Exhibit 10.1


 


MEMORANDUM
OF AGREEMENT


 


Between Lawrence A. Rusinko and
Friendly Ice Cream Corporation


 


This acknowledges and documents our mutual agreement
concerning your separation from Friendly Ice Cream Corporation (“Friendly’s”),
effective May 31, 2005 (“Separation
Date”).  This Agreement will confirm
various matters concerning your separation from employment so that no
misunderstanding exists between you and Friendly’s.


 


I.                                         SALARY CONTINUATION


 


Friendly’s will continue to pay you semimonthly, until May 31,
2006, at your current base rate of pay (plus executive match and automobile
allowance).  The salary you receive will
be subject to appropriate statutory deductions and such other deductions
normally made for employees of Friendly’s.


 


From time to time after your separation, but during your
salary continuation period, you may be contacted with questions relating to
matters you have been involved with while employed by Friendly’s.  You agree to provide your complete
cooperation and make all pertinent information regarding these matters
available upon request, as well as be personally available, at mutually
convenient times, on an as-needed basis.


 


II.                                     VACATION


 


You will be paid for any earned and unused vacation time
(10 day maximum), as of your Separation Date, in accordance with Friendly’s
Vacation Policy.


 


III.                                 BENEFIT/RETIREMENT PLANS


 


You
will be eligible to participate in the medical/dental, short-term disability,
accidental death and dismemberment, long-term disability, Annual Incentive
Plan, 1997 Stock Option Plan, 2003 Incentive Plan and such other benefits plans
in which you may currently be enrolled only through your Separation Date, and
under the terms and conditions of these plans. 
Your group medical/dental insurance
ends on your last day of active work.  To
continue medical/dental coverage beyond your Separation Date, you must complete
a continuation of coverage (COBRA) application, which will be provided to
you.  It is your responsibility to make
all payments to the COBRA carrier.  If
you elect COBRA, Friendly’s will issue a check or checks to you in order for
you to pay for coverage through August 31, 2005.


 


IV.                                OUTPLACEMENT


 


To assist you in securing a new position, Friendly’s has
engaged the services of the nationally recognized outplacement firm of Lee
Hecht Harrison, Inc. for a period of six (6) months.  They will provide the following services at
any of their offices:


 


1.                                       Assistance with your skills analysis and
preparation of your resume;


 


2.                                       Training which covers critical job search techniques
and interviewing skills; and


 


3.                                       Individualized counseling for a six-month period.


 





















 


V.                                    LIFE INSURANCE


 


The life insurance coverage that has been provided to
you through Pacific Mutual Life Insurance Company is unaffected by your leaving
employment because it is your own personal policy.  Payments by Friendly’s on your behalf will
cease as of your Separation Date. 
Questions about coverage thereafter or about other matters related to
this policy should be referred to Ms. Karen Socola of the AYCO Corporation
at (518) 373-7725.


 


VI.                                FINANCIAL PLANNING


 


Friendly’s will pay for the cost of customary meetings
with an AYCO representative for the sole purpose of concluding your financial
planning services with AYCO, up through May 31, 2006, after which Friendly’s
will no longer pay for any further AYCO advisory services on your behalf.


 


VII.                            COVENANTS


 


In consideration of the terms set forth in this letter,
you agree to the following:


 


1.                                       You will forever refrain from disclosing or
confirming, either directly or indirectly, any information concerning
insurance, loss claims, loss payments, safety and health conditions, financial
condition, strategic planning or other confidential or non-public information
relating to Friendly’s or its subsidiaries, divisions, parents and affiliates,
and any of their agents, employees, directors and officers which you learned or
became aware of since the inception of your employment with Friendly’s except
for information which is generally known by the public, without Friendly’s
prior written consent.


 


2.                                       You will turn over to your supervisor all
originals and copies of any documents, manuals, plans, equipment, business
papers, computer diskettes or other materials relating to Friendly’s and its
subsidiaries, divisions, parents and affiliates, their agents, employees,
directors and officers which are in your control or possession within seven
days of the execution of this Agreement.


 


3.                                       You, on
behalf of yourself, your spouse, heirs, agents, attorneys, representatives and
assigns, hereby release and discharge forever all claims and causes of action
of every name and nature that have arisen or might have arisen at any time up
to and including the date on which you sign this Agreement (whether known or
unknown, accrued, contingent, or liquidated) that you now have or may have
against Friendly’s, any of its subsidiaries, divisions, parents and affiliates,
or any of the aforementioned entities’ agents, employees, directors, and
officers, including but not limited to, any claims relating to your employment
with Friendly’s and the termination thereof; any claims based on statute,
regulation, ordinance, contract or tort; any claims arising under the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”), or any other
federal, state, or local law relating to employment discrimination, harassment,
or retaliation; any claims relating to wages, compensation, or benefits; and
any related claims for attorney’s fees.


 


4.                                       You agree
not to file a lawsuit in any court of the United States or any State thereof


 


2





















 


concerning any matter released in
this Agreement.  Nothing in this
Agreement shall be interpreted to prohibit you from filing an age
discrimination claim with any anti-discrimination agency, or from participating
in an age discrimination investigation or proceeding conducted by any such
agency.  However, by signing this
Agreement, you acknowledge that you are waiving your right to money damages and
any other relief should any agency pursue claims on your behalf arising out of
or relating to your employment with and/or separation from Friendly’s.


 


5.                                       The parties agree to forever refrain from taking
any action or making any statement which brings discredit upon or disparages
the other party (including, with respect to Friendly’s, its services or
products, or any of its directors, officers, employees, or agents).


 


6.                                       If either party breaches any of the terms of this
Agreement, the non-breaching party may be entitled to recover from the
breaching party all costs, fees, and expenses (including attorney’s fees) as
may be awarded by a court of competent jurisdiction under applicable law and if
Friendly’s prevails as a non-breaching party, it will be entitled to set off
what it has paid you under this Agreement.


 


VIII.                        ENTIRE AGREEMENT


 


This is the entire agreement between us and any prior
agreements or understandings, whether oral or written, are entirely superseded
by this Agreement.  We each have
voluntarily accepted the terms as sufficient without reservation.  This Agreement may only be modified by a
written agreement signed by you and an officer of Friendly’s.


 


Should any provision of this Agreement be declared or
determined by any court to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby and said illegal part,
term or provision shall be deemed not to be a part of this Agreement.


 


Pursuant to its obligations under the ADEA, Friendly’s
advises you to consult with an attorney prior to executing this agreement.  You have 21 days from the date of receipt of
this document in which to consider this agreement.  In addition, you may revoke this agreement for
seven days following its execution, but only by delivering a written revocation
notice to Friendly’s Vice President of Human Resources.  This agreement shall not become effective or
enforceable until the seven-day revocation period has expired.


 


By signing this Agreement, you acknowledge that you have
read and fully understand all of its provisions and that you are signing it
voluntarily.  You also acknowledge that
you are not relying on any representations by any representative of Friendly’s
concerning the meaning of any aspect of this Agreement.


 


In the
event, after the execution of this Agreement but before all payments to you
have been made, Friendly’s determines that you have engaged in any fraudulent
or illegal activity related to Friendly’s not actually known to Friendly’s
prior to the execution of this Agreement, Friendly’s shall have the right to
terminate its remaining obligations under this Agreement, declaring it null and
void.


 


3





















 


Each
party hereto agrees that they are fully authorized and have all of the
requisite right, power, and authority to enter into this Agreement, which is
fully binding upon and enforceable against the respective parties hereto in
accordance with its terms.


 


This
Agreement is made and entered into in the Commonwealth of Massachusetts and
shall in all respects be interpreted, enforced, and governed by the laws of the
Commonwealth of Massachusetts.


 


If the above is in agreement with your understanding,
please sign and keep one copy of this document for your records and return one
copy to me.


 


 


	
  ACCEPTED AND AGREED TO AS OF THIS 31st DAY OF MAY, 2005.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ Garrett J Ulrich

  	
   

  
	
   

  	
  Garrett J. Ulrich

  
	
   

  	
  Vice President, Human
  Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   /s/ L A Rusinko

  	
   

  
	
   

  	
  Lawrence A. Rusinko

  



 


4