Document:

EX-10.(39) FOURTH AMENDMENT EMPLOYMENT AGREEMENT

 

Exhibit 10(39)

FOURTH AMENDMENT OF EMPLOYMENT AGREEMENT

     THIS FOURTH AMENDMENT, made and entered into as of the 15th day of December, 2006,
by and between RARE HOSPITALITY MANAGEMENT, INC., a Delaware corporation (hereinafter referred to
as the “Company”), and THOMAS W. GATHERS, a resident of the State of Georgia (hereinafter referred
to as the “Executive”);

WITNESSETH:

     WHEREAS, the Company and Executive entered into that certain Employment Agreement, dated as of
April 28, 2003 (the “Original Agreement”), First Amendment of Employment Agreement, dated as of
October 27, 2004 (the “First Amendment”), Second Amendment of Employment Agreement, dated as of
October 27, 2005 (the “Second Amendment”) and Third Amendment of Employment Agreement, dated as of
October 27, 2006 (the “Third Amendment”); and

     WHEREAS, the Third Amendment requires the Company and Executive to renew the Original
Agreement on or before January 1, 2007 in order for the term of the Original Agreement to continue
past the Expiration Date (as defined in the Third Amendment); and

     WHEREAS, the Company and Executive intend to renew the Original Agreement on the terms and
conditions set forth in this Fourth Amendment;

     NOW, THEREFORE, for and in consideration of the sum of One Dollar ($1.00) in hand paid by the
Company to Executive, the receipt and sufficiency of which is hereby acknowledged, and the mutual
covenants and obligations contained herein, the Company and Executive hereby agree as follows:

     1. Section 1.1 of the Original Agreement, as revised by the Third Amendment, shall be deleted
in its entirety and replaced with the following new Section 1.1:

     1.1. Employment Term. The employment term of this Agreement shall commence on
the date hereof (the “Commencement Date”) and shall continue until and end on July 1, 2008
(the “Expiration Date”), unless terminated prior thereto in accordance with Section 3
hereof. Unless renewed by mutual agreement of the Company and Executive, as expressed in
writing signed by both parties on or before January 1, 2008 (the “Notice Date”), this
Agreement shall terminate on the Expiration Date with no renewal or extension; provided,
however, that in the event the Company chooses not to renew the Agreement, the Executive
will be entitled to receive the compensation under Section 2.1 owed to Executive but unpaid
for performance rendered under this Agreement as of the Expiration Date, and the Company
will be obligated to pay Executive an amount equal to six (6) months of his Base
Compensation (as defined below), in effect immediately prior to the Expiration Date (the
“Non-Renewal Severance”). Such payments of Non-Renewal Severance shall be made as and when
salary would otherwise be payable to senior

 

 

officers of the Company; provided, however, that on February 15, 2009, the Company
shall pay Executive in one lump sum any remaining unpaid portion of the Non-Renewal
Severance, plus an amount, if any, equal to Executive’s Base Compensation for the period of
time between the Notice Date and the date on which the Company provides Executive with
written notice of non-renewal. The period from the Commencement Date until the employment
term expires or is terminated by the Company or Executive is hereinafter referred to as the
“Employment Term.”

     2. Section 2.1 of the Original Agreement, as revised by the Third Amendment, shall be deleted
in its entirety and replaced with the following new Section 2.1:

     2.1 Base Compensation. For all the services rendered by Executive hereunder,
the Company shall pay Executive an annual salary at the rate of Two Hundred Sixty Thousand
and 00/100 Dollars ($260,000) for each full year of the Employment Term, payable in
installments at such times as the Company customarily pays its other senior officers (but
in any event no less often than monthly); provided, however, that from and after January 2,
2007, said annual salary rate shall increase to Two Hundred Sixty Seven Thousand Eight
Hundred and 00/100 Dollars ($267,800). The Company agrees that the Executive’s salary
will be reviewed at least annually to determine if an increase is appropriate, which
increase shall be in the sole discretion of the Company. Executive’s salary shall be
prorated for any partial year during which this Agreement remains in effect. Executive’s
annual salary paid from time to time is hereafter referred to as “Base Compensation”.

     3. Section 19 of the Original Agreement, as revised by the Third Amendment, shall be deleted
in its entirety and replaced with the following new Section 19:

     19. Entire Agreement. This Agreement, together with the Fourth Amendment and
Exhibit A thereto, which is incorporated herein by this reference, constitutes the
entire Agreement between the parties hereto with regard to Executive’s employment by the
Company and there are no agreements, understandings, specific restrictions, warranties or
representations, written or oral, relating to said subject matter between the parties other
than those set forth herein or herein provided for.

     4. Exhibit A of the Third Amendment shall be deleted in its entirety and replaced with
new Exhibit A attached hereto and incorporated herein by reference.

     5. Except as otherwise set forth herein, the Original Agreement, as modified by the Third
Amendment, shall remain unchanged and in full force and effect.

-2-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the date
first above written.

	 	 	 	 	 
	 	RARE HOSPITALITY MANAGEMENT, INC.

 	 
	 	By:  	/s/ Eugene I. Lee, Jr.
 	 
	 	 	President 	 
	 	 	 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Thomas W. Gathers
 	 
	 	THOMAS W. GATHERS 	 
	 	 	 

-3-

 

	 	 	 	 	 

EXHIBIT A

Executive and the Company agree that, for purposes of this Agreement, the “Restricted Area” shall
constitute the area within fifteen (15) miles of any of RARE’s restaurants in the following cities:

	 	 	 
	Alabama

	 	Daphne, Dothan, Hoover, Huntsville, Mobile,
Montgomery, Opelika, Oxford, Prattville
	 
	 	 
	Arizona

	 	Phoenix, Scottsdale
	 
	 	 
	Colorado

	 	Denver
	 
	 	 
	Connecticut

	 	Manchester
	 
	 	 
	Delaware

	 	Bear, Newark
	 
	 	 
	District of Columbia

	 	Washington, D.C.
	 
	 	 
	Florida

	 	Altamonte Springs, Boynton Beach, Brandon, Coral
Springs, Daytona Beach, Davie, Delray Beach, Destin,
Fleming Island, Ft. Lauderdale, Ft. Myers, Ft. Walton
Beach, Hollywood, Jacksonville, Jacksonville Beach,
Jensen Beach, Kissimmee, Lakeland, Lake Mary, Largo,
Melbourne, Merritt Island, Miami, Naples, Ocala,
Orange Park, Orlando, Palm Harbor, Panama City,
Pembroke Pines, Port Richey, Sarasota, St. Augustine,
St. Petersburg, Southchase, Tallahassee, Tampa,
Viera, West Palm Beach, Winter Haven
	 
	 	 
	Georgia

	 	Acworth, Albany, Alpharetta, Athens, Atlanta,
Augusta, Austell, Buford, Canton, Carrolton,
Cartersville, College Park, Columbus, Commerce,
Conyers, Covington, Cumming, Dalton, Dawsonville,
Douglasville, Duluth, East Point, Ellijay,
Fayetteville, Gainesville, Hiram, Jonesboro,
Kennesaw, LaGrange, Lawrenceville, Lithonia,
McDonough, Macon, Marietta, Morrow, Newnan, Peachtree
City, Perry, Pooler, Rome, Roswell, Savannah,
Snellville, Statesboro, Tifton, Tucker, Valdosta,
Warner Robins, Woodstock
	 
	 	 
	Illinois

	 	Chicago, Fairview Heights, Lombard, Norridge,
Oaklawn, Peoria, Springfield
	 
	 	 
	Indiana

	 	Avon, Bloomington, Carmel, Clarksville, E.
Indianapolis, Evansville, Indianapolis, Merrillville,
Portage, Southport
	 
	 	 
	Kansas

	 	Kansas City, Lawrence, Leawood, Topeka
	 
	 	 
	Kentucky

	 	Bowling Green, Brownsboro Crossing, Cold Springs,
Florence, Frankfort, Lexington, Louisville
	 
	 	 
	Louisiana

	 	St. Tammany
	 
	 	 
	Maine

	 	Auburn, Augusta, Bangor, Biddeford, South Portland
	 
	 	 
	Maryland

	 	Baltimore, Bowie, Columbia, E. Columbia, Frederick,
Gaithersburg, Germantown, Golden Ring, Hagerstown,
Landover, Laurel, Upper Marlboro, Waldorf

A-1

 

	 	 	 
	Massachusetts

	 	Boston, Braintree, Brockton, Burlington, Chestnut
Hill, Dedham, Framingham, Franklin, Haverhill,
Leominster, Mansfield, Marlboro, Methuen, Milford,
Millbury, North Attleboro, Peabody, Plymouth,
Raynham, Seekonk, Shrewsbury, Tewksbury, Watertown,
W. Springfield
	 
	 	 
	Michigan

	 	Allen Park, Auburn Hills, Clinton Township, Grand
Rapids, Roseville, Troy, Westland
	 
	 	 
	Minnesota

	 	Minneapolis
	 
	 	 
	Mississippi

	 	Hattiesburg, Southaven
	 
	 	 
	Missouri

	 	Ballwin, Belton, Chesterfield, E. Columbia,
Florissant, Hazelwood, Independence, Jefferson City,
Kansas City, O’Fallon, Lee’s Summit, St. Peters,
Sunset Hills
	 
	 	 
	Nevada

	 	Las Vegas
	 
	 	 
	New Hampshire

	 	Amherst, Bedford, Concord, Keene, Manchester, Nashua,
Newington
	 
	 	 
	New Jersey

	 	Flanders, Hamilton, Howell, Millville, Mt. Olive, New
Brunswick, Parsippany, Piscataway, Rochelle Park,
Woodbridge
	 
	 	 
	New York

	 	Albany, New York City, Poughkeepsie, Rochester
	 
	 	 
	North Carolina

	 	Apex, Asheville, Brier Creek, Burlington, Charlotte,
Concord, Gastonia, Greensboro, Greenville, Hickory,
High Point, Huntersville, Pineville, Wilmington,
Winston-Salem
	 
	 	 
	Ohio

	 	Beavercreek, Boardman, Cincinnati, Cleveland,
Columbus, Cuyahoga Falls, Dublin, Fairlawn, Fairview
Park, Gahana, Grove City, Independence, Mayfield
Heights, Maumee, Medina, Mentor, Moraine, North
Canton, Pickerington, Solon, Springdale, St.
Clairsville, Strongsville, West Chester, Wooster
	 
	 	 
	Pennsylvania

	 	Bensalem, Cranberry, Erie, Exton, Franklin Mills,
Harrisburg, Lancaster, Moosic, Norristown, Penns
Port, Philadelphia, Pittsburgh Mills, Pottstown,
Robinson, Stroudsburg, Warrington, Waterfront, West
Homestead, Whitman Square
	 
	 	 
	Rhode Island

	 	Providence, Warwick
	 
	 	 
	South Carolina

	 	Anderson, Columbia, Florence, Greenville, Hilton
Head, Mt. Pleasant, Myrtle Beach, N. Charleston, Rock
Hill, Spartanburg
	 
	 	 
	Tennessee

	 	Brentwood, Chattanooga, Clarksville, Gallatin,
Hermitage, Hixson, Jackson, Madison, Nashville
	 
	 	 
	Texas

	 	Dallas, Houston
	 
	 	 
	Vermont

	 	Williston
	 
	 	 
	Virginia

	 	Chantilly, Dulles, Massaponax, McLean, Williamsburg
	 
	 	 
	West Virginia

	 	Charleston, Morgantown
	 
	 	 
	Wisconsin

	 	Milwaukee

A-2EX-10.41 2007 INCENTIVE AWARD AGREEMENT

 

Exhibit 10.41

POPULAR, INC.

2007 INCENTIVE AWARD AND AGREEMENT

SECTION 1

Introduction

     Section 1.1. Purpose. Popular, Inc. (the “Corporation”) has established and maintains the
2004 Omnibus Incentive Plan (the “Plan”) to, among others, provide flexibility to the Corporation
and its affiliates to attract, retain and motivate their officers, executives and other key
employees through the grant of awards and to adjust its compensation practices to the best
compensation practices and corporate governance trends as they develop from time to time. The
Corporation hereby grants a Short-Term Annual Incentive Award and a Long-Term Incentive Award (the
“Award”) under the Plan to the person identified in Section 3.

SECTION 2

Definitions

     When used in this Award, unless the context clearly requires a different meaning, the
following words and terms shall have the meanings set forth below. Terms not otherwise defined
herein shall have the meaning ascribed to them in the Plan. Whenever appropriate, words and terms
used in the singular shall be deemed to include the plural, and vice versa, and the masculine
gender shall be deemed to include the feminine gender.

     Section 2.1. “Affiliate” shall mean any corporation or other form of entity of which
the Corporation owns, from time to time, directly or indirectly, 50% or more of the total combined
voting power of all classes of stock or other equity interests.

     Section 2.2. “Eligible Earnings” shall mean the Grantee’s base salary (prior to any
deferrals under a cash or deferred compensation plan sponsored by the Corporation or an Affiliate)
paid during the Plan Year. From time to time the Plan Administrator may, in its sole discretion,
establish rules for determining the amounts of Eligible Earnings for employees who become Grantees
other than on the first day of a Plan Year as well as any reduction of Eligible Earnings as a
result of paid leave of absences.

     Section 2.3. “Extraordinary Items” shall mean extraordinary, unusual and/or
non-recurring items of income and expenses.

     Section 2.4. “Net Income” for any Plan Year shall mean net income excluding the
effects of Extraordinary Items for that Plan Year.

1

 

     Section 2.5. “Performance Goal” shall mean:

(a) With regard to the Short-Term Annual Incentive Award: After-tax Net Income (prior to change
in accounting principle) for the 2007 Plan Year:

     i. “Corporate Performance Goal” = $382,238,000 for Popular, Inc.

(b) With regard to the Restricted Stock Award: After-tax Net Income (prior to change in
accounting principle) for the 2007 Plan Year:

     i. “Corporate Performance Goal” = $382,238,000 for Popular, Inc.

(c) With regard to the Performance Shares Award: Popular, Inc. simple average 3-year Return on
Equity (“ROE”) during the Performance Cycle:

     i. Popular, Inc. 3-year Return on Equity = 14%

     Section 2.6. “Performance Cycle,” with regard to the Performance Shares Award, shall
be the calendar years 2007, 2008 and 2009.

     Section 2.7. “Performance Shares,” shall mean an award in units denominated in the
Corporation’s common stock, par value $6.00 per share, the number of such units which may be
adjusted over the Performance Cycle based upon the satisfaction of the Performance Goal, pursuant
to Article IX of the Plan.

     Section 2.8. “Plan Administrator” shall mean the Compensation Committee of the Board
of Directors of the Corporation.

     Section 2.9. “Plan Year” shall be the 2007 calendar year.

     Section 2.10. “Restricted Period” shall mean the period of time during which the
shares of Restricted Stock are subject to forfeiture or restrictions on transfer pursuant to
Article VIII of the Plan.

     Section 2.11. “Restricted Stock” shall mean shares of the Corporation’s common stock,
par value $6.00 per share, subject to forfeiture and restrictions on transferability in accordance
with Article VIII of the Plan.

     Section 2.12. “Return on Equity” shall mean the ratio of after-tax net income divided
by shareholder’s equity at the end of a calendar year, excluding the effects of Extraordinary
Items.

2

 

SECTION 3

Grantee of Award

     Section 3.1. Grantee of Award. An award is granted to Richard L. Carrión (the “Grantee”).

SECTION 4

Award

     Section 4.1. Short-Term Annual Incentive Award — General

The Short-Term Annual Incentive Award of the Grantee shall be an amount equal to the sum of the
Grantee’s:

     (i) Corporate
Performance Component, as described in Section 4.2.(a);
plus

     (ii) Strategic and Personal Performance Component, as described in Section 4.2.(b).

     Section 4.2. Short-Term Annual Incentive Award — Components

	(a)	 	Corporate Performance Component: For the 2007 Plan Year, the Grantee’s Corporate Performance
Component shall be an amount equal to a percentage of the Grantee’s Eligible Earnings,
determined as follows:

	 	 	 
	% of Corporate 	 	% of Eligible
	Performance Goal	 	Earnings 
	Below 90%
	 	0%
	90%
	 	40%
	100%
	 	85%
	105%
	 	105%
	Over 105%
	 	6% for every % over 105% performance, not to exceed 135%

3

 

	(b)	 	Strategic and Personal Performance Component: Based on the strategic and personal
performance of the Grantee during the Plan Year, the Plan Administrator may grant between 0%
and 15% of the Grantee’s Eligible Earnings.

     Section 4.3. Long-Term Incentive Award – Restricted Stock

The Restricted Stock Award shall be an amount equal to a percentage of the Grantee’s Eligible
Earnings determined as follows:

	 	 	 
	% of Corporate	 	% of Eligible
	Performance Goal	 	Earnings
	Below 90%
	 	0%
	90%
	 	50%
	100%
	 	100%
	105%
	 	105%
	Over 105%
	 	4% for every % over 105%
performance, not to exceed 125%

4

 

     Section 4.4. Long-Term Incentive Award – Performance Shares

	(a)	 	The Grantee is hereby granted the Performance Shares Award described below. The Grantee will
earn a number of shares of the Corporation’s common stock based on the Corporation’s
achievement of the Performance Goal at the end of the Performance Cycle as follows:

	 	 	 
	2007-2009 Average 3-year	 	Shares of Popular, Inc.
	Return on Equity (ROE)	 	Common Stock
	Below 12%
	 	0
	12%
	 	20,762
	14%
	 	41,523
	16%
	 	83,046

	(b)	 	For the consequences of the termination of employment with respect to the Performance
Shares awarded to the Grantee, which may result in the forfeiture of such Performance Shares,
please refer to Article IX of the Plan and to the Prospectus of the Plan.

SECTION 5

Payment of Award

     Section 5.1 Short-Term Annual Incentive Award. The Short Term Annual Incentive Award shall be
payable in cash as soon as practicable after the Plan Administrator has determined the amount of
those Awards.

     Section 5.2. Long Term Annual Incentive Award. – Restricted Stock

	(a)	 	The Restricted Stock Award shall be paid in Restricted Stock to be purchased on the open
market. The number of shares of Restricted Stock payable shall be based on the average price
per share for all shares purchased by the Corporation to pay Awards approved concurrently by
the Plan Administrator.
	 
	(b)	 	Except as otherwise provided in paragraph (g) below, the restrictions on 100% of the
Restricted Stock awarded to the Grantee will lapse upon the termination of Grantee’s
employment on or after attaining age 55 and completing 10 years of service, as determined
pursuant to personnel policies and procedures.

5

 

	(c)	 	The shares of Restricted Stock awarded to the Grantee herein may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered by the Grantee during the
Restricted Period, except as may be provided under the Plan.
	 
	(d)	 	For the consequences of the termination of employment with respect to the shares of
Restricted Stock awarded to the Grantee, which may result in the forfeiture of such shares of
Restricted Stock, please refer to Article VIII of the Plan and to the Prospectus of the Plan.
	 
	(e)	 	Cash dividends paid on the Restricted Stock, and all of the Common Stock that may be
subsequently acquired with such cash dividends, will be invested in the purchase of additional
shares of Common Stock of the Corporation in accordance with the Popular, Inc. Dividend
Reinvestment and Stock Purchase Plan (DRIP). Such shares are not subject to the restrictions
described in paragraph (c) above and are immediately vested.
	 
	(f)	 	The Restricted Stock shall be held in custody by the Trust Division of Banco Popular de
Puerto Rico. The Grantee shall have the right to vote the Restricted Stock.
	 
	(g)	 	If the Grantee’s employment is terminated for Cause, the Grantee will forfeit the Restricted
Stock awarded that was subject to restrictions at the time of termination for Cause.

     Section 5.3. Long Term Annual Incentive Award. – Performance Shares

The Performance Shares earned by the Grantee will be determined and delivered to the Grantee as
soon as practicable subsequent to the determination of the Corporation’s financial results for the
Performance Cycle and approval by the Plan Administrator. The corresponding shares of the
Corporation’s common stock will be purchased on the open market.

6

 

SECTION 6

Tax Considerations

     Section 6.1. Certain Income Tax Considerations. The granting of the Award may have certain
income tax considerations to the Grantee, which are generally described in the Prospectus of the
Plan.

SECTION 7

Miscellaneous

     Section 7.1 Leave of Absence. The Plan Administrator may establish a method for
adjusting the Award of the Grantee if he was on an approved leave of absence during the Plan Year
and may establish different methods for different forms of leave of absence.

     Section 7.1. The Plan. This Award is subject to the terms of the Plan, a copy of
which has been provided to you.

     Section 7.2. Controlling Law. The laws of the Commonwealth of Puerto Rico shall be
controlling in all matters relating to this Award.

     Section 7.3. Titles and Captions. Titles and captions in this document are used only
for convenience and are not to be used in the interpretation of this Award.

IN WITNESS WHEREOF, Popular, Inc. and the Grantee have executed this Incentive Award and Agreement
as of the 25th January, 2007.

	 	 	 	 	 	 	 	 	 	 	 
	POPULAR, INC.

	 	 	 	GRANTEE
	 	 
	/s/ Tere Loubriel	 	 	 	/s/ Richard L.
Carrión	 	 
	 	 	 	 	 	 	 
	By:

	 	Tere Loubriel
	 	 	 	By:	 	Richard L. Carrión	 	 
	Title:
	 	Executive Vice President	 	 	 	Date:	 	January 25, 2007	 	 
	Date:
	 	January 25, 2007	 	 	 	 	 	 	 	 

7

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