EXHIBIT 10.2
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Buffets Holdings, Inc.
0000 Xxxxxx Xxx
Xxxxx, XX 00000
_____________ ____, 20__
[Insert Name]
[Insert Address]
[Insert Address]
Re: Form of Cash and Phantom Incentive Unit Award Agreement
Dear [Insert Name]:
I am pleased to report that, effective on December 13, 2005 (the
"Effective Date"), the Board of Directors of Buffets Holdings, Inc. (the
"Company") has awarded to you a tandem Cash Award and Phantom Incentive Unit
Award, on the terms described herein (collectively, the "Tandem Award").
Capitalized terms used but not defined herein shall have the meanings ascribed
to such terms in the Buffets Holdings, Inc. Stockholders' Agreement, dated as of
September 29, 2000, by and among the Company, Xxxxxx-Xxxxxx Investments, L.P., a
Delaware limited partnership ("Xxxxxx-Xxxxxx"), the other investors executing
the agreement and designated as "Other Investors" therein and the individuals
executing the agreement and designated as "Management Stockholders" therein (the
"Stockholders Agreement").
CASH AWARD
As mentioned above, the Tandem Award shall consist of (i) a "Cash Award" and
(ii) a "Phantom Incentive Unit Award". Pursuant to the Cash Award, the Company
agrees to pay you a lump sum cash payment [in an amount equal to
______________________] [based on the purchase price received by holders of the
Company's common stock as presently constituted, $0.01 par value (the "Common
Stock") in connection with such Realization Event, calculated pursuant to the
provisions set forth in detail in our side letter sent to you on December 13,
2005 (the "Side Letter")]if a "Realization Event" occurs prior to July 31, 2006,
and you remain employed by the Company through the date of the Realization
Event. This cash payment shall be made promptly following the Realization Event,
but in no event later than the date that is the later of (i) the date that is 2
1/2 months after the last day of the fiscal year of the Company during which the
Realization Event occurs, and (ii) the date that is 2 1/2 months after the last
day of your tax year during which such event occurs. For purposes of this
Agreement, a "Realization Event" shall mean any transaction in which
Xxxxxx-Xxxxxx has the right to exercise "Drag-Along Rights" pursuant to Section
4.7 of the Stockholders' Agreement. You will be permitted to defer payment of
the Cash Award if and to the extent any buyer in such Realization Event
maintains a phantom equity plan that will permit such deferral; provided, that
the Company shall have no obligation, to require a buyer to maintain such a plan
or assume such an arrangement. If you are entitled to the Cash Award pursuant to
this paragraph, then your right to the Phantom Incentive Unit Award shall be
forfeited.
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PHANTOM INCENTIVE UNIT AWARD
If your right to the Cash Award is not triggered as provided in the
preceding paragraph, then you shall retain all of your rights to the Phantom
Incentive Unit Award described in this paragraph. The Phantom Incentive Unit
Award shall consist of an award to you of ________________ phantom stock units
(called "Units" herein), each of which represents a single share of common stock
of the Company, par value $0.01 ("Common Stock") The value of these Units to you
will generally be related to the value of Common Stock and will be recorded and
maintained by the Company in a bookkeeping account on your behalf (the
"Account"). Your Account is deemed invested in Common Stock, but no Common Stock
will actually be issued to you (which is generally why the Account credits are
called "Phantom"), and no cash or other capital will be held in the Account, and
you will have no security interest in any asset of the Company related to the
Units or otherwise, consistent with the Section of this Agreement entitled
"Awards as an Unsecured Promise."
TAG-ALONG RIGHTS. Upon the occurrence of any event (a "Tag-Along
Event") that qualifies for "Tag-Along" treatment under Section 4.5 of the
Stockholders Agreement, the Company shall, in its sole and absolute discretion
either (i) immediately prior to the Tag-Along Event, distribute to you a number
of shares of Common Stock that you would be entitled to sell under Section 4.5
of the Stockholders Agreement, assuming that all of the Units in your Account,
whether or not such Unit is vested as described in the Section of this Agreement
entitled "Vesting," were shares of Common Stock for all purposes under Section
4.5 of the Stockholders Agreement, or (ii) immediately following the Tag-Along
Event, credit your Account with the value you would have received from the
shares that would be distributed pursuant to clause (i) had such shares been
distributed and sold in the Tag-Along Event, and the Company shall pay such
portion of the Account as soon as practicable following the Tag-Along Event, and
in any event no later than the date that is the later of (A) the date that is 2
1/2 months after the last day of the fiscal year of the Company during which the
Tag-Along Event occurs, and (B) the date that 2 1/2 months after the last day of
your tax year during which such event occurs. The Company's actions in respect
of this section shall first be applied to Vested Units in your Account.
DRAG-ALONG RIGHTS. Upon the closure and funding of a Realization Event
that occurs on or following July 31, 2006, each Unit in your Account, whether or
not such Unit is vested as described in the Section of this Agreement entitled
"Vesting," shall be credited with the same value per Unit as the value received
in the Realization Event by a holder of Common Stock for one share of Common
Stock, and you (or your estate, as applicable) will be paid the value of your
Account, subject to the Board's discretion to defer the payment of the value of
your Account to appropriately reflect the payment schedule, contingent payment,
holdbacks or contingent obligations applicable to holders of Common Stock
following the Realization Event, as follows:
1. following a Realization Event that is a cash transaction, the value
of your Account shall be paid to you in cash as soon as practicable
following the Realization Event, but in no event later than the
date that is the later of (A) the date that is 2 1/2 months after
the last day of the fiscal year of the Company during which the
Realization Event occurs, and (B) the date that is 2 1/2 months
after the last day of your tax year during which the Realization
Event occurs;
2. following a Realization Event that is an equity or other non-cash
exchange for Common Stock, (A) the Board shall credit your Account
at such time and in such amounts of such medium of payment
(including notes, equity securities or a combination of the
foregoing) made available to holders of Common Stock pursuant to
the Realization Event or, in the Board's sole discretion, in cash
and (B) the value of your Account shall be distributed to you as
soon as practicable following such credit to the Account; provided
that the Board may, in its sole and absolute discretion, elect to
continue to defer payment of the Account until not later than such
time as the equity or other medium received in exchange for Common
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Stock may be converted into cash or is otherwise transferable and,
in the event of such deferral, the Board shall determine whether
payment shall be made either in cash or in the same medium of
payment as holders of Common Stock received in the Realization
Event, including notes, equity securities or a combination of the
foregoing.
INITIAL PUBLIC OFFERING. If any payment is required to be paid to you
in respect of your Account at or following the closing of an initial
underwritten public offering of shares of Common Stock of the Company pursuant
to an effective registration statement filed under the Securities Act of 1933,
as amended (an "IPO"), the Company may pay the value of the Account in shares of
Common Stock or in cash (determined by using the market price of the Common
Stock on the date immediately prior to the payment) or a combination of the
foregoing (the "Post-IPO Payout"). Subject to the Company's right after the IPO
to pay the value of your Account at such earlier time as it shall determine, on
the fifth anniversary of the IPO (the "IPO Payment Date") your Account will be
paid to you, and you will receive the Post-IPO Payout.
VESTING. The Units shall be subject to annual vesting over five years,
such that 20% of the Phantom Incentive Unit Award shall vest on the first
anniversary of the Effective Date and on each of the next four anniversaries
thereafter, unless you cease to be employed by the Company, in which event,
vesting shall freeze as of the date of termination. There shall be no pro-rata
vesting for partial year periods. Vested Units shall be referred to herein as
"Vested Units" and unvested Units shall be referred to herein as "Unvested
Units." Upon your termination of employment for any reason, all Unvested Units
shall be forfeited.
PAYMENT FOR VESTED UNITS UPON TERMINATION OF EMPLOYMENT. If, at any
time after July 31, 2006, and prior to a Realization Event or an IPO, your
employment with the Company is terminated for any reason other than due to your
death or Disability (defined below), then (i) all Units in your Account that are
Unvested Units as of the date of such termination shall be cancelled as of the
date of such termination without consideration therefor, and (ii) with respect
to each Unit in your Account that is a Vested Unit as of the date of your
termination of employment, the Company shall have the right, at its election and
in its sole discretion, to repurchase from you all or a portion of such Vested
Units at a price per Vested Unit (the "Per Vested Unit Price") in an amount
equal to (a) the quotient obtained by dividing (I) the amount by which (A) the
sum of (x) the product of 4.5 times Consolidated EBITDA of the Company during
the Measurement Period plus (y) the proceeds payable to the Company upon the
exercise of options or warrants to acquire Common Stock that are included in
determining the number of shares of Fully Diluted Common Stock (B) exceeds the
Consolidated Indebtedness of the Company as of the date of termination by (II)
the number of shares of Fully Diluted Common Stock on the date of termination of
employment, minus (b) $0.11. For purposes of calculating the Per Vested Unit
Price (i) any convertible preferred stock or convertible indebtedness shall be
included as Consolidated Indebtedness and not included in the calculation of
Fully Diluted Common Stock to the extent the conversion right is not "in the
money" and shall be included in the calculation of Fully Diluted Common Stock
and not included as Consolidated Indebtedness to the extent the conversion
feature is "in the money", and (ii) all defined terms shall be interpreted and
applied consistent with the terms of Section 4.8 of the Stockholders Agreement.
The Company shall pay you the amount described in this paragraph no later than
the date that is the later of (A) the date that is 2 1/2 months after the last
day of the fiscal year of the Company during which your employment is terminated
and (B) the date that is 2 1/2 months after the last day of your tax year during
which your employment is terminated.
If a definitive agreement respecting a sale of the Company is executed
within six months following the exercise by the Company of the right described
in the preceding paragraph, which agreement is at any time consummated, and the
per-share purchase price (or in the case of a sale of all or substantially all
of the assets of the Company, the amount available for distribution to
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Xxxxxx-Xxxxxx and its affiliates, the Other Investors, the Management
Stockholders and any other parties to the Stockholders Agreement on a per share
basis) is higher than that determined for the Vested Units in accordance with
the preceding provisions of this section, you shall receive (at such times as
payments in connection with such sale are made to stockholders of the Company)
an additional payment from the Company equal to the difference between such
higher price and the Per Vested Unit Price paid when the Company exercised its
right under the preceding paragraph.
PAYMENT UPON DEATH OR DISABILITY. If at any time following July 31,
2006 your employment shall terminate due to death or "Disability" then the
Company shall purchase from you, or your estate, as applicable, on the first
anniversary of the date of your termination of employment, all, but not less
than all, of the Units in your Account that are Vested Units as of the date of
your termination of employment (the "Death or Disability Payment Right"), at the
Per Vested Unit Price described in the preceding Section of this Agreement;
provided, however, that the Company may defer the amount, if any, that it shall
be obligated to pay under this section if the amount that it is required to pay
(i) in the aggregate to all Management Stockholders in any given fiscal year in
respect of such Management Stockholders' Put Rights under Section 4.9 of the
Stockholders Agreement exceeds $8,000,000 or (ii) individually to any Management
Stockholder in respect of any given fiscal year in respect of such Management
Stockholder's Put Right under Section 4.9 of the Stockholders Agreement exceeds
$4,000,000. As used in this Agreement, "Disability" shall mean any event of
disability under the disability insurance plan of the Company or its
Subsidiaries in which you participate, or if there shall be no such disability
plan, then your inability to perform your duties as an employee of the Company
or its Subsidiaries for any period of at least 90 days during any consecutive
12-month period.
TRANSFER RESTRICTIONS. None of the Tandem Award, the Cash Award, the
Phantom Incentive Unit Award, any Units or the Account may be, directly or
indirectly, voluntarily or involuntarily, offered, sold, exchanged, pledged,
attached, hypothecated, encumbered, transferred, assigned, alienated or
otherwise disposed of other than by will or by the laws of descent and
distribution, and such purported offer, sale, exchange, pledge, attachment,
hypothecation, encumbrance, transfer, assignment, alienation or other
disposition shall be void and unenforceable against the Company.
SETTLEMENT. The Phantom Incentive Unit Award may be settled in cash,
shares of Common Stock or a combination of the foregoing, in the sole discretion
of the Board. To the extent the Phantom Incentive Unit Award is settled in
shares of Common Stock, you shall be required to enter into the Stockholders'
Agreement prior to and as a condition to the receipt of such shares. Following
the payment of all or a portion of the Account attributable to the Phantom
Incentive Unit Award, any such Units shall thereafter be deemed cancelled. The
payment of a dividend or distribution with respect to your Phantom Incentive
Unit Award shall not be considered a payment of any portion of your Account for
purposes of the preceding sentence.
DEFERRAL OF PAYMENT. Notwithstanding anything to the contrary in this
Agreement, the Board may make good faith determinations respecting the time
and/or medium of payment and/or impose conditions on payment of the value of
your Account in order to reflect the time and medium of payment, or conditions
on payment, applicable to holders of Common Stock in connection with a
Realization Event, an IPO or otherwise, in order to accomplish the intended
purposes of this Agreement. By way of example and without limiting the
generality of the foregoing, the Board may impose appropriate restrictions on
the payment of the value of your Account if the holders of Common Stock are
subject to a clawback or are required to escrow payment for their Common Stock.
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LEGAL REQUIREMENTS. Payment of the value of your Account, the Company's
repurchase of the Vested Units and the other obligations of the Company under
this Agreement shall be subject to all applicable federal and state laws, rules
and regulations and to such approvals by any regulatory or governmental agency
as may be required.
DEBT INSTRUMENTS. Notwithstanding anything to the contrary in this
Agreement, the Company shall not be obligated to pay the value of any portion of
your Account, to repurchase any Vested Units or pay any amounts due under this
Agreement if (i) at any time there exists and is continuing a default or an
event of default on the part of the Company or under any guarantee or other
agreement under which the Company or one of its Subsidiaries has borrowed money
or (ii) if such payment would constitute a breach of, or result in a default or
an event of default on the part of the Company or any of its Subsidiaries, under
any such guarantee or agreement. In the event that payment of any portion of any
Account is deferred pursuant to this section of the Agreement, the Company shall
pay the value of such portion as soon as possible following the date on which
such payment would not result in any such breach or default, with interest at
the federal short-term interest rate on the first day of the month you or your
estate, as applicable has the right to receive payment of the value of your
Account, to be recalculated on the first day of each month thereafter until all
such payments due under the Account are made.
POSTPONEMENT. The Board, in its sole discretion, may postpone the
issuance or delivery of any securities under your Account as the Company may
consider appropriate and may require you to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of any such securities in compliance with applicable laws,
rules and regulations.
NO VOTING; SHAREHOLDER RIGHTS; DIVIDENDS. The Phantom Incentive Unit
Award and the Units granted under this Agreement do not constitute an equity
interest in the Company or its Subsidiaries. You shall not share in the voting
rights of the Company or its Subsidiaries as a result of the Phantom Incentive
Unit Award. To the extent dividends or distributions are declared and paid to
holders of Common Stock, you shall receive the amount that would have been
distributed to you had the Units credited to your Account been issued and
outstanding Common Stock and such dividend or distribution shall be paid at the
same time and in the same manner as dividends or distributions are paid to
holders of Common Stock.
DILUTION ADJUSTMENTS. In the event of a merger, consolidation,
recapitalization, reclassification, split-up, stock dividend, rights offering,
stock split, combination of units or other similar action made, declared or
effected with respect to the Common Stock the number and kind of Units shall be
adjusted to reflect such event, and the Board shall make such adjustments as it
deems appropriate and equitable in the number and kind of Units credit to your
Account and in any other matters which relate to the Units or your Account and
which are affected by the events referred to above. The Board is authorized to
make adjustments in the terms and conditions of, and the criteria included in,
your Account in recognition of unusual or nonrecurring events (including,
without limitation, the events described in the first sentence of this section
of the Agreement) affecting the Company, or the financial statements of the
Company or any subsidiary, or of changes in applicable laws, regulations or
accounting principles, whenever the Board determines that such adjustments are
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under this Plan.
GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to
settle the Units in Common Stock, cash or otherwise shall be subject to all
applicable laws, rules and regulations, and to such approvals by governmental
agencies as may be required. Notwithstanding any terms or conditions of this
Agreement to the contrary, the Company shall be under no obligation to offer to
sell or to sell and shall be prohibited from offering to sell or selling any
shares of Common Stock pursuant to the Phantom Incentive Unit Award unless such
shares have been properly registered for sale pursuant to the Securities Act of
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1933, as amended (the "Securities Act"), with the Securities and Exchange
Commission or unless the Company has received an opinion of counsel,
satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms and
conditions of such exemption have been fully complied with. The Company shall be
under no obligation to register for sale under the Securities Act any shares of
Common Stock that may be offered or sold under this Agreement until an IPO. Upon
an IPO, the Company shall undertake to register shares of Common Stock pursuant
to the Securities Act on a Form S-8 with the Securities and Exchange Commission
for issuance under this Agreement, such that in the event the Company makes a
distribution of your Account in shares of Common Stock at any time following an
IPO, there will be a sufficient number of shares registered under this
Agreement.
EXPIRATION. If on the twelfth anniversary of the Effective Date, any
Units remain in your Account and are not settled as of such date (by way of
example, because a Realization Event, IPO Payment Date or Tag-Along Event has
not occurred as of such date and because you are still employed with the Company
as of such date), such Units shall be canceled without consideration therefore,
and the Phantom Incentive Unit Award shall be null and void.
Noncompetition and Nondisclosure of Confidential Information
By signing this Agreement, you agree and acknowledge that, for the
benefit of the Company and any person or entity that directly, or indirectly
through one or more intermediaries, controls, is controlled by or is under
common control with, the Company (any "Affiliate"), that you have had and will
continue to have access to significant confidential and valuable information
which can be used unfairly and to the harm of the Company and its Affiliates by
present or potential competitors in the buffet segment of the restaurant
industry, and:
DURING EMPLOYMENT. You agree that, during the period of your continued
employment with the Company or its Affiliates, you will not render services to,
give advice to, affiliate with (as employer, partner, consultant or otherwise)
or invest or acquire any interest in, in whole or in significant part, 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 (other
than where incidental to primary tableside service), smorgasbord or cafeteria
service format (a "Conflicting Organization"). You shall not, however, be
prohibited from investing in securities of any company that is listed on a
national securities exchange or traded on NASDAQ, provided that you do not
hereafter own, or have the right to acquire, more than 3% of the outstanding
voting securities of such a Conflicting Organization.
POST EMPLOYMENT. You further agree that, until the expiration of a
period of two years after the cessation or termination of your employment with
the Company or any controlled Affiliate of the Company, whether voluntary or
involuntary, with or without cause, you (i) will not render services, give
advice to, or affiliate with (as employee, partner, consultant or otherwise) or
invest or acquire any interest in, any Conflicting Organization operating within
100 miles of any location where a Company 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 a
purchase, a site on which it plans to operate a Company buffet restaurant and
(ii) will not, directly or indirectly, hire or solicit any person who has been
employed by the Company or any Affiliate within one year prior to the date of
such hiring or solicitation or encourage any such person to leave such
employment. This Section shall not prevent you from hiring or soliciting any
employee or former employee (who is or was not a management or store management
employee) of the Company or any Affiliate who responds to an advertisement
placed in a newspaper, magazine, periodical or Internet website that is a public
solicitation of prospective employees. You shall not, however, be prohibited
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from investing in securities of any company that is listed on a national
securities exchange or traded on NASDAQ, provided that you do not hereafter own,
or have the right to acquire, more than 3% of the outstanding voting securities
of such Conflicting Organization. Notwithstanding the foregoing, if the business
of the Conflicting Organization has separate and distinct divisions, you may,
following termination of such employment, render services to or give advice to,
or affiliate with, a division that would not itself constitute a Conflicting
Organization if, prior thereto, the Company received written assurances
satisfactory to the Company from the Conflicting Organization and you that you
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.
CONFIDENTIALITY. During and at all times following your employment, you
will keep secret and retain in strictest confidence, and will not use for the
benefit of yourself or others, except in connection with the business and
affairs of the Company and its Affiliates, all confidential matters relating to
the Company or its Affiliates, including, without limitation, "know-how,"
financial information, trade secrets, recipes and formulas, lease or
construction terms, consultant contracts, pricing policies, operational methods,
marketing or franchising plans or strategies, product development techniques or
plans, business acquisition plans, new personnel acquisition plans, training
materials, designs and design projects and other business affairs relating to
the Company or its Affiliates and will not disclose them to anyone outside of
the Company and its Affiliates, whether during or after your employment with the
Company or its Affiliates, except (i) as required in the course of performing
your duties for the Company or its Affiliates, (ii) with the Company's express
written consent or (iii) to the extent any such confidential matter (A) is in
the public domain or is generally known in the industry through no unlawful or
wrongful act of yourself or (B) must be disclosed by you pursuant to law and
your disclosure is limited to that reasonably required by law. All memoranda,
notes, lists, records and other documents or papers (and all copies thereof),
including such items stored in computer memories, on microfiche or by any other
means, made or compiled by or on behalf of you, or made available to you
concerning the business of the Company or its Affiliates, are and will be the
Company's property and will be delivered to the Company promptly upon the
termination of your employment with the Company or its Affiliates or at any
other time on written request.
ENFORCEMENT; BLUE PENCIL. You acknowledge and agree that the Company's
remedies at law for a breach or threatened breach of any of the provisions of
the preceding three paragraphs would be inadequate, and, in recognition of this
fact, you agree that, in the event of such a breach or threatened breach, in
addition to any remedies at law, the Company, without posting any bond, shall be
entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, temporary or permanent injunction or any other
equitable remedy which may then be available. If you breach any such provisions,
and the Company obtains injunctive relief with respect thereto, the period
during which you are required to comply with that particular covenant shall be
extended by the same period that you were in breach of such covenant prior to
the effective date of such injunctive relief. If any court determines that any
of the covenants set forth in the three preceding paragraphs, or any part
thereof, is unenforceable because of the duration or geographic scope of such
provision, such court shall have the power to reduce the duration or scope of
such provision, as the case may be, and, in its reduced form, such provision
shall then be enforceable.
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General Provisions
NO RIGHTS TO AWARDS. You shall not have any claim to be granted any
further Tandem Award, Cash Award, Phantom Incentive Unit Award or Units other
than as specifically set forth in this Agreement.
TAX WITHHOLDING. You may be required to pay to the Company, at its
request, and the Company shall have the right and is hereby authorized to
withhold from any payment due or transfer made under your Account or otherwise
under this Agreement or from any compensation or other amount owing to or in
respect of you, the amount (in cash, securities or other property) of any
applicable withholding taxes in respect of your Account, its distribution or
settlement in cash or in kind, or any payment or transfer under your Account or
under this Agreement and to take such other action as may be necessary in the
opinion of the Company to satisfy all obligations for the payment of such taxes.
SECTION 409A OF THE INTERNAL REVENUE CODE. The parties to this
Agreement intend that the incentive arrangements set forth in this Agreement not
constitute a plan of nonqualified deferred compensation subject to Section 409A
of the Internal Revenue Code of 1986, as amended (the "Code"); owing to the
uncertain application of Section 409A, however, the parties to this Agreement
generally structured their arrangements with a view to comply to those
requirements in case they were applicable. If any payments of money or delivery
of shares of Common Stock, other securities or benefits due to you under this
Agreement could cause the application of an accelerated or additional tax under
Section 409A of the Code, such payments, delivery of shares of Common Stock,
other securities or benefits shall be deferred if deferral will make such
payment, delivery of shares or other benefits compliant under Section 409A of
the Code, otherwise such payment, delivery of shares of Common Stock, other
securities or benefits shall be restructured, to the extent possible, in a
manner, determined by the Company and reasonably acceptable to you, that does
not cause such an accelerated or additional tax.
OTHER COMPENSATION ARRANGEMENTS. Neither the grant of the Tandem Award
hereunder, nor the payment of any amounts in respect of the Cash Award, the
Phantom Incentive Unit Award, the Units or any Account shall be taken into
account in determining your right to receive any additional benefits or
compensation under any other employee compensation or benefit plan or
arrangement of the Company.
NO RIGHT TO SERVICE OR EMPLOYMENT. The grant of the Tandem Award
hereunder shall not be construed as giving you the right to be retained in the
employ or service of the Company or any Subsidiary. Further, the Company or its
Subsidiaries may at any time terminate you from any employment or other service
relationship or discontinue, free from any liability or any claim under this
Agreement, unless otherwise expressly provided in this Agreement.
AWARDS AS AN UNSECURED PROMISE. The Company shall not be required to
and shall not segregate any funds representing the Tandem Award granted
hereunder, and nothing in this Agreement shall be construed as providing for
such segregation. Nothing in this Agreement, and no action taken pursuant to its
terms, shall create or be construed to create a trust or escrow account of any
kind, or a fiduciary relationship between the Company or its Subsidiaries, on
the one hand, and you on the other hand. You and your estate, as applicable,
shall rely solely on the unsecured promise of the Company to make the payments
required under the terms of your Account, but shall have the right to enforce
such a claim in the same manner as any unsecured general creditor of the
Company. You shall not have any preferred claim on, or any beneficial ownership
in, any assets of the Company. Any rights created under this Agreement are mere
unsecured contractual rights of you against the Company.
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GOVERNING LAW. The validity, construction and effect of this Agreement
shall be determined in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed entirely within such state
without regard to the choice of law principles thereof which would cause the
laws of another state to apply.
You and the Company agree that this Agreement involves at least
$100,000, and that this Agreement has been entered into in express reliance on
Section 2708 of Title 6 of the Delaware Code. You and the Company irrevocably
and unconditionally agree that service of process may also be made on you or the
Company by pre-paid certified mail with a validated proof of mailing receipt
constituting evidence of valid service sent to you or the Company at the address
set forth in this Agreement, as such address may be changed from time to time
pursuant hereto, that service made pursuant to the above shall, to the fullest
extent permitted by applicable law, have the same legal force and effect as if
served upon such party personally within the State of Delaware.
ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to any cash, equity, phantom equity or incentive unit
award payable to you and supersedes all other agreements, whether written or
oral, relating thereto, including, without limitation, all provisions relating
to ________ in the offer letter from the Company to you dated ________ __, 2005.
There are no restrictions, agreements, promises, warranties, covenants or
undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. ]
HEADINGS. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision thereof.
Sincerely,
BUFFETS HOLDINGS, INC.
_____________________________
By:
Its:
Acknowledged and Agreed:
______________________________
(Employee Name)
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