Exhibit 10.1
SEPARATION AGREEMENT AND
RELEASE
This Separation Agreement and
Release (“Agreement”) is made by and between Rayford K.
Whitley (“Employee”) and Cost Plus, Inc. (the
“Company”) (collectively referred to as the
“Parties” or individually referred to as a
“Party”).
RECITALS
WHEREAS, Employee was employed by
the Company;
WHEREAS, the Company and Employee
entered into a Third Amended and Restated Employment Severance
Agreement, dated as of April 1, 2009 (the “Employment
Severance Agreement”) which is superceded by this
Agreement;
WHEREAS, the Company has granted the
Employee options to purchase shares of the Company’s common
stock subject to the terms and conditions of the applicable Company
Stock Option Plan and the Stock Option Agreement (collectively the
“Stock Agreements”), and the options that remain
outstanding are set forth in Exhibit A ;
WHEREAS, Employee separated from
employment with the Company effective May 8, 2009 (the
“Separation Date”); and
WHEREAS, the Parties wish to resolve
any and all disputes, claims, complaints, grievances, charges,
actions, petitions, and demands that the Employee may have against
the Company and any of the Releasees as defined below, including,
but not limited to, any and all claims arising out of or in any way
related to Employee’s employment with or separation from the
Company;
NOW, THEREFORE, in consideration of
the mutual promises made herein, the Company and Employee hereby
agree as follows:
COVENANTS
1. Consideration .
a. Consulting Agreement . The
Company shall provide Employee with a consulting arrangement as set
forth in Exhibit B attached hereto (the “Consulting
Agreement”). The Parties agree to execute Exhibit B
concurrently with this Agreement, and Employee agrees to perform
services on the terms and conditions set forth therein, as
consideration for the benefits contained in this Agreement and the
Consulting Agreement.
b. COBRA . The Company shall
reimburse Employee for the payments Employee makes for COBRA
coverage for a period of twelve (12) months, or until Employee
has secured other employment, whichever occurs first, provided
Employee timely elects and pays for
continuation coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time period prescribed pursuant
to COBRA. COBRA reimbursements shall be made by the Company to
Employee consistent with the Company’s normal expense
reimbursement policy, provided that Employee submits documentation
to the Company substantiating his payments for COBRA
coverage.
2. Stock . Employee agrees
that for purposes of determining the number of shares of the
Company’s common stock that Employee is entitled to purchase
from the Company, pursuant to the exercise of outstanding options,
Employee will be considered to have vested only up to the
Separation Date. Employee acknowledges that as of the Separation
Date, Employee will have vested in the number of options set forth
in Exhibit A of this Agreement and no more. By his signature
below, Employee further agrees that all unvested shares subject to
his outstanding stock options will terminate as of the Separation
Date. He further agrees that Exhibit A contains a complete
listing of all outstanding stock options held by him. The exercise
of Employee’s vested options and shares shall continue to be
governed by the terms and conditions of the Company’s Stock
Agreements.
3. Benefits .
Employee’s health insurance benefits shall cease on the last
day of May 2009, subject to Employee’s right to continue his
health insurance under COBRA, and the Company’s obligation to
reimburse for such costs as set out in Paragraph 1(b).
Employee’s participation in all benefits and incidents of
employment, including, but not limited to, vesting in stock
options, and the accrual of bonuses, vacation, and paid time off,
ceased as of the Separation Date.
4. Payment of Salary and Receipt
of All Benefits . Employee acknowledges and represents that,
other than the consideration set forth in this Agreement, the
Company has paid or provided all salary, wages, bonuses, accrued
vacation/paid time off, premiums, leaves, housing allowances,
relocation costs, interest, severance, outplacement costs, fees,
reimbursable expenses, commissions, stock, stock options, vesting,
and any and all other benefits and compensation due to
Employee.
5. Release of Claims .
Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee
by the Company and its current and former officers, directors,
employees, agents, investors, attorneys, shareholders,
administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor
and successor corporations and assigns (collectively, the
“Releasees”). Employee, on his own behalf and on behalf
of his respective heirs, family members, executors, agents, and
assigns, hereby and forever releases the Releasees from, and agrees
not to sue concerning, or in any manner to institute, prosecute, or
pursue, any claim, complaint, charge, duty, obligation, demand, or
cause of action relating to any matters of any kind, whether
presently known or unknown, suspected or unsuspected, that Employee
may possess against any of the Releasees arising from any
omissions, acts, facts, or damages that have occurred up until and
including the Effective Date of this Agreement, including, without
limitation:
a. any and all claims relating to or
arising from Employee’s employment relationship with the
Company and the termination of that relationship;
-2-
b. any and all claims relating to,
or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of
fiduciary duty, breach of duty under applicable state corporate
law, and securities fraud under any state or federal
law;
c. any and all claims for wrongful
discharge of employment; termination in violation of public policy;
discrimination; harassment; retaliation; breach of contract, both
express and implied; breach of covenant of good faith and fair
dealing, both express and implied; promissory estoppel; negligent
or intentional infliction of emotional distress; fraud; negligent
or intentional misrepresentation; negligent or intentional
interference with contract or prospective economic advantage;
unfair business practices; defamation; libel; slander; negligence;
personal injury; assault; battery; invasion of privacy; false
imprisonment; conversion; and disability benefits;
d. any and all claims for violation
of any federal, state, or municipal statute, including, but not
limited to, Title VII of the Civil Rights Act of 1964; the
Civil Rights Act of 1991; the Rehabilitation Act of 1973; the
Americans with Disabilities Act of 1990; the Equal Pay Act; the
Fair Labor Standards Act; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit
Protection Act; the Employee Retirement Income Security Act of
1974; the Worker Adjustment and Retraining Notification Act; the
Family and Medical Leave Act; the Sarbanes-Oxley Act of 2002; the
California Family Rights Act; the California Labor Code; the
California Workers’ Compensation Act; and the California Fair
Employment and Housing Act;
e. any and all claims for violation
of the federal or any state constitution;
f. any and all claims arising out of
any other laws and regulations relating to employment or employment
discrimination;
g. any claim for any loss, cost,
damage, or expense arising out of any dispute over the
nonwithholding or other tax treatment of any of the proceeds
received by Employee as a result of this Agreement; and
h. any and all claims for
attorneys’ fees and costs.
Employee agrees that the release set
forth in this section shall be and remain in effect in all respects
as a complete general release as to the matters released. This
release does not extend to any obligations incurred under this
Agreement. This release does not release claims that cannot be
released as a matter of law, including, but not limited to,
Employee’s right to file a charge with or participate in a
charge by the Equal Employment Opportunity Commission, or any other
local, state, or federal administrative body or government agency
that is authorized to enforce or administer laws related to
employment, against the Company (with the understanding that any
such filing or participation does not give Employee the right to
recover any monetary damages against the Company; Employee’s
release of claims herein bars Employee from recovering such
monetary relief from the Company).
-3-
6. Acknowledgment of Waiver of
Claims under ADEA . Employee acknowledges that he is waiving
and releasing any rights he may have under the Age Discrimination
in Employment Act of 1967 (“ADEA”), and that this
waiver and release is knowing and voluntary. Employee agrees that
this waiver and release does not apply to any rights or claims that
may arise under the ADEA after the Effective Date of this
Agreement. Employee acknowledges that the consideration given for
this waiver and release is in addition to anything of value to
which Employee was already entitled. Employee further acknowledges
that he has been advised by this writing that: (a) he should
consult with an attorney prior to executing this Agreement;
(b) he has twenty-one (21) days within which to consider
this Agreement; (c) he has seven (7) days following his
execution of this Agreement to revoke this Agreement; (d) this
Agreement shall not be effective until after the revocation period
has expired; and (e) nothing in this Agreement prevents or
precludes Employee from challenging or seeking a determination in
good faith of the validity of this waiver under the ADEA, nor does
it impose any condition precedent, penalties, or costs for doing
so, unless specifically authorized by federal law. In the event
Employee signs this Agreement and returns it to the Company in less
than the 21-day period identified above, Employee hereby
acknowledges that he has freely and voluntarily chosen to waive the
time period allotted for considering this Agreement.
7. California Civil Code
Section 1542 . Employee acknowledges that he has been
advised to consult with legal counsel and is familiar with the
provisions of California Civil Code Section 1542, a statute
that otherwise prohibits the release of unknown claims, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
Employee, being aware of said code
section, agrees to expressly waive any rights he may have
thereunder, as well as under any other statute or common law
principles of similar effect.
8. No Pending or Future
Lawsuits . Employee represents that he has no lawsuits, claims,
or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Employee
also represents that he does not intend to bring any claims on his
own behalf or on behalf of any other person or entity against the
Company or any of the other Releasees.
9. Confidentiality . Employee
agrees to maintain in complete confidence the contents and terms of
this Agreement and the consideration for this Agreement
(hereinafter collectively referred to as “Separation
Information”). Except as required by law, Employee may
disclose Separation Information only to his immediate family
members, the Court in any proceedings to enforce the terms of this
Agreement, Employee’s attorney(s), and Employee’s
accountant and any professional tax advisor to the extent that they
need to know the Separation Information in order to provide advice
on tax treatment or to prepare tax returns, and must prevent
disclosure of any Separation Information to all other third
parties. Employee agrees that he will not publicize, directly or
indirectly, any Separation Information.
-4-
Employee acknowledges and agrees
that the confidentiality of the Separation Information is of the
essence . The Parties agree that if the Company proves that
Employee breached this Confidentiality provision, the Company shall
be entitled to an award of its costs spent enforcing this
provision, including all reasonable attorneys’ fees
associated with the enforcement action, without regard to whether
the Company can establish actual damages from Employee’s
breach, except to the extent that such breach constitutes a legal
action by Employee that directly pertains to the ADEA. Any such
individual breach or disclosure shall not excuse Employee from his
obligations hereunder, nor permit him to make additional
disclosures. Employee warrants that he has not disclosed, orally or
in writing, directly or indirectly, any of the Separation
Information to any unauthorized party.
10. Trade Secrets and
Confidential Information/Company Property . Employee agrees
that he will not disclose the Company’s trade secrets and
confidential and proprietary information. Employee agrees to
promptly return all documents and other items provided to Employee
by the Company, developed or obtained by Employee in connection
with his employment with the Company, or otherwise belonging to the
Company, except as required to perform the services set forth in
the Consulting Agreement.
11. No Cooperation . Employee
agrees that he will not knowingly encourage, counsel, or assist any
attorneys or their clients in the presentation or prosecution of
any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless
under a subpoena or other court order to do so or as related
directly to the ADEA waiver in this Agreement. Employee agrees both
to immediately notify the Company upon receipt of any such subpoena
or court order, and to furnish, within three (3) business days
of its receipt, a copy of such subpoena or other court order. If
approached by anyone for counsel or assistance in the presentation
or prosecution of any disputes, differences, grievances, claims,
charges, or complaints against any of the Releasees, Employee shall
state no more than that he cannot provide counsel or
assistance.
12. Nondisparagement .
Employee agrees to refrain from any disparagement, defamation,
libel, or slander of any of the Releasees, and agrees to refrain
from any tortious interference with the contracts and relationships
of any of the Releasees. Employee shall direct any inquiries by
potential future employers to the Company’s (i) human
resources department, which shall use its best efforts to provide
only the Employee’s last position and dates of employment, or
(ii) Chief Executive Officer.
13. Breach . In addition to
the rights provided in the “Attorneys’ Fees”
section below, Employee acknowledges and agrees that any material
breach of this Agreement, unless such breach constitutes a legal
action by Employee challenging or seeking a determination in good
faith of the validity of the waiver herein under the ADEA, or of
any provision of the Confidentiality Agreement shall entitle the
Company immediately to recover and/or cease providing the
consideration provided to Employee under this Agreement and to
obtain damages, except as provided by law.
-5-
14. No Admission of Liability
. Employee understands and acknowledges that this Agreement
constitutes a compromise and settlement of any and all actual or
potential disputed claims by Employee. No action taken by the
Company hereto, either previously or in connection with this
Agreement, shall be deemed or construed to be (a) an admission
of the truth or falsity of any actual or potential claims or
(b) an acknowledgment or admission by the Company of any fault
or liability whatsoever to Employee or to any third
party.
15. Costs . The Parties shall
each bear their own costs, attorneys’ fees, and other fees
incurred in connection with the preparation of this
Agreement.
16. ARBITRATION . THE PARTIES
AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS
AGREEMENT, INCLUDING DISPUTES ARISING OUT OF THE CONSULTING
AGREEMENT ATTACHED HERETO AS EXHIBIT B, THEIR INTERPRETATION, AND
ANY OF THE MATTERS HEREIN RELEASED, SHALL BE SUBJECT TO ARBITRATION
IN ALAMEDA COUNTY, BEFORE JUDICIAL ARBITRATION & MEDIATION
SERVICES (“JAMS”), PURSUANT TO ITS EMPLOYMENT
ARBITRATION RULES & PROCEDURES (“JAMS RULES”).
THE ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH
DISPUTES. THE ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY
ARBITRATION IN ACCORDANCE WITH CALIFORNIA LAW, INCLUDING THE
CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE ARBITRATOR SHALL APPLY
SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE OR CLAIM,
WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY
JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH
CALIFORNIA LAW, CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION
OF THE ARBITRATOR SHALL BE FINAL, CONCLUSIVE, AND BINDING ON THE
PARTIES TO THE ARBITRATION. THE PARTIES AGREE THAT THE PREVAILING
PARTY IN ANY ARBITRATION SHALL BE ENTITLED TO INJUNCTIVE RELIEF IN
ANY COURT OF COMPETENT JURISDICTION TO ENFORCE THE ARBITRATION
AWARD. THE PARTIES TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE
OF THE COSTS AND EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL
SEPARATELY PAY FOR ITS RESPECTIVE COUNSEL FEES AND EXPENSES;
PROVIDED, HOWEVER, THAT THE ARBITRATOR SHALL AWARD ATTORNEYS’
FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS PROHIBITED BY
LAW. THE PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY
DISPUTE BETWEEN THEM RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY.
NOTWITHSTANDING THE FOREGOING, THIS SECTION WILL NOT PREVENT EITHER
PARTY FROM SEEKING INJUNCTIVE RELIEF (OR ANY OTHER PROVISIONAL
REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE PARTIES AND THE
SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT AND THE
AGREEMENTS INCORPORATED HEREIN BY REFERENCE. SHOULD ANY PART OF THE
ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT WITH ANY
OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE
THAT THIS ARBITRATION AGREEMENT SHALL GOVERN.
-6-
17. Tax Consequences . The
Company makes no representations or warranties with respect to the
tax consequences of the payments and any other consideration
provided to Employee or made on his behalf under the terms of this
Agreement. Employee agrees and understands that he is responsible
for payment, if any, of local, state, and/or federal taxes on the
payments and any other consideration provided hereunder by the
Company and any penalties or assessments thereon. Employee further
agrees to indemnify and hold the Company harmless from any claims,
demands, deficiencies, penalties, interest, assessments,
executions, judgments, or recoveries by any government agency
against the Company for any amounts claimed due on account of
(a) Employee’s failure to pay or delayed payment of
federal or state taxes, or (b) damages sustained by the
Company by reason of any such claims, including attorneys’
fees and costs.
18. Authority . The Company
represents and warrants that the undersigned has the authority to
act on behalf of the Company and to bind the Company and all who
may claim through it to the terms and conditions of this Agreement.
Employee represents and warrants that he has the capacity to act on
his own behalf and on behalf of all who might claim through him to
bind them to the terms and conditions of this Agreement. Each Party
warrants and represents that there are no liens or claims of lien
or assignments in law or equity or otherwise of or against any of
the claims or causes of action released herein.
19. No Representations .
Employee represents that he has had an opportunity to consult with
an attorney, and has carefully read and understands the scope and
effect of the provisions of this Agreement. Employee has not relied
upon any representations or statements made by the Company that are
not specifically set forth in this Agreement.
20. Severability . In the
event that any provision or any portion of any provision hereof or
any surviving agreement made a part hereof becomes or is declared
by a court of competent jurisdiction or arbitrator to be illegal,
unenforceable, or void, this Agreement shall continue in full force
and effect without said provision or portion of
provision.
21. Attorneys’ Fees .
Except with regard to a legal action challenging or seeking a
determination in good faith of the validity of the waiver herein
under the ADEA, in the event that either Party brings an action to
enforce or effect its rights under this Agreement, the prevailing
Party shall be entitled to recover its costs and expenses,
including the costs of mediation, arbitration, litigation, court
fees, and reasonable attorneys’ fees incurred in connection
with such an action.
22. Entire Agreement . This
Agreement represents the entire agreement and understanding between
the Company and Employee concerning the subject matter of this
Agreement and Employee’s employment with and separation from
the Company and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements
and understandings concerning the subject matter of this Agreement
and Employee’s relationship with the Company, with the
exception of the Stock Agreements.
23. No Oral Modification .
This Agreement may only be amended in a writing signed by Employee
and the Company’s Chief Executive Officer.
-7-
24. Gover
