Exhibit 10(r)
SEVERANCE AGREEMENT
This Severance Agreement is entered into as of the 19th day of
December, 2000, by and among XXXX'X, INC. ("Luby's"), a Delaware corporation,
and LUBY'S RESTAURANTS LIMITED PARTNERSHIP (the "Partnership"), referred to
collectively as the "Company," and XXXXX X.X. XXXXXX ("Xxxxxx"). In
consideration of the mutual covenants herein contained, the parties covenant and
agree as follows:
1. Resignation. Xxxxxx hereby resigns as an officer and director of
Luby's and its direct and indirect subsidiaries and affiliates, effective as of
September 25, 2000. Xxxxxx hereby resigns as an employee of the Partnership,
effective as of September 25, 2000.
2. Employment Agreement. The employment agreement dated September 15,
1997, between Luby's Cafeterias, Inc. (now Xxxx'x, Inc.), as amended by letter
agreements dated January 8, 1999, October 15, 1999, and July 25, 2000 (the
"Employment Agreement") is hereby cancelled and terminated, effective as of
September 25, 2000, so that neither party thereto shall have any further rights,
privileges, duties, or obligations thereunder.
3. Cash Payment. In lieu of the salary provided for in the Employment
Agreement, the Partnership agrees to pay to Xxxxxx, as a xxxxxxxxx benefit, the
cash sum of $474,040, payable by (i) payment of his health insurance benefits
through December 31, 2000 in the amount of $1,048.00 and (ii) the balance, in
installments as follows:
Installment Amount Payment Date
__________________ ____________
$ 6,750.00 On or about 10-1-00
33,750.00 On or about 11-1-00
33,750.00 On or about 12-1-00
398,742.00 On or about 1-2-01
Xxxxxx hereby acknowledges receipt of the installments due 9-30-00 and 10-31-00,
less the required payroll deductions and that the Company has paid his health
insurance benefits through December 31, 2000. The remaining installments shall
be paid by check, bank wire, or direct deposit as Xxxxxx may direct.
4. Promissory Note. Xxxxxx has heretofore executed and delivered to
Luby's Cafeterias, Inc. (now Xxxx'x, Inc.) a term promissory note (the
"Promissory Note") dated November 10, 1987, in the original principal sum of
$199,999.00. The unpaid principal balance of the Promissory Note as of
September 25, 2000, in the amount of $119,999.40, and the accrued unpaid
interest thereon as of September 23, 2000, in the amount of $7,079.14, are
hereby forgiven as a severance benefit, and the Promissory Note is hereby
cancelled as of September 25, 2000. Upon the signing of this Agreement, Luby's
will deliver to Xxxxxx the Promissory Note marked "cancelled."
5. Stock Agreement. The Promissory Note was secured by a stock agreement
(the "Stock Agreement") dated November 10, 1997, entered into between Xxxxxx and
Luby's Cafeterias, Inc., pursuant to which Xxxxxx pledged 20,000 shares of the
common stock of Luby's Cafeterias, Inc. to secure payment of the Promissory
Note. Upon the signing of this Agreement, Luby's will deliver to Xxxxxx the
Stock Agreement marked "cancelled" together with the certificates representing
the 20,000 shares of pledged stock.
6. Automobile. The automobile furnished by the Company for Xxxxxx'x use
(being a 1998 model Cadillac Seville having an agreed value of $27,650) is
presently in Xxxxxx'x possession. As a severance benefit, the Company hereby
transfers ownership of such automobile to Xxxxxx. The automobile is transferred
AS IS AND WITH ALL FAULTS; the Company makes no warranty, express or implied,
with respect to the condition of the automobile or its merchantability or
fitness for a particular purpose. Upon the signing of this Agreement, the
Company will deliver to Xxxxxx the certificate of title to the automobile duly
endorsed for transfer.
7. Computer. The personal computer furnished by the Company for Xxxxxx'x
use (being a Compac Presario laptop computer having an agreed value of $2,000)
is presently in Xxxxxx'x possession. As a severance benefit, the Company hereby
transfers ownership of such computer to Xxxxxx. The computer is transferred AS
IS AND WITH ALL FAULTS; the Company makes no warranty, express or implied, with
respect to the condition of the computer or its merchantability or fitness for a
particular purpose.
8. Withholding. It is understood and agreed that the cash and non-cash
severance benefits to which Xxxxxx is entitled under the foregoing provisions of
this Agreement are subject to federal withholding taxes. The Company is
authorized to deduct from any cash severance benefits payable to Xxxxxx
hereunder the amounts required to be withheld under applicable federal laws.
9. Chase Loan. Luby's has heretofore guaranteed payment of a loan made by
Chase Bank of Texas, National Association, to Xxxxxx in the original principal
amount of $180,000 (the "Chase Loan"). Xxxxxx acknowledges that the Chase Loan
remains due and payable according to its terms.
10. Stock Options. Xxxxxx retains all rights and benefits to which he is
entitled under the terms and provisions of outstanding employee stock options
heretofore granted to him by Luby's. Xxxxxx'x rights with respect to such
options shall be governed by the provisions of the pertinent option agreements
and the plans under which the options were granted.
11. Profit Sharing. Xxxxxx retains all rights and benefits to which he is
entitled under the terms and provisions of the Company's profit sharing plan.
Xxxxxx'x rights to such benefits shall be governed by the provisions of the
profit sharing plan and applicable laws.
12. SERP. Xxxxxx acknowledges that he is not entitled to any benefits
under Luby's Supplemental Executive Retirement Plan (SERP). Accordingly, Xxxxxx
waives and relinquishes all claims to any benefits under such plan.
13. Health Benefits. The Company has provided health insurance for Xxxxxx
under the Company's group health insurance until December 31, 2000. Subsequent
to that date, Xxxxxx may, at his own expense, continue coverage under such
program to the extent provided by the Consolidated Omnibus Budget Reconciliation
Act of 1985 (COBRA).
14. Full Satisfaction. Xxxxxx acknowledges and agrees that the severance
benefits and rights to which he is entitled under the terms of this Agreement
are accepted in full satisfaction of any obligation of the Company to Xxxxxx
arising out of or in any way related to his employment or the termination of his
employment or the severance of his relations with the Company.
15. Release by Xxxxxx. Except as expressly provided in this Agreement,
Xxxxxx hereby releases Luby's and the Partnership and their subsidiaries and
affiliates and their respective officers, directors, agents, employees, and
attorneys (in this Paragraph, the "Released Parties") from any and all claims of
every kind which Xxxxxx may have against the Released Parties or any of them
arising out of or in connection with Xxxxxx'x employment by any of the Released
Parties or the termination of such employment or the severance of Xxxxxx'x
relations with any of the Released Parties.
16. Release by the Company. Except as expressly provided in this
Agreement, Luby's and the Partnership, for themselves and on behalf of their
subsidiaries and affiliates (in this Paragraph, the "Releasing Parties"), hereby
release Xxxxxx and his agents and attorneys (in this Paragraph, the "Released
Parties") from any and all claims of every kind which the Releasing Parties may
have against the Released Parties or any of them arising out of or in connection
with Xxxxxx'x employment or the termination of such employment or the severance
of Xxxxxx'x relations with any of the Released Parties.
17. Non-Disclosure of Confidential Information. Xxxxxx acknowledges that,
by virtue of his position of employment with the Company, he has received
confidential information regarding the Company that is not publicly available or
readily ascertainable by independent investigation. Xxxxxx acknowledges and
agrees that he will not voluntarily disclose any confidential information
received during the course of his employment with the Company unless compelled
to do so by subpoena or other legal process. Xxxxxx also agrees that he shall
be liable to the Company for any unauthorized use or disclosure of confidential
information. Xxxxxx acknowledges and agrees that the provisions of this
Paragraph are a reasonable and necessary protection of substantial interests and
that any violation of these restrictions would cause substantial injury to the
Company. Therefore, Xxxxxx agrees that, in the event of a breach or threatened
breach by Xxxxxx of this Paragraph, the Company shall be entitled to seek a
temporary and/or permanent injunction through the appropriate forum restraining
Xxxxxx from such breach or threatened breach; provided, however, that nothing
contained herein shall be construed to preclude the Company from pursuing any
other available remedy for such breach or threatened breach in addition to, or
in lieu of, such injunctive relief.
18. Effect. This Agreement constitutes the complete understanding between
Xxxxxx and the Company and supersedes any and all prior agreements, promises,
and inducements concerning the subject matter, except as expressly provided
herein. This Agreement shall be binding upon the parties hereto and their
respective heirs, executors, administrators, successors, and assigns.
Executed in duplicate originals as of the date first above written.
XXXX'X, INC.
By: /s/XXXXX X. XXXXXX
___________________
Xxxxx X. Xxxxxx, Chairman of the Board
and Acting Chief Executive Officer
LUBY'S RESTAURANTS LIMITED PARTNERSHIP
a Texas limited partnership
By: Luby's Management, Inc., a Delaware
corporation, General Partner
By: /s/XXXXX X. XXXXXX
___________________
Xxxxx X. Xxxxxx, Chairman of the Board
and Acting Chief Executive Officer
/s/XXXXX X.X. XXXXXX
_____________________
XXXXX X.X. XXXXXX
