Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(c) On March 31, 2021, the Board of Directors (the "Board") of Texas
Roadhouse, Inc. (the "Company") moved forward with its previously planned action
and appointed Christopher C. Colson, age 44, as General Counsel. He joined Texas
Roadhouse in 2005 serving as Senior Counsel and then Associate General Counsel.
Mr. Colson became the first full-time member of the Global Development Group in
2009, where he served until becoming Vice President of Legal and Franchise
Partnerships and Corporate Secretary in 2019. Before joining the Company, Mr.
Colson worked for Yum! Brands, Inc. from 2000 to 2003 and then worked for Frost
Brown Todd LLC serving as outside counsel to the Company on its initial public
offering in 2004. Mr. Colson has almost 20 years of restaurant industry
experience. Mr. Colson does not have any direct or indirect material interest in
any transaction required to be disclosed pursuant to Item 404(a) of Regulation
S-K.
(e) On March 31, 2021, Texas Roadhouse Management Corp. and Gerald Morgan,
Chief Executive Officer and President of the Company, entered into the First
Amendment to Employment Agreement (the "First Amendment"). The First Amendment
has a retroactive effective date of March 18, 2021 and was entered into in order
to reflect Mr. Morgan's title as Chief Executive Officer as a part of his
employment agreement. Additionally, and in light of the change of job
responsibilities and duties relating to Mr. Morgan's appointment to Chief
Executive Officer, the Compensation Committee of the Board exercised its
discretion and adjusted certain elements of Mr. Morgan's compensation. In
furtherance of the foregoing and effective as of March 31, 2021, the annual base
salary for Mr. Morgan is increased to $450,000, and the target incentive bonus
for Mr. Morgan relating to the portion of his 2021 fiscal year service
commencing on March 31, 2021 and continuing to and through December 28, 2021 is
increased to $450,000. Finally, the Compensation Committee authorized the grant
of an additional 5,000 service-based restricted stock units and an additional
12,500 performance-based restricted stock units for Mr. Morgan, each of which
will be granted on March 31, 2021, consistent with the terms of the Company's
equity incentive plan, with a vesting date of January 8, 2022, provided he is
still employed as of the vesting date. The foregoing description of the First
Amendment is qualified in its entirety by reference to the First Amendment, a
copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated herein by reference.
Additionally, on March 31, 2021, and in light of the change in market conditions
relating to the COVID-19 pandemic and to be performed concurrently with
scheduled compensation increases for all support center employees, the
Compensation Committee of the Board exercised its discretion to move forward
with previously delayed increases in certain elements of the respective
compensation for each of Doug Thompson, Tonya Robinson, and Chris Jacobsen (as
applicable). In furtherance of the foregoing and effective as of March 31, 2021,
the annual base salary for Mr. Thompson, Ms. Robinson, and Mr. Jacobsen are
increased to $500,000, $350,000, and $350,000, respectively. In addition and
effective as of March 31, 2021, the target incentive bonus for Mr. Thompson, Ms.
Robinson, and Mr. Jacobsen relating to the portion of their respective 2021
fiscal year service commencing on March 31, 2021 and continuing to and through
December 28, 2021 are increased to $500,000, $250,000, and $225,000,
respectively. Finally, the Compensation Committee authorized the grant of an
additional 500 performance-based restricted stock units for Ms. Robinson, which
will be granted on March 31, 2021, consistent with the terms of the Company's
equity incentive plan, with a vesting date of January 8, 2022, provided she is
still employed as of the vesting date. Unless otherwise set forth herein, the
cash and/or equity compensation for the respective executive officers remained
unchanged.
Finally, on March 31, 2021, we entered into a new employment agreement with Mr.
Colson. The employment agreement has an effective date of March 31, 2021 and an
initial term expiring on January 7, 2024. Thereafter, the term will
automatically renew for successive one-year terms unless either party elects not
to renew by providing written notice to the other party at least 60 days before
expiration.
Base Salary. The employment agreement establishes an annual base salary of
$350,000. During the term of his employment agreement, base salary increases are
at the discretion of the Compensation Committee.
Incentive Bonus. The employment agreement also provides an annual short-term
cash incentive opportunity with a base target bonus of $200,000 relating to the
portion of his 2021 fiscal year service commencing on March 31, 2021 and
continuing to and through December 28, 2021, with increases in the target bonus
amount at the discretion of the Compensation Committee. During the term of his
employment agreement, the performance criteria and terms of bonus awards are at
the discretion of the Compensation Committee. The targets are currently based
upon earnings per share growth and pre-tax profits. Depending on the level of
achievement of the goals, the bonus may be reduced to a minimum of $0 or
increased to a maximum of two times the base target amount under the current
incentive compensation policy of the Compensation Committee of the Board.
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Stock Awards. The employment agreement provides that the Compensation
Committee of the Board may grant stock awards to Mr. Colson during the term of
his employment agreement. The amount, performance criteria and terms of equity
awards are at the discretion of the Compensation Committee of the Board. In
connection with the same, on March 31, 2021, the Compensation Committee
authorized the grant of 7,500 service-based restricted stock units for his 2021
fiscal year service under the employment agreement. These service-based
restricted stock units were granted on March 31, 2021 and will vest on
January 8, 2022, provided he is still employed as of the vesting date.
Separation and Change in Control Arrangements. Mr. Colson's employment
agreement generally provides that if his employment is terminated during the
term of the employment agreement for a Qualifying Reason, the Company will pay
the officer three months of base salary, unless the termination occurs within 12
months following a Change in Control (as defined in the employment agreement),
in which case an amount equal to Mr. Colson's current base salary remaining for
the then existing term of his employment agreement will be paid. In addition, if
his termination occurs for a Qualifying Reason within 12 months following a
Change in Control, then he shall be paid any incentive bonus earned but not yet
paid for any fiscal year ended before the date of termination, plus an incentive
bonus for the year in which the date of termination occurs, equal to his target
bonus for that year, prorated based on the number of days in the fiscal year
elapsed before the date of termination.
The employment agreement also provides for the reduction of Change in Control
payments to the maximum amount that could be paid to him without giving rise to
the excise tax imposed by Section 4999 of the Internal Revenue Code. For
purposes of his employment agreement, termination for a Qualifying Reason is
generally defined to be attributable to one of the following: (i) the result of
him having submitted to the Company his resignation in accordance with a request
by the Board or the chief executive officer, provided that such request is not
based on the Company's finding that Cause (as defined in the agreement) for
termination exists, (ii) a termination for Good Reason (as defined in the
employment agreement) within 12 months of a Change in Control, or (iii) a
termination by the Company for any reason other than Cause or as a result of
death or disability which entitles Mr. Colson to benefits under the Company's
long-term disability plan. The severance payments are generally contingent upon
his execution of a full release of claims against the Company and continued
compliance with the non-competition, non-solicitation, confidentiality and other
restrictive covenants. If his employment is terminated for any reason other than
a Qualifying Reason (such as the officer's death, disability or for Cause), then
the Company will pay only the base salary accrued for the last period of actual
employment and any accrued paid time off in accordance with policies of the
Company in effect from time to time.
Non-competition and other Restrictions. Mr. Colson has agreed not to compete
with us during the term of his employment and for a period of two years
following the termination of his employment agreement. The employment agreement
also contains confidentiality, non-solicitation, and non-disparagement
provisions. The employment agreement contains a "clawback" provision that any
compensation paid or payable pursuant to the employment agreement or any other
agreement or arrangement with the Company shall be subject to recovery or
reduction in future payments in lieu of recovery pursuant to any Company
clawback policy in effect from time to time, whether adopted before or after the
date of the employment agreement.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibit First Amendment to Employment Agreement between Texas
10.1 Roadhouse Management Corp. and Gerald L. Morgan dated March 31,
2021 and having a retroactive effective date of March 18, 2021
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded
within the Inline XBRL document.
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