Document:

EX-10.(34) FOURTH AMENDMENT EMPLOYMENT AGREEMENT

 

Exhibit 10(34)

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 JOIA M. JOHNSON, 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 her 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 Three Hundred Thirty
Thousand and 00/100 Dollars ($330,000) 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 Three Hundred Thirty Nine
Thousand Nine Hundred and 00/100 Dollars ($339,900). 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.

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     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/ Joia M. Johnson
 	 
	 	JOIA M. JOHNSON 	 
	 	 	 

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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.(38) THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

 

Exhibit 10(38)

THIRD AMENDMENT OF EMPLOYMENT AGREEMENT

     THIS THIRD AMENDMENT, made and entered into as of the 27th day of October, 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”) and Second Amendment of Employment Agreement, dated as of
October 27, 2005 (the “Second Amendment”); and

     WHEREAS, the Second Amendment requires the Company and Executive to renew the Original
Agreement on or before October 27, 2006 in order for the term of the Original Agreement to continue
past the Expiration Date (as defined in the Second Amendment); and

     WHEREAS, the Company and Executive intend to renew the Original Agreement on the terms and
conditions set forth in this Third 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 Second 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, 2007
(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, 2007 (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, 2008, 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 Second 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). 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 2.3 of the Original Agreement, as revised by the Second Amendment, shall be deleted
in its entirety and replaced with the following new Section 2.3:

     2.3 Equity Awards. The Company acknowledges that it has caused the Parent to
issue equity awards, including incentive stock options, non-qualified stock options and
restricted stock awards (collectively, the “Equity Awards”) to Executive pursuant to the
Parent’s 1997 Long-Term Incentive Plan (the “1997 Plan”) and the Parent’s Amended and
Restated 2002 Long Term Incentive Plan (the “2002 Plan”, together with the 1997 Plan, the
“Equity Incentive Plans”). The Company represents and warrants to Executive that (i)
during the Employment Term, the Company will cause Executive to be within the category of
persons for which awards may be granted under the 2002 Plan or its successor plan; (ii) the
Equity Incentive Plans have been approved by the Parent’s Board of Directors and
shareholders and all Equity Awards granted to Executive under the Equity Incentive Plans
are and shall remain in full force and effect as the legally binding obligations of the
Parent and the Company throughout the Employment Term, subject to the terms of the Equity
Incentive Plans and the award agreements executed in connection with the issuance of Equity
Awards; and (iii) the Parent has caused all shares of stock in the Parent that may be
acquired by Executive through the exercise or vesting of the Equity Awards to be registered
and freely tradable, whether by means of the Parent’s filing of all necessary Form S-8
registration statements or otherwise, subject to restriction on sale
or transfer of such shares

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under applicable securities laws by virtue of Executive’s position with the Company
or ownership of the Parent’s securities.

     4. Section 3.2 of the Original Agreement shall be deleted in its entirety and replaced with
the following new Section 3.2:

     3.2 Payment upon Termination.

     (a) Upon termination of the Employment Term for Cause, or as a result of Executive’s
resignation pursuant to Section 3.1(e), in the absence of circumstances described in
Section 3.2(e), Executive shall be entitled to receive the compensation under Section 2.1
owed to Executive but unpaid for performance rendered under this Agreement as of the date
of termination and any additional compensation he may be entitled to receive under the
terms of any employee benefit plan offered by the Company.

     (b) Upon termination of the Employment Term by the death of Executive, Executive’s
estate shall be entitled to receive (i) the compensation under Section 2.1 owed to
Executive but unpaid for performance rendered under this Agreement as of the date of death;
and (ii) a lump sum equal to Executive’s pro-rata share (based on days worked before death)
of the bonus to which he would have been entitled under Section 2.2 if he had been an
employee on the date bonuses for the then-current fiscal year were distributed.

     In addition to the foregoing, upon such termination (i) all of Executive’s Equity
Awards that are outstanding on the date of Executive’s death shall be deemed amended,
without further action by the Parent, the Company or Executive, so that any portion of such
Equity Awards that would have vested solely with the passage of time over the twenty-four
(24) month period following such termination, had Executive remained an employee of the
Company during such period, shall be immediately vested and exercisable as of the date of
termination, and any such stock options shall thereafter continue or expire in accordance
with their original terms, and (ii) the Company shall continue to provide and pay for all
health, hospitalization and long-term care insurance premiums necessary to provide
Executive’s dependent family members, if any, with coverage under the Company’s group
health insurance program, on the same terms and conditions as offered to other executives
of the Company throughout the period of coverage, for a period of twenty-four (24) months
from and after the date of Executive’s termination of employment. From and after the
expiration of such twenty-four (24) month period, all applicable laws shall continue to
apply to any person’s or persons’ rights to continue such benefits.

     Payments pursuant to this Section 3.2(b) shall be in addition to any insurance
proceeds that may be payable to Executive’s estate or beneficiaries.

     (c) In the event that during the Employment Term Executive becomes Disabled (as
defined in Section 3.1(b)) and the Company thereafter terminates Executive’s employment
during the continuation of such disability, Executive shall

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be entitled to receive (i) the
compensation under Section 2.1 owed to Executive but unpaid for performance rendered under
this Agreement as of the date of termination; (ii) a lump sum equal to Executive’s pro rata
share (based on days worked before he
became disabled) of the bonus to which he would have been entitled under Section 2.2
if he had been an employee on the date bonuses for the then-current fiscal year were
distributed; and (iii) continuation of Executive’s Base Compensation, as in effect
immediately prior to the date of termination of employment, for a period of ninety (90)
days following the termination of employment, which shall be paid as and when salary
payments would otherwise be made under Section 2 of this Agreement.

     In addition to the foregoing, upon such termination of employment (i) all of
Executive’s Equity Awards that are outstanding on the date of Executive’s termination from
employment shall be deemed amended, without further action by the Parent, the Company or
Executive, so that any portion of such Equity Awards that would have vested solely with the
passage of time over the twenty-four (24) month period following such termination, had
Executive remained an employee of the Company during such period, shall be immediately
vested and exercisable as of the date of termination, and any such stock options shall
thereafter continue or expire in accordance with their original terms, and (ii) the Company
shall continue to provide and to pay for all health, hospitalization and long-term care
insurance premiums necessary to provide Executive and his dependent family members, if any,
with coverage under the Company’s group health insurance program, on the same terms and
conditions as offered to other executives of the Company throughout the period of coverage,
for a period of twenty-four (24) months from after the date of Executive’s termination of
employment. From and after the expiration of such twenty-four (24) month period, all
applicable laws shall continue to apply to any person’s or person’ rights to continue such
benefits.

     Payments pursuant to this Section 3.2 (c) shall be in addition to any disability
insurance payments that may be payable to Executive.

     (d) In the event that the Company terminates Executive’s employment for any reason
other than those set forth in subsections 3.1 (a), (b) or (c) above, except upon expiration
of the Employment Term, or unless the provisions of Section 3.2(e) apply, Executive shall
be entitled to receive the compensation under Section 2.1 owed to Executive but unpaid for
performance rendered under this Agreement as of the date of termination, and the Company
will be obligated to pay Executive an amount equal to twelve (12) months of his Base
Compensation, as in effect immediately prior to the date of termination (the “Termination
Severance”). Executive shall also be entitled to receive his pro-rata share (based on days
worked before termination) of the bonus to which he would have been entitled under Section
2.2 if he had been an employee on the date bonuses for the then-current fiscal year were
distributed. Such payments of Base Compensation and bonus shall be made over time, as and
when salary and bonuses would otherwise be payable under Section 2 of this Agreement;
provided, however, that on February 15 of the

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year following the termination date, the
Company shall pay Executive in one lump sum any unpaid portion of the Termination
Severance.

     In addition to the foregoing, upon such termination of employment,
(i) all of Executive’s Equity Awards that are outstanding on the date of Executive’s
termination from employment shall be deemed amended, without further action by the
Parent, the Company or Executive, so that any portion of such Equity Awards that would have
vested solely with the passage of time over the twenty-four (24) month period following
such termination, had Executive remained an employee of the Company during such period,
shall be immediately vested and exercisable as of the date of termination, and any such
stock options shall thereafter continue or expire in accordance with their original terms,
and (ii) the Company shall continue to provide and to pay for all health, hospitalization
and long-term care insurance premiums necessary to provide Executive and Executive’s
dependant family members, if any, with coverage under the Company’s group health insurance
program , on the same terms and conditions as offered to other executives of the Company
throughout the period of coverage, for a period of twelve (12) months from and after the
date of Executive’s termination of employment. From and after the expiration of such
twelve (12) month period, all applicable laws shall continue to apply to any person’s or
persons’ rights to continue such benefits.

     (e) In the event that (i) during the Employment Term a “Change in Control” (as
defined below) shall occur and (ii) within eighteen (18) months following such
Change in Control, either (A) the Company substantially reduces Executive’s scope of
responsibility, and Executive resigns as a result of such action, or (B) the
Company terminates Executive’s employment for any reason other than those set forth in
subsections (a), (b) or (c) above then, in lieu of the amounts payable pursuant to Section
3.2(d), Executive shall be entitled to receive (i) the compensation under Section 2.1 owed
to Executive but unpaid for performance rendered under this Agreement as of the date of
resignation or termination; (ii) a lump sum equal to the average of the bonus paid to
Executive with respect to each of the two fiscal years of the Company prior to the year in
which the resignation or termination occurs; and (iii) an amount equal to twenty-four (24)
months of his Base Compensation, as in effect immediately prior to the date of resignation
or termination. The amount payable pursuant to clause (iii) of the immediately preceding
sentence (the “CIC Severance”) shall be payable in periodic amounts, each equal to the
periodic Base Compensation payments being made to Executive immediately prior to the date
of resignation or termination, on the dates that salary payments are normally made to
executives of the Company or its successor; provided, however, that on February 15 of the
year following the date of resignation or termination, the Company shall pay Executive in
one lump sum any remaining unpaid portion of the CIC Severance. Notwithstanding the
provisions of the immediately preceding sentence, in the event that the Company shall fail
to make any payment of the CIC Severance, which failure is not cured within thirty (30)
days following written notice to the Company of the failure to make such payment, then all
remaining portions of the CIC Severance shall thereupon be immediately due and payable
without further notice to the Company. All payments made

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pursuant to this Section 3.2(e),
other than the CIC Severance, shall be made within thirty (30) days following the date of
resignation or termination.

     In addition to the foregoing, upon the date of resignation or termination (i) all of
Executive’s Equity Awards that are outstanding on the date of Executive’s resignation or
termination from employment shall be deemed amended, without further action by the Parent,
the Company or Executive, so that any portion of such Equity Awards that would have vested
solely with the passage of time over the twenty-four (24) month period following such
resignation or termination, had Executive remained an employee of the Company during such
period, shall be immediately vested and exercisable as of the date of resignation or
termination, and any such stock options shall thereafter continue or expire in accordance
with their original terms, and (ii) the Company shall continue to provide and pay for all
health, hospitalization and long-term care insurance premiums necessary to provide
Executive and Executive’s dependant family members, if any, with coverage under the
Company’s group health insurance program, on the same terms and conditions as offered to
other executives of the Company throughout the period of coverage, for a period of eighteen
(18) months from and after the date of resignation or termination. From and after the
expiration of such eighteen (18) month period, all applicable laws shall continue to apply
to any person’s or persons’ rights to continue such benefits.

     For purposes of this subsection (e), “Change in Control” means and includes each of
the following:

(i) The acquisition, at one time or over time, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “1934 Act”) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 35% or
more of the combined voting power of the then outstanding voting securities
of the Parent entitled to vote generally in the election of directors (the
“Outstanding Corporation Voting Securities”); provided,
however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control; (a) any acquisition
by a Person who is on the date of this Agreement the beneficial owner of
35% or more of the Outstanding Corporation Voting Securities, (b) any
acquisition by the Parent, or (c) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Parent or any
corporation controlled by the Parent;

(ii) Consummation of a reorganization, merger, share exchange or
consolidation or sale or other disposition of all or substantially all of
the assets of the Parent (a “Business Combination”), in each case,
unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the beneficial
owners of the Outstanding Corporation Voting Securities immediately prior
to

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such Business Combination beneficially own, directly or indirectly, more
than 60% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors
or comparable persons of the corporation or other entity resulting from
such Business Combination (including, without limitation, a corporation or
other entity which as a result of such transaction owns the Parent or all
or substantially all of the Parent’s assets either directly or through one
or more subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the Outstanding
Corporation Voting Securities, and (ii) no Person (excluding any
corporation or other entity resulting from such Business Combination or any
employee benefit plan (or related trust) of the Parent of such corporation
or other entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 35% or more of the combined voting power of
the then outstanding voting securities of such corporation or other entity
except to the extent that such ownership existed prior to the Business
Combination, and (iii) at least a majority of the members of the board of
directors or comparable body of the corporation or other entity resulting
from such Business Combination were members of the incumbent Board or
comparable body at the time of the execution of this Agreement, or of the
action of the Board or comparable body, providing for such Business
Combination.

     (f) Payments made pursuant to this Section 3.2 are in lieu of any other obligations
to Executive pursuant to the terms of this Agreement.

     (g) In the event that Executive’s employment is terminated pursuant to Sections
3.2(c), (d) or (e), or Executive resigns from employment pursuant to Section 3.2(e), a
condition of Executive’s receipt of any consideration, compensation or benefits beyond that
which would otherwise be required to be paid or provided for performance rendered under
this Agreement as of the date of resignation or termination shall be his execution of a
separation agreement, including a full release of all claims, in a form acceptable to the
Company.

     5. Section 4 of the Original Agreement shall be deleted in its entirety and replaced with the
following new Section 4:

     4. Noncompetition. Executive covenants and agrees that during the term of his
employment with the Company and for a period of one (1) year thereafter, Executive shall
not, as an officer, manager, supervisor, independent contractor or equity owner of any
business or enterprise, engage or participate in any Business Activities in the Restricted
Area. For purposes of this Section 4, “Business Activities” shall be those activities that
relate to the management of human resources, compensation and benefits, risk management or
training services for any “Designated Competitor”, or any single restaurant or group of
restaurants

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that derives more than 30% of its food sales from the sale of steak products.
For purposes of this Section 4, the “Restricted Area” shall be the area described in
Exhibit A attached hereto, which the parties agree may be amended from
time-to-time, and “Designated Competitor” shall mean Outback Steakhouse, Texas
Roadhouse, Texas Steakhouse, Lone Star Steakhouse, Logan’s Roadhouse, Roadhouse Grill,
Ted’s Montana Grill, Steak & Ale, Traildust Steakhouse, Tumbleweed, Ryan’s Steakhouse,
Sizzler, Sagebrush, Golden Corral, Chop House, Smokey Bones and Saltgrass Steakhouse, all
of which the Company deems to be similar to and current competitors of LongHorn Steakhouse
and Bugaboo Creek Steak House. “Designated Competitor” also means Flemings, Ruth’s Chris,
Smith & Wolinsky, Morton’s, Del Frisco’s, The Palm, Sullivan’s, Stonewood and Fogo de Chao,
all of which the Company deems to be similar to and current competitors of The Capital
Grille.

     Nothing in this Section 4 shall prohibit Executive from acquiring or holding, for
investment purposes only, less than 2% of the outstanding publicly traded securities of any
corporation that may compete directly or indirectly with the Company. The provisions of
this Section 4 shall terminate and be of no further force and effect from and after the
date on which the Company fails to make any payment owed to Executive under this Agreement
following the Employment Term, which payment remains unpaid ten (10) business days
following the receipt of written notice from Executive that such payment has not been made
(provided that such cure period shall not apply with respect to the Company’s third or
subsequent failure to make any payment due Executive hereunder in any twelve (12) month
period); provided, however, that in the event that there is any reasonable and good faith
dispute between the Company and Executive as to any amount payable to Executive, for
purposes of this Section 4 the disputed amount shall not be considered due and payable
until such dispute shall have been finally resolved in an appropriate legal proceeding and
any time for appeal of such resolution shall have run without an appropriate appeal having
been taken.

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

     19. Entire Agreement. This Agreement, together with the Third 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. For the sake of clarity, the Third
Amendment replaces and supercedes the Second Amendment, which, like the First Amendment, is
hereby terminated and of no further force and effect.

     7. A new Section 24 is hereby inserted in the Original Agreement as follows:

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24. Code Section 409A.

     (a) Notwithstanding anything in this Agreement to the contrary, if any amount
or benefit that would otherwise be payable or distributable under this Agreement by
reason of Executive’s separation from service, constitutes “deferred compensation”
for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), then if and to the extent necessary to comply with Code Section 409A: (i)
if the payment or distribution of such amount or benefit is payable in a lump sum,
such payment or distribution will be delayed until the first day following the
six-month anniversary of Executive’s separation from service, and (ii) if the
payment or distribution of such amount or benefit is payable over time, the amount
that would otherwise be payable during the six-month period immediately following
Executive’s separation from service will be accumulated and paid to Executive,
without interest, on the first day following the six-month anniversary of
Executive’s separation from service, whereupon the normal payment or distribution
schedule will resume.

     (b) Notwithstanding anything in this Agreement to the contrary, the Company’s
obligation hereunder to pay health, hospitalization and/or long-term care insurance
premiums to provide Executive and Executive’s dependant family members with
coverage under the Company’s group health insurance program for a stated period of
time after the termination of the Employment Term (“extended medical coverage”)
shall not extend beyond December 31 of the second calendar year following the year
in which Executive’s separation from service occurs, and all such payments by the
Company for such extended medical coverage shall be imputed as income to Executive

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

     9. Except as otherwise set forth herein, the Original Agreement shall remain unchanged and in
full force and effect.

-9-

 

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

	 	 	 	 	 
	 	RARE HOSPITALITY MANAGEMENT, INC.

 	 
	 	By:  	/s/ Philip J. Hickey, Jr.
 	 
	 	 	Chief Executive Officer 	 
	 	 	 	 
	 
	 	EXECUTIVE

 	 
	 	/s/ Thomas W. Gathers
 	 
	 	THOMAS W. GATHERS 	 
	 	 	 

-10-

 

	 	 	 	 	 

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, 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, 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, Lawrenceville, Lithonia, McDonough, Macon,
Marietta, Morrow, Newnan, Peachtree City, Pooler,
Rome, Roswell, Savannah, Snellville, Statesboro,
Tifton, Tucker, Valdosta, Warner Robins, Woodstock
	 
	 	 
	Illinois

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

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

	 	Kansas City, Lawrence, Leawood, Topeka
	 
	 	 
	Kentucky

	 	Bowling Green, Cold Springs, Florence, Frankfort,
Lexington, Louisville
	 
	 	 
	Maine

	 	Auburn, Augusta, Bangor, Biddeford, South Portland
	 
	 	 
	Maryland

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

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

	 	Allen Park, Auburn Hills, Clinton Township, Grand
Rapids,

A-1

 

	 	 	 
	 

	 	Roseville, Troy, Westland
	 
	 	 
	Minnesota

	 	Minneapolis
	 
	 	 
	Mississippi

	 	Hattiesburg
	 
	 	 
	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, Erie, Exton, Franklin Mills, Lancaster,
Norristown, Penns Port, Philadelphia, Pittsburgh
Mills, Pottstown, 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, Hermitage,
Hixson, Jackson, Madison, Nashville
	 
	 	 
	Texas

	 	Dallas, Houston
	 
	 	 
	Vermont

	 	Williston
	 
	 	 
	Virginia

	 	Chantilly, Dulles, Massaponax, McLean, Williamsburg
	 
	 	 
	West Virginia

	 	Charleston, Morgantown
	 
	 	 
	Wisconsin

	 	Milwaukee

A-2

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