Exhibit 10.1
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") is entered into as of
January 3, 2005 between Cosi, Inc., a Delaware corporation, and any successor
thereto (collectively, the "Company"), and Xxxxxxxx X. Xxxxxxxxxx, Xx. (the
"Executive").
The Executive and the Company agree as follows:
1. The employment relationship between the Executive and the Company
terminated, by mutual agreement, on December 9, 2004 (the "Effective Date"). In
lieu of written notice of the Executive's termination pursuant to Section 10 of
the Employment Agreement between the Executive and the Company, dated August 20,
2003 (the "Employment Agreement"), the Executive shall be paid an amount equal
to his pro rata bi-weekly salary for the period commencing December 10, 2004,
through December 27, 2004, payable on the first pay date following the
Commencement Date. For purposes of this Agreement, the "Commencement Date" shall
be the date the Agreement is executed by the Executive. The Company shall
reimburse the Executive for all reimbursable expenses incurred by the Executive
through December 9, 2004, and submitted to the Company with proper receipts, in
accordance with the Company's then-current expense policy and the Employment
Agreement. Except for the amounts expressly set forth in this Section 1 and in
Section 2 below, no other compensation or benefits are due to the Executive
under this Agreement, the Employment Agreement or otherwise.
2. The Company has agreed to pay the Executive severance payments and
other benefits as set forth on Annex 1 hereto. The Company shall have the right,
upon due notice to the Executive, to set off any amounts due and owing by the
Executive to the Company against any severance payments due and owing by the
Company to the Executive.
3. The Executive 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 the Executive's control or possession,
including, without limitation, confidential information of the Company, files
and documents, keys, and key cards.
4. For and in consideration of the payments and/or other benefits to be
provided to and/or on behalf of the Executive pursuant to the Employment
Agreement and this Agreement, the sufficiency of which the Executive hereby
acknowledges, the Executive, on behalf of the Executive and the Executive's
heirs, executors and assigns, hereby releases and forever discharges the Company
and its stockholders, parents, affiliates, subsidiaries, divisions, any and all
current and former directors, officers, executives and agents thereof, and their
heirs 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 the Executive may have arising from or
relating to the Executive's employment or termination from employment with the
Company, including a release of any rights or claims the Executive may have
under Title VII of the Civil Rights Act of 964, as amended, and the Civil Rights
Act of 1991 (which prohibit discrimination based upon disability); the 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 Executive 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 the Executive of
any claims for wrongful discharge, breach of contract, torts or any other claims
in any way related to the Executive's employment with or resignation or
termination from the Company. Notwithstanding the foregoing provisions of this
Section 3, the release given by the Executive hereunder shall not apply to, and
the Executive 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 the Executive, including, without
limitation, with respect to the shareholder class action suit pending in the
United States District Court for the Southern District of New York as of the
date hereof (In Re Cosi, Inc. Securities Litigation, Case No. 03-CV-812 (JGK)),
(ii) all directors and officers liability insurance coverage applicable to the
Executive, (iii) the Executive's rights to enforce the terms of this Agreement,
and (iv) any and all benefits to which the Executive shall be entitled under the
terms of the Company's employee benefit plans.
5. This Agreement is not an admission by either the Executive or the
Company of any wrongdoing or liability.
6. The Executive agrees he will not make, or cause any other person to
make, any false, disparaging or derogatory statements regarding the Company or
its subsidiaries or any of their respective current or former shareholders,
directors, officers, employees, agents or representatives. The Executive further
agrees not to take any action or make any statement the effect of 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 regarding the
Executive.
7. Notwithstanding any provision of this Agreement to the contrary, (i)
the rights and benefits of the parties set forth in Sections 6, 7, 8 and 9 of
the Employment Agreement shall remain in full force and effect following the
execution of this Agreement to the extent necessary to give effect to the terms
thereof and (ii) the Company shall indemnify the Executive to the fullest extent
permissible under its by-laws as in effect on the date hereof, including,
without limitation, with respect to the shareholder class action suit pending in
the United States District Court for the Southern District of New York as of the
date hereof (In Re Cosi, Inc. Securities Litigation, Case No. 03-CV-812 (JGK)).
The Executive agrees that he will cooperate with the Company with respect to any
suit filed, or investigation undertaken, against the Company.
8. The Executive waives any right to reinstatement or future employment
with the Company following the Executive's separation from the Company on the
Effective Date.
9. The Executive 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 officers,
directors, stockholders or executives. The Executive will take no action which
would reasonably be expected to lease to unwanted or unfavorable publicity to
the Company.
10. The Executive 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 Executive has
knowledge as a result of Executive's employment with the Company. Such
reasonable cooperation shall consist of the Executive making himself available
at reasonable times for consultation with officers of the Company and its
counsel and for depositions or other similar activity. The Executive shall not
receive any additional compensation for rendering such assistance.
11. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without reference to the principles of
conflict of laws.
12. This Agreement and the Employment Agreement (to the extent set forth
in Section 7 hereof) represent the complete agreement between the Executive and
the Company concerning the subject matter in this Agreement and supersedes all
prior agreements or understandings, written or oral. This Agreement may not be
amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
13. This Agreement has been entered into voluntarily and not as a result
of coercion, duress, or undue influence. The Executive acknowledges that the
Executive has read and fully understands the terms of this Agreement and has
been advised to consult with an attorney before executing this Agreement.
14. This Agreement may be executed in counterparts, each of which shall be
deemed an original. This Agreement and any counterpart so executed shall be
deemed one and the same instrument.
15. Any notice required or permitted to be given hereunder shall be in
writing and shall be delivered by hand or mailed by certified mail, return
receipt requested, postage prepaid, addressed as follows:
To the Executive: 00 Xxxxxxxxxx Xxxxx #0X
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxxx, Xx.
To the Company: Cosi, Inc.
0000 Xxxx Xxxx Xx., 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
16. In the event, and at such point, that the Company elects to make a
formal communication to its employees or any other public disclosure regarding
Executive's departure from the Company, other than substantially in the form of
the draft 8-K disclosure in Annex II attached hereto, the Company agrees to
review the content thereof with Executive prior to distributing any such formal
communication or making any such filing.
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LEFT BLANK; SIGNATURE PAGE(S) FOLLOW]
The parties to this Agreement have executed this Agreement as of the day
and year first written above.
COMPANY:
COSI, INC.
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: CEO and President
EXECUTIVE:
/s/ Xxxxxxxx X. Xxxxxxxxxx, Xx.
-----------------------------------------
Xxxxxxxx X. Xxxxxxxxxx, Xx.
ANNEX 1
To the Separation and Release Agreement
(Xxxxxxxx X. Xxxxxxxxxx, Xx.)
The Executive shall receive the following severance payments and benefits,
less any applicable withholding taxes:
1) Payments in an amount equal to the total gross amount of Fifty Three
Thousand Eight Hundred Forty-Six and 00/100 Dollars ($ 53,846), less applicable
withholding taxes and deductions, payable in bi-weekly equal installments and
subject to the Company's right of set off. Such payments shall commence as of
the first pay date following the Commencement Date and shall continue on each
such bi-weekly pay date thereafter until such amount is paid in full.
2) Executive's medical and health benefits shall continue through
December 31, 2004. Thereafter, in the event that Executive elects continuing
benefits coverage pursuant to his rights under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"), Executive shall be responsible for payment of
Executive's COBRA premiums.
3) Each of the Company and the Executive acknowledges and agrees that all
stock options held by the Executive, as set forth in Schedule A attached hereto,
were 100% vested immediately prior to the Effective Date, and shall be
exercisable through and including the date which is the fifth (5th) anniversary
of the Effective Date, such date being December 9, 2009. Immediately following
full execution of this Agreement and effective as of the Effective Date, the
total number of fully vested options held by Executive in accordance herewith is
Four Million Forty-One Thousand Eight Hundred Fifty Eight (441,858) options.
4) Executive shall be permitted to retain for his personal use, at his
sole cost and expense, the notebook computer and blackberry currently in his
possession.
1/03/05 JMW
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Date Executive
(initials)
1/03/05 KWA
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Date Company
(initials)
