Exhibit 10(a)
SEPARATION AGREEMENT
WHEREAS, ▇▇▇▇ ▇. ▇▇▇▇▇ ("EMPLOYEE") is employed by BUFFETS, INC.
("EMPLOYER") as Executive Vice President of Operations.
WHEREAS, EMPLOYEE and EMPLOYER are ending their employment
relationship; and
WHEREAS, EMPLOYEE and EMPLOYER wish to set forth the terms and
conditions under which they will end their employment relationship;
NOW THEREFORE, in consideration of the premises and the mutual
agreements, covenants, and provisions contained in this Separation Agreement
("Agreement") and the companion General Release, the parties hereto agree as
follows:
1. RESIGNATION. EMPLOYEE agrees to resign his employment with
EMPLOYER, effective June 30, 1997, the date of this Agreement ("Separation
Date").
2. RELEASE OF CLAIMS BY EMPLOYEE. Contemporaneously with the
execution of this Agreement, EMPLOYEE will also execute a General Release in
favor of EMPLOYER, its insurers, affiliates, divisions, committees, directors,
officers, employees, agents, successors, and assigns ("General Release"). This
Agreement will not be interpreted or construed to limit the companion General
Release in any manner.
3. PAYMENT. Provided EMPLOYEE complies with the provisions of this
Agreement and the General Release, and further provided that EMPLOYEE has not
rescinded the General Release within the applicable rescission period, EMPLOYER
or its agent will pay EMPLOYEE the amounts set forth in Subparagraphs 3(a) and
3(b) below (collectively, the "Payments") as EMPLOYER's sole payment obligation
to EMPLOYEE in consideration of this Agreement and the General Release. In the
event that EMPLOYEE rescinds the General Release, EMPLOYER's obligation to make
the Payments shall be null and void
a. BASE CONSIDERATION: Subject to the provisions of the
initial paragraph in Section 3 as set forth above, EMPLOYER shall pay EMPLOYEE
the amount of One Hundred Forty Thousand and No/100's Dollars ($140,000.00),
payable in two installments. The first installment of Seventy Thousand and
No/100's Dollars ($70,000) shall be payable on the date the provisions of
Section 3 above are met, and the second installment of Seventy Thousand and
No/100's Dollars ($70,000) shall be payable six (6) months from the date the
provisions of Section 3 above are met and provided that EMPLOYEE has otherwise
continuously complied with the terms of this Agreement and the General Release.
Payments shall be made on the first EMPLOYER regular payroll date following the
dates specified above.
b. GROUP HEALTH INSURANCE CONTINUATION: As of and after the
Separation Date, EMPLOYEE will be entitled to continue his group medical and
dental insurance and life insurance under such terms as are made available to
similarly situated former employees of EMPLOYER. In order to continue such
coverage, EMPLOYEE must maintain continued coverage under EMPLOYER's plan.
Subject to the provisions of the initial paragraph in Section 3 as set forth
above and for the duration specified below in this Section 3(b), EMPLOYER will
pay Seventy Five Percent (75%) of the total contribution cost of the plan.
EMPLOYEE shall be responsible for the remaining Twenty Five (25%) of the total
contribution cost of the plan, plus all deductibles, co-pays and
any other payment obligations specified under the plan. EMPLOYEE'S coverage
under the plan, and EMPLOYER's obligation pursuant to this Section 3(b), shall
terminate in the event that EMPLOYEE fails to make the contributions required in
this Section 3(b), consistent with the Consolidated Omnibus Budget
Reconciliation Act of 1986 ("COBRA")) until EMPLOYEE obtains other such
benefits, or until twelve (12) months from the date EMPLOYEE executes this
Agreement, whichever comes first. If EMPLOYEE has not obtained other benefits
one year from the date of this Agreement, EMPLOYEE may continue coverage under
EMPLOYER's plan, entirely at his own expense, at rates then specified by the
EMPLOYER for coverage continuation for former corporate office employees.
EMPLOYEE acknowledges that EMPLOYER may modify its premium structure, the terms
of its plan and the coverage of the plan, including the termination of all or a
part of a plan. All insurance shall terminate the earlier of eighteen (18)
months after the date that EMPLOYEE resigned his employment, or when EMPLOYEE
becomes a participant under another group medical plan (except in certain
circumstances where that plan has a pre-existing conditions clause that is
applicable to a covered person, coverage might not terminate), or when COBRA
permits termination. EMPLOYEE agrees to notify EMPLOYER when he begins
participation in another group plan. Except as expressly provided in this
Agreement, EMPLOYEE will not be eligible to participate in any of EMPLOYER's
employee benefit plans after the date of this Agreement.
4. REFERENCES. EMPLOYEE agrees to direct or cause to be directed to
the EMPLOYER all future requests for references concerning him. EMPLOYER agrees
to respond to all future requests for references concerning EMPLOYEE by
confirming the dates of his employment with EMPLOYER and identifying the last
position that he held while he worked at EMPLOYER.
5. CLAIMS INVOLVING EMPLOYER. EMPLOYEE will not recommend or
suggest to any potential claimants against or employees of EMPLOYER or their
attorneys or agents that they initiate claims or lawsuits against EMPLOYER, any
of its affiliates, or any of its or their directors, officers, employees, or
agents, nor will EMPLOYEE voluntarily aid, assist, or cooperate with any
claimants against or employees of EMPLOYER or their attorneys or agents in any
claims or lawsuits now pending or commenced in the future against EMPLOYER, any
of its affiliates, or any of its or their directors, officers, employees, or
agents; provided, however, that nothing in this paragraph will be construed to
prevent EMPLOYEE from giving truthful testimony in response to direct questions
asked pursuant to a lawful subpoena during any future legal proceedings
involving EMPLOYER, any of its affiliates, or any of its or their directors,
officers, employees, or agents.
6. CONFIDENTIALITY. It is the intent of the parties that the
terms and conditions of this Separation Agreement and the companion General
Release ("Confidential Information"), will be treated as confidential.
Accordingly, EMPLOYEE and his attorneys will not disclose Confidential
Information to anyone at any time, except as follows: EMPLOYEE may disclose
Confidential Information: (1) to his spouse; (2) to his attorney; or (3) to
his accountants or tax planners. If EMPLOYEE discloses Confidential Information
to any person identified above, he must simultaneously inform the person to whom
the disclosure is being made that he or she must keep such Confidential
Information strictly confidential and that he or she may not disclose such
Confidential Information to any other person without the advance written consent
of EMPLOYEE and EMPLOYER. EMPLOYER may disclose Confidential Information to the
extent that it is required to do so under federal or state securities
regulations or other applicable law, and EMPLOYER presently believes that such
disclosure will be necessary. Furthermore, either EMPLOYEE or EMPLOYER may
disclose Confidential Information in the event that they are legally required to
do so subject to the order of a court of applicable jurisdiction. If EMPLOYEE
is subpoenaed in any proceeding to disclose any Confidential Information, he
shall give EMPLOYER prompt notice of such request so that EMPLOYER may have the
ability to seek an appropriate protective order. It is further agreed that, if
in the absence of a protective order EMPLOYEE is nonetheless compelled to
disclose Confidential Information through a subpoena or other lawful process,
EMPLOYEE may disclose such information without liability hereunder; provided,
however, that EMPLOYEE gives EMPLOYER written notice of the information to be
disclosed as far in advance of its disclosure as is practicable and, upon
EMPLOYER'S request, use it's best efforts to obtain assurances that confidential
treatment will be accorded to such information.
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7. FULL COMPENSATION. EMPLOYEE agrees that the Payments made and
other consideration provided by EMPLOYER under this Agreement constitute full
compensation for and extinguish all EMPLOYEE's claims as set forth in the
companion General Release, including, but not limited to, all claims for
attorneys' fees, costs, and disbursements, and all claims for any type of legal
or equitable relief. EMPLOYEE acknowledges and agrees that all salary, bonus,
vacation and other payments associated with EMPLOYEE's employment with EMPLOYER
shall terminate effective as of the Separation Date. EMPLOYEE agrees that he
has received all bonuses for which he is due, and that he is ineligible to
receive bonuses under the EMPLOYER's bonus programs for the 1997 fiscal year,
since they are calculated based upon year-end corporate performance and apply
only to individuals that are active employees as of the end of the 1997 fiscal
year.
8. EMPLOYEE'S CONTINUED AVAILABILITY. For a six month period
commencing as of the Separation Date (or for such longer period reasonably
required by EMPLOYER to support the EMPLOYER in any pending litigation),
EMPLOYEE will make himself reasonably available from time to time upon
reasonable advance notice to confer with EMPLOYER'S senior executive officers,
directors, and lawyers at mutually convenient times during regular business
hours for reasonable amounts of time regarding EMPLOYER's significant business
matters and legal affairs. EMPLOYER will reimburse EMPLOYEE for any actual
out-of-pocket expenses that he incurs when conferring with EMPLOYER's senior
executive officers, directors, and lawyers, but will not make any other payments
to him for so conferring. The consulting provided hereunder shall be requested
at times and locations which, to the extent reasonably possible, will not
interfere with other employment which EMPLOYEE may now or hereafter obtain.
9. RECORDS, DOCUMENTS AND PROPERTY. EMPLOYEE acknowledges that he
has returned to EMPLOYER all records, correspondence, documents, financial data,
plans, computer disks, computer tapes, keys, credit cards, and other tangible
property in his possession belonging to EMPLOYER.
10. STOCK OPTION PLANS. EMPLOYEE is a participant in EMPLOYER's
employee stock option plans ("Stock Option Plans"). EMPLOYEE acknowledges that
neither his separation of employment or entry into this Agreement or
accompanying General Release shall serve to amend the Stock Option Plans or
create new or differing rights than those set forth in the Stock Option Plans
and associated written incentive stock option agreements to which EMPLOYEE is a
party. EMPLOYEE further acknowledges that his ability to exercise stock options
under the Stock Option Plans following his separation of employment is
restricted per the terms of the Stock Option Plans, it being EMPLOYEE's
responsibility to monitor the associated timing provisions and otherwise comply
with terms of the Stock Option Plans.
11. NO ADMISSION OF WRONGDOING. EMPLOYEE understands that this
Agreement does not constitute an admission that EMPLOYER has violated any local
ordinance, state or federal statute, or principle of common law, or that
EMPLOYER has engaged in any improper or unlawful conduct or wrongdoing against
EMPLOYEE. EMPLOYEE agrees that he will not characterize this Agreement or the
payment of any money or other consideration in accord with this Agreement as an
admission that EMPLOYER has engaged in any wrongdoing.
12. AUTHORITY. EMPLOYEE represents and warrants that he has the
authority to enter into this Agreement and the companion General Release, and
that no causes of action, claims, or demands released pursuant to this Agreement
and the companion General Release have been assigned to any person or entity not
a party to this Agreement and the companion General Release.
13. REPRESENTATION. EMPLOYEE acknowledges that he has been
represented by his own attorney in this matter, that he has had a full
opportunity to consider this Agreement and the companion General Release, that
he has had a full opportunity to ask any questions that he may have concerning
this Agreement and the companion General Release, and that he has not relied
upon any statements made by EMPLOYER or its attorneys, other than the statements
made in this Agreement and any EMPLOYER employee benefit plans in which EMPLOYEE
is a participant.
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14. INVALIDITY. In the event that any provision of this Agreement or
the companion General Release is determined by a court of competent jurisdiction
to be invalid, illegal, or unenforceable in any respect, such a determination
will not affect the validity, legality, or enforceability of the remaining
provisions of this Agreement or the companion General Release, and the remaining
provisions of this Agreement and the companion General Release will continue to
be valid and enforceable.
15. ENTIRE AGREEMENT. This Agreement, Exhibit "A" hereto, the
companion General Release, and any EMPLOYER employee benefit plans and Stock
Option Plans in which EMPLOYEE is a participant, contain all the agreements
between EMPLOYEE and EMPLOYER related to the subject matter contained therein.
This Agreement does not, however, limit the effectiveness or terms of any
existing written confidentiality, non-compete, and non-inducement agreements or
similar covenants binding EMPLOYEE, including those contained in the various
stock option agreements (collectively, "Continuing Undertakings") between
EMPLOYER AND EMPLOYEE, all of which remain in full force and effect, with the
proviso that if there exist any conflicts in interpretation among the various
Continuing Undertakings with respect to the matters contained in Exhibit "A"
hereto, then the terms of Exhibit "A" shall control. EMPLOYEE's performance of
the undertakings set forth in Exhibit "A" are a material inducement for EMPLOYER
to enter into this Agreement.
16. COUNTERPARTS. This Agreement may be executed simultaneously in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
17. GOVERNING LAW. This Agreement and the companion General Release
will be construed in accord with, and any dispute or controversy arising from
any breach or asserted breach of this Agreement or the companion General Release
will be governed by, the laws of the State of Minnesota.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates indicated at their respective signatures below.
EMPLOYEE
Dated: June 30, 1997.
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▇▇▇▇ ▇. ▇▇▇▇▇
Dated: June 30, 1997. EMPLOYER
Buffets, Inc.
By:
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Its:
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EXHIBIT "A"
TO THE SEPARATION AGREEMENT BETWEEN BUFFETS, INC. AND ▇▇▇▇ ▇▇▇▇▇
DATE JUNE 30, 1997 ("AGREEMENT")
RESTRICTIONS ON COMPETITION BY EMPLOYEE. In partial consideration for
EMPLOYEE's receipt of the payments to be made by EMPLOYER pursuant to the
Agreement:
(a) The EMPLOYEE acknowledges that the EMPLOYEE has had and may continue
to have access to significant confidential and valuable information which can be
used unfairly to the harm of EMPLOYER and its subsidiary or affiliated companies
(collectively, the "Company") by present or potential competitors in the buffet
segment of the restaurant industry.
(b) The EMPLOYEE agrees that through and until June 30, 1999, the EMPLOYEE
will not render services or give advice to, or affiliate with (as employee,
partner, consultant or otherwise) or invest or acquire any interest in, any
other person or organization which is engaged in or about to become engaged in
franchising, developing, owning or operating a restaurant or other food service
establishment that utilizes, in whole or in significant part, a buffet,
smorgasbord or cafeteria service format (collectively, a "Conflicting
Organization"), operating within twenty-five miles of any location where an Old
Country Buffet restaurant or HomeTown Buffet restaurant is then currently
operating, or where the Company, an affiliate or a present or prospective
franchise operator has leased or purchased, or is then negotiating to lease or
purchase, a site on which it plans to operate an Old Country Buffet restaurant
or HomeTown Buffet restaurant. Notwithstanding the foregoing, if the business
of the Conflicting Organization has separate and distinct divisions, EMPLOYEE
may, following termination of such employment, render services or give advice
to, or affiliate with, a division which would not itself constitute a
Conflicting Organization if, prior thereto, the Company receives written
assurances satisfactory to the Company from the Conflicting Organization and
EMPLOYEE that EMPLOYEE will not directly or indirectly render services or give
advice or information to any division of such Conflicting Organization which
would itself constitute a Conflicting Organization. In addition to the
foregoing, but only in the states of California, Oregon, Washington and
Minnesota, EMPLOYEE agrees that it will observe identical covenants to those
described above but with respect to restaurants utilizing a casual western theme
restaurant concept similar to that operated by EMPLOYER under the Roadhouse
Grill trademark.
(c) The EMPLOYEE further agrees that, during the period described in
subparagraph (b) of this Exhibit "A", the EMPLOYEE will not, directly or
indirectly, assist or encourage any other person to carry out, directly or
indirectly, any activity that would be prohibited by the above provisions of
this Exhibit "A" if such activity were carried out by the EMPLOYEE, either
directly or indirectly; and in particular the EMPLOYEE agrees that the EMPLOYEE
will not, directly or indirectly, induce any employee of the Company to carry
out, directly or indirectly, any such activity.
(d) The EMPLOYEE acknowledges and agrees that the Company will not have an
adequate remedy at law in the event of any breach by the EMPLOYEE of this
Exhibit "A" and the Company shall therefore be entitled, in addition to any
other remedies that may be available, to injunctive and/or other equitable
relief to prevent or remedy a breach of this Exhibit "A" by the EMPLOYEE.
(e) The EMPLOYEE acknowledges that this Exhibit "A" limits the EMPLOYEE's
right to compete only to the extent necessary to protect the Company from unfair
competition. The EMPLOYEE therefore agrees that a court of competent
jurisdiction may, if it finds the restrictions to be unlawful or excessive,
modify and enforce them to the extent it believes to be reasonable under the
circumstances.
(f) The EMPLOYEE acknowledges that he has knowledge of material non-public
information regarding the Company's finances, business and strategic plans,
budgets, forecasts, operational practices, policies, procedures, systems,
recipes, and other confidential, proprietary and/or trade secret information
(collectively, "Confidential Information") that could cause irreparable harm to
the Company if disclosed without first obtaining the Company's prior written
consent, signed by an officer of EMPLOYER. Furthermore, EMPLOYEE agrees that he
will not use any of the Confidential Information for personal gain or the
benefit of others. The confidentiality obligations contained in this paragraph
(d) shall be indefinite, and shall survive the two year term of EMPLOYEE's other
obligations contained in this Exhibit "A".
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GENERAL RELEASE
DEFINITIONS. I intend all words used in this General Release to have
their plain meanings in ordinary English. Technical legal words are not needed
to describe what I mean. Specific terms I use in this General Release have the
following meanings:
A. "I", "ME", and "MY" mean both me and anyone who has or obtains
any legal rights or claims through me.
B. "EMPLOYER" means Buffets, Inc., any company related to Buffets,
Inc. in the present or past, any company providing insurance to
Buffets, Inc. in the present or past, any present or past
employee benefit plan sponsored by Buffets, Inc., any present or
past affiliates, divisions, committees, directors,officers,
employees, agents, successors, or assigns of Buffets, Inc., and
any person who acted on behalf of or on instructions from
Buffets, Inc.
C. "MY CLAIMS" mean all of my existing rights to any relief of any
kind from the Employer, whether or not I now know about those
rights, including, but not limited to:
1. all claims that arise out of or that relate to my employment
or the termination of my employment with the Employer;
2. all claims that arise out of or that relate to the
statements or actions of the Employer;
3. all claims for any alleged unlawful discrimination or any
other alleged unlawful practices that arise out of or that
relate to the statements or actions of the Employer,
including, but not limited to, claims under the Civil Rights
Act of 1964, the Americans with Disabilities Act, the
National Labor Relations Act, the Employee Retirement Income
Security Act, the Minnesota Human Rights Act, the Minnesota
Workers' Compensation Act, and any federal or state wage and
hour laws; and claims that the Employer engaged in
conduct prohibited on any other basis under any federal,
state, or local statute, ordinance, or regulation;
4. all claims for alleged unpaid compensation, expenses, and
employee benefits; wrongful discharge; breach of contract;
breach of implied contract; breach of a covenant of good
faith and fair dealing; defamation; intentional or negligent
infliction of emotional distress; fraud; negligent
misrepresentation; negligence; assault and battery; false
imprisonment; invasion of privacy; interference with
contractual or business relationships; breach of
fiduciary duty; and promissory or equitable estoppel; and
any other wrongful employment practices or violations of
common law; and
5. all claims for attorneys' fees, liquidated damages, punitive
damages, costs, and disbursements.
AGREEMENT TO RELEASE MY CLAIMS. I will receive a certain sum of money
and other consideration from the Employer or its agents as set forth in the
companion Separation Agreement if I sign and do not rescind this General Release
as provided below. In exchange for that money and other consideration, I agree
to give up all My Claims against the Employer. I will not bring any lawsuits or
make any other demands against the Employer based on My Claims. The money and
other consideration that I will receive in exchange for this General Release and
the companion Separation Agreement is a full and fair payment for the release of
My Claims. The Employer does not owe me anything for the release of My Claims
in addition to the money and other consideration that I am receiving in exchange
for this General Release and the companion Separation Agreement.
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MY RIGHT TO RESCIND THIS GENERAL RELEASE AND THE COMPANION SEPARATION
AGREEMENT. I understand that I have the right to rescind (that is, cancel or
revoke) this General Release for any reason within 15 (fifteen) calendar days
after I sign it. I understand that this General Release will not become
effective or enforceable unless and until I have not rescinded it and the
rescission period has expired. I understand that if I wish to rescind, the
rescission must be in writing and hand-delivered or mailed to the Employer. If
hand-delivered, the rescission must be (a) addressed to Buffets, Inc., attn:
General Counsel, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and (b) delivered
to said General Counsel within the 15 (fifteen) day period. If mailed, the
rescission must be: (i) postmarked within the 15 (fifteen) day period;
(ii) addressed consistent with the foregoing instructions; and (iii) sent by
certified mail, return receipt requested.
ADDITIONAL AGREEMENTS AND UNDERSTANDINGS. Even though the Employer
will pay me for the release of My Claims, the Employer does not admit that it is
responsible or legally obligated to me for My Claims. In fact, I understand
that the Employer denies that it is responsible or legally obligated for My
Claims or that it has engaged in any improper or unlawful conduct or wrongdoing
against me.
I also understand that the terms of this General Release and the
companion Separation Agreement are confidential, and that I may not disclose
those terms to any person except under the circumstances described in the
companion Separation Agreement.
I have read this General Release and the companion Separation
Agreement carefully and I understand all its terms. I have been advised to
consult with my own attorneys prior to executing this General Release and the
companion Separation Agreement. I have discussed this General Release and the
companion Separation Agreement with my own attorneys, and they have fully
explained them to me. In agreeing to sign this General Release and the
companion Separation Agreement I have not relied on any statements or
explanations made by the Employer or its attorneys, other than statements made
in the companion Separation Agreement and any employee benefit plans sponsored
by the Employer in which I am a participant.
I understand and agree that this General Release, the companion
Separation Agreement, and any employee benefit plans sponsored by the Employer
in which I am a participant contain all the agreements between the Employer and
me relating to this separation. We have no other written or oral agreements
relating to this separation.
I am age 18 or older, and I am not under any legal disabilities that
prevent me from being legally bound by the agreements that I am making in this
General Release and the companion Separation Agreement.
I have not filed for personal bankruptcy or been involved in any
personal bankruptcy proceedings between the accrual of My Claims and the date of
my signature below. I am legally able and entitled to receive the money and
other consideration that I will receive from the Employer as set forth in the
companion Separation Agreement in separation of My Claims.
Dated: June 30, 1997
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▇▇▇▇ ▇. ▇▇▇▇▇
Witnesses:
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