 4(b) exceeds the
Initial Amount, the severance amount in excess of the Initial Amount shall be
paid to Executive on the date that is the
earliest of 6 months after Executive’s “separation from service” within
the meaning of IRC Section 409A (a “Separation
from Service”), Executive’s death, or such other date as will not
result in such payment being subject to additional tax under Section 409A
of the Code.  For purposes of this
Section 4, “Annual Compensation”
shall be an amount equal to the sum of (i) Executive’s annual base salary
from the Company and its Subsidiaries (including scheduled base salary
increases or increases that are budgeted and approved either by the
Compensation Committee of the Board of Directors or by the Board of Directors of
the Company in advance of the Change in Control Date), annualized for any
partial year, in effect immediately prior to the Change in Control Date; and (ii) the
annual bonus amount earned by Executive for performance in the last completed
calendar year prior to the Change in Control Date for which bonuses have been
paid or are payable (which annual bonus may be in the aggregate if Executive
has earned more than one bonus payment for such calendar year);


 


(c)           Upon surrender by
Executive (which surrender shall be at the sole option of Executive) of his
outstanding options to purchase common shares of the Company (“Common Shares”) granted to Executive by
the Company (the “Outstanding Options”),
an amount in respect of each Outstanding Option (whether vested or not) equal
to the difference between the exercise price of such Outstanding Option and the
fair market value of the Common Shares at the time of such termination (but not
less than the closing price for the Common Shares on NASDAQ, or such other
national stock exchange on which such shares may be listed, on the last trading
day such shares traded prior to the date of termination); and


 


(d)           Upon Executive’s
timely election of continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”),
the Company shall pay, on Executive’s behalf, the portion of premiums of
Executive’s group health insurance, including coverage for your eligible
dependents, that the Company paid immediately prior to the date of termination
(“COBRA Payments”) for the period
that you are entitled to coverage under COBRA, but not to exceed twenty-four
months (“COBRA Period”).  The Company will pay such COBRA Payments for
Executive’s eligible dependents only for coverage for which those dependents
were enrolled immediately prior to the Date of Termination.  Executive will continue to be required to pay
that portion of the premium of Executive’s health coverage, including coverage
for Executive’s eligible dependents, that Executive was required to pay as an
active employee immediately prior to the date of termination.  Within 30 days following the end of the COBRA
Period, the Company shall pay to Executive in a lump sum an amount equal to the
product of (x) the amount of the COBRA payment paid on Executive’s behalf
for the final month of the COBRA Period and (y) the number of months by
which the Cobra Period was less than twenty-four.


 


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5.             Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit Executive’s continuing or future participation in any benefit, bonus,
incentive, or other plans, practices, policies, or programs provided by the
Company or any of its Subsidiaries and for which Executive may qualify, nor
shall anything in this Agreement limit or otherwise affect such rights as
Executive may have under any stock option or other agreements with the Company
or any of its Subsidiaries.  Amounts that
are vested benefits or that Executive is otherwise entitled to receive under
any plan, practice, policy, or program of the Company or any of its
Subsidiaries at or subsequent to the date of termination shall be payable in
accordance with such plan, practice, policy, or program; provided, however,
that Executive shall not be entitled to severance pay, or benefits similar to
severance pay, under any plan, practice, policy, or program generally
applicable to employees of the Company or any of its Subsidiaries.


 


6.             Full Settlement; No Obligation to Seek Other
Employment; Legal Expenses. 
The Company’s obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations under this Agreement shall
not be affected by any set-off, counterclaim, recoupment, defense, or other
claim, right, or action that the Company may have against Executive or
others.  Executive shall not be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to Executive under any of the provisions of this
Agreement.  The Company agrees to pay,
within five days following timely written demand by Executive, but no later
than the last day of the third calendar year following the calendar year in
which Executive experiences a Separation from Service, all legal fees and
expenses Executive may reasonably incur as a result of any dispute or contest
(regardless of outcome) by or with the Company or others regarding the validity
or enforceability of, or liability under, any provision of this Agreement;
provided that such legal fees and expenses are incurred on or before the last
day of the second calendar year following the year in which Executive
experienced a Separation from Service. 
In any such action brought by Executive for damages or to enforce any
provisions of this Agreement, he shall be entitled to seek both legal and
equitable relief and remedies, including, without limitation, specific
performance of the Company’s obligations under this Agreement, in Executive’s
sole discretion.


 


7.             Gross-Up Payments.


 


(a)           Anything in this
Agreement to the contrary notwithstanding and except as set forth below, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Agreement) (a “Payment”) would be
subject to the excise tax imposed by Code Section 4999 or any interest or
penalties are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”),
then Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that
after payment by Executive of all taxes imposed upon the Gross-Up Payment
(including any interest or penalties imposed with respect to such taxes but
excluding any taxes or interest imposed by Section 409A of the Code),
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.  This
provision is intended to override the cut-back provisions of Section 7.7
of the Company’s 2004 Performance Incentive Plan and 2007 Performance Incentive
Plan, and any similar cut-back provision in any plan adopted by the 


 


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Company
following the date of this Agreement. 
Any Gross Up Payment shall be paid to Executive on or before the date
that is ten (10) days prior to the date when Executive is legally required
to remit such taxes.  Notwithstanding the
foregoing provisions of this Section 7, if it is determined that Executive
is entitled to a Gross-Up Payment, but that the Payments do not exceed by
$25,000 the greatest amount that could be paid to Executive such that the
receipt of Payments would not give rise to any excise tax (the “Reduced Amount”), then no Gross-Up Payment
shall be made to Executive and the Payments, in the aggregate, shall be reduced
to the Reduced Amount.


 


(b)           Subject to the
provisions of Section 7(c) below, all determinations required to be
made under this Section 7, including whether and when a Gross-Up Payment
is required and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by a certified public
accounting firm designated by the Board (the “Accounting
Firm”) which shall provide detailed supporting calculations both to
the Company and Executive.  If the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control Event, the Board shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder).  All fees and expenses
of the Accounting Firm shall be borne solely by the Company.


 


(c)           If Executive is, or
could be, entitled to receive a Gross-Up Payment, pursuant to Section 7(a) Executive
shall take any position requested by the Company (a “Requested Position”) on Executive’s federal income tax
returns with respect to the treatment of the Payment from the Company, any
Gross-Up Payment, the payment of any Indemnified Amount (as defined below), and
the receipt of any refund or interest paid by the government to Executive as a
result of a Contest (as defined below), provided that: (i) the Company
shall provide Executive with an opinion from a nationally recognized accounting
firm that there is “substantial authority” for the Requested Position within
the meaning of Code Section 6662; and (ii) the general long term or
senior unsecured corporate credit rating of the Company or its successor is at
least BBB- as rated by Standard & Poors and Baa3 as rated by Moody’s
Investor Services at the time Executive would be required to take a Requested
Position or the Company places in an escrow account or otherwise provides
security reasonably requested by Executive to ensure payment to Executive of
the indemnity amount that could become due to Executive pursuant to the
following sentence.  The Company shall
indemnify Executive for any tax, penalty and interest incurred by him as a
result of taking the Requested Position. 
The amount for which Executive is indemnified under the preceding
sentence (the “Indemnified Amount”)
shall be computed on an after-tax basis, taking into account any income, Excise
or other taxes, including interest and penalties.  Executive shall keep the Company informed of
all developments in any audit with respect to a Requested Position.  Upon payment of the Indemnified Amount, or
(if the Indemnified Amount is not yet payable) upon the Company’s written
affirmation, in form and substance reasonably satisfactory to Executive, of the
Company’s obligation to indemnify Executive with respect to the Requested
Position, and provided part (ii) of the first sentence of this Section 7(c) is
satisfied at such time, the Company shall be entitled, at its sole expense, to
control the contest of any disallowance or proposed disallowance of a Requested
Position (a “Contest”), and
Executive agrees to cooperate in connection with a Contest, including, without
limitation, executing powers of attorney and other documents at the reasonable
request of the Company.  The Indemnified
Amount shall be paid to Executive on or before the date that is ten 


 


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(10) days
prior to the date when Executive is legally required to remit such payment as a
result of the disallowance of a Requested Position.  Following payment by the Company of the
Indemnified Amount, if the Requested Position is sustained by the Internal
Revenue Service or the courts, the Company shall be entitled to any resulting
receipt of interest or refund of taxes, interest and penalties that were
properly attributable to the Indemnified Amount.  If a Requested Position is sustained in whole
or in part in a final resolution of a Contest, and if the Indemnified Amount
therefore exceeds the amount of taxes, penalties and interest payable by
Executive as a result of the Requested Position (determined on an after-tax
basis after taking into account payments made pursuant to the preceding
sentence and this sentence), any such excess portion of the Indemnified Amount
shall be treated as a loan by the Company to Executive, which loan Executive
must repay to the Company together with interest at the applicable federal rate
under Code Section 7872(f)(2); provided, however, that if at the time the
Company is to make such payment, a loan to Executive would not permitted under
the Sarbanes-Oxley Act of 2002, as amended, because Executive continues to be
an officer or director of the Company, the Company shall pursue such appeal in
a manner that does not require Executive to make such excess payment to the
applicable taxing authority.


 


8.             Code Section 409A Savings Provision.  Notwithstanding anything in this Agreement to
the contrary, the following provisions related to payments treated as deferred
compensation under Code Section 409A shall apply:


 


(a)           If, on the date of
Executive’s Separation from Service, Executive is a “specified employee,”
within the meaning of Sections 409A(a)(2)(A)(i) and 409A(a)(2)(B)(i) of
the Code, and as a result of such Separation from Service Executive would
receive any payment that, absent the application of these provisions, would be
subject to the constructive receipt, interest, and additional tax provisions of
Code Section 409A(a), then any such payment shall be made on the date that
is the earliest of: (i) six (6) months after Executive’s Separation
from Service, (ii) Executive’s date of death, or (iii) such other
earliest date for which such payment will not be subject to such constructive
receipt, interest, and additional tax.


 


(b)           If
Executive would not have a Separation from
Service and, as a result of Executive’s termination of employment, would
receive any payment that, absent the application of this Section 8(b),
would be subject to additional tax imposed pursuant to Section 409A of the
Code, then such payment shall instead be payable on the date that is the
earliest of (i) Executive’s Separation from Service, (ii) the date
Executive becomes disabled (within the meaning of Section 409A(a)(2)(C) of
the Code), (iii) Executive’s death, or (iv) such other
earliest date for which such payment will not be subject to such constructive
receipt, interest, and additional tax.


 


(c)           It is the intention of the parties
that all amounts payable under this Agreement not be subject to the
constructive receipt, interest, and additional tax resulting from the
application of Code Section 409A. 
To the extent such amounts could become subject to such constructive
receipt, interest, and additional tax, the parties shall cooperate to amend
this Agreement with the goal of giving Executive the same or equivalent value
of the benefits described in this Agreement in a manner that does not result in
such constructive receipt, interest, and additional tax.


 


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9.             Confidentiality and Nonsolicitation Provisions.


 


(a)           Confidentiality.  Executive shall hold in a fiduciary capacity
for the benefit of the Company all secret or confidential information,
knowledge, or data relating to the Company or any of its Subsidiaries, and
their respective businesses, obtained by Executive during Executive’s
employment by the Company or any of its Subsidiaries and that has not become
public knowledge (other than by acts of Executive or Executive’s
representatives in violation of this Agreement).  After the date of termination of Executive’s
employment with the Company, Executive shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge,
or data to anyone other than the Company and those designated by it.  In no event shall an asserted violation of
the provisions of this Section constitute a basis for deferring or
withholding any amounts otherwise payable to Executive under this Agreement.


 


(b)           Non-Solicitation.
Executive, for the twelve (12) month period immediately following the date of
termination of Executive’s employment, shall not, either on his own account or
jointly with or as a manager, agent, officer, employee, consultant, partner,
joint venturer, owner or shareholder or otherwise on behalf of any other
person, firm or corporation, directly or indirectly solicit or attempt to
solicit away from the Company any of its officers or employees or offer
employment to any person who, on or during the six (6) months immediately preceding
the date of such solicitation or offer, is or was an officer or employee of the
Company; provided, however, that (i) a
general solicitation or advertisement to which an employee of the Company
responds shall in no event be deemed to result in a breach of this Section 9(b),
and (ii) it shall not be a violation of this Section 9(b) for
Executive to directly or indirectly solicit the employment of, or to hire, his
current executive assistant.


 


(c)           Survival; Reformation. The provisions of this Section 9
shall survive the termination or expiration of this Agreement and Executive’s
employment with the Company and shall be fully enforceable thereafter.  If it shall be finally determined that any
restriction in this Section 9 is excessive in duration or scope or is
unreasonable or unenforceable under the laws of any state or jurisdiction, it
is the intention of the parties that such restriction may be modified or
amended to render it enforceable to the maximum extent permitted by the law of
that state or jurisdiction.


 


(d)           Remedies;
Equitable Relief.  Should Executive violate the
non-solicitation provisions of Section 9(b), Executive will be obligated
to pay back to the Company all payments received pursuant to this Agreement and
the Company will have no further obligation to pay Executive any payments that
may be remaining due under this Agreement. 
In the event that Executive breaches or threatens to breach any of the
provisions of this Section 9, in addition to and without limiting or
waiving any other remedies available to the Company under this Agreement, in
law or in equity, the Company shall be entitled to immediate injunctive relief
in any court, domestic or foreign, having the capacity to grant such relief, to
restrain such breach or threatened breach and to enforce the provisions of this
Section 9.


 


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10.           Successors.


 


(a)           This Agreement is
personal to Executive and without the prior written consent of the Company
shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution.  This Agreement
shall inure to the benefit of and be enforceable by Executive’s legal
representatives or successor(s) in interest.  Executive may designate a successor (or
successors) in interest to receive any and all amounts due Executive in
accordance with this Agreement should Executive be deceased at any time of
payment.  Such designation of successor(s) in
interest shall be made in writing and signed by Executive, and delivered to the
Company pursuant to Section 15(b). 
This Section 11(a) shall not supersede any designation of
beneficiary or successor in interest made by Executive, or separately covered,
under any other plan, practice, policy, or program of the Company.


 


(b)           This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns.


 


(c)           The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the business or
assets of the Company or any successor and without regard to the form of
transaction utilized to acquire the business or assets of the Company, to
assume expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession or parentage had taken place. 
As used in this Agreement, “Company”
shall mean the Company as defined above and any successor to its business or
assets as aforesaid (and any Parent of the Company or any successor) that is
required by this clause to assume and agree to perform this Agreement or which
otherwise assumes and agrees to perform this Agreement.


 


11.           Notice of Termination.  Any termination of Executive’s employment by
the Company for Cause or by Executive for Good Reason shall be communicated by
Notice of Termination to the other party given in accordance with Section 15(b) of
this Agreement.  For purposes of this
Agreement, a “Notice of Termination”
means a written notice that (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination
of Executive’s employment under the provision so indicated, and (iii) if the
date of termination is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than 15 days after the
giving of such notice).


 


12.           Requirements and Benefits if Executive Is Employee of
Subsidiary of Company.  If
Executive is an employee of any Subsidiary of the Company, he shall be entitled
to all of the rights and benefits of this Agreement as though he were an
employee of the Company and the term “Company” shall be deemed to include the
Subsidiary by whom Executive is employed. 
The Company guarantees the performance of its Subsidiary under this
Agreement.


 


13.           Release of Claims.  All payments under this Agreement will be
contingent upon the execution of a Release of Claims by and between Executive
and the Company in the form attached as Appendix A to this Agreement.


 


10

















 


14.           Miscellaneous.


 


(a)           This Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without reference to principles of conflict of laws.  The captions of this Agreement are not part
of the provisions hereof and shall have no force or effect.  In the event of any conflict between this
Agreement and the Company’s 1996 Stock Option Plan, 2000 Management Performance
Common Stock Option Plan, 2002 Stock Incentive Plan, 2004 Performance Incentive
Plan, 2007 Performance Incentive Plan, any incentive plan pursuant to which
Executive has awards outstanding as of the date of this Agreement or any other
incentive plan that is adopted by the Company following the date of this
Agreement, the agreement or plan with the more favorable terms to Executive
shall control for purposes of such conflict. 
This Agreement supersedes all prior oral or written promises or agreements
between the parties related to the subject matter hereof.  This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties or their
respective successors and legal representatives.


 


(b)           All notices and other
communications under this Agreement shall be in writing and shall be given by
hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, to the addresses for each party as first
written above or to such other address as either party shall have furnished to
the other in writing in accordance with this Section.  Notices and communications to the Company
shall be addressed to the attention of the Company’s Corporate Secretary.  Notice and communications shall be effective
when actually received by the addressee.


 


(c)           Whenever reference
is made in this Agreement to any specific plan or program of the Company, to
the extent that Executive is not a participant in the plan or program or has no
benefit accrued under it, whether vested or contingent, as of the Change in
Control Date, then such reference shall be null and void, and Executive shall
acquire no additional benefit as a result of such reference.


 


(d)           The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement.


 


(e)           The Company may
withhold from any amounts payable under this Agreement such Federal, state, or
local taxes as shall be required to be withheld pursuant to any applicable law
or regulation.


 


(f)            Executive’s failure
to insist upon strict compliance with any provision of this Agreement shall not
be deemed to be a waiver of such provision or any other provision.


 


11

















 


IN
WITNESS WHEREOF, Executive has set his hand to this Agreement and, pursuant to
the authorization from the Board, the Company has caused this Agreement to be
executed as of the day and year first above written.


 


	
   

  	
  RED ROBIN
  GOURMET BURGERS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Dennis B. Mullen

  
	
   

  	
   

  	
  Name: Dennis B. Mullen

  
	
   

  	
   

  	
  Title: Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE

  
	
   

  	
   

  
	
   

  	
  /s/ Eric C. Houseman

  
	
   

  	
  Eric C. Houseman

  



 


12

















 


APPENDIX
A


 


FORM OF
GENERAL RELEASE


 


I, Eric C. Houseman, for good and valuable
consideration, including the performance by Red Robin Gourmet Burgers, Inc.,
a Delaware corporation (the “Company”),
of certain obligations under that certain Change in Control Agreement dated as
of March 10, 2008 between myself and the Company (the “Change in Control Agreement”), do hereby
release and forever discharge as of the date hereof, the Company and all
present, future and former subsidiaries, affiliates, directors, officers,
agents, attorneys, insurers, shareholders, representatives and employees of the
Company (including all subsidiaries, affiliates, directors, officers, agents,
attorneys, insurers, shareholders, partners, representatives and employees
thereof), and the successors and assigns of each of them (collectively, the “Released Parties”) to the extent provided
below.


 


1.             Except as
provided in Section 2 below, I knowingly and voluntarily release and
forever discharge the Company and the other Released Parties from any and all
claims, controversies, actions, causes of action, cross-claims, counter-claims,
demands, debts, damages (however styled, including compensatory, liquidated,
punitive or exemplary damages), claims for costs and attorneys’ fees, or
liabilities of any nature whatsoever in law and in equity, both past and
present (from the beginning of the world through the date of this General
Release) and whether known or unknown, suspected, or claimed against the
Company or any of the Released Parties which I, my spouse, or any of my heirs,
executors, administrators, representatives or assigns, have or may have, which
arise out of or are connected with my employment or association with, or my
separation or termination from, the Company (including, but not limited to, any
allegation, claim or violation, arising under: 
Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991, as amended; the Equal Pay Act of 1963, as amended; the
Americans with Disabilities Act of 1990, as amended; the Family and Medical
Leave Act of 1993, as amended; the Civil Rights Act of 1866, as amended; the
Age Discrimination in Employment Act (29 U.S.C. § 621 et seq.),
as amended (“ADEA”), subject to Section 15
below; the Worker Adjustment Retraining and Notification Act, as amended; the
Employee Retirement Income Security Act of 1974, as amended; any applicable
Executive Order Programs; the Fair Labor Standards Act, as amended; or their
state or local counterparts; or under any other federal, state or local civil
or human rights law, or under any other local, state, or federal law,
regulation or ordinance; or under any public policy, contract or tort, or under
common law; or arising under any policies, practices or procedures of the
Company; or any claim for wrongful discharge, breach of contract, infliction of
emotional distress, defamation; or any claim for costs, fees, or other
expenses, including attorneys’ fees incurred in these matters) (all of the
foregoing collectively referred to herein as the “Claims”).  As part of
the release set forth in this Section 1, I fully and forever covenant not
to sue or cause to be sued the Company or any other Released Party with respect
to any Claims.


 


2.             This General
Release shall not relinquish, diminish, or in any way affect (i) any
accrued benefits under the terms of the Change in Control Agreement or any
other plans or programs of the Company which are due to me, (ii) rights
for indemnification as a director, officer or employee of the Company under the
Company’s certificate of incorporation or bylaws for duly approved acts taken
prior to the date of this General Release, subject to the provisions


 

















 


thereof, or (iii) rights under any director &
officer insurance or similar insurance policies in effect prior to the date of
this General Release.


 


3.             I represent
that I have made no assignment or transfer of any Claims, or any other matter
covered by Section 1 above.  I agree
that I will indemnify, defend and hold harmless the Company from any and all
Claims so assigned and transferred.  I
have not been involved in any personal bankruptcy or other insolvency
proceedings at any time since I began my employment with the Company.  No child support orders, garnishment orders,
or other orders requiring that money owed to me by the Company be paid to any
other person are now in effect.


 


4.             In signing
this General Release, I acknowledge and intend that it shall be effective as a
bar to each and every one of the Claims hereinabove mentioned or implied that
are released by me.  I further
acknowledge and agree that my separation from employment with the Company shall
not serve as the basis for any claim or action. 
I agree that this General Release shall be given full force and effect
according to each and all of its express terms and provisions, including those
relating to unknown and unsuspected Claims (notwithstanding any state statute
that expressly limits the effectiveness of a general release of unknown,
unsuspected and unanticipated Claims), if any, as well as those relating to any
other Claims hereinabove mentioned or implied. 
I acknowledge and agree that this waiver is an essential and material
term of this General Release.  I
therefore agree that in the event a Claim is brought seeking damages against me
in violation of the terms of this General Release, or in the event a party
should seek to recover against the other in any Claim brought by a governmental
agency on such party’s behalf, this General Release shall serve as a complete
defense to such Claims.  I further agree
that I am not aware of any pending or threatened charge or complaint of the
type described above as of the execution of this General Release.


 


5.             I agree that,
by my signature below, I hereby resign from all positions, including any board
memberships, related to the Company and its subsidiaries contemporaneously with
the execution of this General Release.


 


6.             I understand
that this General Release embodies the complete agreement and understanding
among the parties with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.


 


7.             Whenever
possible, each provision of this General Release shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held by any court of competent jurisdiction to be
invalid, illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other provision or any other jurisdiction, but this General Release
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.


 


8.             This General
Release shall be binding in all respects upon, and shall inure to the benefit
of, the heirs, successors and assigns of the parties hereto; provided that I
acknowledge that I may not assign my rights under the this General Release without
the prior written consent of the Company. 
I agree, upon reasonable request of the Company, to execute, acknowledge
and 


 

















 


deliver any additional instrument or documents that may be
reasonably required to carry out the intentions of this General Release.  This General Release may be executed in
counterparts and facsimile signatures shall be originals for all purposes.


 


9.             I agree that
this General Release shall be interpreted and construed in accordance with the
laws of the State of Colorado and that any disputes arising under this General
Release or by any asserted breach of it, or from the employment relationship
between the Company and Executive, shall be litigated in the state or federal
courts in Colorado and I consent to such jurisdiction.


 


10.           I represent
that I am over the age of forty (40).  As
part of the release set forth in Section 1, I knowingly and voluntarily
agree to waive any rights or claims arising out of or relating to the ADEA (the
“ADEA Waiver”) and acknowledge
that I have been informed of the following:


 


a.                                       I
represent and acknowledge that I am waiving any and all rights or claims that I
may have arising under the ADEA;


 


b.                                      I
represent and acknowledge that I have been informed of my right to consult with
an attorney regarding these ADEA rights, before executing this General Release;


 


c.                                       I
know and understand that I am not waiving any rights or claims that may arise
after the date this waiver of ADEA rights is executed;


 


d.                                      I
know and understand that in exchange for the waiver of my rights under the
ADEA, I am receiving consideration in addition to any consideration to which I
am already entitled;


 


e.                                       BY
SIGNING THIS GENERAL RELEASE, I REPRESENT AND ACKNOWLEDGE THAT I HAVE BEEN
INVITED AND ADVISED TO CONSULT AN ATTORNEY BEFORE SIGNING THIS DOCUMENT.  I acknowledge and understand that I have been
given a period of at least twenty-one (21) days in which to consider the
terms of the ADEA Waiver provided to me; and


 


f.                                         I
understand that I have the right to revoke this ADEA Waiver contained in this
General Release at any time within seven (7) days after signing this
General Release, by providing written notice to the following address:  Red Robin Gourmet Burgers, Inc., 6312 So
Fiddlers Green Circle, Suite 200, Greenwood Village, CO 80111, Attention:
General Counsel, and that, upon such revocation, this General Release will not
have any further legal force and effect. 
I further understand and agree that this General Release shall not
become effective or enforceable until this seven day revocation period has
expired.


 

















 


By signing this General Release, I further represent
and agree that:


 


(i)                                     I
have read it carefully;


 


(ii)                                  I
understand all of its terms and know that I am giving up important rights,
including but not limited to, rights under Title VII of the Civil Rights
Act of 1964, as amended; the Equal Pay Act of 1963, as amended; the Americans
with Disabilities Act of 1990, as amended; and the Employee Retirement Income
Security Act of 1974, as amended;


 


(iii)                               I
voluntarily consent to everything in this General Release;


 


(iv)                              I
have been advised to consult with an attorney before executing this General
Release and I have done so or, after careful reading and consideration I have
chosen not to do so of my own volition;


 


(v)                                 I
have signed this General Release knowingly and voluntarily and with the advice
of any counsel retained to advise me with respect to this General Release;


 


(vi)                              I
agree that the provisions of this General Release may not be amended, waived,
changed or modified except by an instrument in writing signed by an authorized
representative of the Company and by me.


 


	
  DATE:
                                  ,
  20

  	
   

  
	
   

  	
  Eric C. Houseman

  
	
   

  	
   

  



 


Acknowledged and agreed to this
           day of
                              ,


 


	
   

  	
  Red
  Robin Gourmet Burgers, Inc.

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title: