On August 15, 2008, Red Robin Gourmet Burgers, Inc. (the “Company”) entered into a letter agreement with Dennis B. Mullen, the Company’s Chairman of the Board and Chief Executive Officer (the “Agreement”).  The Agreement amended certain provisions of Mr. Mullen’s Second Amended and Restated Employment Agreement dated March 10, 2008 (the “Existing Agreement”).

The Agreement extended the term of Mr. Mullen’s employment as set forth in Section 1 of the Existing Agreement from December 31, 2010 to December 31, 2012, subject to earlier termination as contemplated by the Existing Agreement.

In addition, the Agreement amends Mr. Mullen’s annual incentive compensation set forth in Section 3(b) of the Existing Agreement.  Under the Agreement, Mr. Mullen shall be eligible to receive a cash bonus for the years ended December 31, 2009, 2010, 2011 and 2012, which shall not be less than fifty percent (50%) of his Annual Base Salary (as defined in the Existing Agreement) (the “Guaranteed Amount”) for that year, so long as the compensation committee of the Company’s board of directors (the “Committee”) certifies by June 1, 2010 that certain performance metrics for the year ended December 31, 2009 have been met.  The performance metrics, once met, trigger eligibility for the remaining years’ bonuses.  If the Committee does not provide such certification by June 1, 2010, the Company shall be under no obligation to pay Mr. Mullen a cash bonus equal to the Guaranteed Amount unless such bonus is otherwise earned under the terms of the Company’s annual incentive plan.

Section 3(h) and Section 4(d) of the Existing Agreement were also amended to reflect the grant of additional shares of restricted stock as described below.  Except as specifically set forth in the Agreement, the Company and Mr. Mullen continue to be bound by the terms and conditions of the Existing Agreement, and the terms of the Existing Agreement are controlling as to matters not specifically set forth in the Agreement.

In connection with the amendment of the Existing Agreement, the Company and Mr. Mullen also entered into a Restricted Stock Grant Agreement (the “Stock Agreement”) dated August 15, 2008.  Under the Stock Agreement, the Company granted to Mr. Mullen 50,000 restricted shares of the Company’s common stock under the 2007 Amended and Restated Incentive Plan.  The restricted stock shall vest in equal installments of 25,000 shares and the Forfeiture Restrictions (as defined in the Stock Agreement) to which the restricted stock is subject shall lapse on each of December 31, 2011 and December 31, 2012, so long as certain performance metrics for the year ended December 31, 2009 have been met.  If such performance metrics have not been met for the year ended December 31, 2009, the restricted stock shall be forfeited.  The restricted stock shall also vest in full upon termination of Mr. Mullen’s employment (a) related to a change of control event, (b) due to death or total disability, (c) by the Company without cause, or (d) in connection with a transition event.  In addition, the restricted stock shall pro rata vest upon the voluntary resignation of Mr. Mullen and Mr. Mullen will forfeit the unvested restricted stock upon a termination with cause.