Exhibit 10.1

AMENDED AND RESTATED

SEPARATION AGREEMENT AND GENERAL RELEASE

This Amended and Restated Separation Agreement and General Release (“Agreement”)
is made between Alexander M. Winiecki, whose address is 12 Boylston Terrace,
Amherst NH 03031 (“Employee”) and Brookstone, Inc., a Delaware corporation
(“Employer” or “Company”).

WHEREAS, Employer and Employee are parties to an Employment Agreement dated as
of October 4, 2005 (“Employment Agreement”);

WHEREAS, Employee held the position of Executive Vice President, Store
Operations of the Employer;

WHEREAS, effective July 12, 2006 (“Termination Date”), Employee resigned his
position held with Employer and any affiliated entities; and

WHEREAS, the Company and the Employee have entered into that certain Separation
Agreement and General Release, dated as of August 10, 2006 (the “Original
Separation Agreement”), in connection with the termination of the Employee’s
employment;

WHEREAS, pursuant to the Original Separation Agreement, Employee was deemed to
have resigned his employment with Employer without Good Reason pursuant to
Section 7(d) of the Employment Agreement as of the Termination Date, and all of
his positions as an officer of Employer and any of its affiliated entities
terminated as of that date; and

WHEREAS, the Company and the Employee desire to amend and restate the Original
Separation Agreement in its entirety as set forth herein.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Employee agree that the Original Separation Agreement is hereby
amended and restated in its entirety as follows:

1. The Parties agree that, except as expressly and specifically provided herein,
the Employment Agreement is terminated insofar as it may require the Company to
make any further payments or to provide any further benefits to Employee.

For avoidance of doubt, Sections 8 and 11 of the Employment Agreement shall
remain in full force and effect and are incorporated into this Agreement by
reference. A copy of Sections 8 and 11 (“Restrictive Covenants”) are attached
hereto as Exhibit A. Section references in Exhibit A are to the Employment
Agreement.

2. Employee acknowledges that, effective July 12, 2006, his employment and any
and all positions he held with Employer and any affiliated entities were
terminated by him without Good Reason, and as of that date he relinquished any
and all of his authorities with each of those entities. Employee agrees and
acknowledges that he has received a final payroll check in the

 

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gross amount of $29,166, which amount represents payment in full to Employee for
Employee’s base salary through July 31, 2006, payment for 160 hours of vacation
for fiscal year 2006 in accordance with New Hampshire law, less applicable
payroll taxes and deductions. Employee agrees and acknowledges that Employee has
been reimbursed for all business related travel and entertainment expenses
incurred through the Termination Date. Employee agrees that Employee has no
right to any further compensation, including medical benefits, except in
accordance with the terms of this Agreement.

3. In consideration of Employee’s commitments as set forth in this Agreement,
including the release of claims set forth below, Employer will continue to pay
Employee, as severance pay and in accordance with the provisions of Section 3,
Employee’s regular base salary, less legally required deductions and deductions
requested by Employee, for ten (10) months following the Termination Date (the
“Severance Period”).

 

  a. Severance payments will be made monthly according to the same schedule that
Employee received Employee’s base salary prior to the Termination Date, except
that severance payments will not commence until the first regularly scheduled
pay date following the Effective Date of this Agreement as defined in
Section 13. Such first severance payment shall include all severance pay due
Employee pursuant to this Agreement from the Termination Date through the
closing date of the pay period in which the first severance payment is made,
less deductions required by law or requested by Employee. All other severance
payments shall consist of Employee’s regular monthly base salary, less
deductions required by law or requested by Employee. For the avoidance of doubt,
Employee acknowledges and agrees that the aggregate severance payments shall
equal $291,660 (subject to any deductions required by law or requested by
Employee).

 

  b.

Subject to Section 3(c) below, from the Termination Date until October 4, 2008
(the “Benefit Continuation Period”), Employee will continue to participate in
those Brookstone group health and dental plans, under the terms of any such
plans as may be in effect during such period, on the same cost-sharing basis as
during Employee’s tenure with Brookstone as a full-time employee. During the
Severance Period, Employee’s premium contribution will be deducted automatically
from the severance payments, and Employee’s signature on this Agreement serves
as authorization for such deductions. During the portion of the Benefit
Continuation Period following the Severance Period, Employee shall pay his
premium contribution to Employer in cash at or prior to the end of each pay
period or in such other manner as may be mutually agreed upon by him and
Employer. To the extent that Employee has elected to include qualified
dependents under the benefits made available under Brookstone’s group health and
dental insurance plans, the dependants will also continue to so participate. In
no event shall the Employee participate in any Employer bonus or profit sharing
plan the Termination Date. Employee acknowledges and agrees (for the avoidance
of doubt) that, for purposes of the Brookstone Company, Inc. Retiree Health
Plan, his termination

 

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of employment shall not be deemed to have occurred as a result of his retirement
from service with the Company.

 

  c. Notwithstanding the foregoing, if during the period in which salary and/or
benefits continue pursuant to the provisions of Section 3, Employee accepts
other employment providing him medical and dental coverage, the continuation of
his medical and dental coverage hereunder shall immediately cease.

4. You agree that the payments and other benefits provided under this Agreement
are in complete satisfaction of any and all compensation due to you for services
provided to Brookstone, and that they represent a benefit to which you are not
otherwise entitled. You understand and acknowledge that you will not continue to
earn vacation or other paid time off after the Termination Date and your
participation in all employee benefit and fringe benefit plans of Brookstone
will end as of the Termination Date excepting continuation rights as may be
contained in this Agreement.

5. Upon the termination or expiration of the Benefit Continuation Period in
accordance with Section 3(b) above, you and/or your qualified beneficiaries will
become eligible to elect to continue to participate in Brookstone’s group health
plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985,
Title X, as amended (“COBRA”) at your sole cost for limited periods of time as
prescribed by COBRA. You will receive information regarding your COBRA rights at
the end of the Benefit Continuation Period.

6. Employee’s Equity Securities.

 

  a.

OSIM Brookstone Holdings, L.P. (“OBH”) is hereby exercising its rights under the
Second Amended and Restated Limited Partnership Agreement of OBH LP (the
“Partnership Agreement”), dated as of October 4, 2005, among OSIM Brookstone
Holdings, Inc. (“OBH GP”) and each of the limited partners of OBH LP, to
purchase the 61,409 Class A Common Limited Partnership Interests of OBH LP (the
“Class A Interests”) and the 2,288 Class B Common Limited Partnership Interests
of OBH LP (the “Make-Up Class B Interests”, and collectively with the Class A
Interests, the “OBH LP Interests”) held by him. Subject to the terms and
conditions set forth in this Agreement, Employee hereby agrees to sell to OBH
LP, and OBH LP hereby agrees to purchase and accept from Employee on the date
hereof, Employee’s right, title and interest in and to the OBH LP Interests in
exchange for 455.56 shares of common stock, par value $0.01 per share, of
Brookstone Holdings Corp. (the “Pass-Through Common Stock”), and Employee hereby
agrees to sell to Brookstone Holdings Corp., and Brookstone Holdings Corp.
hereby agrees to purchase and accept from Employee, the Pass-Through Common
Stock on the first day after the date hereof, for a total purchase price equal
to Six Hundred Fourteen Thousand Ninety Dollars ($614,090.00), which Employee
agrees shall, notwithstanding anything to the contrary contained in the
Partnership Agreement, be payable (without interest) in two equal installments
by wire transfer of immediately available funds in accordance with wire transfer
instructions set forth on the signature pages hereto, as follows: the first
installment shall be paid on January 2, 2007 and the second installment shall be
paid on July 2, 2007. For the avoidance of doubt, Employee and OBH LP hereby
acknowledge and agree that the

 

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Call Price and the Cost Price (each, as defined in the Partnership Agreement) of
the Make-Up Class B Interests is zero.

 

  b. In accordance with Section 9.1(c) of the Partnership Agreement and
Section 2.1 of the Shareholders Agreement, dated as of October 4, 2005, among
OBH GP and each of the shareholders of OBH GP, Employee agrees to transfer to
OBH GP the 61,409 ordinary shares in the capital of OBH GP held by him (the “OBH
GP Shares”) for no additional consideration, simultaneously with the repurchase
by OBH LP of the OBH LP Interests on the date hereof;

 

  c. Employee agrees to execute and deliver to the applicable party a written
assignment, the form of which is attached hereto as Exhibit B, with respect to
each of the (i) OBH LP Interests, (ii) OBH GP Shares and (iii) Pass-Through
Common Stock.

 

  d. The OBH LP Interests and the OBH GP Shares held by Employee are owned of
record and beneficially by Employee and represent all of the equity interests
held by Employee and his direct and indirect Permitted Transferees (as defined
in the Partnership Agreement) in the Applicable Entities (as defined in the
Partnership Agreement), and Employee has good and marketable title to the OBH LP
Interests and the OBH GP Shares, free and clear of any Liens (as defined in the
Partnership Agreement) and the execution by Employee of this Agreement shall not
result in the imposition of any Lien upon the OBH LP Interests, the OBH GP
Shares or the Pass-Through Common Stock. Employee agrees that, upon his receipt
of the Pass-Through Common Stock, he will not transfer any of the Pass-Through
Common Stock other than to Brookstone Holdings Corp. in accordance with Section
(a) above.

 

  e. Employee and OBH LP agree that the execution of this Agreement shall be
deemed to satisfy all requirements with respect to the delivery of a Call Notice
under the Partnership Agreement and, notwithstanding the provisions contained in
Section 9.6 of the Partnership Agreement, the closing of the purchase of
Employee’s OBH LP Interests, OBH GP Shares and Pass-Through Common Stock shall
take place on the date hereof and the first day hereafter, as provided herein.

 

  f. Employee acknowledges and agrees that in accordance with the terms of the
Restricted Interest Award Agreement (Time Vested) and the Restricted Interest
Award Agreement (IRR Vested), each dated as of October 4, 2005, between OBH LP
and Employee, all Restricted IRR Interests and Restricted Time Interests,
including those Restricted Time Interests that are Vested Class B Interests
(each as defined in such award agreements) were automatically forfeited by him
upon the Termination Date.

 

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  g. OBH LP and the Company represent and warrant that (A) this Agreement and
each instrument executed and to be executed by the Company or any of its
affiliated entities (“Company Entities”) in connection herewith constitute the
legal, valid and binding obligations of the applicable Company Entity,
enforceable against it in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other Laws affecting generally the
enforcement of creditors’ rights and doctrines of equity relating to the
availability of specific performance as a remedy, and (B) the execution and
delivery of this Agreement and each instrument executed and to be executed by a
Company Entity in connection herewith, the consummation of the transactions
contemplated herein, and the performance of, fulfillment of and compliance with
the terms and conditions hereof and thereof by the Company Entities does not and
will not: (i) conflict with or result in a breach of the organizational
documents of any Company Entity, including any amendments and modifications
thereto; or (ii) violate or conflict with or constitute a default under any
agreement, instrument or writing of any nature to which any Company Entity is a
party or by which any Company Entity or its assets or properties may be bound,
which violation, conflict or default would have a material adverse effect on any
Company Entity’s ability to consummate the transactions contemplated hereby.

 

  h. Employee and OBH LP agree to treat the above repurchase of the OBH LP
Interests by OBH LP as a distribution to Employee under Section 731 of the
Internal Revenue Code of 1986, as amended (the “Code”) and that all income tax
returns, reports and IRS forms filed by them shall be prepared consistently with
such treatment. Employee and Brookstone Holdings Corp. agree to treat the above
sale of the Pass-Through Common Stock by Employee to Brookstone Holdings Corp.
as a complete redemption of Employee’s interest in Brookstone Holdings Corp.
under Section 302(b)(3) of the Code for all income tax purposes and that all
income tax returns, reports and IRS forms filed by them shall be prepared
consistently with such treatment.

7. In consideration of this Agreement, including without limitation the making
of the severance payments to you provided for in Section 3, Employee, on behalf
of himself, his agents, heirs, representatives, assigns, executors and
administrators (collectively, the “Releasors”), hereby releases and forever
discharges Employer, its affiliated entities, Brookstone Holdings Corp.,
Brookstone Acquisition Corp, OBH LP, J.W. Childs Associates, L.P., and any and
all of their respective parents, subsidiaries, predecessors, successors,
assigns, employees, shareholders, members, officers, directors, agents,
attorneys, representatives, affiliates, and related companies (collectively, the
“Brookstone Releasees”) of and from any and all claims, causes of action, suits,
charges, debts, demands and liabilities, both in law and in equity, including
without limiting the generality of the foregoing, claims, demands or actions for
wages, benefits, damages, attorney’s fees, or any other form of relief
available, and any rights or claims under Title VII of the Civil Rights Act of
1964, as amended; the Age Discrimination in Employment Act of 1967, 29 U.S.C.
§ 621 et seq., as amended by the Older Workers Benefit Protection Act (except
for such rights

 

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and claims arising after the date of execution of this Agreement); the
Vocational Rehabilitation Act of 1973, 29 U.S.C. § 701, as amended; the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., as amended;
the Americans With Disabilities Act; the Family and Medical Leave Act; the Fair
Labor Standards Act; and the state human rights laws of the state of New
Hampshire, including but not limited to New Hampshire RSA 354-A; as well as any
other federal, state, or local law, regulation, ordinance, judicial decision or
public policy; as well as any contract, tort or other claims, whether known or
unknown, which the Releasors now have, own or hold, or claim to have, own or
hold, or which the Releasors at any time heretofore had, owned or held, or
claimed to have had, owned or held against any Brookstone Releasees from the
beginning of the world to the Effective Date of this Agreement, except for
claims for breach of the terms of this Agreement. This shall be a full and final
release of all claims, known and unknown, foreseen and unforeseen, regardless of
the adequacy of the compensation or the extent or character of Employee’s
injuries and/or damages. Employee expressly acknowledge and assume all risk,
chance, or hazard that any injuries and/or damages may become permanent,
progressing, greater, or more extensive than is known, anticipated, or expected.

Further, to the fullest extent permitted by law, Employee, on behalf of himself
and all Releasors, agrees not to lodge any formal or informal complaint in
court, with any federal, state or local agency or any other forum, including
without limitation arbitration, in any jurisdiction, arising out of or related
to any claim described above. Employee hereby represents and warrants that he
has brought no complaint, claim, charge, action or proceeding against any of the
Brookstone Releasees in any jurisdiction or forum. Employee further represents,
warrants and agrees that he has not in the past and will not in the future
assign any claim to any person, corporation or other entity.

Execution of this Agreement by Employee operates as a complete bar and defense
against any and all of Employee’s claims against Employer and/or the other
Releasees. If Employee should hereafter make any claim in any charge, complaint,
action or proceeding against Employer or any other of the Releasees, this
Agreement may be raised as and shall constitute a complete bar to any such
action, claim or proceeding and Employer and/or the other Releasees shall be
entitled to and shall recover from Employee all costs incurred, including
attorney’s fees, in defending against any such charge, complaint, action, claim
or proceeding.

8. You agree to indemnify and hold Employer harmless from and against any and
all loss, costs, damages, or expenses, including reasonable attorney’s fees,
arising out of your breach of any of the terms in this Agreement, including,
without limitation, any amounts incurred by Employer in connection with any
attempt to enforce the terms of this Agreement against Employee.

9. You confirm that you have returned to Brookstone any and all Brookstone
property currently in your possession or control including, without limitation,
any Company vehicle, keys, access cards, computer equipment, telephones, credit
cards, Brookstone documents, policies, manuals, personnel files and any other
confidential materials and agree that you shall return any such property as
described in this section which you locate after the execution of this
Agreement.

10. You agree to cooperate with Brookstone at the request of Brookstone or its
counsel, upon reasonable notice, with respect to all matters arising out of or
during your employment at

 

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Brookstone including but not limited to cooperation in connection with any
judicial, administrative, or governmental investigation or proceeding.
Brookstone will reimburse to you those reasonable out-of-pocket expenses
incurred by you in performance of your obligations under this Section 10.

11. You covenant and agree not to disclose to anyone other than your immediate
family and your personal financial, tax and legal advisors any information
relating to the fact or contents of this Agreement, except that you may disclose
this Agreement to the Internal Revenue Service and/or the New Hampshire
Department of Employment Security if required by the applicable agency. You and
Brookstone further agree that you may disclose only Section 9 of this Agreement
and Sections 8 and 11 of the Employment Agreement to current or prospective
employers or other business affiliates to aid in the enforcement of those
sections. You likewise authorize Brookstone to disclose and provide copies of
these provisions to any of your current or prospective employers or other
business affiliates.

12. By signing this Agreement, you acknowledge that you:

 

  a. have read this Agreement;

 

  b. understand it is a legally binding agreement and that you were advised to
review it with legal counsel of your choice;

 

  c. have had, or have had the opportunity to take, twenty-one (21) calendar
days to discuss it with legal counsel of your choice before signing and that, if
you sign before the end of such period, you do so of your free will and with
full knowledge that you could have taken the full period;

 

  d. realize and understand that it applies to and covers all claims, demands,
and causes of action of any kind whatsoever, including those under the ADEA,
against Brookstone and the Brookstone Releasees, whether or not you know or
suspect them to exist at the present time; and

 

  e. understand (1) the terms of this Agreement, (2) that it is not part of an
exit incentive or other employment termination program being offered to a group
or class of employees, and (3) that your signing this Agreement is done
voluntarily and with the full understanding of its consequences and you have not
been forced or coerced in any way to do so.

13. You shall have a period of seven (7) calendar days after the date you sign
this Agreement to revoke and cancel it. Any revocation and cancellation must be
in writing, signed by you and received by Brookstone’s Vice President of Human
Resources before the close of business of the seventh (7th) calendar day
following the date you sign this Agreement. Consequently, the Agreement shall
have no force and effect until the expiration of seven (7) calendar days
following the day you sign it. As of the first business day following the
expiration of the seven-day revocation period the “Effective Date” of this
Agreement shall be the Effective Date under the Original Separation Agreement.

 

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14. Each of the parties agree to the following miscellaneous provisions:

 

  a. All written notices to be given hereunder, whether pursuant to this
Agreement or a provision of law, shall be given in person, by nationally
recognized overnight courier service, or by first class United States mail,
postage prepaid, return receipt requested, as follows and deemed received upon
the earlier of (i) when acknowledged to be received or (ii) five (5) business
days after mailing:

To Brookstone:    Brookstone, Inc.

                                Attn: Carol Lambert

                                Vice President Human Resources

                                One Innovation Way

                                Merrimack, New Hampshire 03054

With a copy to:        Kaye Scholer LLP

                                425 Park Avenue

                                New York, New York 10022

                                Fax: (212) 836-8689

                                Attn.: Stephen C. Koval, Esq.

                                           John D. Geelan, Esq.

To Employee:        Alexander M. Winiecki

                                12 Boylston Terrace

                                Amherst, NH 03031

 

  b. This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of law thereof. Any action or
proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against either of the parties in the
courts of the State of New Hampshire, or if it has or can acquire jurisdiction,
in the United States District Court for the State of New Hampshire, and each of
the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding referred to
in the preceding sentence may be served on any party anywhere in the world,
whether within or without the State of New Hampshire.

 

  c.

This Agreement constitutes our entire understanding and supersedes all prior
agreements between us, including, for the avoidance of doubt, the Original
Separation Agreement. The Company and Employee each agree that as of the
Effective Date, except as otherwise expressly and specifically provided for
herein, any other agreement entered into between any of the Company Entities and
the Employee shall be deemed null and

 

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void and of no further effect and superceded in all respects by this Agreement.

 

  d. No waiver of any rights caused by breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent, or subsequent breach of the
same or any other provisions hereof, and no waiver shall be effective unless
made in writing.

 

  e. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one
instrument.

 

  f. Should any provision of this Agreement be held invalid, illegal or
unenforceable, it shall be deemed to be modified so that its purpose can
lawfully be effectuated and the balance of this Agreement shall be enforceable
and remain in full force and effect.

 

  g. Any employment tax payable as a result of this Agreement shall be the sole
and exclusive responsibility of Employee. Employee acknowledges that the Company
has given him no tax advice as to the appropriate tax treatment of the
transactions described in this Agreement and that any taxes owing by Employee
are his sole responsibility. Employee hereby agrees to hold harmless and
indemnify the Company should it be determined by the IRS that any employment
taxes (and any interest and penalties related thereto) are due with respect to
the transactions described in this Agreement.

 

  h. This Agreement shall inure to the benefit of the parties hereto and their
respective successors, heirs, legatees and legal representatives.

15. The parties hereto hereby acknowledge and agree that nothing in this
Agreement shall affect the rights Employee has accrued under the Brookstone,
Inc. Pension Plan.

 

ALEXANDER M. WINIECKI

 

____________________________________________________

 

Date:________________________________________________

 

BROOKSTONE, INC.

 

By:   ______________________________________________

 

Name:_____________________________________________

 

Title:   _____________________________________________

 

Date:______________________________________________

 

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Solely with respect to Paragraph 6

 

OSIM BROOKSTONE HOLDINGS, L.P.

By: OSIM Brookstone Holdings, Inc.,

its general partner

By:  ______________________________________

        Name:

        Title:

Solely with respect to Paragraph 6.

 

BROOKSTONE HOLDINGS CORP.

By:  ______________________________________

        Name:

        Title:

 

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EXHIBIT A

 

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EXHIBIT B

FORM OF ASSIGNMENT

For valuable consideration, the receipt of which is hereby acknowledged,
Alexander M. Winiecki hereby [sells], assigns and transfers to
__________________ all of his right, title, benefit, privileges and interest in
and to the _____________________ (______) shares of [common stock] [Class A/B
Interests] of ____________ (the “Company”) standing in his name on the books of
the Company as of the date hereof.

Dated _____________, 2006

_______________________________________

Alexander M. Winiecki

 

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