Texas Roadhouse, Inc 8-K, filed Dec 9, 2021
Texas Roadhouse, Inc. (TXRH)
About this 8-K
Texas Roadhouse, Inc filed this 8-K on December 9, 2021, reporting on events of December 3, 2021.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
As previously reported in the Current Report on Form 8-K dated November 29, 2021, Texas Roadhouse, Inc. (the “Company”) announced that Douglas W. Thompson retired from his position and would no longer serve as Chief Operating Officer effective as of November 29, 2021.
Additionally, on December 3, 2021, the Company and Mr. Thompson entered into a Separation Agreement and Release of Claims (the “Separation Agreement”). Under the Separation Agreement, the Company will pay to Mr. Thompson an aggregate sum of $4,745,000 (less any applicable withholdings and/or deductions), which will be paid in three installments in accordance with the following schedule: (i) $1,581,667 due and payable no later than December 27, 2021; (ii) $1,581,666 due and payable on January 31, 2022; and (iii) $1,581,666 due and payable on March 14, 2022. The Separation Agreement also provides a general release of all claims by Mr. Thompson and affirms certain obligations under his 2021 employment agreement, including, without limitation, obligations pertaining to confidentiality, non-competition, non-hire, and non-solicitation.
Finally and pursuant to the terms of the respective 2021 employment agreements with each executive officer, the Compensation Committee of the Board of Directors for the Company (the “Board”) reserved the right to adjust compensation for each executive officer throughout the duration of the term of such employment agreements. On December 6, 2021, the Compensation Committee of the Board exercised its discretion to adjust each executive officer’s compensation in the manner described in this Current Report on Form 8-K with respect to each executive officer’s 2022 fiscal year service. Based in part on the recommendation of a third-party compensation consultant recently retained by the Compensation Committee, the total compensation package established for each executive officer for their 2022 fiscal year service reflects a shift in the compensation breakdown among the base salary, bonus and equity components to a more weighted emphasis on cash compensation as well as a shift from a fixed number of service-based restricted stock units and/or performance-based restricted stock units to a fixed dollar amount with respect to such service-based restricted stock units and/or performance-based restricted stock units.
Base Salary. Effective as of January 8, 2022 and continuing thereafter until such time as an executive officer’s annual base salary is adjusted by the Compensation Committee in accordance with the applicable employment agreement, the Compensation Committee establishes an annual base salary as show in the table below.
|
2022 ($) |
||||
| Jerry Morgan | 1,000,000 | |||
| Tonya Robinson | 500,000 | |||
| Chris Jacobsen | 500,000 | |||
| Chris Colson | 500,000 | |||
| Hernan Mujica | 500,000 | |||
| Gina Tobin | 500,000 | |||
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Incentive Bonus. On December 6, 2021, the Compensation Committee established an annual short-term cash incentive opportunity with a target bonus as set forth in the table below relating to each executive officer’s 2022 fiscal year service. 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 $0 or increased to a maximum of two times the base target amount under the current incentive compensation policy of the Compensation Committee of the Board.
|
2022 Target Bonus ($) |
2022 Minimum Bonus ($) |
2022 Maximum Bonus ($) |
||||||||||
| Jerry Morgan | 1,000,000 | 0 | 2,000,000 | |||||||||
| Tonya Robinson | 400,000 | 0 | 800,000 | |||||||||
| Chris Jacobsen | 400,000 | 0 | 800,000 | |||||||||
| Chris Colson | 400,000 | 0 | 800,000 | |||||||||
| Hernan Mujica | 400,000 | 0 | 800,000 | |||||||||
| Gina Tobin | 400,000 | 0 | 800,000 | |||||||||
Stock Awards. On December 6, 2021, the Compensation Committee authorized the grant of service-based restricted stock units equal to the dollar amount described in the table below for each executive officer with respect to their respective 2022 fiscal year service. These service-based restricted stock units will be calculated by dividing the dollar amount described in the table below by the per share closing sales price of the Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding the date of the grant, with such quotient rounded up or down to the nearest 100 shares. Additionally, these service-based restricted stock units will be granted on January 8, 2022 and will vest on January 8, 2023, provided the officer is still employed as of the vesting date.
|
Restricted Stock Units ($) |
||||
| Jerry Morgan | 1,100,000 | |||
| Tonya Robinson | 500,000 | |||
| Chris Jacobsen | 400,000 | |||
| Chris Colson | 500,000 | |||
| Hernan Mujica | 500,000 | |||
| Gina Tobin | 500,000 | |||
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Additionally, on December 6, 2021, the Compensation Committee authorized the grant of performance-based restricted stock units as described in the table below for those certain executive officers described below with respect to their respective 2022 fiscal year service. These performance-based restricted stock units will be calculated by dividing the target dollar amount described in the table below by the per share closing sales price of the Company’s common stock on the Nasdaq Global Select Market on the trading day immediately preceding the date of the grant, with such quotient rounded up or down to the nearest 100 shares. Additionally, these performance-based restricted stock units will be granted on January 8, 2022 and will vest on January 8, 2023, subject to the achievement of defined goals established by the Compensation Committee of the Board. The performance targets are currently based upon earnings per share growth and pre-tax profits. Depending on the level of achievement of the goals, the number of performance-based restricted stock units may be reduced to zero or increased to a maximum of two times the target amount shown below.
|
Target $ of |
Minimum $ of Performance-Based Restricted Stock Units |
Maximum $ of Performance-Based Restricted Stock Units |
||||||||||
| Jerry Morgan | 1,100,000 | 0 | 2,200,000 | |||||||||
| Tonya Robinson | 400,000 | 0 | 800,000 | |||||||||
| Chris Jacobsen | 400,000 | 0 | 800,000 | |||||||||
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
| 10.1 | Separation Agreement dated December 3, 2021 by and among Douglas W. Thompson and Texas Roadhouse, Inc., Texas Roadhouse Holdings LLC, and Texas Roadhouse Management Corp. | |
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEXAS ROADHOUSE, INC. | ||
| Date: December 9, 2021 | By: | /s/ Tonya Robinson |
| Tonya Robinson | ||
| Chief Financial Officer | ||
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Exhibit 10.1
EXECUTION COPY
SEPARATION AGREEMENT AND RELEASE OF CLAIMS
I, Douglas W. Thompson, understand that my employment with Texas Roadhouse Management Corp. ended, effective November 29, 2021. I seek to resolve any issues, conflicts, or disputes I have with Texas Roadhouse Management Corp. (including its parent and affiliated organizations; its past and present officers, directors, agents, and employees; and past and present fiduciaries and administrators of its employee benefit plans) (collectively, the “Company”). Accordingly, I voluntarily enter into this Separation Agreement and Release of Claims (“Agreement”).
1. Consideration: I understand the Company will continue to pay my salary and benefits through November 29, 2021 and, in addition, in consideration for the promises and commitments made herein, the Company will pay me:
| A. | a total sum of $125,000 (less applicable withholdings), which reflects approximately three (3) months of my base salary; and |
| B. | a one-time discretionary bonus of $4,620,000 (less applicable deductions). |
Together, the above payments constitute the “Separation Payments” being provided by the Company. I realize that I am not otherwise entitled to all these Separation Payments and am receiving them only because I am entering into this Agreement. I understand that I will not begin receiving the Separation Payments until after I have executed the Agreement and following completion of a seven (7) day revocation period (listed below) from the date I sign this Agreement, provided that I do not exercise my right of revocation.
I also understand that if I have met the conditions set forth in this Section 1, the Separation Payments will be payable to me in three installments as follows (i) $1,581,667 (less applicable withholdings) as soon as possible after the Agreement is fully executed and the revocation period referred to in the prior paragraph has expired, but in no event no later than December 27, 2021; (ii) $1,581,666 (less applicable withholdings) on January 31, 2022; and (iii) $1,581,666 (less applicable withholdings) on March 14, 2022.
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EXECUTION COPY
2. Release: I, individually and collectively, for and on behalf of myself, my estate, agents, attorneys, successors, heirs, executors, administrators and assigns, agree not to file, pursue or prosecute any lawsuit, action, charge or claim, of any nature whatsoever, against the Company or any of its agents, directors, shareholders, parent, affiliate and/or subsidiary corporations and/or companies, joint ventures, officers, employees, representatives, attorneys, predecessors and/or successors, or against any other person or entity of any kind affiliated with Company (collectively, the “Releasees”), both jointly and individually, and release all such claims, demands, causes of action, suits, debts, complaints, liabilities, obligations, promises, agreements, controversies, damages and expenses that are releasable by law (including, without limitation, claims for attorneys fees and costs actually incurred or to be incurred) of any nature or description whatsoever, in law or equity, whether known or unknown, in connection with or arising out of my employment with the Company, the terms and conditions of employment with the Company and/or my separation from employment with the Company, whether such claim is known or unknown to me, accrued or unaccrued, which I ever had, now have or may have had against Releasees since the beginning of time through the date of execution of this Agreement. This release and waiver of claims includes, but is not limited to, any and all claims arising under federal, state or local statutes, ordinances, resolutions, regulations or constitutional provisions, each as amended, regulating employment relationships or prohibiting discrimination in employment, such as, but not limited to, claims arising under: The Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621, et seq., including the Older Workers’ Benefit Protection Act; Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e, et seq.; The Americans With Disabilities Act, as amended, 42 U.S.C. § 12101, et seq.; The Fair Labor Standards Act, as amended, 29 U.S.C. § 201, et seq.; The Family and Medical Leave Act, as amended, 29 U.S.C. § 2601, et seq.; The Employee Retirement Income Security Act (ERISA), as amended, 29 U.S.C. § 1001, et seq., and any other laws relating to employee benefits including, but not limited to, any retirement, health or welfare benefit plans; and any state anti-discrimination and anti-retaliation statutes. This release and waiver of claims also includes, but is not limited to, any and all claims for unpaid benefits or entitlements asserted under any plan, policy, benefits offering or program (except as otherwise required by law), any and all contract or tort claims, including, without limitation, claims of wrongful discharge, retaliation for assertion of worker’s compensation rights, assault, battery, intentional infliction of emotional distress, loss of consortium, negligence, and/or defamation.
Nothing in this Agreement shall be construed to prevent me from talking to, cooperating in any investigation by, and/or filing a charge with a government agency, including but not limited to, the Securities and Exchange Commission, the U.S. Equal Employment Opportunity Commission (the “EEOC”), or any similar state or local fair employment practices administrative agency. However, by signing this Agreement, I hereby waive the right to recover from Releasees any relief from any charge or claim pursued or otherwise prosecuted by me, or by persons or entities like the EEOC acting by or through me, including, without limitation, the right to attorneys’ fees, costs, and any other relief, whether legal or equitable, sought in such charge, claim, or other proceeding.
3. Acknowledgement and Disclaimer: I acknowledge that I have not suffered any injury or illness in my work for Company that would give rise to a claim under worker’s compensation law. I also acknowledge that I have been fully and properly paid for all of my hours worked for Company. I am not owed any wages, bonuses, or other sums pursuant to my Executive Employment Agreement with the Company.
4. Incorporation and Ratification of Ongoing Obligations: I understand that, although my employment has terminated, I remain obligated to abide by certain obligations as a result of agreements I made with the Company at the beginning of or during my employment, detailed in my Employment Agreement, as defined in the termination letter issued to me by Company on my Date of Termination, and incorporated by reference herein. These ongoing obligations include my agreement not to use or disclose any of the Company’s trade secrets or confidential or proprietary information, my commitment regarding non-disparagement, my commitments regarding non-solicitation of employees and non-competition, and my promise to cooperate with the Company in litigation and/or administrative proceedings related to my former employment with the Company.
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EXECUTION COPY
I specifically acknowledge and agree that I remain obligated to these commitments even if I exercise my right of revocation, detailed below. I affirm that I have returned to the Company all documents and papers (including any and all copies thereof) relating to confidential information and other property in my possession belonging to the Company.
5. Review and Revocation: I understand that the Company is providing me a period of at least twenty-one (21) days in which to decide whether to sign this Agreement before executing it, although I may choose to sign the Agreement in fewer than twenty-one (21) days. I also understand that, by way of this Agreement, Company has advised me to consult with an attorney before signing this Agreement. I understand that, even if I sign this Agreement, I can change my mind and revoke this Agreement within seven (7) days after I sign it by notifying Company in writing of my decision to revoke. I realize that if I do not revoke this Agreement during that seven (7-) day period, the Agreement will become enforceable, and Company will make the Separation Payments to me as described above.
-- Signatures Appear on Following Page --
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EXECUTION COPY
IN WITNESS WHEREOF, the parties have affixed their signatures below.
Douglas W. Thompson
| By: | /s/ Douglas W. Thompson, | |
| Douglas W. Thompson, | ||
| an individual resident of Kentucky | ||
| Date: | 12/3/2021 | 5:38 PM EST |
COMPANY
TEXAS ROADHOUSE MANAGEMENT CORP.,
a Kentucky corporation
| By: | /s/ Christopher Colson | |
| Name: | Christopher Colson | |
| Title: | Secretary | |
| Date: | 12/3/2021 | 5:41 PM EST | |
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