SEVERANCE PROTECTION AGREEMENT*
Exhibit 10.8
THIS AGREEMENT, dated as of September 29, 2000 (the “Agreement”) is entered into by and
between Buffets, Inc. (the “Company”) and the person named on Appendix A attached hereto (the
“Executive”), effective as of the Closing Date.
ARTICLE I
STATEMENT OF PURPOSE
STATEMENT OF PURPOSE
1.1 The purpose of this Agreement is to encourage and motivate Executive to devote his full
attention to the performance of his assigned duties without the distraction of concerns regarding
the involuntary termination of his employment by the Company. The Company believes it is in the
best interests of the Company and its shareholders to provide for severance payments and other
benefits to Executive in the event his employment is terminated by the Company for reasons other
than Cause, Disability or on account of his death.
ARTICLE II
DEFINITIONS
DEFINITIONS
2.1 “Annual Base Salary” shall mean the greater of (a) Executive’s 2000 base salary listed on
Appendix A attached hereto, or (b) Executive’s highest rate of base salary in effect at anytime
within the one-year period prior to Executive’s Date of Termination.
2.2 “Board” means the Board of Directors of the Company.
2.3 “Cause” shall mean “Cause” as defined in the Stockholders’ Agreement.
2.4 “Closing Date” shall mean the “Effective Time” as defined in the Agreement and Plan of
Merger among Buffets, Inc., Big Boy Holdings, Inc., and Big Boy Merger Corporation, dated as of
June 4, 2000.
2.5 “COBRA” means Section 4980B of the Code and Section 601 et seq. of ERISA, and the proposed
or final regulations thereunder.
2.6 “Code” means the Internal Revenue Code of 1986, as amended.
2.7 “Date of Termination” means the last day on which Executive is actively employed by an
Employer.
2.8 “Disability” shall mean “Disability” as defined in Section 4.9 of the Stockholders’
Agreement.
2.9 “Employer” means the Company or any Subsidiary.
| * | Each of the officers on the signature pages and Exhibit As hereto have entered into a Severance Protection Agreement in the form of this Exhibit 10.8. |
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2.10 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
2.11 “Protection Period” means the total number of weeks listed on Appendix A that are used to
calculate Executive’s Severance Benefits.
2.12 “Release” means a general release executed by Executive in the form attached hereto as
Appendix B or as the same may be revised from time to time by the Company in its sole and absolute
discretion.
2.13 “Severance Benefits” means the severance payments, medical and other
benefits described in Sections 3.2., 3.3, 3.4 and 3.5.
2.14 “Stockholders’ Agreement” means the Buffets Holdings, Inc. Stockholders’ Agreement, dated
as of September 28, 2000.
2.15 “Subsidiary” means any corporation, business trust, limited liability company or
partnership with respect to which the Company or any other Employer owns, directly or indirectly,
stock, securities, or other ownership interests representing at least 50% of the aggregate value of
the corporation, business trust, limited liability company or partnership.
2.16 “Weekly Compensation” means Executive’s Annual Base Salary divided by fifty two (52).
ARTICLE III
SEVERANCE PAYMENTS AND RELATED BENEFITS
SEVERANCE PAYMENTS AND RELATED BENEFITS
3.1 Entitlement to Benefits. If the Employer terminates Executive’s employment for any reason
other than Cause, Disability or death, Executive shall be entitled to Severance Benefits provided
Executive executes a Release at the termination of his employment.
3.2 Severance Payments. If Executive is eligible for benefits under Section 3.1, he shall
receive payments equal to his Weekly Compensation multiplied by the number of weeks in his
Protection Period, payable in biweekly installments in accordance with his Employer’s regular
payroll practices.
3.3 Medical Benefits. During Executive’s Protection Period, Executive’s Employer shall
continue to provide Executive and Executive’s family with medical and/or health benefits on the
same basis as provided to active executive management employees immediately prior to Executive’s
Date of Termination; provided, however, that Executive shall continue to pay the costs (including
premiums and co-payments) he was required to pay for such medical and/or health coverage prior to
his Date of Termination (in the event such continuation of
coverage is not permitted under the Employer’s medical and/or health plan, such coverage shall be
secured through COBRA continuation coverage which shall be provided at the Employer’s expense for
the duration of Executive’s Protection Period).
3.4 Life Insurance and Long-Term Disability Benefits. For the duration of Executive’s
Protection Period, the Employer shall continue to provide Executive with group term life insurance
coverage and long-term disability coverage in the same amount as in effect immediately prior to
Executive’s Date of Termination; provided, however, that Executive shall continue to pay the costs
he was required to pay for such life insurance and/or long-term disability insurance coverage, if
any, prior to his Date of Termination.
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3.5 Other Benefits Discontinued. Except for those fringe benefits listed on Appendix A and as
set forth in Sections 3.3 and 3.4, no fringe benefits or plans or related payroll deductions, other
than those provided pursuant to this Article III (and applicable tax withholding), shall be
continued after Executive’s Date of Termination.
3.6 Forfeiture. Notwithstanding any provision in this Agreement to the contrary, any payment
of benefits under this Agreement shall automatically cease in the event Executive materially
breaches his Release or the noncompetition, nonsolicitation or confidentiality provisions in the
Stockholders’ Agreement (and Executive continues to engage in such conduct after notice from
Employer has been received) and the Employer shall be entitled to a full refund from Executive of
any benefits paid to him under this Agreement.
3.7 Tax Withholding; Other Set-offs. The Employer may withhold from any amounts payable under
this Agreement any federal, state, and local income, excise, employment, or other tax that is
required to be withheld pursuant to any applicable law or regulation. Payments hereunder shall not
be subject to set off except for bona fide indebtedness or advances owed by the Executive to the
Employer.
ARTICLE IV
DISPUTE RESOLUTION
DISPUTE RESOLUTION
4.1 Dispute Resolution. Any dispute or controversy arising under or in connection with this
Agreement that cannot be mutually resolved by the parties hereto shall be settled exclusively by
arbitration in Minneapolis, Minnesota before a single arbitrator, who shall be selected jointly by
the Company and Executive, or, if the Company and Executive cannot agree on the selection of the
arbitrator, shall be selected by the American Arbitration Association (provided that any arbitrator
selected by the American Arbitration Association shall not,
without the consent of the parties hereto, be affiliated with the Company or Executive or any of
their respective affiliates). Judgment may be entered on the arbitrator’s award in any court having
jurisdiction. The parties hereby agree that the arbitrator shall be empowered to enter an equitable
decree mandating specific enforcement of the terms of the Agreement.
ARTICLE V
NO MITIGATION
NO MITIGATION
5.1 No Mitigation. Executive shall have no duty to mitigate the amounts payable by the
Employer under this Agreement by seeking or accepting new employment following his Date of
Termination. Except as specifically provided in this Agreement, all amounts payable pursuant to
this Agreement shall be paid without reduction regardless of any amounts which may be paid or
payable to Executive as a result of Executive’s employment by another employer.
ARTICLE VI
EXCLUSIVITY OF RIGHTS
EXCLUSIVITY OF RIGHTS
6.1 Waiver of Certain Other Rights. If Executive is entitled to receive Severance Benefits
pursuant to Section 3.1 hereof, he shall be deemed to have waived his right to receive severance
payments or other severance benefits under any other agreement, plan, program or arrangement of any
Employer.
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ARTICLE VII
MISCELLANEOUS
MISCELLANEOUS
7.1 No Assignability. This Agreement is personal to Executive and without the prior written
consent of the Company shall not be assignable by Executive otherwise than by will or the laws of
descent and distribution.
7.2 Payments to Beneficiary. If Executive dies before receiving the amounts to which he is
entitled under this Agreement, such amounts shall be paid to the beneficiary designated in writing
by Executive, or if none is so designated, to Executive’s estate.
7.3 Non-alienation of Benefits. The Severance Benefits payable under this Agreement shall not
be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary,
before actually being received by Executive, and any such attempt to dispose of any right to
benefits payable under this Agreement shall be void.
7.4 Severability. In the event that any provision of this Agreement is determined to be
invalid or unenforceable, the remaining terms and conditions of this Agreement shall be unaffected
and shall remain in full force and effect. In addition, if any provision is determined to be
invalid or unenforceable due to its duration and/or scope, the duration and/or scope of such
provision, as the case may be, shall be reduced, such reduction to be to the smallest extent
necessary to comply with applicable law, and such provision shall be enforceable, in its reduced
form, to the fullest extent permitted by applicable law.
7.5 Amendments. This Agreement shall not be altered, amended or modified except by written
instrument executed by the Company and Executive.
7.6 Notices. Any notice given pursuant to this Agreement to any party hereto shall be deemed
to have been duly given when hand delivered or mailed by registered or certified mail, return
receipt requested, or by overnight courier, addressed to Executive at the address listed on
Appendix A and to the Company at Buffets, Inc., Attn: General Counsel, 0000 Xxxxxx Xxx, Xxxxx,
Xxxxxxxxx 00000, or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
7.7 Counterparts. This Agreement may be executed by one or more of the parties hereto on any
number of separate counterparts and all such counterparts shall be deemed to be one and the same
instrument. Each party hereto confirms that any facsimile copy of such party’s executed counterpart
of the Agreement (or its signature page thereof) shall be deemed to be an executed original
thereof.
7.8 Captions. The captions of this Agreement are not part of the provisions hereof and shall
have no force and effect.
7.9 Pronouns. Masculine pronouns and other words of masculine gender shall refer to both men
and women.
7.10 No Waiver. A party’s failure to insist upon strict compliance with any provision of this
Agreement which inures to the benefit of a party shall not be deemed to be a waiver of such
provision or any other provision of this Agreement by such party.
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7.11 Governing Law. This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of Minnesota, without giving effect to conflict-of-laws principles.
7.12 Entire Agreement. This Agreement sets forth the entire understanding of the parties with
respect to the subject matter hereof and supersedes all existing agreements among them concerning
such subject matter.
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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date
first set forth above.
| BUFFETS, INC. | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr., | ||
| Executive Vice President & | ||
| Chief Financial Officer | ||
| /s/ Xxxxx Xxxxx | ||
| Xxxxx Xxxxx |
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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date
first set forth above.
| BUFFETS, INC. | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr., | ||
| Executive Vice President & | ||
| Chief Financial Officer | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr. |
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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date
first set forth above.
| BUFFETS, INC. | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr., | ||
| Executive Vice President & | ||
| Chief Financial Officer | ||
| /s/ Xxxxx X. Xxxxxxx | ||
| Xxxxx X. Xxxxxxx |
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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date
first set forth above.
| BUFFETS, INC. | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr., | ||
| Executive Vice President & | ||
| Chief Financial Officer | ||
| /s/ Xxxxxx X. Xxxxxxxx | ||
| Xxxxxx X. Xxxxxxxx |
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IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date
first set forth above.
| BUFFETS, INC. | ||
| /s/ R. Xxxxxxx Xxxxxxx, Jr. | ||
| R. Xxxxxxx Xxxxxxx, Jr., | ||
| Executive Vice President & | ||
| Chief Financial Officer | ||
| /s/ Xxxx Xxxxxxxx | ||
| Xxxx Xxxxxxxx |
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| APPENDIX A | ||
NAME OF EXECUTIVE: |
Xxxxx Xxxxx | |
ADDRESS: |
0000 Xxxxxxxx Xxxxx | |
| Xxxx Xxxxxxx, XX 00000 | ||
2000 BASE SALARY: |
$350,000.00 | |
PROTECTION PERIOD: |
52 Weeks | |
OTHER BENEFITS: |
None | |
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| APPENDIX A | ||
NAME OF EXECUTIVE: |
R. Xxxxxxx Xxxxxxx, Jr. | |
ADDRESS: |
0 Xxxxxxxxx Xxxx | |
| Xxxxx Xxxx, XX 00000 | ||
2000 BASE SALARY: |
$185,000.00 | |
PROTECTION PERIOD: |
52 Weeks | |
OTHER BENEFITS: |
None | |
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| APPENDIX A | ||
NAME OF EXECUTIVE: |
Xxxxx X. Xxxxxxx | |
ADDRESS: |
0000 Xxxxxx Xxxx Xxxxx | |
| Xxxxxxxx, XX 00000 | ||
2000 BASE SALARY: |
$200,000.00 | |
PROTECTION PERIOD: |
52 Weeks | |
OTHER BENEFITS: |
None | |
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| APPENDIX A | ||
NAME OF EXECUTIVE: |
Xxxxxx X. Xxxxxxxx | |
ADDRESS: |
00000 Xxxxxx Xxxxxx | |
| Xxxxxxxxx, XX 00000 | ||
2000 BASE SALARY: |
$175,000.00 | |
PROTECTION PERIOD: |
52 Weeks | |
OTHER BENEFITS: |
None | |
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| APPENDIX A | ||
NAME OF EXECUTIVE: |
Xxxx Xxxxxxxx | |
ADDRESS: |
00000 XX 000xx Xxxxxx | |
| Xxxxx Xxxxxxx, XX 00000 | ||
2000 BASE SALARY: |
$117,000.00 | |
PROTECTION PERIOD: |
39 Weeks | |
OTHER BENEFITS: |
None | |
