BUFFETS, INC.
00000 XXXXXX XXXXX
XXXX XXXXXXX, XXXXXXXXX 00000
June 3, 1996
Mr. C. Xxxxxx Xxxxx
HomeTown Buffet, Inc.
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Dear Xxxxxx:
In connection with the proposed combination of Buffets, Inc. and HomeTown
Buffet, Inc., as set forth in the Agreement and Plan of Merger dated June 3,
1996 (the "Merger Agreement"), the parties have agreed to the following
severance obligations for the persons listed on Exhibit 1.04(a) of the Merger
Agreement (the "listed employees"). If, within a period of 12 months after the
Effective Time, any of the listed employees who were employees of HomeTown at
the Effective Time (as defined in the Merger Agreement)(other than Xxxxx Xxxxx)
shall be terminated by Buffets without cause (as defined below), they shall be
entitled to the following severance payments from Buffets:
a) If they have not relocated to the Minneapolis metropolitan area as of
such termination, they shall be entitled to a severance payment from
Buffets equal to six months of such person's base salary at HomeTown
in effect immediately prior to the Merger (as defined in the Merger
Agreement); or
b) If they have relocated to the Minneapolis metropolitan area as of such
termination, they shall be entitled to a severance payment from
Buffets equal to nine months of such person's base salary at HomeTown
in effect immediately prior to the Merger.
For these purposes, "cause" shall mean the following: (i) indictment for or a
conviction of, or a plea of nolo contendere to, any felony or gross misdemeanor;
(ii) commission of an act of fraud, theft or embezzlement or commission of
similar acts involving dishonesty or moral turpitude; (iii) employee's failure
to devote substantially all of his working time and efforts during normal
business hours to the business of Buffets and its subsidiaries; (iv) knowingly
providing materially misleading information concerning Buffets or any of its
subsidiaries to Buffets or the Board of Directors of Buffets; (v) a breach by
employeee of any confidentiality or non-compete obligation he may have to
Buffets or its subsidiaries; or (vi) employee's
Mr. C. Xxxxxx Xxxxx
June 3, 1996
Page 2
failure to substantially perform his material duties as an employee of Buffets.
As a condition for receiving the severance payments described above, a
listed employee will be required to sign a written general release which
releases Buffets, HomeTown and their employees and affiliates from all claims.
Very truly yours,
/s/ Xxx X. Xxxxxx
--------------------------------------
Xxx X. Xxxxxx, Chairman and CEO of
Buffets, Inc.
Agreed to as of the date first written above.
/s/ C. Xxxxxx Xxxxx
-------------------------------------
C. Xxxxxx Xxxxx, Chairman and CEO of
HomeTown Buffet, Inc.
