SEPARATION AND CONSULTING
AGREEMENT
THIS SEPARATION
AND CONSULTING AGREEMENT (this “Agreement”), effective
as of October 23, 2008, is made by and between Caribou Coffee
Company, Inc., (the “ Company ”) and Amy
O’Neil (“ Employee ”).
WHEREAS, Employee
was formerly the Company’s Senior Vice-President for Store
Operations; and
WHEREAS, the
Company and Employee are party to an Employment Agreement, dated
July 1, 2005 (the “ Employment Agreement
”);
WHEREAS, it is the
position of the Company that Employee resigned her employment with
the Company for a reason other than for Good Reason (as defined in
the Employment Agreement) effective October 23,
2008;
WHEREAS, it is the
position of Employee that her resignation was for Good Reason (as
defined in the Employment Agreement); and
WHEREAS, the
Company and Employee have agreed that while Employee’s
employment as the Senior Vice-President for Store Operations ended
on October 23, 2008, Employee shall be employed with the
Company in a consulting role as an employee for a transitional
period from October 23, 2008 to January 23, 2009 (the
“Transition Period”);
NOW, THEREFORE, in
consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties
hereby agree as follows:
A.
Employee and the Company acknowledge and agree that Employee
resigned her employment as the Senior Vice-President for Store
Operations pursuant to the Employment Agreement on October 23,
2008, and that the Employment Agreement is superseded, cancelled
and of no further effect, except as provided in Section 11 of
this Agreement.
B.
Employee hereby accepts new employment with the Company as an
employee pursuant to this Agreement and agrees to perform executive
and consulting services for the Company during the Transition
Period as reasonably requested by the Company’s Chief
Executive Officer, and shall continue to be paid Employee’s
former regular base salary ($265,282 per annum —
“Base Salary”) during the Transition Period. Employee
shall not be entitled and waives any right to any other
compensation (including, without limitation, any bonuses or any
similar or other payments) during the Transition Period or
thereafter, except as provided herein. The Transition Period shall
end on January 23, 2009, and may be shortened by the Company
in its sole discretion, and the amount and extent of
Employee’s duties may fluctuate (or be reduced to zero)
during the Transition Period, but Employee’s right to receive
the Base Salary shall continue through the entire Transition Period
provided that Employee is in compliance with this Agreement and any
other agreements between Employee and the Company. If Employee
ceases to perform services during the Transition Period, and as a
result, the Company determines that the Employee has incurred a
“Separation from Service” (within the meaning of
Section 409A of the Internal Revenue Code), any remaining
payments owed under this subsection 1.B. shall not be paid until
the date which is six
(6) months
and one day after the date of such Separation from Service. Any
payment resulting from a “Separation from Service”
prior to January 23, 2009 shall be paid independently from any
amounts due Employee under Section 2 of this Agreement. For
the purposes of clarity, Employee is considered a “specified
employee” for the purposes of Section 409A of the
Internal Revenue Code.
C.
Subject to the terms set forth in Employee’s Stock Option
Agreements, Employee shall have ninety (90) days from the end
of the Transition Period on January 23, 2009, to exercise all
options vested on such date. In the event Employee incurs a
separation from service prior to the end of the Transition Period
contemplated to be January 23, 2009, Employee shall have
ninety (90) days from the date of such separation from service
to exercise all options vested on such date. All options not vested
on the end of the Transition Period are immediately and
automatically be forfeited on such date.
D.
During the Transition Period, Employee shall be eligible for the
same benefits as are made available to other senior executive
employees of the Company (other than equity awards, including
without limitation, any stock options) , as well as such
other benefits as may be specified from time to time by the
Company. Currently Employee is enrolled in the Company medical,
dental, 401K plan, basic life, supplemental life, long term
disability and short-term disability programs and may continue to
be enrolled in such programs as an employee throughout the
Transition Period. The Company reserves the right at any time and
from time to time to change, amend, or terminate any such benefits
as the Company in its discretion deems appropriate or necessary
under the circumstances.
E.
Employee shall be eligible to continue to accrue pooled leave
during the Transition Period consistent with any other employee.
Company shall pay Employee all earned and unused pooled leave as of
the last day of the Transition Period which is contemplated to be
January 23, 2009, but which may be an earlier date as provided
in Section 1. B. Such earned and unused pooled leave shall be
paid on the date of the first normal payroll cycle following the
end of the Transition Period. As of October 23, 2008 Employee
has accrued and unused pooled leave equal to 200 hours, which is
the maximum amount of pooled leave an employee may accrue under the
Company pooled leave policy.
2.
Additional Consideration. In consideration for Employee
entering into this Agreement, and provided that Employee complies
with the terms and conditions hereof (including, without
limitation, the obligation under Section 1.B to perform
services throughout the Transition Period and Employee’s
obligations under certain surviving provisions of the Employment
Agreement, as referenced in Section 11, below), and provided
that Employee executes a second release in the form attached hereto
as Exhibit A (the “Second Release”), the Company
agrees to pay Employee the gross amount of $221,068 (less
applicable withholdings) following the later of (i) the
termination or expiration of the Transition Period;
(ii) Employee’s signing the Second Release,
(iii) the expiration of any revocation periods contained in
the Second Release and (iv) Employee’s “separation
from service” (within the meaning of Section 409A of the
Code); provided, however , to comply with the
restriction in Section 409A of the Code concerning payments to
specified employees, the payment to Employee pursuant to this
Paragraph 2 shall be made at least six months and one day
after Employee’s “separation from service”
(within the meaning of section 409A of the Code). The gross payment
of $221,068 described above shall be made in two lump sum payments,
the first of which in the amount of $132,640 (less applicable
withholdings) is to be paid on July 24, 2009, and the second
payment of $88,428 (less applicable withholdings) is to be paid on
November 23, 2009. The Company and Employee intend that the
payments made pursuant to Paragraph 1.B after Employee has a
Separation from Service and that the payments made pursuant to this
Paragraph 2 comply with the requirements of Section 409A
of the Code and this Agreement shall be construed to effect such
intent. The Company shall report the payments to the Internal
Revenue Service and Employee in a manner consistent with this
intent.
3.
Release . Employee, on her behalf and on behalf of her
heirs, executors, administrators, trustees and assigns hereby
fully, knowingly and voluntarily, releases and forever discharges
the Company and the Company’s past and present agents,
representatives, employees, officers, directors, affiliates,
controlling persons, stockholders, subsidiaries, successors and
assigns (collectively, the “ Releasees ”),
collectively, separately, and severally, from or for any and all
state, local or federal claims, causes of action, liabilities, and
judgments of every type and description whatsoever, known and
unknown
(including, but
not limited to, claims arising under Title VII of the Civil Rights
Act of 1964, as amended; the Rehabilitation Act of 1973, as
amended; the Employee Retirement Income Security Act of 1974, as
amended; the Fair Labor Standards Act of 1938, as amended; the
Americans with Disabilities Act; the Minnesota Human Rights Act;
Minn. Stat. § 181.81; the Minneapolis Code of Ordinances;
wrongful discharge; violation of Minn. Stat. § 176.82; breach
of contract; tortious interference with contractual relations;
promissory estoppel; breach of the implied covenant of good faith
and fair dealing; breach of express or implied promise; breach of
manuals or other policies; assault; battery; fraud; false
imprisonment; invasion of privacy; intentional or negligent
misrepresentation; defamation, including libel, slander, discharge
defamation and self-publication defamation; discharge in violation
of public policy; whistleblower claims; intentional or negligent
infliction of emotional distress; or any other theory, whether
legal or equitable) which she, her heirs, administrators,
executors, personal representatives, beneficiaries, and assigns may
have or claim to have against Releasees related to Employee’s
employment or the termination thereof. Employee warrants that
Employee has been provided all leave under the Family and Medical
Leave Act to which she is or may have been entitled, and that the
Company has not interfered with her rights thereunder. Employee
specifically waives the benefit of any statute or rule of law
which, if applied to this Agreement, would otherwise exclude from
its binding effect any claims not now known by her to exist.
Notwithstanding this release provision, or any other provision or
section of this Agreement, Employee does not waive or release any
claims to enforce this Agreement.
4. Employee
also hereby knowingly and voluntarily releases and discharges
Releasees, collectively, separately and severally, from or for any
and all liability, claims, allegations, and causes of action
arising under the Age Discrimination in Employment Act of 1967, as
amended (“ADEA”), which Employee, Employee’s
heirs, administra
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