General Separation and Release Agreement
EXHIBIT 10.1
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
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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.
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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
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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 | ||
| Xxxxxxx Xxxxxxx | ||
| COMPANY: | ||
| COSI, INC., a Delaware corporation |
| By: | ||||
| Name: | ||||
| Title: | ||||
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