ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On November 3, 2022, Red Robin Gourmet Burgers, Inc. (the "Company") filed a
Current Report on Form 8-K (the "Original Form 8-K") reporting various executive
transitions including the departures of Lynn Schweinfurth, the Company's
Executive Vice President and Chief Financial Officer, Jonathan Muhtar, the
Company's Executive Vice President and Chief Concept Officer, and Darla Morse,
the Company's Executive Vice President and Chief Information Officer. As
previously disclosed, Ms. Schweinfurth will remain as a special advisor to the
Company until December 31, 2022, to work with the Company's management team to
ensure a smooth transition of the responsibilities of the Chief Financial
Officer. As of the date of the Original Form 8-K, no new compensatory
arrangements had been entered into in connection with the departures of Ms.
Schweinfurth, Mr. Muhtar or Ms. Morse.
In connection with the departures of Ms. Schweinfurth and Ms. Morse (the
"Executives"), the Company has agreed to provide to each Executive, pursuant to
a severance agreement between the Company and Ms. Schweinfurth dated as of
November 14, 2022 and a severance agreement between the Company and Ms. Morse
dated as of November 11, 2022 (each, a "Severance Agreement"), in addition to
any accrued but unpaid benefits or obligations: (i) a lump-sum cash payment of
which equals twelve (12) months of each Executive's base salary prior to their
respective departure, which in the case of (a) Ms. Schweinfurth, shall be
$490,000, and (b) Ms. Morse, shall be $390,000, (ii) a lump-sum cash payment in
an amount equal to the annual bonus that becomes payable, if any, in respect of
the 2022 fiscal year to the Executive, based on actual performance and payable
at the same time such payments are made to other employees of the Company
generally, (iii) a lump-sum cash payment in the amount equal to the product of
(x) the number of the Executive's time-based restricted stock units outstanding
as of the date of separation that would have vested during the 2023 calendar
year (if the Executive's employment with the Company had not terminated),
multiplied by (y) $7.50, (iv) subject to the Executive's timely election of
continued healthcare coverage under COBRA, a lump sum cash payment within 30
days after such election in an amount equal to the product of (x) the portion of
monthly premiums of the Executive's group health insurance, including coverage
for the Executive's eligible dependents, that the Company paid immediately prior
to the date of separation, and (y) 12, (v) a lump-sum cash payment equal to the
amount of the Executive's annual life insurance premiums, and (vi) a lump-sum
cash payment in the amount of $15,000 for executive outplacement services. Each
Executive shall forfeit all of their outstanding and unvested restricted stock
units, performance stock units and stock options, and any vested stock options
will remain outstanding and exercisable for the designated period under the
applicable award agreement. Each Executive's receipt of the severance benefits
mentioned in this paragraph is subject to their execution of a waiver and
release of claims in favor of the Company and its affiliates. Each Executive
shall be subject to certain restrictive covenants, including nondisclosure of
confidential information, return of Company property, and, for the twelve months
following the date of separation, non-competition and non-solicitation of
employees, suppliers, and business relations of the Company. Each Severance
Agreement also includes post-employment cooperation and non-disparagement
covenants as well as a general release of claims against the Company by each
Executive.
The foregoing description of the terms of each Severance Agreement is qualified
in its entirety by reference to the full terms of each Severance Agreement, each
of which is filed as an exhibit to this Current Report on Form 8-K and is
incorporated herein by reference.
As of the date of this report, no new compensatory arrangements have been
entered into in connection with the departure of Mr. Muhtar. The Company expects
to enter into a severance agreement between the Company and Mr. Muhtar, the
material terms of which will be disclosed in an amendment to the Original Form
8-K.
ITEM 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Severance Agreement, by and between Red Robin Gourmet Burgers,
Inc. and Darla Morse, dated November 11, 2022
10.2 Severance Agreement, by and between Red Robin Gourmet Burgers,
Inc. and Lynn Schweinfurth, dated November 14, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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