Document:

Exhibit

        

Exhibit 10.37

EMPLOYMENT AGREEMENT  
This EMPLOYMENT AGREEMENT (this “Agreement”) is made as of this 13th day of December, 2016, by and between RED ROBIN GOURMET BURGERS, INC., a Delaware corporation (the “Company”), and Guy J. Constant (“Executive”).
RECITAL
WHEREAS, the parties desire to enter into this Agreement setting forth the terms and conditions for the employment relationship between Executive and the Company. 

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements herein contained and intending to be legally bound hereby, the Company and Executive hereby agree as follows:

AGREEMENT
1.Employment Period.  The Company, through its wholly-owned subsidiary, Red Robin International, Inc., a Nevada corporation (“RRI”), hereby employs Executive, and Executive hereby accepts such employment, upon the terms and conditions hereinafter set forth.  The term of Executive’s employment hereunder shall be deemed to have commenced on December 14, 2016 (the “Effective Date”), and shall continue indefinitely, subject to termination as provided herein (such term being referred to herein as the “Employment Period”).  Executive and the Company acknowledge that, except as may otherwise be provided by this Agreement or under any other written agreement between Executive and the Company, the employment of Executive by the Company and RRI is “at will” and Executive’s employment may be terminated by either Executive or the Company at any time for any reason, or no reason.  RRI shall be the “employer” for tax, legal reporting, payroll processing and similar purposes.
2.    Position and Duties.
(a)    During the Employment Period, Executive shall be employed as and hold the title of Executive Vice President and Chief Financial Officer (“Chief Financial Officer”) of the Company, with such duties and responsibilities that are customary for public company chief financial officer positions.  Executive shall report to the Chief Executive Officer and President and shall interface with Company’s Board of Directors, the Audit Committee and the Finance Committee, and certain other committees of the Board of Directors and their respective chairpersons from time to time (collectively, the “Board”).  In addition, the Chief Executive Officer and President may assign Executive such duties and responsibilities that are not substantially inconsistent with his position as Chief Financial Officer of the Company.
(b)    During the Employment Period, Executive shall devote substantially all of his skill, knowledge and working time to the business and affairs of the Company and its subsidiaries; provided that in no event shall this sentence prohibit Executive from performing personal and charitable activities and any other activities approved in advance by the Board, so long as such activities do not materially and adversely interfere with Executive’s duties for the Company and are in compliance with the Company’s policies.  Executive shall perform his services at the Company’s headquarters, presently located in Greenwood Village, Colorado.  Executive shall use his best efforts to carry out his responsibilities under this Agreement faithfully and efficiently.
3.    Compensation.
(a)    Base Salary.  During the Employment Period, Executive shall receive from the Company an annual base salary (“Annual Base Salary”) at the rate of $500,000.00, with such salary to be adjusted at such times, if any, and in such amounts as recommended by the Chief Executive Officer and President and approved by the Compensation Committee of the Board (the “Compensation Committee”).  

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Executive’s Annual Base Salary shall be subject to annual review by the Chief Executive Officer and President and the Compensation Committee during the Employment Term.  The Company shall pay the Annual Base Salary to Executive in accordance with the Company’s and RRI’s normal payroll policy.
(b)    Sign-On Bonus. The Company agrees to pay Executive a one-time sign-on bonus of $200,000 (the “Sign-On Bonus”), subject to all required taxes and withholdings, to be paid within twenty-one (21) days following the Effective Date.  If Executive’s employment with the Company terminates less than twenty-four (24) full months after the Effective Date, Executive agrees to repay the full amount of the Sign-On Bonus, less 1/24th of the Sign-On Bonus (i.e., $8,333.33) for each full month of employment completed after the Effective Date. Executive further agrees that Executive will repay the Bonus by no later than the effective date of the employment termination, and that any outstanding balance on such repayment obligation is delinquent and immediately collectable the day following the effective date of termination. 
(c)    Annual Incentive Compensation.  In addition to the Annual Base Salary, Executive is eligible to receive an annual cash bonus each fiscal year during the Employment Period as determined in accordance with the Company’s annual incentive plan and as approved by the Compensation Committee (the “Annual Bonus”).  For the 2017 fiscal year, the Annual Bonus shall be targeted at up to 70% of Executive’s Annual Base Salary. Such target will be subject to adjustment by the Compensation Committee in fiscal year 2018 and later.  The actual amount of any Annual Bonus shall depend on the level of achievement of the applicable performance criteria established with respect to the Annual Bonus by the Board and the Compensation Committee in their sole discretion.  There shall be no Annual Bonus in respect of fiscal year 2016.
(d)    Long-Term Incentive Awards.  
(i)    Sign-On Equity Awards.  Executive will receive equity awards pursuant to the Company’s Second Amended and Restated 2007 Performance Incentive Plan (the “2007 Plan”) or the Company’s new equity incentive award plan (subject to approval of such plan at the shareholder meeting in fiscal year 2017), as applicable, as follows (the “Sign-On Equity Awards”): (x) on January 3, 2017, a non-qualified stock option having a Black-Scholes grant date fair value of $400,000, of which 25% shall vest on each of the first, second, third and fourth anniversaries of the date of grant, subject to continued employment through each such vesting date; (y) on January 3, 2017, time-vested restricted stock units having a grant date fair value of $200,000, of which 25% shall vest on each of the first, second, third and fourth anniversaries of the date of grant, subject to continued employment through each such vesting date; and (z) during the first quarter of fiscal 2017, performance share units (PSUs) representing that number of shares of the Company’s common stock (at target) equal to $400,000 divided by the closing price of the Company’s common stock on January 3, 2017 (such PSU grant shall be subject to approval of the Company’s new equity incentive award plan at the shareholder meeting in fiscal year 2017).  The PSU award will cliff-vest at the end of a three-year performance cycle, generally subject to Executive’s continued employment through the applicable vesting date, with the number of PSUs earned and issued to be determined based on achievement of EBITDA and ROIC threshold, target or maximum performance objectives.  Specific EBITDA and ROIC targets (and associated periods for such targets) will be approved by the Compensation Committee in the first quarter of fiscal year 2017, with the threshold, target, and maximum number of shares eligible for issuance under the PSU award to be consistent with past practice.  The Sign-On Equity Awards shall be subject to the terms and conditions set forth in the Company’s standard award agreement for the applicable type of award and shall be subject to the terms of the 2007 Plan or the new equity incentive award plan, as applicable.
(ii)    Beginning in fiscal year 2018, Executive shall have the opportunity to participate in the Company’s long term incentive plan (“LTIP”), which will have a target value equal to 150% of Annual Base Salary.  During the Employment Period, Executive shall be entitled to participate in such annual long term incentive awards as may be approved by the Board or 

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the Compensation Committee from time to time in accordance with the Company’s compensation plans.   
(e)    Other Benefits.  
(i)    Welfare and Benefit Plans.  During the Employment Period: (A) Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs of the Company and RRI to the same extent as other senior executive employees, including, among other things, participation in the Company’s Non-Qualified Deferred Compensation Plan; and (B) Executive and/or Executive’s family, as the case may be, shall be eligible to participate in, and shall receive all benefits under, all welfare benefit plans, practices, policies and programs provided by the Company and RRI (including, to the extent provided, without limitation, medical, prescription, dental, disability, salary continuance, employee life insurance, group life insurance, accidental death and travel accident insurance plans and programs) to the same extent as other senior executive employees.
(ii)    Expenses.  During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable travel and other expenses incurred by Executive in carrying out Executive’s duties under this Agreement, provided that Executive complies with the policies, practices and procedures of the Company and RRI for submission of expense reports, receipts or similar documentation of the incurrence and purpose of such expenses (collectively referred to herein as “Expense Policies”).
(iii)     Paid Time Off.  Executive shall be entitled to holidays and paid time off in accordance with the Company’s holiday and paid time off policies applicable to executive officers as in effect from time to time.
(iv)     Car Allowance.  During the Employment Period, Executive shall be paid a monthly car allowance in the gross amount of $850.00.
(f)    Reservation of Rights.  The Company reserves the right to modify, suspend or discontinue any and all of the employee benefit plans, practices, policies and programs referenced in subsections (e)(i), (ii) and (iii) above at any time without recourse by Executive so long as such action is taken with respect to senior executives generally and does not single out Executive.
4.    Termination.  
(a)    Death or Disability.  Executive’s employment and all associated rights and benefits shall terminate automatically upon Executive’s death.  If the Company determines in good faith that the Disability of Executive has occurred, it may give to Executive written notice of its intention to terminate Executive’s employment.  In such event, Executive’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by Executive, provided that, within the 30 days after such receipt, Executive shall not have returned to full-time performance of his duties.
(b)    Cause.  The Company may terminate Executive’s employment at any time for Cause.  
(c)    By the Company without Cause.  The Company may terminate Executive’s employment at any time without Cause.  
(d)    By Executive for Good Reason.  Executive may terminate his employment at any time for Good Reason subject to the notice and cure provisions set forth in the definition thereof.  
(e)    Obligations of the Company Upon Termination.

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(i)    Death; Disability; For Cause; Resignation without Good Reason.  If Executive’s employment is terminated by reason of Executive’s Death or Disability or by the Company for Cause or Executive resigns without Good Reason, this Agreement shall terminate without further obligations to Executive or his legal representatives under this Agreement, other than for (A) payment of the sum of Executive’s Annual Base Salary through the date of termination to the extent not theretofore paid (“Accrued Obligation”), which Accrued Obligation shall be paid to Executive or his estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the effective date of termination or such earlier date as may be required by law; and (B) payment to Executive or his estate or beneficiary, as applicable, of any amounts due pursuant to the terms of any applicable employee benefit plans. 
(ii)    By the Company without Cause or by Executive for Good Reason.  If, prior to the expiration of the stated term of this Agreement, the Company terminates Executive’s employment for any reason other than for Cause or Executive terminates his employment for Good Reason, this Agreement shall terminate without further obligations to Executive other than: 
(A)    payment of the Accrued Obligation through the effective date of termination in a lump sum in cash within 30 days of the effective date of termination or such earlier date as may be required by law; 
(B)     payment of the equivalent of twelve (12) months of Executive’s Annual Base Salary as in effect immediately prior to the date of termination in a lump sum in cash within 60 days of the effective date of termination, subject to standard withholdings and other authorized deductions;
provided, however, that as conditions precedent to receiving the payments and benefits provided for in this Section 4(e)(ii) (other than payment of the Accrued Obligation), Executive shall first execute and deliver to the Company and RRI a general release agreement  in a  form that is satisfactory to the Company and RRI, and all rights of Executive thereunder or under applicable law to rescind or revoke the release shall have expired no later than the 60 days after the date of termination. If Executive fails to timely execute the general release, all payments and benefits set forth in this Section 4(e)(ii) (other than the payment of the Accrued Obligation) shall be forfeited.
(iii)    Exclusive Remedy.  Executive agrees that the payments contemplated by this Section 4(e) shall constitute the exclusive and sole remedy for any termination of his employment, and Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment; provided, however, that nothing contained in this Section 4(e)(iii) shall prevent Executive from otherwise challenging in a subsequent arbitration proceeding a determination by the Company that it was entitled to terminate Executive’s employment hereunder for Cause.
(iv)    Termination of Payments.  Anything in this Agreement to the contrary notwithstanding, the Company shall have the right to terminate all payments and benefits owing to Executive pursuant to this Section 4(e) upon the Company’s discovery of any breach by Executive of his obligations under the general release or Sections 5, 6, 7 and 8 of this Agreement.
(f)    Survival of Certain Obligations Following Termination.  Notwithstanding any other provision contained in this Agreement, the provisions in Sections 5 through 11 and 14 through 22 of this Agreement shall survive any termination of Executive’s employment hereunder (but shall be subject to Executive’s right to receive the payments and benefits provided under this Section 4).
5.    Confidential Information.  Except in the good-faith performance of his duties hereunder, Executive shall not disclose to any person or entity or use, any information not in the public domain, in any 

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form, acquired by Executive while he was employed or associated with the Company or RRI or, if acquired following the termination of such association, such information which, to Executive’s knowledge, has been acquired, directly or indirectly, from any person or entity owing a duty of confidentiality to the Company or RRI, relating to the Company or its business.  Executive agrees and acknowledges that all of such information, in any form, and copies and extracts thereof are and shall remain the sole and exclusive property of the Company, and Executive shall on request return to the Company the originals and all copies of any such information provided to or acquired by Executive in connection with his association with the Company or RRI, and shall return to the Company all files, correspondence and/or other communications received, maintained and/or originated by Executive during the course of such association.
6.    Covenant Not to Compete.  Executive agrees that, for the period commencing on the Effective Date and ending twelve (12) months after the date of termination of Executive’s employment with the Company (the “Restrictive Period”), Executive shall not directly or indirectly, either for himself or for, with or through any other Person, own, manage, operate, control, be employed by, participate in, loan money to or be connected in any manner with, or permit her name to be used by, either (i) any business that, in the reasonable judgment of the Board, competes with the Company and its subsidiaries in the burger focused restaurant business in (x) the United States, (y) the Canadian provinces of Alberta and British Columbia, or (z) any other country, province or territory in which the Company conducts business as of the date Executive’s employment terminates, or (ii) the following casual dining and brew-centric restaurant concepts (and their successors): Chili’s, Applebee’s, Ruby Tuesday, TGIFridays, Texas Roadhouse, BJ’s, Yardhouse, Millers Ale House and Brickhouse (“Competitive Activity”).  In making its judgment as to whether any business is engaged in a burger focused Competitive Activity, the Board shall act in good faith, and shall first provide Executive with a reasonable opportunity to present such information as Executive may desire for the Board’s consideration.  For purposes of this Agreement, the term “participate” includes any direct or indirect interest, whether as an officer, director, employee, partner, sole proprietor, trustee, beneficiary, agent, representative, independent contractor, consultant, advisor, provider of personal services, creditor, owner (other than by ownership of less than five percent of the stock of a publicly-held corporation whose stock is traded on a national securities exchange (a “Public Company”)).  
7.    No Interference.  During the Restrictive Period, Executive shall not, without the prior written approval of the Company, directly or indirectly through any other Person (a) induce or attempt to induce any employee of the Company or RRI at the level of General Manager or higher in restaurant operations or the level of Director or higher at the Company’s home office to leave the employ of the Company or RRI, or in any way interfere with the relationship between the Company or RRI and any employee thereof, (b) hire any individual who was an employee of the Company or RRI at the level of General Manager or higher in restaurant operations or the level of Director or higher at the Company’s home office within twelve (12) months after such individual’s employment with the Company or RRI was terminated for any reason or (c) induce or attempt to induce any supplier or other business relation of the Company or RRI to cease doing business with the Company or RRI, or in any way interfere with the relationship between any such supplier or business relation and the Company or RRI.
8.    Return of Documents.  In the event of the termination of Executive’s employment for any reason, Executive shall deliver to the Company all of (a) the property of the Company or any of its subsidiaries, and (b) non-personal documents and data of any nature and in whatever medium of the Company or any of its subsidiaries, and he shall not take with his any such property, documents or data or any reproduction thereof, or any documents containing or pertaining to any Confidential Information.
9.    Reasonableness of Restrictions.  Executive agrees that the covenants set forth in Sections 5, 6, 7 and 8 are reasonable with respect to their duration, geographical area and scope.  In the event that any of the provisions of Sections 5, 6, 7 and 8 relating to the geographic or temporal scope of the covenants contained therein or the nature of the business or activities restricted thereby shall be declared by a court of competent jurisdiction to exceed the maximum restrictiveness such court deems enforceable, such provision shall be deemed to be replaced herein by the maximum restriction deemed enforceable by such court.  

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10.    Injunctive Relief.  The parties hereto agree that the Company would suffer irreparable harm from a breach by Executive of any of the covenants or agreements contained herein, for which there is no adequate remedy at law.  Therefore, in the event of the actual or threatened breach by Executive of any of the provisions of this Agreement, the Company, or its respective successors or assigns, may, in addition and supplementary to other rights and remedies existing in their favor, apply to any court of law or equity of competent jurisdiction for specific performance, injunctive or other relief (without the necessity of posting bond) in order to enforce compliance with, or prevent any violation of, the provisions hereof; and that, in the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining Executive from engaging in activities prohibited hereby or such other relief as may be required to specifically enforce any of the covenants contained herein.
11.    Extension of Restricted Periods.  In addition to the remedies the Company may seek and obtain pursuant to this Agreement, the restricted periods set forth herein shall be extended by any and all periods during which Executive shall be found by a court to have been in violation of the covenants contained herein.
12.    Stock Ownership Requirement.  While employed by the Company, Executive shall be expected to maintain ownership of common stock or stock equivalents in such amounts and on such terms and conditions as are set forth in the Company’s Executive Stock Ownership Guidelines established by the Compensation Committee and in effect from time to time (the “Ownership Guidelines”).  Executive is expected to meet the ownership requirements set forth in the Ownership Guidelines within the time period stated in the Ownership Guidelines.  In the event Executive is unable to meet his ownership requirements within the defined time period, Executive shall retain all net after tax profit shares following option exercise and/or the vesting of restricted stock units until Executive has satisfied the requirements set forth in this Section 12.  No additional liability shall apply to Executive if Executive fails to satisfy the stock ownership requirements set forth in this Section 12.
13.    Definitions.  As used herein, unless the context otherwise requires, the following terms have the following respective meanings:
“Cause” means with respect to the termination by the Company of Executive as an employee of the Company:
(i)    Executive’s continual or deliberate neglect in the performance of his material duties; 
(ii)    Executive’s failure to devote substantially all of his working time to the business of the Company and its subsidiaries (other than as expressly permitted in this Agreement);
(iii)    Executive’s failure to follow the lawful directives of the Board or the Chief Executive Officer and President in any material respect;
(iv)    Executive’s engaging in misconduct in connection with the performance of any of his 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;

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(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 act of 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;
provided, however, Executive will not be deemed to have been terminated for Cause in the case of clauses (i), (ii), (iv) and (v) above, unless any such failure or material breach is not fully corrected prior to the expiration of the ten (10) business day period following delivery to Executive of the Company’s written notice that specifies in detail of the alleged Cause event(s) and the Company’s intention to terminate his employment for Cause.
“Disability” means a physical or mental impairment which substantially limits a major life activity of Executive and which renders Executive unable to perform the essential functions of his position, even with reasonable accommodation which does not impose an undue hardship on the Company.  The Company reserves 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. 
“Good Reason” shall mean the occurrence, without Executive’s express written consent, of: (i) a material reduction in Executive’s compensation other than as permitted pursuant to Section 3 hereof; (ii) a relocation of the Company’s headquarters to a location more than twenty (20) miles from the location of the Company’s headquarters prior to such relocation; (iii) any willful breach by the Company of any material provision of this Agreement; or (iv) a significant reduction in the then-effective responsibilities of the Chief Financial Officer; 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, 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 due to termination by the Executive for Good Reason, and the Executive actually terminates his employment for Good Reason within six (6) months of the initial occurrence of any of the conditions in (i) – (iv), above. 
“Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended.
14.    Arbitration.  Except as otherwise provided herein, any controversy arising out of or relating to this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, or any other controversy arising out of Executive’s employment, including, but not limited to, any state or federal statutory or common law claims, shall be submitted to arbitration in Denver, Colorado, before a sole arbitrator selected from Judicial Arbiter Group, Inc., Denver, Colorado, or its successor (“JAG”), or if JAG is no longer able to supply the arbitrator, such arbitrator shall be selected from the Judicial Arbitration and Mediation Services, Inc. (“JAMS”), or other mutually agreed upon arbitration provider, as the exclusive forum for the resolution of such dispute.  Provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the Arbitrator.  Final resolution of any dispute through arbitration may include any remedy or relief which the Arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes.  At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the Arbitrator’s award or decision is based.  Any award or relief granted by the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction.  The parties acknowledge 

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and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement or Executive’s employment, and under no circumstances shall class claims be processed or participated in by Executive.  The parties agree that Company shall be responsible for payment of the forum costs of any arbitration hereunder, including the Arbitrator’s fee.  Executive and the Company further agree that in any proceeding to enforce the terms of this Agreement, the prevailing party shall be entitled to its or his reasonable attorneys’ fees and costs incurred by it or his in connection with resolution of the dispute in addition to any other relief granted.
15.    Governing Law.  This Agreement and the legal relations hereby created between the parties hereto shall be governed by and construed under and in accordance with the internal laws of the State of Colorado, without regard to conflicts of laws principles thereof.  Each Participant shall submit to the venue and personal jurisdiction of the Colorado state and federal courts concerning any dispute for which judicial redress is permitted pursuant to this Agreement; however the Company is not limited in seeking relief in those courts.
16.    Taxes.  
(a)    Except as otherwise provided in Section 20, and to the extent specifically provided in Section 17, Executive shall be solely liable for Executive’s tax consequences of compensation and benefits payable under this Agreement, including any consequences of the application of Section 409A of the Code.
(b)    In order to comply with all applicable federal or state income tax laws or regulations, the Company may withhold from any payments made under this Agreement all applicable federal, state, city or other applicable taxes.
17.    Section 409A Savings Clause.  
(a)    It is the intention of the parties that compensation or benefits payable under this Agreement not be subject to the additional tax imposed pursuant to Section 409A of the Code, and this Agreement shall be interpreted accordingly.  To the extent such potential payments or benefits could become subject to additional tax under such Section, the parties shall cooperate to amend this Agreement with the goal of giving Executive the economic benefits described herein in a manner that does not result in such tax being imposed.
(b)    Each payment or benefit made pursuant to Section 4(e) of this Agreement shall be deemed to be a separate payment for purposes of 409A.  In addition, payments or benefits pursuant to Section 4(e) shall be exempt from the requirements of Code Section 409A to the maximum extent possible as “short-term deferrals” pursuant to Treasury Regulation Section 1.409A-1(b)(4), as involuntary separation pay pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), and/or under any other exemption that may be applicable, and this Agreement shall be construed accordingly.  
(c)    For purposes of this Agreement, phrases such as “termination of employment” shall be deemed to mean “separation from service,” as defined in Section 409A of the Code and the Treasury Regulations thereunder.  
(d)    If Executive is a specified employee within the meaning of Section 409A(a)(2)(B)(i) of the Code and would receive any payment sooner than six (6) months after Executive’s “separation from service” that, absent the application of this Section 17(d), would be subject to additional tax imposed pursuant to Section 409A of the Code as a result of such status as a specified employee, then such payment shall instead be payable on the date that is the earliest of (i) six (6) months after Executive’s “separation from service” or (ii) Executive’s death.

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18.    Entire Agreement.  This Agreement (including Exhibits) constitutes and contains the entire agreement and final understanding concerning Executive’s employment with the Company and the other subject matters addressed herein between the parties.  It is intended by the parties as a complete and exclusive statement of the terms of their agreement.  It supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matter hereof.  Any representation, promise or agreement not specifically included in this Agreement shall not be binding upon or enforceable against either party.  This is a fully integrated agreement.
19.    Amendment and Waiver.  The provisions of this Agreement may be amended or waived only with the prior written consent of the Board (or a person expressly authorized thereby) and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.
20.    Excise Tax Payment.  
(a)Anything in this Agreement to the contrary notwithstanding, 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)  (a “Payment”) including, by example and not by way of limitation, acceleration (by the Company or otherwise) of the date of vesting or payment under any plan, program, arrangement or agreement of the Company, would be subject to the excise tax imposed by Code Section 4999 or any interest or penalties with respect to such excise tax (such excise tax together with any such interest and penalties, shall be referred to as the “Excise Tax”), then there shall be made a calculation under which such Payments provided to Executive are reduced to the extent necessary so that no portion thereof shall be subject to the Excise Tax (the “4999 Limit”).  A comparison shall then be made between (A) Executive’s Net After-Tax Benefit (as defined below) assuming application of the 4999 Limit; and (B) Executive’s Net After-Tax Benefit without application of the 4999 Limit.  If (B) exceeds (A) by $50,000 or more, then no limit on the Payments received by Executive under this Agreement shall be imposed by this Section 20.  Otherwise, the amount payable to Executive pursuant to this Agreement shall be reduced so that no such Payment is subject to the Excise Tax.  “Net After-Tax Benefit” shall mean the sum of (x) all payments that Executive receives or is entitled to receive from the Company that are contingent on a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company within the meaning of Code section 280G(b)(2) (either, a “Section 280G Transaction”), less (y) the amount of federal, state, local and employment taxes and Excise Tax (if any) imposed with respect to such payments.  
(b)    All determinations required to be made under this Section 20, including whether and when a Payment is cut back pursuant to Section 20(a) and the amount of such cut-back, and the assumptions to be utilized in arriving at such determination, shall be made by a professional services firm designated by the Board that is experienced in performing calculations under Section 280G (the “Professional Services Firm”) which shall provide detailed supporting calculations both to the Company and Executive.  If the Professional Services Firm is serving as accountant or auditor for the individual, entity or group effecting the Section 280G Transaction, the Board shall appoint another qualified professional services firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Professional Services Firm hereunder).  All fees and expenses of the Professional Services Firm shall be borne solely by the Company.
(c)    In the event that a reduction in Payments is required pursuant to this Section, then, except as provided below with respect to Payments that consist of health and welfare benefits, the reduction in Payments shall be implemented by determining the “Parachute Payment Ratio” (as defined below) for each Payment and then reducing the Payments in order beginning with the Payment with the highest Parachute Payment Ratio.  For Payments with the same Parachute Payment Ratio, such Payments shall be reduced based on the time of payment of such Payments, with amounts being paid furthest in the future being reduced first.  For Payments with the same Parachute Payment Ratio and the same time of payment, such Payments shall be reduced on a pro-rata basis (but not below zero) prior to reducing Payments next 

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in order for reduction.  For purposes of this Section, “Parachute Payment Ratio” shall mean a fraction, the numerator of which is the value of the applicable Payment as determined for purposes of Code Section 280G, and the denominator of which is the financial present value of such Parachute Payment, determined at the date such payment is treated as made for purposes of Code Section 280G (the “Valuation Date”).  In determining the denominator for purposes of the preceding sentence (1) present values shall be determined using the same discount rate that applies for purposes of discounting payments under Code Section 280G; (2) the financial value of payments shall be determined generally under Q&A 12, 13 and 14 of Treasury Regulation 1.280G-1; and (3) other reasonable valuation assumptions as determined by the Company shall be used.  Notwithstanding the foregoing, Payments that consist of health and welfare benefits shall be reduced after all other Payments, with health and welfare Payments being made furthest in the future being reduced first.  Upon any assertion by the Internal Revenue Service that any such Payment is subject to the Excise Tax, Executive shall be obligated to return to the Company any portion of the Payment determined by the Professional Services Firm to be necessary to appropriately reduce the Payment so as to avoid any such Excise Tax. 
20.    Clawback.  Executive acknowledges that any incentive compensation contemplated under this Agreement shall be subject to the Company’s clawback policies, including without limitation any policy adopted to the extent required by applicable law or written company policy adopted to implement the requirements of such law (including without limitation Section 304 of the Sarbanes Oxley Act and Section 954 of the Dodd Frank Act.
21.    Miscellaneous.
(a)    Binding Effect.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, successors and assigns, except that Executive may not assign his rights or delegate his obligations hereunder without the prior written consent of the Company.
(b)    Notices.  All notices required to be given hereunder shall be in writing and shall be deemed to have been given if (i) delivered personally or by documented courier or delivery service, (ii) transmitted by facsimile or (iii) mailed by registered or certified mail (return receipt requested and postage prepaid) to the following listed persons at the addresses and facsimile numbers specified below, or to such other persons, addresses or facsimile numbers as a party entitled to notice shall give, in the manner hereinabove described, to the others entitled to notice:
If to the Company, to:

Red Robin Gourmet Burgers, Inc. 
6312 South Fiddler’s Green Circle, Suite 200N  
Greenwood Village, CO  80111  
Attention:  Chief Executive Officer 
Facsimile No.:  303-846-6048
with a copy to:
Red Robin Gourmet Burgers, Inc. 
6312 South Fiddler’s Green Circle, Suite 200N  
Greenwood Village, CO  80111  
Attention:  Chief Legal Officer 
Facsimile No.:  303-846-6048

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Bryan Cave LLP 
One Metropolitan Square 
211 N. Broadway, Suite 3600
St. Louis, MO 63102 
Attention:  Robert J. Endicott 
Facsimile No.:  314-259-2447
If to Executive:
To Executive’s last known address as reflected in the Company’s records, or to such other address as Executive shall designate by written notice to the Company.
If given personally or by documented courier or delivery service, or transmitted by facsimile, a notice shall be deemed to have been given when it is received.  If given by mail, it shall be deemed to have been given on the third business day following the day on which it was posted.
(c)    Headings.  The section and other headings contained in this Agreement are for the convenience of the parties only and are not intended to be a part hereof or to affect the meaning or interpretation hereof
(d)    Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
(e)    Construction.  Each party has cooperated in the drafting and preparation of this Agreement.  Hence, in any construction to be made of this Agreement, the same shall not be construed against any party on the basis that the party was the drafter.
(f)    Savings Clause.  If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.  Subject to the foregoing, upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent reasonably practicable.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
RED ROBIN GOURMET BURGERS, INC.

By:   /s/ Denny Marie Post_______________
Name: Denny Marie Post
Title: Chief Executive Officer

EXECUTIVE:

  /s/ Guy J. Constant____________________
Guy J. Constant

12Exhibit 10.1

 

Restricted Stock Award Agreement

 

This Restricted Stock Award Agreement (this “Award Agreement”) is made and entered into as of February 20, 2017 (the “Grant Date”) by and between Ashford Hospitality Trust, Inc., a Maryland corporation (the “Company”) and Douglas A. Kessler (the “Participant”).  All capitalized terms in this Award Agreement shall have the meanings assigned to them herein.   Capitalized terms not defined herein shall have the meanings assigned to them in the Company’s 2011 Stock Incentive Plan, as amended by Amendment No. 1 dated May 13, 2014 and Amendment No. 2 dated August 2, 2016 and as the same may be amended from time to time (the “Plan”).

 

1.             Grant of Restricted Stock.  Pursuant to the terms and conditions of this Award Agreement and the terms and conditions of the Plan, the Company grants to the Participant all rights, title and interest in the record and beneficial ownership of  three hundred fifty nine thousand four hundred seventy seven (359,477) shares (the “Restricted Stock”) of common stock, $0.01 par value per share, of the Company (“Common Stock”), on the terms and conditions and subject to the restrictions set forth in this Award Agreement and the Plan.  The grant of Restricted Stock is made in consideration of the services to be rendered by the Participant to the Company and its Affiliates and is subject to the terms and conditions of the Plan.

 

2.             Issuance and Transferability.  In the event certificates representing the shares granted hereunder are issued to the Participant such certificates shall be of even date herewith and shall be marked with the following legend:

 

“The shares represented by this certificate have been issued pursuant to the terms of the Ashford Hospitality Trust, Inc. 2011 Stock Incentive Plan and the Restricted Stock Award Agreement dated February 20, 2017, and may not be sold, pledged, transferred, assigned or otherwise encumbered in any manner except as is set forth in the terms of such plan or grant.”

 

Such shares are not transferable except by will or the laws of descent and distribution or pursuant to a domestic relations order of the court in a divorce proceeding.  No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities, or torts of the Participant.  Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or any rights relating to any of the foregoing shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be automatically forfeited by the Participant and all of the Participant’s rights to such shares shall immediately terminate without any payment or consideration by the Company, Advisor and/or their respective Affiliates.

 

3.             Risk of Forfeiture.  The Participant shall immediately forfeit all rights to any non-vested portion of the Restricted Stock for no consideration in the event of the Participant’s Termination of Service, if applicable, under circumstances that do not cause the Participant to become fully vested under the terms of Section 4.  For the purposes of this Award Agreement, “Termination of Service” shall mean the Participant’s termination of service or employment with the Company and its Affiliates (excluding Advisor), for any reason other than an Involuntary Termination. The Participant shall not be deemed to have a Termination of Service

 

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merely because of a change in the capacity in which the Participant renders service to the Company and its Affiliates (excluding Advisor), provided that there is no interruption or termination of the Participant’s service.

 

4.             Vesting.  Subject to Section 3 hereof, the Participant’s rights in the Restricted Stock shall vest, and the Company’s right to repurchase such shares shall lapse:

 

(a)      with respect to one-third (1/3) of the Restricted Stock on February 20, 2018, and on each subsequent anniversary of said date thereafter that the Participant does not experience a Termination of Service;

 

(b)      with respect to 100% of the Restricted Stock that has not otherwise vested, upon the Participant’s Involuntary Termination with the Company, death or Disability;

 

(c)       with respect to 100% of the Restricted Stock that has not otherwise vested, upon a Change of Control of the Company;

 

(d)      upon a change of control of  Ashford Inc. (the “Advisor”) (as change of control is defined in any employment or other written agreement between the Participant and Advisor, as the same may be amended from time to time (the “Employment Agreement”)), to the extent provided therein, if such change of control of Advisor results in the vesting of this Award under the terms of the Employment Agreement; and

 

(e)       to the extent provided in the Employment Agreement if an involuntary termination of employment from Advisor causes vesting of this Award under the Employment Agreement.

 

For the purposes of this Section 4, “Involuntary Termination” means (A) at a time that the Participant is otherwise willing and able to continue providing services, a Termination of Service by the Company without Cause or (B) a Termination of Service by Participant for Good Reason.

 

5.             Ownership Rights.   Subject to the restrictions set forth in this Award Agreement and the Plan, the Participant is entitled to all voting and ownership rights applicable to the Restricted Stock, including the right to receive any dividends or other distributions that may be paid on the Restricted Stock, regardless of restriction periods with respect to the underlying Restricted Stock.  For purposes of clarity, Participant shall be entitled to dividends or other distributions with respect to all shares of Restricted Stock held thereby, whether vested or unvested.

 

6.             Reorganization of the Company.   The existence of this Award Agreement shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business; any merger or consolidation of the Company; any issue of bonds, debentures, preferred or prior preference stock ahead of or affecting the Restricted Stock or the rights thereof; the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

 

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7.             Recapitalization Events.   In the event of stock dividends, spin-offs of assets or other extraordinary dividends, stock splits, combinations of shares, recapitalizations, mergers, consolidations, reorganizations, liquidations, issuances of rights or warrants and similar transactions or events involving the Company (“Recapitalization Events”), then for all references herein to Common Stock or to Restricted Stock shall mean and include all securities or other property (other than cash) that holders of Common Stock of the Company are entitled to receive in respect of Common Stock by reason of each successive Recapitalization Event, which securities or other property (other than cash) shall be treated in the same manner and shall be subject to the same restrictions as the underlying Restricted Stock.

 

8.             Certain Restrictions.   By executing this Award Agreement, the Participant acknowledges that he has received a copy of the Plan and agrees that he will enter into such written representations, warranties and agreements and execute such documents as the Company may reasonably request in order to comply with the securities law or any other applicable laws, rules or regulations, or with this document or the terms of the Plan.

 

9.             Withholding. If the Company, in its discretion, determines that it is obligated to withhold any tax in connection with the grant or vesting of Restricted Stock hereunder, the Participant must make arrangements satisfactory to the Company to pay or provide for any applicable federal, state, local and other withholding obligations. The Participant may satisfy any federal, state, local or other tax withholding obligation relating to the vesting of Restricted Stock hereunder by tendering cash payment to the Company, or if permitted by the Committee (which permission shall not be unreasonably withheld), by any of the following means: (a) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise held by the Participant as a result of the vesting of the Restricted Stock; provided, however, that no shares of Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (b) delivering to the Company previously owned and unencumbered shares of Common Stock. The Company also has the right to withhold from any other compensation payable to the Participant.

 

10.          Tax Liability.  Notwithstanding any action the Company takes with respect to any or all tax or other tax-related withholding with respect to the Restricted Stock (“Tax-Related Items”), the ultimate liability for all Tax-Related Items (and any associated penalties and interest) is and remains the Participant’s responsibility, and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock, dividends or other distributions with respect to shares of Common Stock received under this Award Agreement, or the subsequent sale or other disposition of any such shares acquired hereunder; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Participant’s liability for Tax-Related Items.

 

11.          No Right to Continued Service. Neither the Plan nor this Award Agreement shall confer upon the Participant any right to be retained in any capacity as a service provider to the Company, Advisor and/or their respective Affiliates.  Further, nothing in the Plan or this Award Agreement shall be construed to limit the discretion of the Company, Advisor and/or their respective Affiliates to terminate the Participant’s service at any time, with or without Cause.

 

12.          Compliance with Law.  The issuance of shares of Common Stock shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and

 

3

 

state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Common Stock may be listed.  No shares of Common Stock shall be issued or transferred unless and until any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.  The Participant understands that the Company is under no obligation to register any shares with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.

 

13.          Notices. Any notice required to be delivered to the Company under this Award Agreement shall be in writing and addressed to the General Counsel of the Company at the Company’s principal corporate offices.  Any notice required to be delivered to the Participant under this Award Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company at the time such notice is to be delivered. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.

 

14.          Governing Law.   This Award Agreement shall be construed and interpreted in accordance with the laws of the State of Maryland without regard to conflict of law principles.

 

15.          Interpretation. Any dispute regarding the interpretation of this Award Agreement shall be submitted by the Participant or the Company to the Committee for review.  The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.

 

16.          Restricted Stock Subject to Plan.  This Award Agreement is subject to the Plan as approved by the Company’s shareholders.  The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference.  In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail; provided, that, any such amendment, modification or termination shall not, without the Participant’s consent, materially reduce or diminish the Participant’s rights to the Restricted Stock granted pursuant to this Award Agreement or otherwise increase the Participant’s obligations to the Company.

 

17.          Successors and Assigns.  The Company may assign any of its rights under this Award Agreement. This Award Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Award Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom this Award Agreement may be transferred in accordance with Section 2.

 

18.          Severability.  The invalidity or unenforceability of any provision of the Plan or this Award Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Award Agreement, and each provision of the Plan and this Award Agreement shall be severable and enforceable to the extent permitted by law.

 

19.          Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion; provided, that, any such amendment, modification or termination shall not, without the Participant’s consent, materially reduce or diminish the Participant’s rights to the Restricted Stock granted pursuant to this Award

 

4

 

Agreement or otherwise increase the Participant’s obligations to the Company. The grant of the Restricted Stock under this Award Agreement does not create any contractual right or other right to receive any other awards in the future. Future awards, if any, will be at the sole discretion of the Company.

 

20.          No Guarantee of Tax Consequences.  The Company, its Affiliates, the Board and the Committee make no commitment or guarantee to the Participant (or to any other person claiming through or on behalf of the Participant) that any federal, state, local or other tax treatment will (or will not) apply or be available to any person eligible for benefits under this Award Agreement and assume no liability or responsibility whatsoever for the tax consequences to the Participant (or to any other person claiming through or on behalf of the Participant).

 

21.          Claw-back Policy. This Award (including any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of any Award or upon the receipt or resale of any shares of Common Stock underlying the Award) shall be subject to the provisions of any claw-back policy implemented by the Company, Advisor or any of their respective Affiliates, as applicable, including, without limitation, any claw-back policy adopted to comply with the requirements of any federal or state laws and any rules or regulations promulgated thereunder, to the extent set forth in such claw-back policy.

 

22.          Amendment. The Committee has the right, without the consent of the Participant, to amend, modify or terminate the Award, prospectively or retroactively; provided, that, such amendment, modification or termination shall not, without the Participant’s consent, materially reduce or diminish the value of the Award determined as if the Award had been vested and settled on the date of such amendment or termination.

 

23.          No Impact on Other Benefits. The value of the Participant’s Award is not part of his or her normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar benefit, as applicable, except as otherwise provided in any employment agreement, service agreement or similar agreement in effect between the Company, Advisor and/or their respective Affiliates and the Participant.

 

24.          Counterparts. This Award Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument. Counterpart signature pages to this Award Agreement transmitted by facsimile transmission, by electronic mail in portable document format (.pdf), or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature.

 

25.          Headings. The headings in this Award Agreement are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof.

 

26.          Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Award Agreement. The Participant has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Award Agreement.

 

5

 

Executed as of the 20th day of February 2017.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
ASHFORD HOSPITALITY TRUST, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ David A. Brooks
    
	
 
    	
Name: David A. Brooks
    
	
 
    	
Title: Chief Operating   Officer/General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
PARTICIPANT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Douglas A. Kessler
    
	
 
    	
DOUGLAS A. KESSLER
    

 

6

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