Exhibit 10.1
GENERAL SEPARATION AND RELEASE AGREEMENT
THIS GENERAL SEPARATION AND RELEASE AGREEMENT ("Agreement") is entered
into as of the 17th day of August, 2005, between COSI, INC., a Delaware
corporation, and any successor thereto (collectively, the "Company"), and
XXXXXXX XXXXXXX, an Illinois resident ("Employee").
Employee and the Company agree as follows:
1. Termination of Employment. The employment relationship between Employee
and the Company shall terminate on August 17, 2005 (the "Termination Date"). The
Employee shall be paid an amount equal to her pro rata bi-weekly salary and
accrued 2005 bonus, payable over the period commencing August 17, 2005, through
February 20, 2006, as set forth in Section 2 below (collectively, the "Severance
Payments"). The Company shall reimburse the Employee for all reimbursable
expenses incurred by the Employee through the Termination Date, and submitted to
the Company with the proper receipts, in accordance with the Company's
then-current expense policy. The Company will pay the Employee for any vacation
accrued between January 1, 2005, and the Termination Date, but then unused, in
accordance with the Company's then-current vacation policy. Except for the
amounts expressly set forth in this Section 1 and Section 2 below, no other
compensation or benefits are due to the Employee under this Agreement or that
certain letter dated as of July 7, 2004 (the "2004 Letter") or otherwise.
2. Severance and Benefits. Subject to the terms of this Agreement, and
providing Employee executes and does not revoke this Agreement and complies with
the terms of this Agreement, the Company agrees to pay to Employee the Severance
Payments and other benefits as set forth below. The Company shall have the
right, upon due notice to Employee to set off any amounts due and owing by
Employee to the Company against any amounts due and owing by the Company to
Employee.
(a) Severance Payments. Employee shall be paid Severance Payments in
the total gross amount of: (i) One Hundred Twenty-Five Thousand and 00/100
Dollars ($125,000), less applicable withholding taxes and deductions,
representing an amount equal to six (6) months' gross salary, plus (ii)
Sixty-Two Thousand Nine Hundred Three and 22/100 Dollars ($62,903.22),
representing an amount equal to accrued bonus for fiscal year 2005 pro
rated through the Termination Date. In no event shall Employee's aggregate
gross Severance Payments exceed One Hundred Eighty Seven Thousand Nine
Hundred Three and 22/100 Dollars ($187,903.22), less applicable
withholding taxes and deductions, payable in bi-weekly equal installments
and subject to the Company's right of set off to the extent set off is
permitted under Section 4(b) below.
(b) Medical and Health Benefits. Employee's medical and health
benefits shall continue on the same or substantially the same terms
through February 20, 2006. Thereafter, in the event that Employee elects
continuing benefits coverage pursuant to her rights under the Consolidated
Omnibus Budget Reconciliation Act ("COBRA"), Employee shall be responsible
for payment of Employee's COBRA premiums.
3. Return of Company Materials. Employee, or her heirs, agrees to and
shall promptly return to the Company, at the Company's corporate offices or such
other location as may be directed by the Company, all property of the Company in
Employee's control or possession, including, without limitation, confidential or
proprietary information of the Company, files and documents, keys, key cards,
personal computer and software, blackberry, and cell phone.
4. Release.
(a) Release by Employee. For and in consideration of the payments
and/or other benefits to be provided to and/or on behalf of Employee
pursuant to this Agreement, the sufficiency of which Employee hereby
acknowledges, Employee, on behalf of Employee and Employee's heirs,
executors and assigns, hereby releases and forever discharges the Company,
its affiliates and subsidiaries, and its and their current and former
directors, officers, executives and agents, heirs, executors,
representatives, successors and assigns, and any and all pension benefit
or welfare benefit plans of the Company, including current and former
trustees and administrators of such pension benefit and welfare benefit
plans, from all claims, charges, or demands, in law or in equity, whether
known or unknown, which may have existed or which may now exist from the
beginning of time to the date of this Agreement, including, without
limitation, any claims Employee may have arising from or relating to
Employee's employment or termination from employment with the Company,
including a release of any rights or claims Employee may have under Title
VII of the Civil Rights Act of 1964, as amended, and the Civil Rights Act
of 1991 (which prohibit discrimination in employment based upon race,
color, sex, religion, and national origin); the American with Disabilities
Act of 1990, as amended, and Family and Medical Leave Act of 1993 (which
prohibits discrimination based on requesting or taking a family or medical
leave); Section 1981 of the Civil Rights Act of 1866 (which prohibits
discrimination based upon race); Section 1985(3) of the Civil Rights Act
of 1871 (which prohibits conspiracies to discriminate); the Employee
Retirement Income Security Act of 1974, as amended (which prohibits
discrimination with regard to benefits); any other federal, state or local
laws against discrimination' or any other federal, state, or local
statute, or common law relating to employment, wages, hours, or any other
terms and conditions of employment. This includes a release by Employee of
any claims for wrongful discharge, breach of contract, torts or any other
claims in any way related to Employee's employment with or resignation or
termination from the Company. This release also includes a release of any
claims for age discrimination under the Age Discrimination in Employment
Act, as amended ("ADEA"). The ADEA requires that Employee be advised to
consult with an attorney before Employee waives any claim under ADEA. In
addition, the ADEA provides Employee with at least 21 days to decide
whether to waive claims under ADEA and seven (7) days after Employee
executes this Agreement to revoke that waiver. Notwithstanding the
foregoing provisions of this Section 4(a), the release given by Employee
hereunder shall not apply to, and Employee shall retain and shall be
entitled to enforce by litigation or otherwise, all rights arising under
or with respect to (i) the obligations of the Company to indemnify and
hold harmless Employee in Employee's capacity as a former executive of the
Company, (ii) all directors and officers liability insurance coverage
applicable to Employee, (iii) Employee's rights to enforce the terms of
this Agreement, and (iv) any and all benefits to which Employee shall be
entitled under the terms of the Company's employee benefit plans.
(b) Release by the Company. For and in consideration of the
agreements set forth in this Agreement, the sufficiency of which the
Company hereby acknowledges, the Company, on behalf of the Company and its
affiliates and subsidiaries and its and their respective officers,
directors, managers, successors and assigns, hereby releases and forever
discharges Employee from all claims, charges, or demands, in law or in
equity, whether known or unknown, which may have existed or which may now
exist from the beginning of time to the date of this Agreement but
expressly excluding any such claims arising out of Employee's intentional
or willful misconduct or fraud. As of the date of this Agreement, the
Company has no actual knowledge of any acts by Employee of intentional or
willful misconduct or fraud giving rise to, or that could in the future
give rise to, any such claims. Notwithstanding the foregoing provision of
this Section 4(b), the release given by the Company hereunder shall not
apply to, and the Company shall retain and shall be entitled to enforce by
litigation or otherwise, all rights arising under or with respect to (i)
any claims arising out of Employee's intentional or willful misconduct or
fraud, and (ii) the Company's rights to enforce the terms of this
Agreement.
5. Stock Options. Any stock options held beneficially and of record by the
Employee as of the Termination Date which are fully vested as of such date shall
be exercisable through and including the date set as the twelve (12) month
anniversary of the Termination Date, such date being August 17, 2006. Any stock
options which are not fully vested as of the Termination Date shall terminate in
accordance with the terms of the respective stock incentive plan under which any
such options were granted.
6. No Admission. This Agreement is not an admission by either Employee or
the Company of any wrong doing or liability.
7. No Disparagement. Employee agrees not to make, or to cause any other
person to make, any false, disparaging or derogatory statements regarding the
Company or its affiliates or subsidiaries or any of their respective current or
former shareholders, directors, officers, employees, agents or representatives
(in their respective capacities as current or former shareholders, directors,
officers, employees, agents or representatives of the Company or its affiliates
or subsidiaries). Employee further agrees not to take any action or make any
statement the effect to which would be directly or indirectly to materially
impair the goodwill of the Company, including but not limited to any action or
statement intended, directly or indirectly, to benefit a competitor of the
Company. The Company shall take all reasonable measures to cause the senior
officers and directors of the Company (in their respective capacities as senior
officers and directors of the Company) not to make any false, disparaging or
derogatory statements in any form regarding Employee.
8. Confidentiality and Nondisclosure of Confidential Information.
(a) Employee acknowledges and agrees that she has had access to
Confidential Information (as defined below) of the Company, which has been
developed at considerable risk and expense of the Company. Employee agrees
that for so long as any information received by Employee remains
Confidential Information, she shall not at any time copy, or disclose to
any person or entity, or use for her own benefit or the benefit of any
third party, or otherwise exploit, such Confidential Information.
(b) "Confidential Information" includes the terms of this Agreement
and information, documents and materials which contain confidential,
proprietary and/or trade secrets of Cosi, its affiliates and subsidiaries,
its business partners, its vendors, and/or its franchisees, or are
otherwise of a confidential nature and which are proprietary to Cosi, its
affiliates and subsidiaries, its customers, its business partners, its
vendors, and/or its franchisees that are not otherwise part of the public
domain (whether or not reduced to writing or other tangible medium of
expression), including, without limitation, information relating to
business and marketing plans and strategies (including, without
limitation, development and expansion plans, new markets, new store
openings and store closings), historical and projected financial
information, revenues, costs, personnel information, processes and
procedures, products, recipes, formulae, other trade secrets pertaining to
products, goods, services, inventions, discoveries, improvements,
innovations, designs, ideas, manufacturing processes, methods and
activities, costs, sources of supply, advertising and marketing plans and
activities, distribution and sales methods, employee information, wage,
salary and bonus information, customer lists and customer information,
sales, profits, pricing and pricing methods, personnel, business
relationships, litigation, business concepts, patents, copyrights,
trademarks, trade names, trade secrets, formulae, patent, trademark and
copyright applications, agreements, and any and all other information,
records, knowledge or data of a confidential, proprietary and/or trade
secret nature. Notwithstanding the foregoing, Confidential Information
does not include information which Employee can prove: (i) at the time of
disclosure to Employee was already known to Employee prior to its
disclosure by the Disclosure (as established by written records) without
an obligation of confidentiality; (ii) is or becomes generally available
to the public other than through a breach of this Agreement; or (iii) is
at any time furnished to Employee by a third party who is lawfully in
possession of such information and who lawfully conveys such information
to Employee.
(c) Employee covenants and agrees that disclosure of any or all of
the Confidential Information in violation of this Agreement will cause the
Company irreparable injury and that, in the event of a breach by Employee
her obligations pursuant to this Section 8, the Company shall be entitled
to any remedy available at law or equity, including, without limitation,
specific performance and injunctive relief (without bond or proof of
damages but upon due notice) and all reasonable costs incurred in seeking
any such remedy, including, without limitation, attorneys' fees and costs.
9. Company Indemnification; Employee Cooperation; D&O Insurance. The
Company shall indemnify Employee to the fullest extent permissible under its
by-laws in effect on the day hereof, the Delaware General Corporation Law and
other applicable laws. Employee agrees to cooperate reasonably with the Company
and its counsel in regard to any litigation, investigation, or similar action
presently pending or subsequently initiated involving matters of which the
Employee has knowledge as a result of Employee's employment with the Company.
Such reasonable cooperation shall consist of the Employee making herself
available at reasonable times for consultation with officers of the Company and
its counsel and for depositions or other similar activity. The actual costs
incurred with respect to Employee's reasonable cooperation shall be borne by the
Company. Such costs shall not include Employee's compensation. For at least a
period of two (2) years following the Termination Date of this Agreement, the
Company shall maintain directors and officers liability insurance, or insurance
providing similar coverage, in an amount and on the terms as may be reasonably
determined from time to time by the executive officers and directors of the
Company, which coverage shall include Employee in Employee's capacity as a
former officer of the Company.
10. Waiver of Reinstatement. Employee waives any right to reinstatement or
future employment with the Company following the date of Employee's separation
from the Company as set forth herein.
11. Employee Agreement. Employee agrees not to engage in any act after
execution of this Agreement that is intended, or may reasonably be expected to,
harm the reputation, business, prospects or operations of the Company, its
affiliates or subsidiaries, or its or their respective officers directors,
stockholders or executives. Employee will take no action which would reasonably
be expected to lead to unwanted or unfavorable publicity to the Company.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without reference to the
principles of conflict of laws.
13. Entire Agreement; Severability. This Agreement represents the complete
agreement between Employee and the Company concerning the subject matter in this
Agreement and supersedes all prior agreements or understandings, written or
oral, including, without limitation the 2004 Letter. This Agreement may not be
amended or modified otherwise than by written agreement executed by the parties
hereto or their respective successors and legal representatives. The provisions
of this Agreement are severable, and if any part of this Agreement is found to
be unenforceable, the other provisions of this Agreement shall remain fully
valid and enforceable to the fullest extent permitted by law.
14. Revocation Period. It is further understood that for a period of seven
(7) days following the execution of this Agreement in duplicate originals,
Employee may revoke this Agreement, and this Agreement shall not become
effective or enforceable until this revocation period has expired. No revocation
of this Agreement by Employee shall be effective unless the Company has received
within the seven (7) day revocation period, written notice of any revocation,
all monies received by Employee under this Agreement and all original copies of
this Agreement.
15. Voluntary Execution. This Agreement has been entered into voluntarily
and not as a result of coercion, duress, or undue influence. Employee
acknowledges that Employee has read and fully understands the terms of this
Agreement and has been advised to consult with an attorney before executing this
Agreement. Additionally, Employee acknowledges that Employee has been afforded
the opportunity of at least twenty-one (21) days to consider this Agreement.
16. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which taken together shall be
deemed to constitute one and the same instrument.
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The parties hereto have executed this Agreement as of the day and year
first above written.
EMPLOYEE:
/s/Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
COMPANY:
COSI, INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Chief Executive Officer and President
