Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE

THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the “Agreement”) dated January 5,
2007 (the “Agreement”), is made and entered into by and between Barry Erdos
(“Erdos”) and Build-A-Bear Workshop, Inc., a Delaware corporation (“Company”).
Erdos and the Company are hereinafter sometimes collectively referred to as the
“Parties”.

WHEREAS, Erdos’ employment with the Company will be terminated effective as of
the date of this Agreement (“Separation Date”); and

WHEREAS, the Parties desire to enter into full and final settlement of all
matters between them, including, but not limited to, any issues or disputes
(known or unknown) that might arise out of or relate to Erdos’ employment with,
or termination of employment from, the Company;

NOW, THEREFORE, for and in consideration of the mutual releases, covenants and
undertakings hereinafter set forth, and for other good and valuable
consideration, the legal sufficiency of which each party hereby acknowledges, it
is agreed as follows:

1.     Separation.

Erdos’ employment with the Company shall cease effective on the Separation Date.
As of that date, neither the Company nor any of its parent companies, affiliate
companies, subsidiary companies, or their respective directors, shareholders,
attorneys, agents, officers, employees, successors or assigns (together,
“Releasees”) shall have any further obligation to Erdos for compensation or
otherwise except as expressly set forth in this Agreement.

2.     Mutual Releases.

(a)          Upon the effectiveness of this Agreement, the Parties, on behalf of
themselves and all of their respective current and/or former investors,
partners, general partners, joint venturers, limited partners, shareholders,
owners, officers, directors, employees, managers, agents, insurers, parents,
subsidiaries, affiliates, predecessors, successors, successors-in-interest,
assignees, corporations, partnerships, heirs, executors, and administrators, for
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, fully and forever releases,
acquits, disclaims, remises, waives, relinquishes, and discharges each other,
and each of the Parties’ respective current and/or former creditors, investors,
partners, present and former general partners, present and former limited
partners, present and former shareholders[img1.gif]
, owners, control persons, officers, directors, managing directors, managers,
employees, agents, attorneys, representatives, advisors, insurers, parents,
subsidiaries, affiliates, predecessors, successors, successors-in-interest,
assignees, trusts, beneficiaries, trustees, grantors, corporations,
partnerships, heirs, executors, and administrators, from any and all claims,
debts, demands, accountings, actions, causes of action, controversies, damages,
suits, liabilities, obligations, charges, and remedies of whatever nature, known
or unknown, foreseen or unforeseen, whether at law, admiralty, or equity, that
have arisen or could arise by either of the Parties hereto, or their above
referenced affiliates, arising out of, related to (directly or indirectly), or
connected in any way with Erdos’ employment at the Company which occurred on or
before the Separation Date. The releases set forth herein shall be, and remain
in effect as, full and complete releases, notwithstanding the discovery or
existence of any such additional or different facts relating to the subject
matter of Erdos’ employment with the Company or this

 

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Agreement. The Parties hereby waive each and every statutory, equitable, and
common law prohibition and limitation on the release of unknown claims and
acknowledges that the foregoing waiver is given knowingly and with the advice of
counsel.

(b)          This release of claims, complaints, and actions includes, but is
not limited to: (i) any claim for breach of an actual or implied contract of
employment between Erdos and any of the Releasees (including any claim of
fraudulent misrepresentation or negligent misrepresentation in the making of any
actual or implied contract of employment), (ii) any claim of unjust, wrongful,
discriminatory, retaliatory or tortious discharge or other adverse employment
action (including any claim of whistle-blowing), (iii) any claim of slander,
libel or other similar action for defamation, (iv) any claim of intentional tort
(including assault, battery, and intentional infliction of emotional distress),
(v) any claim of negligence (including negligent infliction of emotional
distress, negligent hiring, or negligent retention), (vi) any claim of a
violation of a statute or ordinance, including, but not limited to, the Civil
Rights Act of 1866, 42 U.S.C. Section 1981, the Civil Rights Act of 1964, 42
U.S.C. Section 2000e et seq., as amended by the Civil Rights Act of 1991, the
Age Discrimination in Employment Act, 29 U.S.C. Section 621 et. seq. (including
but not limited to the Older Worker Benefit Protection Act (“OWBPA”)) (“ADEA”),
the Employee Retirement Income Security Act, 29 U.S.C. Section 1001 et seq.
(including, but not limited to, COBRA), Executive Order 11246, the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et. seq., the National Labor
Relations Act, 29 U.S.C. Section 151 et. seq. the Fair Labor Standards Act of
1938, 29 U.S.C. Section 201 et seq., (including, but not limited to, the Equal
Pay Act), the Rehabilitation Act of 1973, 29 U.S.C. Section 701 et seq., the
Americans with Disabilities Act, 42 U.S.C. Section 12101 et seq., the Family and
Medical Leave Act, 29 U.S.C. Section 2601 et seq., the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Section 2101 et seq., the Missouri
Workers’ Compensation Act, Section 287.010 R.S.Mo. et seq., the Missouri
Employment Security Act, Section 288.010 R.S.Mo. et seq., the Missouri Human
Rights Act, Section 213.010 R.S.Mo. et seq., the Missouri Service Letter Act,
Section 290.140, or any other relevant federal, state, or local statutes or
ordinances governing employment and the payment of compensation; (vii) all
claims and obligations under Erdos’ Employment Agreement with the Company
(except as expressly preserved herein). Notwithstanding the foregoing, nothing
in this release shall affect or impair any rights Erdos may have by virtue of
his status as a director or officer of the Company to indemnification for
attorneys’ fees, costs and/or expenses pursuant to applicable statute,
Certificates of Incorporation and By-Laws of the Company, its affiliates or
subsidiaries, nor does Erdos waive or lose any rights he has as a former
employee under the Build-A-Bear Workshop, Inc. Employee Savings Trust.

(c)          Erdos releases and waives any and all claims under or pursuant to
any employment agreement with the Company, including without limitation his
Employment Agreement.

(d)          Nothing in this Agreement prevents any of the Parties from bringing
an action to enforce this Agreement, or any other related agreement expressly
referenced herein, in the event of breach nor is this Agreement intended to
release any rights or obligations expressly preserved under the terms of this
Agreement including, without limitation, those continuing rights relating to
Erdos’ stock ownership (if any) in the Company.

3.     Payment and Benefits.

The Company will provide Erdos with the payments and other consideration set
forth in this Section 3 in consideration and exchange for Erdos’ promises,
agreements and obligations set out in this Agreement, so long as Erdos submits
this Agreement, properly executed, to Maxine Clark, Chief Executive Bear, within
the time allowed herein and adheres to the promises and agreements set forth
herein.

 

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(a)          The Company shall continue to pay Erdos’ base salary in accordance
with the time period and other terms specified in Section 4.2(b) of his
Employment, Confidentiality and Non-compete Agreement dated April 13, 2004, as
amended (the “Employment Agreement”). This amount will be paid in accordance
with the Company’s regular payroll periods and practices, and applicable local,
state and federal taxes and other required withholdings will be deducted.

(b)          The Company shall pay Erdos’ bonus payment for 2006, if any, in
accordance with Section 3(b) of his Employment Agreement.

(c)          During the time period in which the Company pays Erdos severance
payments under Section 2 of the Employment Agreement, Erdos shall be eligible to
continue to participate in the Company’s group health, welfare and benefits
plan(s) to the extent permitted in such plans, in accordance with the terms of
Section 4(b) of his Employment Agreement. After such period, Erdos shall be
provided with such continuation notices, rights and obligations as may be
required under federal or state law (including COBRA).

(d)          Erdos shall be entitled to all vacation accrued but unused as of
the Separation Date. He shall be entitled to no additional vacation accruals on
and after such date.

4.     Covenant Not to Sue.

(a)          The Parties hereby covenant not to sue each other or their
respective agents, representatives, successors, assigns or present or former
employees with respect to any of the claims, rights, obligations or causes of
actions mutually released pursuant to Section 2 of this Agreement. The Parties
agree not to file or otherwise submit any claim, complaint, or action to any
agency, court, organization, or judicial forum (nor will they permit any person,
group of persons, or organizations to take such action on their behalf)
concerning any of the released claims under Section 2 of this Agreement;
provided however, nothing herein shall preclude the Parties from suing or
bringing a claim against each other for any future breach of this Agreement.

(b)          In the event either of the Parties should bring such a charge,
claim, complaint, action or suit in the future in violation of Section 4(a) of
this Agreement, the Party bringing such claim will be responsible for any actual
damages suffered by the other party as a result of said breach (including,
without limitation, an award of reasonable attorneys’ fees, disbursements and
costs to the prevailing party) and the party bringing the claim will exercise
every good faith effort to have such claim dismissed and to hold the other party
harmless against any judgment that might be rendered as a result of said breach.

(c)          For purposes of the ADEA only, this Agreement does not affect the
Equal Employment Opportunity Commission’s (“EEOC”) rights and responsibilities
to enforce the ADEA, nor does this Agreement prohibit Erdos from filing a charge
under the ADEA (including

 

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a challenge to the validity of the waiver of claims in this Agreement) with the
EEOC, or participating in any investigation or proceeding conducted by the EEOC.
Nevertheless, Erdos agrees that the Releasees will be shielded against any
recovery by Erdos, provided this Agreement is valid under applicable law.

(d)          With the exception of challenges for compliance with the ADEA or
the OWBPA, Erdos agrees not to challenge the enforceability of this Agreement
and the release and waiver of claims herein.

5.     Non-disparagement.

The Parties agree that after the Separation Date they will not in any way
disparage each other, including current or former officers, directors and
employees of the Company, nor will they make or solicit any comments, statements
or the like to the media or to others, including making any disparaging or
defamatory claims or statements against each other or their respective agents or
representatives, that may be considered to be derogatory or detrimental to the
good name or business reputation of the other.

6.     No Admission of Wrongdoing.

The parties agree that nothing in this Agreement is an admission by any party
hereto of any wrongdoing, either in violation of an applicable law or otherwise,
and that nothing in this Agreement is to be construed as such by any person.

7.     Voluntary Agreement. Erdos further acknowledges that he understands this
Agreement, the claims he is releasing, the promises and agreements he is making,
and the effect of his signing this Agreement. Erdos further represents, declares
and agrees that he voluntarily accepts the payment described above for the
purpose of making a full and final compromise, adjustment, and settlement of all
claims or potential claims against the Releasees from any action or inaction
taking place prior on or before the Separation Date.

8.     Independent Representation.

The Parties acknowledge and agree that they have received independent legal
counsel of their own choice and that they have been sufficiently apprised of and
understand their respective rights and responsibilities with regard to the
substance of this Agreement. The Parties hereto acknowledge and represent that
they have carefully read this Agreement, and understand and freely and voluntary
consent to its terms. Given that all Parties have had the opportunity to draft,
review, and edit the language of this Agreement in consultation with their own
counsel, no presumption for or against any Party arising out of drafting all or
any part of this Agreement will be applied in any action relating to, connected
to, or involving this Agreement.

 

9.     Confidential Information, Post-Termination Restrictions, Inventions and
Company Property.

Erdos hereby affirms his obligations and agreements contained in Sections 5
through 12 of his Employment Agreement..

 

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10.     Resignation as Director.

In accordance with Section 20 of his Employment Agreement, Erdos agrees to
resign as a member of the Board of Directors, effective immediately. Erdos
agrees to cooperate with the Company to execute the appropriate paperwork
effectuating his resignation as a Director and/or Officer of the Company and its
affiliates. Erdos’ formal resignation letter shall be executed in conjunction
with this Agreement.

11.     Governing Law.

The parties agree that the Agreement shall be interpreted and governed by the
laws of the state of Missouri, without regard for any conflict of law principles
and that any action or suit brought by any of the Parties to this Agreement
against each other related to the interpretation of the Agreement or the
Parties’ obligations under it shall be brought only in the state or federal
courts located in St. Louis City or St. Louis County, Missouri to the extent
permitted by law. The Parties irrevocably agree to submit to the jurisdiction
and venue of the Missouri courts in connection with any action to enforce this
Agreement.

 

12.     Invalidity of Provisions/Severability.

In the event that any provision of this Agreement is adjudicated to be invalid
or unenforceable under applicable law, the validity or enforceability of the
remaining provisions shall be unaffected. To the extent that any provision of
this Agreement is adjudicated to be invalid or unenforceable because it is
overbroad, that provision shall not be void but rather shall be limited only to
the extent required by applicable law and enforced as so limited.

13.     Time for Consideration. By executing this Agreement, Erdos acknowledges
that he has been advised he has at least twenty-one (21) days within which to
consider this Agreement before signing the same, and he has been given at least
twenty-one (21) days within which to consider this Agreement prior to signing
the Agreement. Notwithstanding the opportunity to consider this Agreement for 21
days, Erdos acknowledges if he signs this agreement anytime prior to the
expiration of 21 days, that he has nonetheless given full consideration to those
terms and signs of his free volition.

14.     Effective Date and Time for Revocation.

This Agreement shall become effective and binding on the date hereof, except
that Erdos shall have the right to revoke his agreement to waive claims under
the ADEA at any time within eight days after the date hereof. By executing this
Agreement, Erdos acknowledges that by being presented with this Agreement, he
has been advised by a representative of the Company that this Agreement shall
not become permanently effective until the eighth (8th) calendar day after the
date of Erdos’ execution of this Agreement. During the seven (7) day period
following Erdos’ execution of this Agreement, Erdos may freely revoke his
execution of this Agreement. Any such revocations should be made in writing and
delivered to Maxine Clark, Chief Executive Officer of the Company. Upon
expiration of the seven (7) day period, Erdos acknowledges that this Agreement
becomes final and binding. If Erdos revokes this Agreement within the seven (7)
day period following his execution of this Agreement, it shall not be effective
or enforceable, and shall be of no force and effect and Erdos will not receive
the consideration described in this Agreement; provided however, that upon the
proper exercise of such right of revocation, the Parties will be deemed to
retain

 

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whatever contractual or other rights and obligations they may have had with
respect to each other prior to the execution of this Agreement.

15.     Successors and Assigns.

This Agreement shall be binding upon, and shall inure to the benefit of, the
Parties hereto and their respective predecessors, successors, assigns,
representatives, heirs, executors, and administrators.

 

16.     Entire Agreement.

The parties acknowledge that this Agreement and the Employment Agreement
constitute the entire agreement between them superseding all prior written and
oral agreements, regarding Erdos’ employment with or separation from the
Company, and that there are no other understandings or agreements, written or
oral, among them on the subject of Erdos’ employment with or separation from the
Company.

17.     No Reliance.

The parties have not relied on any representations, promises, or agreements of
any kind made to them in connection with this Agreement, except for those set
forth in this Agreement, and any such reliance is expressly disclaimed.

18.     Forfeiture. Erdos agrees that in the event he breaches a material term
of this Agreement, the Company shall notify him of such breach in writing and he
shall be given thirty (30) days to cure the breach, to the extent that the
breach is one capable of being cured. If such breach is not cured, or is not
capable of being cured, then Erdos shall not be entitled to any of the payments
or other benefits described herein, and he shall repay any payments previously
made hereunder.

19.     Modification; Section 409A.

The parties hereto agree that this Agreement may not be modified, altered, or
changed except by a written agreement signed by the parties hereto. The parties
hereto recognize that certain provisions of this Agreement may be affected by
Section 409A of the Internal Revenue Code and, notwithstanding the above to the
contrary, the parties agree to negotiate in good faith to amend this Agreement
or to take such other actions as may be necessary or advisable to comply with
Section 409A. It is the intent of the parties that all payments hereunder will
be paid on or before March 15, 2008.

20.     Authorized Signatures.

Each Party represents and warrants that its signatory whose signature appears
below has been and is on the date of this Settlement Agreement duly authorized
to execute this Agreement and to make the representations and agreements herein.
The Company represents and warrants to Erdos that all necessary internal
corporate steps necessary for the internal approval of this Agreement, if any,
have been taken.

 

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IN WITNESS WHEREOF, the undersigned parties have executed this Separation
Agreement and General Release.

 

BARRY ERDOS

 

 

 

/s/ Barry Erdos

 

Barry Erdos

 

 

 

Date:

5 January 2007

 

Subscribed and sworn to before me, a Notary Public, this _5__ day of January,
2007.

 

 

 

NOTARY PUBLIC

 

(STAMP)

My commission expires:

 

 

 

 

BUILD-A-BEAR WORKSHOP, INC.

 

 

 

/s/ Scott Seay

 

Scott Seay

 

Chief Operating Bear
(Duly Authorized)

 

 

 

Date:

5 January 2007

 

Subscribed and sworn to before me, a Notary Public, this _5__ day of January,
2007.

 

 

 

NOTARY PUBLIC

 

(STAMP)

My commission expires:

 

 

                                          
                                                                     

 

 

 

 

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