SEPARATION AGREEMENT AND
RELEASE
This Separation
Agreement and Release (the “ Agreement ”) is
entered into by James C. Alling (“Alling”) and
Starbucks Corporation (“ Starbucks
”).
A. Alling has
been employed by Starbucks as president, Starbucks Coffee
International. Alling’s employment at Starbucks will
terminate on July 29, 2008 (the “ Separation Date
”).
B. Starbucks
and Alling enter this Agreement to clarify their respective rights
and responsibilities arising out of the conclusion of
Alling’s employment relationship, including Alling’s
reaffirmation of post-separation commitments arising under the
non-competition agreement between Starbucks and Alling (the “
Non-Competition Agreement ”) and the confidentiality
agreement set forth in Paragraph 7 (the “
Confidentiality Agreement ”).
NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises
contained below, it is agreed as follows:
1. Separation Date and Responsibilities. Alling’s
employment with Starbucks will end on July 29, 2008. Alling
thereafter will have no further duties or responsibilities to
Starbucks.
2. Compensation. Except as may be expressly provided
for in this Agreement, Alling agrees and acknowledges that he is
and shall be entitled to no further or additional compensation of
any kind after the Separation Date. If Alling signs this Agreement
and does not revoke it pursuant to Paragraph 18, Starbucks
will pay Alling the equivalent of twelve months of his base salary,
payable in a lump sum within ten days following the revocation
period set forth in Paragraph 18, subject to customary tax and
other withholdings.
Starbucks and
Alling agree that these payments are expressly conditioned on his
strict compliance with the terms of this Agreement, the
Non-Competition Agreement and the Confidentiality Agreement. Any
violation of any of these agreements, whether material or not,
shall result in (a) a forfeiture by Alling of any unpaid
compensation that might otherwise be owing to Alling pursuant to
this Paragraph 2, and (b) an obligation by Alling to
immediately repay to Starbucks any and all compensation previously
paid to Alling by Starbucks pursuant to this Paragraph 2.
Starbucks may, in addition, pursue whatever other rights or
remedies it may have against Alling, including, without limitation,
enforcing this Agreement, the Non-Competition Agreement or the
Confidentiality Agreement, through injunctive relief and/or seeking
an award of attorneys fees and costs.
3. Medical Coverage. Starbucks agrees to provide Alling
with a lump sum payment equal to the cost of COBRA continuation
coverage under the applicable Starbucks medical, dental and vision
programs for a period of twelve months, less applicable withholding
taxes. This payment may be used by Alling at his discretion to pay
for the post- employment continuation of medical, dental and/or
vision coverage pursuant to COBRA if Alling properly elects such
coverage. Alling agrees and acknowledges that he will be solely
responsible for remitting all COBRA payments, and will be solely
responsible for the cost of any additional COBRA coverage at the
standard COBRA rate and in accordance with the terms and conditions
of COBRA and the Starbucks COBRA procedures.
4. Outplacement Services. Starbucks will provide Alling
with twelve months of outplacement services (until July 29,
2009) through the firm of Lee Hecht Harrison, up to a maximum of
$14,000. Such services shall commence as of the Separation
Date.
5. Valid
Consideration. Alling and Starbucks agree that the offer of
compensation by Starbucks to Alling described in Paragraph 2
is not required by Starbucks policies or procedures or by any
pre-existing contractual obligation of Starbucks or by any statute,
regulation or ordinance, and is offered by Starbucks solely as
consideration for this Agreement.
6. Stock
Options and Other Compensation and Benefits. Alling
acknowledges and agrees that any vested options to acquire shares
of Starbucks common stock shall expire or be exercisable in
accordance with the terms and conditions of the applicable plan
documents, program documents and grant agreements. Alling agrees
that he will conduct any and all market transactions involving
Starbucks securities in compliance with the Starbucks Insider
Trading Policy and Blackout Procedures.
Alling’s
participation in all equity compensation, incentive compensation
and all other compensation and benefits plans, programs and
agreements shall terminate effective as of the Separation Date.
Alling acknowledges and agrees that he shall not be entitled to any
compensation and benefits after the Separation Date except as
specified in this Agreement or by the terms of the Starbucks 401(k)
Plan or Management Deferred Compensation Plan.
7. Post-Separation Commitments. Alling expressly
reaffirms his on-going duties and responsibilities under the
Non-Competition Agreement following the Separation Date.
In addition,
Alling agrees not to use, publish, misappropriate or disclose any
Confidential Information following the Separation Date, except as
expressly authorized in writing by Starbucks Board of Directors.
For this purpose “Confidential Information” shall have
the meaning set forth in the Non-Competition Agreement and
incorporated herein by reference. If Alling violates the agreement
set forth in this Paragraph 7, Starbucks and its successors
and assigns shall have (a) the right or remedy, in the event of a
breach or a
threatened
breach, to have the p
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