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SUMMIT FAMILY RESTAURANTS INC.
Separation Compensation Plan
September 25, 1995
1. PURPOSE. The Summit Family Restaurants Inc. Separation
Compensation Plan (the "Plan") is intended to provide selected employees of
Summit Family Restaurants Inc. and its subsidiaries (the "Company") with certain
benefits upon their involuntary termination of employment. The Plan is meant to
ease the financial hardships that may be experienced by these employees.
2. SCOPE AND DURATION. The benefits of the Plan will be
provided to employees notified of an involuntary termination of employment on or
after September 25, 1995, and on or before December 31, 1995. Any and all
previous plans, policies and practices of any type concerning benefits upon
termination of employment are hereby terminated and superseded by the terms of
the Plan.
Upon termination of employment, an employee's eligibility for
participation in the Company's benefit plans, including the:
(i) COMPANY 401(K) RETIREMENT SAVINGS PLAN
(ii) COMPANY MEDICAL AND DENTAL PLAN
(iii) COMPANY ESOP
(iv) COMPANY HEALTH CARE REIMBURSEMENT ACCOUNT
shall cease, and such employee's rights with respect to the benefits afforded by
such plans shall be in accordance with the provisions of such plans or as
required by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA")
or paragraph 5 (C). Further, after termination of employment, an employee will
not accrue vacation time, or paid holidays, nor be eligible for disability
benefits, car allowances or other similar benefits normally associated with
employment.
3. SELECTION OF EMPLOYEES. The terms and conditions of the Plan
are tailored to the business needs of the Company. The only employees eligible
for benefits under this Plan are those employees whose work location is at the
Home Office of the Company or whose work location is outside of the Home Office
and the employee is at the level of district manager or above, and other
employees designated by the Company, from time to time, in its sole discretion.
Within the previous indicated categories of employees, the Company has sole
discretion to determine whether an employee receives benefits under
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the Plan. Only an employee described below may be considered for benefits under
the Plan.
A. Employment Termination. An employee is entitled to
benefits under the Plan in the event of an involuntary termination of
employment under circumstances which, in the Company's opinion and sole
discretion, warrant the payment of such benefits.
B. Reassignment. Generally, the Company will exercise
its discretion (i) to deny benefits under the Plan when an employee who
is reassigned to a similar job within the same locale refuses such
reassignment and, (ii) to provide benefits under the Plan when an
employee who is reassigned to a similar job not within the same locale
refuses such reassignment.
In order to be eligible to receive benefits under the Plan, the Company
must determine that the employee's termination of employment is in the best
interest of the Company. Furthermore, and not by way of limitation, no employee
terminated for cause (including unsatisfactory performance) will be eligible to
receive benefits under the Plan.
4. CONDITIONS. Eligible employees may be required to satisfy
such conditions as the Company's management in its sole discretion decides are
appropriate in order for an employee to obtain any benefit under the Plan. For
example, and not by way of limitation, the Company's management may decide in
its discretion that the business requirements of the Company require an employee
to continue in employment through a specified date or until a specified project
has been completed to the Company's management's satisfaction. If continued
employment is necessary to satisfy the condition, an employee's performance of
services during the continued employment must be satisfactory to the Company's
management.
5. BENEFITS. An employee who is eligible for benefits under the
Plan, who satisfies any conditions required under Paragraph 4, above, and whose
employment with the Company is involuntarily terminated on the date specified by
the Company, may receive any or all of the benefits listed below following the
employee's termination of employment with the Company. The determination of
which benefit(s) an employee is to receive will be made by the Company in its
sole discretion.
A. Cash Severance Payment. An employee who the Company
determines to be entitled to this benefit will receive an amount to be
determined by the Company in lieu of advance notice of termination
("Severance Pay").
B. Cash Separation Payment. An employee who the Company
determines to be entitled to this benefit will, subject to execution of
the Release described below, receive an amount to be determined by the
Company pursuant to a letter from the
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Company to the Employee ("Separation Pay").
Eligible employees will be entitled to receive the above-referenced
cash Separation Pay only after executing, and not revoking, a Release
and covenant not to sue on the form attached to the Plan (the
"Release").
An eligible employee must terminate employment on the date specified by
the Company. The employee will have 45 days from termination of
employment within which to execute the Release and to receive the cash
separation payment. If the employee executes the Release within the
45-day period, the employee will have an additional 7 days from the
date the Release is executed to revoke the Release. If the employee
does not revoke the Release during the 7-day revocation period, the
employee will receive the cash separation payment as soon as
administratively feasible thereafter.
The executed Release must be submitted to the Senior Vice President of
Human Resources, Summit Family Restaurants Inc., 440 Lawndale Drive,
Salt Lake City, Utah 84115, before the end of the 45-day period
following termination of employment. To revoke a Release, an employee
must submit a written letter of revocation to the Human Resources
Senior Vice President, Summit Family Restaurants Inc., 440 Lawndale
Drive, Salt Lake City, Utah 84115, before the end of the 7-day period
following execution of the Release. If the executed Release or letter
of revocation is mailed, it must be postmarked no later than the last
day of the 45-day period following termination of employment (in the
case of the Release) or the 7-day period following execution of the
Release (in the case of the letter of revocation). Employees are
advised to consult with their personal attorneys before executing the
Release.
The foregoing time limits may be reduced by the Company in its sole
discretion, as allowed by applicable law as to any employee or group of
employees.
Employees who do not execute a Release, or who revoke a Release, are
eligible, at the Company's discretion, to receive only Severance Pay in
lieu of notice described above in paragraph 5 A.
C. Health Benefits. During the time an employee
receives Severance Pay under this Plan, such employee will continue to
receive the health benefits the employee received prior to receipt of
the Severance Pay, and the appropriate deductions will be made from the
Severance Pay for the employee's portion of the premium payments.
An employee's medical coverage under the Company's Medical Plan shall
terminate upon the last day of the month in which the employee receives
Severance Pay, with
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conversion privileges, in accordance with COBRA, as applicable, without
Company subsidization of the COBRA monthly premium.
Health coverage during payment of Separation Pay is only available
through COBRA, without any subsidization by the Company.
D. Additional Payments. An employee who the Company
determines to be entitled to additional severance compensation will be
eligible to receive such additional cash severance compensation as the
Company, in the Company's sole discretion, decides is appropriate. An
employee who does not execute a Release, or who revokes a Release,
shall not be eligible for additional payments.
6. ADMINISTRATION. For purposes of the Plan, the Company's
Senior Vice President of Human Resources is the "Administrator." The
Administrator shall have the full power and authority as the Plan's Named
Fiduciary to manage and control the operation and administration of the Plan, to
correct deficiencies therein, and to supply omissions. The Administrator's
powers shall include, but shall not be limited to, the discretionary power:
A. to determine an employee's eligibility for benefits
pursuant to the Plan; to determine the amounts and time of payment of
Plan benefits; to take any actions necessary to assure timely payments
of benefits to any employee eligible to receive benefits pursuant to
the Plan; and to assure a full and fair review for any employee who is
denied a claim to any benefit pursuant to the Plan;
B. to interpret the Plan and to decide any and all
matters arising hereunder, including the right to remedy possible
ambiguities;
C. to maintain Plan records, to communicate with
employees, and to submit required reports to appropriate regulatory
authorities;
D. to employ other persons (i) to render advice with
respect to any responsibility or authority pursuant to the Plan being
carried out by the Company or the Administrator and (ii) to assist in
the administration of the Plan; and
E. to exercise any discretion and to take other action
necessary or appropriate to the effective administration of the Plan.
The Administrator shall have full and exclusive discretionary power and
authority to make factual determinations, to interpret the Plan, to make benefit
and eligibility determinations, and to determine all questions arising in the
administration, interpretation, and application of the Plan.
All decisions, actions and interpretations of the Administrator in the
administration of
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the Plan shall be final, binding and conclusive upon all parties. The
Administrator and any employee appointed by the Administrator to administer the
Plan shall be indemnified by the Company against personal liability for actions
taken in good faith in the discharge of their duties under the Plan.
Indemnification rights granted hereunder are in addition to, and not in lieu of,
any rights to indemnification to which the individual may be entitled pursuant
to law or the by-laws of the Company.
The Administrator may designate other persons to carry out such of the
Administrator's responsibilities hereunder for the operation and administration
of the Plan as the Administrator deems advisable, and may delegate to the
persons so designated such of his powers as the Administrator deems necessary to
carry out such responsibilities. Such designation and delegation shall be
subject to such terms and conditions as the Administrator deems proper. Any
action or determination made or taken in carrying out responsibilities hereunder
by persons so designated by the Administrator shall have the same force and
effect for all purposes as if such action or determination had been made or
taken by the Administrator.
7. CLAIMS PROCEDURE.
A. Application. An employee who is determined by the
Administrator not to be entitled to benefits under the Plan may file
with the Administrator a signed, written application for benefits
specifically identifying the benefits claimed and describing all facts
and circumstances entitling the employee to benefits under the Plan.
B. Decision. Within ninety (90) days after receipt of a
claim for benefits, the Administrator shall notify the employee of the
Administrator's decision. If the claim is denied, in whole or in part,
the Administrator's notice of denial shall be in writing and shall
state:
(i) the specific reasons for denial of the claim
with specific references to pertinent Plan provisions on which the
denial was based;
(ii) a description of any additional materials or
information necessary for the employee to perfect the claim and an
explanation of why the materials or information are necessary; and
(iii) an explanation of the Plan's claim review
procedure.
C. Appeal. In the event a claim for benefits is denied,
or if an employee receives no response to a claim within ninety (90)
days of its submission (in which case the claim for benefits shall be
deemed to have been denied), the employee or the employee's duly
authorized representative, at the employee's sole expense, may request
reconsideration of the denial by the Administrator, by filing a written
request for reconsideration with the Administrator within sixty (60)
days of the receipt of the
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written notice of denial or sixty (60) days from the date the claim is
deemed to be denied. In pursuing such request, the employee or the
employee's duly authorized representative may:
(i) review pertinent documents; and
(ii) submit issues and comments in writing to the
Administrator.
D. Reconsideration. The Administrator shall afford any
employee requesting reconsideration a full and fair review of the
decision denying the employee's claim. The Administrator has the sole
discretion to determine whether to hold a hearing to review any or all
issues raised by the employee. The Administrator shall issue a written
decision to the employee within sixty (60) days after receipt of the
request for reconsideration (unless special circumstances require an
extension of time, in which case a decision shall be rendered as soon
as possible, but not later than one hundred twenty (120) days after the
request for review). The Administrator's decision shall give specific
reasons for the decision, written in a manner calculated to be
understood by the employee and shall include specific references to the
pertinent Plan provisions upon which the decision is based. If the
decision on reconsideration is not furnished within the time specified
above, the claim shall be deemed denied on reconsideration.
8. AMENDMENT AND TERMINATION. The Company retains the right, at
any time and from time to time, to amend or terminate the Plan for any reason,
and without either the consent of or a prior notification to any employee.
Furthermore, the Plan shall automatically terminate when all employees who were
notified of their involuntary termination of employment on or prior to December
31, 1995, have received all of the benefits to which they are entitled under the
Plan.
The Plan has been adopted by the Company to better reflect changing
operations and management requirements. Because the Company's particular
business needs may change from time to time, it is not possible to predict how
or when circumstances might arise that will result in changes in or the
elimination of the Plan. The Company retains complete and full discretion to
modify, amend or cancel the Plan at any time and for any reason.
Only the President of the Company or the Administrator of the Plan can
make decisions to modify, amend or cancel the Plan and such decisions must be in
writing. Other employees are not likely to know about proposals for changes or
the likely outcome of consideration of such proposals. In any event, no Company
manager or employee is authorized to discuss, give opinions, predict or
otherwise comment on possible future announcements relating to changes in, or
the elimination of, the Plan or the adoption of new separation benefit plans.
All Company employees are cautioned that they may not rely on such discussion,
opinion, prediction or other managerial or employee comment or speculation.
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The Company, in its discretion, may adopt new or modified separation
benefit plans or may withdraw or change existing plans or programs in ways that,
depending on one's individual circumstances, might be more or less advantageous
than the current Plan. If in the Company's view business conditions require, the
Company may subsequently implement other separation programs with such
provisions as the Company in its sole discretion deems appropriate.
9. MISCELLANEOUS.
A. Effect on Employment. The Plan shall not confer upon
a person any right to be employed by, or to be continued in the
employment of, the Company.
B. Alienation and Assignment. No benefit under the Plan
may be assigned or alienated, voluntarily or involuntarily.
C. Facility of Payment. If the Administrator deems any
person incapable of receiving benefits to which the person is entitled
by reason of minority, illness, infirmity, or other incapacity, the
Administrator may direct that payment be made directly for the benefit
of such person or to any person selected by the Administrator to
disburse it, whose receipt shall be complete acquittance therefor. To
the extent thereof, such payment shall discharge all liability of the
Plan.
D. Lost Employees. If the Administrator is unable to
locate an employee to whom payment is due after making reasonable
efforts to locate the employee, any benefit payable under the Plan
shall be deemed forfeited. However, if an employee is declared dead
under applicable state law as of a date within the period the employee
otherwise would be receiving payments under Paragraph 5.A. above, any
payments not made to the deceased employee shall be made in accordance
with Paragraph 9.E., below.
E. Death. If an employee dies while entitled to receive
payments under Paragraph 5.A. above, any remaining payments shall be
made to the employee's spouse as of the date of the employee's death
or, if none, to the employee's estate. The payments will be made at the
same time that they would have been made if the employee had survived
(or, if later, as soon as administratively feasible after the Company
receives all documents and determinations necessary to make payments in
respect of the deceased employee).
F. Source of Payments. All benefits under the Plan shall
be paid exclusively by the Company out of its general assets, and the
Company shall have no obligation to fund the Plan.
G. Severability. If any provisions of the Plan shall be
held invalid or
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unenforceable, such invalidity or unenforceability shall not affect any
other provision, and the Plan shall be construed and enforced as if the
provision had not been included.
H. Headings and Captions. The headings and captions in
this document are provided for reference and convenience only, shall
not be considered part of the Plan, and shall not be used in the
construction of the Plan.
I. Gender and Number. Except where otherwise clearly
indicated by context, the neuter shall include the masculine and the
feminine, the singular shall include the plural, and vice-versa.
J. Withholding. All benefits under the Plan shall be
paid subject to applicable withholding requirements.
10. TECHNICAL DETAILS.
A. Information about the Plan Sponsor and Plan
Administrator.
(i) The Plan Sponsor is Summit Family Restaurants
Inc.
(ii) The Plan Sponsor's address is 440 Lawndale
Drive Salt Lake City, Utah 84115.
(iii) The Plan Sponsor's telephone number is
(801) 463-5500.
(iv) The Employer Identification Number assigned
by the Internal Revenue Service to the Plan Sponsor is
87-0264039.
(v) The Administrator of the Plan is the
Company's Senior Vice President of Human Resources.
(vi) The Administrator's telephone number is (801)
463-5500 and address is 440 Lawndale Drive, Salt Lake City,
Utah 84115.
All inquiries and requests for information, for document examination,
and for copies of documents should be directed to the Senior Vice President of
Human Resources, Summit Family Restaurants Inc., 440 Lawndale Drive, Salt Lake
City, Utah 84115. All personal data about an employee that might have a bearing
on an employee's right to participate under the Plan, or on an employee's
benefits, should also be directed to the Company's Senior Vice President of
Human Resources at the above address. The Administrator is the agent for the
service of legal process; legal process also may be served on the Plan Sponsor.
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B. Identification of the Plan.
(i) The Name of the Plan is the "Summit Family
Restaurants Inc. Separation Compensation Plan."
(ii) The Plan Number assigned by the Sponsor is
550.
(iii) The Plan is a welfare benefit plan providing
separation pay benefits.
(iv) The last day of the Plan's fiscal year is
December 31.
11. STATEMENT OF ERISA RIGHTS. The following "Statement of
ERISA Rights" is provided pursuant to Section 2520.102- 2(t), Title 29, Code of
Federal Regulations. It does not describe the Plan. The "Statement" should not
be construed as (a) legal advice or (b) material for which any party related to
the plan is responsible. The "Statement" is the product of the U.S.
Department of Labor.
As a participant in the Plan you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 ("ERISA").
ERISA provides that all plan participants shall be entitled to:
(1) Examine, without charge, at the Administrator's office or
at other specified locations, all Plan documents, including insurance
contracts, collective bargaining agreements (where applicable), and
copies of all documents filed by the Plan with the U.S. Department of
Labor, such as detailed annual reports and Plan descriptions.
(2) Obtain copies of all Plan documents and other Plan
information upon written request to the Administrator. The
Administrator may make a reasonable charge for the copies.
(3) Receive a summary of the Plan's annual financial report.
The Administrator is required by law to furnish each participant with a
copy of this summary annual report.
In addition to creating rights for Plan participants, ERISA imposes
duties upon the people who are responsible for the operation of the Plan. The
people who operate your Plan, called "fiduciaries" of the Plan, have a duty to
do so prudently and in the interest of you and other Plan participants and
beneficiaries. No one, including your employer or any other person, may fire you
or otherwise discriminate against you in any way to prevent you from obtaining a
benefit under the Plan or exercising your rights under ERISA. If your claim for
a benefit under the Plan is denied in whole or in part, you must receive a
written
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explanation of the reason for the denial. You have the right to have the
Administrator review and reconsider your claim.
Under ERISA, there are steps you can take to enforce the rights
summarized above. For instance, if you request materials from the Administrator
and do not receive them within 30 days, you may file suit in federal court. In
such a case, the court may require the Administrator to provide the materials
and pay you up to $100 a day until you receive the materials, unless the
materials were not sent because of reasons beyond the control of the
Administrator. If you have a claim for benefits that is denied or ignored, in
whole or in part, you may file suit in a state or federal court.
If it should happen that Plan fiduciaries misuse the Plan's funds, or
if you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor or you may file suit in a federal
court. The court will decide who should pay court costs and legal fees. If you
are successful, the court may order the person you have sued to pay these costs
and fees. If you lose, the court may order you to pay these costs and fees if,
for example, it finds your claim to be frivolous.
If you have any questions about your Plan, you should contact your
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administration, Department of Labor.
Notes: The Department of Labor has issued a number of administrative
exemptions from certain reporting and disclosure requirements. Some of
these exemptions may apply to the Plan from time to time. For example,
many plans are exempted from preparing and filing annual reports and
summary annual reports. To the extent that any of these exemptions
apply to the Plan, the above "Statement of ERISA Rights" must be
considered to be modified.
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The foregoing Separation Compensation Plan is executed this 25th day of
September, 1995, by the undersigned officer of Summit Family Restaurants Inc,
George H. Gehling, its Senior Vice President of Human Resources.
/s/ George H. Gehling
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George H. Gehling
Senior Vice President of Human Resources
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