Document:

<PAGE>

                                                                       Ex.  10.5

                         CHART HOUSE ENTERPRISES, INC.

                              SEVERANCE PAY PLAN
                         AND SUMMARY PLAN DESCRIPTION

                            EFFECTIVE JUNE 10, 1999
<PAGE>

                         CHART HOUSE ENTERPRISES, INC.

                              SEVERANCE PAY PLAN
                         AND SUMMARY PLAN DESCRIPTION

                               TABLE OF CONTENTS
                               -----------------

<TABLE>
<CAPTION>
                                                                                              Page
                                                                                              ----
<S>                                                                                           <C>
ESTABLISHMENT OF THE PLAN.....................................................................  1

PURPOSE OF THE PLAN...........................................................................  1

ELIGIBLE EMPLOYEES............................................................................  1

CONDITIONS OF INELIGIBILITY...................................................................  1

BASE SEVERANCE PAY............................................................................  2

SUPPLEMENTAL SEVERANCE PAY....................................................................  3

PAYMENT OF SEVERANCE PAY......................................................................  4

WAIVER AND RELEASE AGREEMENT..................................................................  5

PLAN ADMINISTRATION...........................................................................  5

PROCEDCURE FOR MAKING AND APPEALING CLAIMS FOR PLAN BENEFITS..................................  5

AMENDMENT/TERMINATION AND VESTING.............................................................  6

NO ASSIGNMENT.................................................................................  6

CONFIDENTIAL INFORMATION......................................................................  7

NO SOLICITATION OF EMPLOYEES..................................................................  7

NO DISPARGEMENT...............................................................................  7

RECOVERY OF PAYMENTS MADE BY MISTAKE..........................................................  7

REPRESENTATIONS CONTRARY TO THE PLAN..........................................................  7

NO EMPLOYMENT RIGHTS..........................................................................  8

PLAN FUNDING..................................................................................  8

APPLICABLE LAW................................................................................  8
</TABLE>

                                       i
<PAGE>

<TABLE>
<S>                                                                                           <C>
SEVERABILITY................................................................................. 8

PLAN YEAR.................................................................................... 8

MANDATED PAYMENTS............................................................................ 8

ERISA INFORMATION............................................................................ 8

GENERAL INFORMATION.......................................................................... 9

MISCELLANEOUS PROVISIONS..................................................................... 10

EXHIBIT A (BENEFICIARY DESIGNATION FORM)

EXHIBIT B (WAIVER AND RELEASE AGREEMENT)
</TABLE>

                                      ii
<PAGE>

                               SEVERANCE PAY PLAN

ESTABLISHMENT OF THE PLAN

Chart House Enterprises, Inc. ("Company") hereby adopts the Severance Pay Plan
("Plan"), effective June 10, 1999, for the benefit of eligible employees of the
Company.

The Plan is an unfunded welfare benefit plan for purposes of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and a severance
pay plan within the meaning of United States Department of Labor Regulations
Section 2510.3-2(b).  The Plan supercedes any prior Company severance plan,
program or policy (formal or informal) covering any employee of the Company who
is eligible to participate in this Plan ("Eligible Employee").  This documents
serves as both the Plan document and the Summary Plan Description for the Plan
for all purposes under ERISA.

PURPOSE

The purpose of the Plan is to provide an Eligible Employee with severance pay
for a specified period of time in the event the Eligible Employee's employment
with the Company is terminated due to a reduction in workforce, lack of work,
rearrangement of work, change in Company management, or inability to
satisfactorily perform the responsibilities of his or her position, as
determined in the sole discretion of the Plan Committee (defined hereinafter).

ELIGIBLE EMPLOYEES

The Plan covers all regular full-time employees with one year or more of service
with the Company.   A year of service is defined as twelve (12) months of
continuous employment with the Company.  Periods of employment of less than
twelve months are not counted toward years of service under this Plan and no
partial or pro rata credit will be given unless otherwise granted by the Plan
Committee in its sole discretion.  The amount of base severance compensation
payable to an Eligible Employee is set forth below under "Base Severance Pay."

CONDITIONS OF INELIGIBILITY

An employee is not eligible for severance pay under the Plan if any of the
following conditions exist:

     .    The employee's employment with the Company terminates through
          retirement, resignation or job abandonment.

     .    Death of the employee or discharge for cause. For purposes of this
          Plan, "cause" means, as determined by the Plan Committee, because of
          an employee's violation of Company policies or gross negligence,
          willful misconduct, fraud or conviction of a felony.

                                       1
<PAGE>

     .    The employee is eligible to receive disability benefits from the
          Company or any plan maintained by the Company.

     .    The employee leaves employment with the Company prior to the date
          authorized by the Company.

     .    The employee is on an authorized leave of absence; provided that an
          Eligible Employee who returns from an authorized leave of absence
          seeks reemployment with the Company which can not otherwise be
          provided by the Company.

     .    The employee is terminated for poor job performance, as determined by
          the Plan Committee.

     .    With respect to a reduction of workforce or elimination of a position,
          the employee is involuntarily terminated after the employee refuses to
          accept another position within the Company or, in the case of a change
          in control of the Company, with the surviving or successor entity,
          offering comparable compensation and requiring similar skills,
          knowledge, and/or qualifications.

     .    The employee's employment is terminated under the terms of a group
          reorganization/restructuring benefit plan or program sponsored by the
          Company.

     .    The employee is covered by a preexisting written letter of employment,
          employment agreement, severance agreement, or other written document
          specifying severance compensation is to be paid upon termination of
          employment with the Company.

     .    The employee ceases to be an Eligible Employee as defined under the
          terms of the Plan.

     .    The Plan is terminated.

BASE SEVERANCE PAY

Except as otherwise stated herein, Eligible Employees may receive base severance
pay based upon criteria including employment status and position as summarized
in the table below.  For purposes of the Plan, one week of base severance pay is
equal to the average weekly wages or salary paid to the Eligible Employee by the
Company during the preceding four (4) week period (excluding all bonus and other
non-wage or salary compensation, including, but not limited to, tips income
attributed to restaurant employees).  Base severance pay shall be payable in
accordance with the Company's ordinary payroll practices.

     POSITION CATEGORY                       BASE SEVERANCE PAY
     -----------------                       ------------------

     President/Chief Executive Officer       Determined by the Company's Board
                                             of Directors

                                       2
<PAGE>

     Chief Financial Officer                 4 weeks

     Vice President                          3 weeks

     Director of Operations                  2 weeks
     or Director

     Restaurant General Manager              1 week

     Department Manager                      1 week
     and equivalent positions

     Restaurant Operations Manager           1 week
     (other than General Manager)

     Full-time Exempt (salaried)             1 week
     (1,000 hours per year minimum)

     Full-time Nonexempt (hourly)            1 week
     (25 hours per week minimum)

     Part-time Hourly Employees              None

All Eligible Employees receiving base severance pay should execute and return a
Designation of Beneficiary Form ("Beneficiary Form") (attached hereto as Exhibit
A) to the Plan Committee.

SUPPLEMENTAL SEVERANCE PAY

In addition to base severance pay, each Eligible Employee is eligible to receive
supplemental severance pay in the amounts set forth below in exchange for
providing the Company with a valid executed Waiver and Release Agreement
("Waiver and Release") (attached hereto as Exhibit B).

For purposes of the Plan, one week of supplemental severance pay is equal to the
average weekly wages or salary paid to the Eligible Employee by the Company
during the preceding four (4) week period (excluding all bonus and other non-
wage or salary compensation), including, but not limited to, tips income
attributed to restaurant employees.  Supplemental severance amounts shall be
payable in accordance with the Company's ordinary payroll practices after the
expiration of base severance pay payments.

       POSITION CATEGORY                     SUPPLEMENTAL SEVERANCE PAY
       -----------------                     --------------------------

       President/Chief Executive Officer     Determined by the Company's Board
                                             Of Directors.

       Chief Financial Officer               4 weeks per year of service to a
                                             maximum of 36 weeks or 40% of
                                             salary (whichever is greater).

                                       3
<PAGE>

       Vice President                        3 weeks per year of service to a
                                             maximum of 26 weeks or 30% of
                                             salary (whichever is greater).

       Director of Operations                2 weeks per year of service to a
       or Director                           maximum of 13 weeks or 20% of
                                             salary (whichever is greater).

       Restaurant General Manager            1 week per year of service to a
                                             maximum of 10 weeks.

       Department Manager                    1 week per year of service to a
       and equivalent positions              maximum of 8 weeks.

       Restaurant Operations Manager         1 week per year of service to a
       (other than General Manager)          maximum of 8 weeks.

       Full-time Exempt (salaried)           1 week per year of service to a
       (1,000 hours per year minimum)        maximum of 6 weeks.

       Full-time Nonexempt (hourly)          1 week per year of service to a
       (30 hours per week minimum)           maximum of 4 weeks.

       Part-time Hourly Employees            None.

The Plan Committee acting in its sole discretion may, in writing, enhance the
amount of supplemental severance pay that an Eligible Employee is eligible to
receive over the amount of the supplemental severance pay set forth above.

The consideration for the voluntary Waiver and Release shall be the supplemental
severance pay that the Eligible Employee would otherwise not be eligible to
receive.

PAYMENT OF SEVERANCE PAY

Base severance pay and any supplemental severance pay will be paid in accordance
with the Company's regular payroll practices following the Eligible Employee's
date of termination of employment.  However, any supplemental severance pay that
becomes payable will be paid only after the seven (7) day revocation period for
a signed Waiver and Release has passed in accordance with the terms of the Plan.
All legally required taxes and any sums owing to the Company shall be deducted
from the Plan severance pay payments.  In the event an Eligible Employee who is
receiving payment of severance pay under the Plan is reemployed by the Company,
the payment of severance pay under the Plan shall cease as of the date his or
her reemployment begins.  If an Eligible Employee dies before receiving full
payment of his or her severance pay, the balance of the base severance pay and
any supplemental severance pay, shall be paid in accordance with the terms of
the executed Beneficiary Form or, in the case where no such Beneficiary Form has
been submitted, to his or her estate.

                                       4
<PAGE>

WAIVER AND RELEASE AGREEMENT

In order to receive the supplemental severance pay available under the Plan, an
Eligible Employee must submit a signed Waiver and Release to the Plan Committee
(or the Plan Committee's designee) on or within forty-five (45) days of its
receipt by the Eligible Employee.  The form of the required Waiver and Release
for Eligible Employees is attached hereto as Exhibit B.  An Eligible Employee
may revoke his or her signed Waiver and Release within seven (7) days of the
date the employee signs the Waiver and Release.

Any such revocation must be made in writing and must be received by the Plan
Committee within the seven (7) day period.  An Eligible Employee who timely
revokes the Waiver and Release shall not be eligible to receive any supplemental
severance pay under the Plan.  An Eligible Employee who timely submits a signed
Waiver and Release and who does not exercise his or her right of revocation
shall be eligible to receive supplemental severance pay under the Plan.

In the event an Eligible Employee breaches the provisions of the Waiver and
Release, the payment of any supplemental severance pay shall cease, and the
Company shall exercise, and the Eligible Employee shall be bound by, the
remedies provided in the Waiver and Release.

Eligible Employees shall be advised to contact their personal attorney to review
the Waiver and Release, if they so desire.

PLAN ADMINISTRATION

The Vice President - Human Resources, Vice President - Corporate Counsel, and
Chief Financial Officer shall comprise the Company's Plan Committee ("Plan
Committee"), which shall serve as the "named fiduciary" within the meaning of
such terms as defined under ERISA.  The Plan Committee shall have the
discretionary authority to determine coverage and eligibility for Plan benefits
and to construe the terms of the Plan, including the making of factual
determinations.  The decisions of the Plan Committee shall be final and
conclusive with respect to all questions concerning the administration of the
Plan.

The Plan Committee may delegate to other persons the responsibility of
performing certain duties of the Plan Committee under the terms of the Plan and
may seek such expert advice as the Plan Committee deems reasonable or necessary
with respect to the Plan.  The Plan Committee shall be entitled to rely upon the
information and advice furnished by such delegatees and experts, unless actually
knowing such information and advice to be inaccurate or unlawful.

In the event of a group termination, as determined in the sole discretion of the
Plan Committee, the Plan Committee shall furnish affected eligible employees
with such additional information as may be required by law.

PROCEDURES FOR MAKING AND APPEALING CLAIMS FOR PLAN BENEFITS

It is not necessary that an Eligible Employee apply for benefits under the Plan.
However, if an Eligible Employee wishes to file a claim for benefits, such claim
must be

                                       5
<PAGE>

in writing and filed with the Plan Committee within six (6) months of his/her
termination date. Within ninety (90) days after receiving a claim, the Plan
Committee will either accept or deny the claim completely or partially, and
notify the claimant of the acceptance or denial of the claim.

If the claim is completely or partially denied, the Plan Committee will furnish
a written notice to the claimant containing the following information:

     .    The specific reasons for the denial;

     .    The specific references to the Plan provisions on which any denial is
          based;

     .    A description of any additional material or information that must be
          provided by the claimant to support the claim; and

     .    An explanation of the Plan's appeal procedures.

A claimant may appeal the denial of a claim and have the Plan Committee
reconsider the decision.  The claimant or the claimant's authorized
representative has the right to:

     .    Request an appeal in writing to the Plan Committee not later than
          sixty (60) days after receipt of the notice from the Plan Committee
          denying the claim;

     .    Review the Plan documents; and

     .    Submit issues and comments regarding the claim in writing to the Plan
          Committee.

The Plan Committee will make a decision with respect to the appeal within sixty
(60) days after receiving the written request for appeal.  The claimant will be
advised of the Plan Committee's decision on the appeal in writing.  The notice
will set forth the specific reasons for the decision and make specific reference
to Plan provisions which the decision on the appeal is based.

In no event shall a claimant or any other person be entitled to challenge a
decision of the Plan Committee in court or in any other administrative
proceeding unless and until the claim and appeal procedures described above have
been complied with and exhausted.

PLAN AMENDMENT/TERMINATION AND VESTING

Eligible Employees do not have any vested right to base severance pay or
supplemental severance pay under the Plan, and the Company reserves the right in
its sole discretion to amend or terminate the Plan at any time, retroactively or
otherwise, as determined by the Plan Committee.

NO ASSIGNMENT

Base severance pay and supplemental severance pay under the Plan shall not be
subject to anticipation, alienation, pledge, sale, transfer, assignment,
garnishment, attachment, execution, encumbrance, levy, lien or charge, and any
attempt to do so shall be void, except to the extent required by law.

                                       6
<PAGE>

CONFIDENTIAL INFORMATION

Eligible Employees may have access to trade secrets and other confidential and
proprietary information ("Confidential Information") with regard to the business
of the Company.   Recognizing that the disclosure or improper use of such
Confidential Information will cause serious and irreparable injury to the
Company, Eligible Employees with such access acknowledge that (a) they will not
at any time, directly or indirectly, disclose Confidential Information to any
third party or otherwise use such Confidential Information for their own benefit
or the benefit of others, and (b) payment of any supplemental severance pay
under the Plan shall cease if an Eligible Employee discloses or improperly uses
such Confidential Information.

NO SOLICITATION OF EMPLOYEES

An Eligible Employee shall not at any time during his or her employment with the
Company or thereafter during the severance pay period, directly or indirectly,
in his or her individual capacity or otherwise, induce, cause, persuade or
attempt to do any of the foregoing to cause any representative, agent or
employee of the Company to terminate such person's employment relationship with
the Company, or to violate the terms of any agreement between such
representative, agent or employee and the Company.  Any Eligible Employee
engaging in the foregoing, as determined by the Plan Administrator, in its sole
discretion, shall forfeit his or her right to any supplemental severance
payments under the Plan.

NO DISPARAGEMENT

An Eligible Employee shall not at any time during his or her employment with the
Company or thereafter during the severance pay period, directly or indirectly,
defame or speak negatively about the Company, its affiliates, customers or
related entities, or its products and services, nor shall the employee
disparage, subvert, disclose or discuss any detail or aspect of the professional
careers or personal lives of any of the Company directors, officers or employees
for any reason whatsoever, except as may be required by law.  Any Eligible
Employee engaging in the foregoing, as determined by the Plan Committee, in its
sole discretion, shall forfeit his or her right to any supplemental severance
payments under the Plan.

RECOVERY OF PAYMENTS MADE BY MISTAKE

An Eligible Employee shall be required to return to the Company any basic
severance or supplemental severance payments, or portion thereof, made by a
mistake of fact or law.

REPRESENTATIONS CONTRARY TO THE PLAN

No employee, officer, director or agent of the Company has the authority to
alter, vary or modify the terms of the Plan except by means of an authorized
written amendment to the Plan.  No verbal or written representations contrary to
the terms of the Plan and its written amendments shall be binding upon the Plan,
the Plan Committee, the Company, or, in the case of a change in control, any
surviving or successor employer.

                                       7
<PAGE>

NO EMPLOYMENT RIGHTS

The Plan shall not confer employment rights upon any person.  No person shall be
entitled, by virtue of the Plan, to remain in the employ of the Company and
nothing in the Plan shall restrict the right of the Company to alter or
terminate the employment of any Eligible Employee or other person at any time.

PLAN FUNDING

No Eligible Employee shall acquire by reason of the Plan any right in or title
to any assets, funds or property of the Company or any other employer.  Any
severance pay that becomes payable under the Plan is an unfunded obligation of
the Company and shall be paid from the general assets of the Company.  No
employee, officer, director or agent of the Company or any other employer
guarantees in any manner the payment of Plan base severance pay or supplemental
severance pay.

APPLICABLE LAW

The Plan shall be governed and construed in accordance with the laws of the
state in which the Eligible Employee was employed by the Company, except where
preempted by federal law.

SEVERABILITY

If any provision of the Plan is found, held or deemed by the Plan Committee or a
court of competent jurisdiction to be void, unlawful or unenforceable under any
applicable statute or other controlling law, the remainder of the Plan shall
continue in full force and effect.

PLAN YEAR

The Plan Year of the Plan shall be the calendar year.

MANDATED PAYMENTS

The base severance pay and supplemental severance pay available under the Plan
are the maximum made available by the Company in the event of involuntary
termination of employment.  To the extent that a federal, state or local law
mandates the Company to make a payment to an Eligible Employee because of
involuntary termination of employment or in accordance with a plant closing law,
any severance pay under the Plan shall be reduced by the amount of such mandated
payment.

ERISA INFORMATION

As a participant in the Plan, you are entitled to certain rights and protections
under the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
ERISA provides that all Plan participants will be entitled to:

     .    Examine, without charge, at the Plan Committee's office and at other
          locations, such as work sites and union halls, all Plan documents,
          including insurance contracts, collective bargaining agreements and
          copies of all

                                       8
<PAGE>

          documents filed by the Plan with U.S. Department of Labor, such as
          detailed annual reports and Plan descriptions; and

     .    Obtain copies of all Plan documents and other Plan information upon
          written request to the Plan Committee. The Plan Committee may make a
          reasonable charge for the copies.

     .    Receive a summary of the Plan's annual report.

In addition to creating rights for Plan participants, ERISA imposes duties upon
persons who are responsible for the operation of the employee benefit 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 your union, may fire you or otherwise
discriminate against you in any way to prevent you from obtaining a welfare
benefit or exercising your rights under ERISA.  Under ERISA, there are steps you
can take to enforce the above rights.  For instance, if you request materials
from the Plan and do not receive them within thirty (30) days, you may file suit
in a federal court.  In such a case, the court may require the Plan Committee to
provide the materials and pay you up to $110 a day until you receive the
materials.  This does not apply if the materials were not sent because of
reasons beyond the control of the Plan Committee.

If you have a claim for benefits which 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 money, or if you are discriminated against
for asserting your rights, 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; for example, if it
finds your claim is frivolous.

If you have any questions about the Plan, you should contact the Plan Committee.
If you have any questions about this statement or about your rights under ERISA,
you should contact the nearest office of the Pension and Welfare Benefits
Administration, U.S. Department of Labor, listed in your telephone directory or
the Division of Technical Assistance and Inquiries, Pension and Welfare Benefit
Administration, U.S. Department of Labor, 200 Constitution Avenue N.W.,
Washington, D.C. 20210.

GENERAL INFORMATION

Name of Plan:             Chart House Enterprises, Inc. Severance Pay Plan

Plan Number:              505

Plan Sponsor:             Chart House Enterprises, Inc.
                          640 North LaSalle Street
                          Suite 295
                          Chicago, Illinois 60610
                          (312) 266-1100

                                       9
<PAGE>

Plan Sponsor's Employer
Identification Number:    33-0147725

Plan Administrator:       Severance Pay Plan Committee
                          Chart House Enterprises, Inc.
                          640 North LaSalle Street
                          Suite 295
                          Chicago, Illinois 60610
                          (312) 266-1100

Plan Year:                Calendar Year

MISCELLANEOUS PROVISIONS

All Company property (i.e., keys, credit cards, documents and records,
identification cards, office equipment, portable computers, car/mobile
telephones, parking cards, etc.) must be returned by an Eligible Employee as of
his or her date of termination of employment with the Company in order for the
Eligible Employee to begin receiving base severance pay or supplemental
severance pay under the Plan.

All pay and benefits (other than supplemental severance pay) payable to an
Eligible Employee as of his or her date of termination of employment with the
Company under any established plan, policy or procedure of the Company shall be
paid in accordance with the terms of such plan, policy or procedure.  In
addition, any benefit continuation or conversion rights that an Eligible
Employee has as of his or her date of termination of employment with the Company
shall be made available to the Eligible Employee.

                              CHART HOUSE ENTERPRISES, INC.

                              By______________________________________
                                 Thomas J. Walters
                                 President and Chief Executive Officer

                                       10
<PAGE>

                         CHART HOUSE ENTERPRISES, INC.

                                                            EXHIBIT A
                                                            ---------
                              SEVERANCE PAY PLAN
                        DESIGNATION OF BENEFICIARY FORM

EMPLOYEE INFORMATION:
--------------------

Name:  (Last) __________________________  (First) __________________ (MI) ______

Social Security Number:  ____ - __ - ___

I hereby designate the following beneficiary(ies) to receive benefits which may
be payable from the Plan because of my death, canceling any previous
designation(s) I may have made.  Benefits are payable to the Secondary
Beneficiary only if the Primary Beneficiary dies before him or her.

PRIMARY BENEFICIARY:
-------------------

<TABLE>
<CAPTION>
Primary Beneficiary Name                       Social Security Number     Relationship
<S>                                            <C>                        <C>
_______________________________________        _____ - ____ - _____       ___________

_______________________________________
Address (Street, City, State, Zip Code)
</TABLE>

________________________________________________________________________________

SECONDARY BENEFICIARY:
---------------------

<TABLE>
<CAPTION>
Primary Beneficiary Name                       Social Security Number     Relationship
<S>                                            <C>                        <C>
_______________________________________        _____ - ____ - _____       ___________

_______________________________________
Address (Street, City, State, Zip Code)
</TABLE>

________________________________________________________________________________

If the person(s) designated above is not living at the time of my death, or if I
do not designate a beneficiary, I understand that any Plan benefit will be paid
as provided in the Plan.  If I am married at the time of my death and my spouse
at the time of my death has not signed the spousal consent below, my beneficiary
will be my spouse.

Employee's Signature:  ___________________________        Date:_________________

SPOUSAL CONSENT AND NOTARIZATION:
--------------------------------

COMPLETE THIS SECTION ONLY IF YOU ARE MARRIED AND YOUR SPOUSE IS NOT YOUR SOLE
DESIGNATED PRIMARY BENEFICIARY AS INDICATED ABOVE.

I am the husband/wife of the employee named above, I hereby consent to the
designation made by my spouse to have any benefits payable under the Plan
because of his or her death paid to the person(s) named as Primary Beneficiary
and/or Secondary Beneficiary in the current designation. I hereby acknowledge
that I understand that: (1) the effect of such designation is to cause all or
part of such Plan benefits to be paid to a beneficiary other than me; (2) the
designation is not valid unless I consent to it; and (3) my consent to this
designation is irrevocable unless my spouse revokes the designation.

Name of Employee's Spouse: _____________________________     Date:______________
                                   Please Print

Spouse's Signature: ____________________________________     Date:______________
                    (Your signature must be notarized)

SIGNED AND SWORN TO BEFORE ME THIS _______ DAY OF ______________________, 1999.

_______________________________________
          Notary Public
<PAGE>

                         CHART HOUSE ENTERPRISES, INC.
                                                                   EXHIBIT B
                                                                   ---------
                              SEVERANCE PAY PLAN

                         WAIVER AND RELEASE AGREEMENT

(1)  In consideration for the supplemental severance pay to be provided to me
     under the terms of the Chart House Enterprises, Inc. Severance Pay Plan
     ("Plan"), I, on behalf of myself and my heirs, executors, administrators,
     attorneys and assigns, hereby waive, release and forever discharge Chart
     House Enterprises, Inc. ("Company") and its parents, subsidiaries,
     divisions and affiliates, whether direct or indirect, its and their joint
     ventures and joint venturers (including its and their respective directors,
     officers, associates, employees, shareholders, partners and agents, past,
     present and future) and each of its and their respective successors and
     assigns (collectively referred to as "Releasees"), from any and all known
     or unknown actions, causes of action, claims or liabilities of any kind
     that have or could be asserted against the Releasees arising out of or
     related to my employment with and/or separation from employment with the
     Company and/or any of the other Releasees and/or any other occurrence up to
     and including the date of this Waiver and Release Agreement, including but
     not limited to:

     (a)  claims, actions, causes of action or liabilities arising under Title
          VII of the Civil Rights Act, as amended, the Age Discrimination in
          Employment Act, as amended ("ADEA"), the Employee Retirement Income
          Security Act, as amended, the Rehabilitation Act, as amended, the
          Americans with Disabilities Act, as amended, the Family and Medical
          Leave Act, as amended, and/or any other federal, state, municipal or
          local employment discrimination statutes (including, but not limited
          to, claims based upon age, sex, attainment of benefit plan rights,
          race religion, national origin, marital status, sexual orientation,
          ancestry, harassment, parental status, handicap, disability,
          retaliation and veteran status); and/or

     (b)  claims, actions, causes of action or liabilities arising under any
          other federal, state municipal or local statute, law, ordinance or
          regulation; and/or

     (c)  any other claim whatsoever including, but not limited to, claims for
          severance pay (other than claims for supplemental severance pay under
          the Plan), claims based upon breach of contract, wrongful termination,
          defamation, intentional infliction of emotional distress, tort,
          personal injury, invasion of privacy, violation of public policy,
          negligence and/or any other common law, statutory or other claim
          whatsoever arising out of or relating to my employment with and/or
          separation from employment with the Company and/or any of the other
          Releasees,

     but excluding the filing of an administrative charge, any claims I may make
     under state workers' compensation or unemployment laws, and/or any claims
     by law I cannot waive.

(2)  I also agree never to sue any of the Releasees or become a party to in a
     lawsuit on the basis of any claim or any type whatsoever arising out of or
     related to my employment with and/or separation from employment with the
     Company and/or any of the other Releasees, other than a lawsuit to
     challenge this Waiver and Release Agreement under the ADEA.
<PAGE>

(3)  I further acknowledge and agree that if I breach the provisions of
     paragraph (2) above, then (a) the Company shall be entitled to apply for
     and receive an injunction to restrain any violation of paragraph (2) above,
     (b) the Company shall not be obligated to continue payment of the
     supplemental severance pay, if any, to me,  (c) I shall be obligated to pay
     to the Company its costs and expenses in enforcing this Waiver and Release
     Agreement and defending against such lawsuit (including court costs,
     expenses and reasonable legal fees), and (d) as an alternative to (c), at
     the Company's option, I shall be obligated upon demand to repay to the
     Company all but $500.00 of any supplemental severance pay, if any, paid or
     made available to me.  I further agree that the foregoing covenants in this
     paragraph (3) shall not affect the validity of this Waiver and Release
     Agreement and shall not be deemed to be a penalty or forfeiture.

(4)  I further waive my right to any monetary recovery should any federal, state
     or local administrative agency pursue any claims on my behalf arising out
     of or related to my employment with and/or separation from employment with
     the Company and/or any of the other Releasees.

(5)  I further waive, release and discharge the Releasees from any reinstatement
     rights which I have or could have, and I acknowledge that I have not
     suffered any on-the-job injury for which I have not already filed a claim.

(6)  I further agree that if I breach the Confidential Information, No
     Solicitation of Employees or No Disparagement provisions of the Plan, then
     (a) the Company shall be entitled to apply for and receive an injunction to
     restrain such breach, (b) the Company shall not be obligated to continue
     payment of any supplemental severance pay, and (c) I shall be obligated to
     pay to the Company its costs and expenses in enforcing the Confidential
     Information provisions of the Plan (including court costs, expenses and
     reasonable legal fees).

(7)  I acknowledge I have been given forty-five (45) days to consider this
     Waiver and Release Agreement thoroughly and I was encouraged by the Plan
     Committee to consult with my personal attorney, if desired, before signing
     below.

(8)  I understand I may revoke this Waiver and Release Agreement within seven
     (7) days after its signing and that any revocation must be made in writing
     and submitted within this seven-day period to the Plan Committee.  I
     further understand that if I revoke this Waiver and Release Agreement, I
     shall not receive any supplemental severance pay under the Plan.

(9)  I also understand that the supplemental severance pay, if any, which I will
     receive under the Plan in exchange for signing, and not later revoking,
     this Waiver and Release Agreement are in addition to anything of value to
     which I am already entitled.

(10) I FURTHER UNDERSTAND THAT THIS WAIVER AND RELEASE AGREEMENT INCLUDES A
     RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

(11) I acknowledge and agree that if any provision of this Waiver and Release
     Agreement is found, held or deemed by a court of competent jurisdiction to
     be void, unlawful or unenforceable under any applicable statute or
     controlling law, the remainder of this Waiver and Release Agreement shall
     continue in full force and effect.

                                       2
<PAGE>

(12) This Waiver and Release Agreement is deemed made and entered into in the
     state in which I was employed by the Company and in all respects shall be
     interpreted, enforced and governed under the laws of that state, except to
     the extent superseded by federal law.  Any dispute under this Waiver and
     Release Agreement shall be adjudicated by a court of competent jurisdiction
     in the state in which I was employed by the Company.

(13) I further acknowledge and agree that I have carefully read and fully
     understand all of the provisions of this Waiver and Release Agreement and
     that I voluntarily enter into this Waiver and Release Agreement by signing
     below.

(14) If applicable, I also knowingly waive the provision of the California Civil
     Code Section 1542, which reads as follows:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
          NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
          RELEASE, WHICH IF KNOW BY HIM MUST HAVE MATERIALLY AFFECTED HIS
          SETTLEMENT WITH THE DEBTOR.

                         Signed:  ____________________________

                         Dated:  _____________________________

                         PLEASE RETURN THE SIGNED AND DATED WAIVER AND RELEASE
                         AGREEMENT TO THE HUMAN RESOURCES MANAGER AT YOUR
                         LOCATION.

                                       3<PAGE>

                                                                      Ex. 10.5.1

                            FIRST AMENDMENT TO THE
               CHART HOUSE ENTERPRISES, INC. SEVERANCE PAY PLAN
               ------------------------------------------------

     WHEREAS, Chart House Enterprises, Inc. (the "Company") has established and
maintains the Chart House Enterprises, Inc. Severance Pay Plan, effective June
10, 1999 (the "Plan"), for the benefit of its eligible employees;

     WHEREAS, the terms of the Plan reserve to the Company the right to amend
the Plan at any time, retroactively or otherwise;

     WHEREAS, the Company desires to amend the Plan to provide for all severance
pay benefits for the Company's officers in the event an officer's employment
with the Company is adversely affected following a change in control of the
Company, and authorize the Board of Directors to act with respect to members of
the Plan Committee in connection therewith.

     WHEREAS, the Plan contains a typographical error with respect to the hours
requirements  for Full-time Nonexempt (hourly) employees, which the Company
desires to clarify through this Amendment.

     NOW, THEREFORE, the Plan is hereby amended, effective as of June 10, 1999,
in the following respects:

     1.  The following new Section, "CHANGE IN CONTROL BENEFITS," is hereby
added to the Plan to be and read as follows:

     CHANGE IN CONTROL BENEFITS
     --------------------------

     Notwithstanding anything in the Plan to the contrary, the Chief Executive
     Officer, the President, the Chief Financial Officer, all Executive Vice
     Presidents and Vice Presidents of the Company (an "Officer") shall be
     entitled to all base and supplemental severance pay benefits pursuant to
     the Plan if there is a "change in control" of the Company and (a) the
     Officer voluntarily terminates his or her employment for "good reason"as
     determined by the Plan Committee or (b) the Officer is involuntarily
     terminated without "cause."

     Change in Control

     A "change in control" of the Company shall occur in connection with any of
     the following events, as determined in the discretion of the Plan
     Committee:
<PAGE>

               The acquisition (or series of acquisitions) by any entity, person
               or group (including any other entity, person or group
               controlling, controlled by or in common control with such entity,
               person or group), other than a parent, subsidiary or affiliate of
               the Company, of the capital stock of the Company entitled to
               exercise more than fifty percent (50%) of the outstanding voting
               power of all capital stock of the Company;

               The merger or consolidation of the Company with one or more other
               corporations as a result of which the current shareholders of the
               Company hold less than fifty-one percent (51%) of the Voting
               Stock of the surviving or resulting corporation;

               A change in the majority composition of the Board of Directors
               during any consecutive two-year period; and/or

               The transfer or sale (or series of transfers or sales) of
               substantially all of the assets of the Company to any entity
               other than an entity of which the Company directly or indirectly
               owns at least fifty-one percent (51%) of such entity's capital
               stock or beneficial interest.

     Good Reason

     "Good reason" as determined by the Plan Committee, shall include, among
     other things: (i) within a reasonable period of time following a change in
     control, there is a diminution in the nature or the scope of the Officer's
     authority or duties, (ii) within a reasonable period of time following a
     change in control, there is a reduction in the Officer's regular base
     salary in effect just prior to such change in control or (iii) as a result
     of a change in control, the Company changes the principal location where
     the Officer is required to perform services to a location that is 30 miles
     outside of the Chicago downtown business district.

     Cause

     "Cause" shall mean, as determined by the Plan Committee, that an employee's
     termination of employment was on account of (i) an act or omission of the
     employee constituting dishonesty in the capacity of his or her employment
     with the Company, (ii) an intentional wrongdoing or malfeasance involving
     the Company or any of its employees, customers, suppliers, facilities or
     equipment, or (iii) the employee's conviction of a felony.

                                      -2-
<PAGE>

     No Waiver and Release Agreement Required

     If following a "change in control"of the Company, an Officer (a)
     voluntarily terminates his or her employment for "good reason" as
     determined by the Plan Committee or (b) is involuntarily terminated without
     "cause,"the Officer shall be entitled to all base and supplemental
     severance pay benefits pursuant to the Plan, payable in accordance with the
     terms of the Plan, and shall not otherwise be required to execute a Waiver
     and Release Agreement in order to receive such severance pay.

     2.   The following new paragraph is hereby added as a new second paragraph
to the Section entitled "PLAN ADMINISTRATION," to be and read as follows:

     "Notwithstanding the foregoing, the Board of Directors of the Company shall
     have the discretionary authority to determine coverage and eligibility for
     Plan benefits, and to construe the terms of the Plan, with respect to the
     coverage and eligibility of any member of the Plan Committee."

     3.   The Section, "SUPPLEMENTAL SEVERANCE PAY," is hereby clarified to
describe the Position Category for Full-time Nonexempt (hourly) employees as
follows:

     "Full-time Nonexempt (hourly)    1 week per year of service to a maximum of
     (25 hours per week minimum)      4 weeks."

                                 *     *     *

     IN WITNESS HEREOF, the Company has caused this instrument to be executed by
its duly authorized officer this 9th day of December, 1999.

                              CHART HOUSE ENTERPRISES, INC.

                              By:_________________________________
                                 Laura A. Mondrowski
                                 Vice President Corporate Counsel & Assistant
                                 Secretary

                                      -3-

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