EXHIBIT 10.11
CARIBOU COFFEE COMPANY, INC.
EMPLOYMENT AGREEMENT
FOR
XXXXXX X. XXXXXXXXX
This is an Employment Agreement ("Agreement") entered into between Caribou
Coffee Company, Inc., a Minnesota corporation (the "Company"), and Xxxxxx X.
Xxxxxxxxx, a resident of the State of Minnesota ("Employee"), the terms and
conditions of which are as follows:
Section 1 EFFECTIVE DATE AND TERM OF EMPLOYMENT
This Agreement shall be effective on July 1, 2005 (the "Effective Date").
Subject to the terms and conditions set forth in this Agreement, the Company
agrees to employ Employee and Employee agrees to be employed by the Company for
the period which starts on the Effective Date and ends on the second anniversary
of such date; provided, however, this initial two year term automatically shall
extend for one additional year on such second anniversary date and on each
subsequent anniversary of such date unless the Company or Employee notifies the
other pursuant to Section 6.1 that no such extension will be effected at least
90 days before such anniversary date. The employment term described in this
Section 1 shall be referred to in this Agreement as the "Term".
Section 2 TITLE, DUTIES AND RESPONSIBILITIES AND POWERS AND WORK SITE
2.1. Title. Employee's title on the Effective Date shall be Chief
Financial Officer.
2.2. Duties and Responsibilities and Powers. Employee shall have such
responsibilities, duties, and authorities as are assigned to him by the Chief
Executive Officer in consultation with the Company's Board of Directors (the
"Board"); provided that all such services and functions shall be reasonable,
consistent with the position of Chief Financial Officer, and within Employee's
area of expertise. Employee shall fulfill his duties and responsibilities in a
reasonable and appropriate manner and in compliance with the Company's policies
and practices and the laws and regulations that apply to the Company's operation
and administration. Employee shall devote his full business time and attention
to the business and affairs of the Company and shall not be engaged in or
employed by any other business enterprise without the written approval of the
Board; provided, however, Employee shall be permitted to continue his activities
with the organizations listed on Exhibit B.
2.3. Outside Activities. Employee shall have the right to serve on the
board of directors of business, civic and charitable organizations as long as
doing so has, in the judgment of the Board, no significant and adverse affect on
the performance of his duties and responsibilities or the exercise of his powers
under this Agreement.
Employee shall not be engaged in or employed by any other business enterprise
(other than those listed on Exhibit B) without the written approval of the
Board.
Section 3 COMPENSATION AND BENEFITS
3.1. Base Salary. Employee's gross annual base salary ("Base Salary") on
the Effective Date shall be Two Hundred Seventy-Five Thousand Dollars ($275,000)
per year, which Base Salary shall continue to be payable in accordance with the
Company's standard payroll practices and policies and shall be subject to such
withholdings as required by law or as otherwise permissible under such practices
or policies. Employee's base salary shall be subject to annual review by the
Board (or its compensation committee).
3.2. Annual Bonus. Employee shall be eligible for a target annual bonus
each fiscal year of fifty percent (50%) of his average Base Salary for such year
as determined by the Board (or its compensation committee) based upon Company
financial and other goals to be approved by the Board (or such committee) with
each such target annual bonus payable within 75 days of the end of the
applicable fiscal year; provided, however, that in 2005 Employee shall be
entitled additionally to a portion of the 2005 Supplemental Bonus Plan available
to certain vice-presidents; provided further, however, that any such bonus paid
pursuant to the 2005 Supplemental Bonus Plan shall not apply for purposes of
Section 6.2(b)(2) of this Agreement and Section 1(a) of Exhibit A.
3.3. Option Stock. As of the Effective Date, the Company shall grant
Employee an option to purchase 50,000 shares of Company stock at an exercise
price of $13.17 per share. This option shall vest over a four (4) year period,
25% in each year, in four equal annual installments, beginning on the first
anniversary of the Effective Date, provided Employee is still employed by the
Company on each such anniversary date.
3.4. Employee Benefit Plans, Programs and Policies. Employee shall be
eligible to participate in the employee benefit plans, programs and policies
maintained by the Company for the Company's similarly situated senior executives
subject to the terms and conditions set forth in such plans, programs and
policies.
Section 4 EXPENSE REIMBURSEMENT
The Company, consistent with its business expenses and reimbursement
policy, shall reimburse Employee for (or, at the Company's option, pay) all
business travel and other out-of-pocket expenses reasonably incurred by Employee
in the performance of his services during the Term. All reimbursable expenses
shall be appropriately documented in reasonable detail by Employee upon
submission of any request for reimbursement, and in a format and manner
consistent with the Company's business expense reporting and reimbursement
policies and applicable federal and state tax recordkeeping requirements. At the
Employee's discretion, reasonably incurred expenses shall from time-to-time
include first class air travel.
-2-
Section 5 PLACE OF PERFORMANCE
Unless otherwise determined by the Board, Employee shall carry out his
duties and responsibilities principally in and from the Brooklyn Center,
Minnesota Company headquarters.
Section 6 TERMINATION OF EMPLOYMENT; RIGHTS ON TERMINATION
6.1. General. The Company shall have the right to terminate Employee's
employment at any time, and Employee shall have the right to resign at any time.
However, any notice to the effect that there will be no extension of this
Agreement pursuant to Section 1 shall not constitute a termination of Employee's
employment or a resignation by Employee under Section 6 of this Agreement.
6.2. Termination By The Company Other Than For Cause Or Disability Or By
Employee For Good Reason.
(a) If the Company terminates Employee's employment other than for
Cause (as defined in Section 6.2(c)) or a Disability (as defined in
Section 6.2(d)) before the end of the Term or Employee resigns for Good
Reason (as defined in Section 6.2(e)) before the end of the Term, the
Company shall pay Employee's then Base Salary and bonus, if any, which
were due and payable on the date Employee's employment terminated.
(b) If the Company terminates Employee's employment other than for
Cause (as defined in Section 6.2(c)) or a Disability (as defined in
Section 6.2(d)) before the end of the Term or Employee resigns for Good
Reason (as defined in Section 6.2(e)) before the end of the Term and
Employee signs the general release in substantially the form attached as
Exhibit A, the Company (in lieu of any severance pay under any severance
pay plans, programs or policies) in addition to the payments described in
Section 6.2(a) shall within 60 days of such termination of employment make
a cash lump sum payment equal to one and one-half times:
(1) Employee's Base Salary as in effect on the date Employee's
employment terminates in accordance with the Company's normal
payroll practices, and
(2) the most recent annual bonus paid to Employee by the
Company,
provided, however, that if Employee is a "specified employee" as defined in
Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the
"Code") at the time Employee has a "separation from service" as defined in Code
Section 409A(a)(2)(A)(i), the Company shall not make any payments provided by
this Section 6.2(b) before the date which is six (6) months after the date of
Employee's separation from service (or, if earlier, the date of the death of
Employee).
-3-
(c) Cause. The term "Cause" as used in this Agreement shall mean:
(1) Employee is convicted of, pleads guilty to, or confesses
or otherwise admits to any felony or any act of fraud, dishonesty or
misconduct with respect to, or disparagement of, the business
affairs of the Company;
(2) Employee knowingly engages in any act or course of conduct
or knowingly fails to engage in any act or course of conduct which
is reasonably likely to adversely affect the Company's business;
(3) There is any act or omission by Employee involving
malfeasance or negligence in the performance of Employee's material
duties and responsibilities under Section 2 or the exercise of
Employee's powers under Section 2;
(4) (a) Employee breaches any of the provisions of this
Agreement or (b) Employee violates any Company policy or code of
conduct if the consequence to such violation for any employee
subject to such policy or code of conduct ordinarily would be a
termination of his or her employment by the Company; or
(5) Employee fails to implement and monitor the requirements
of the Xxxxxxxx-Xxxxx Act of 2002.
(d) Disability. The term "Disability" as used in this Agreement
means any physical or mental condition which renders Employee unable even
with reasonable accommodation by the Company to perform the essential
functions of Employee's job for at least a one hundred and eighty (180)
consecutive day period and which makes Employee eligible to receive
benefits under the Company's long term disability plan as of the date the
Employee's employment terminates.
(e) Good Reason. The term "Good Reason" as used in this Agreement
shall mean:
(1) A material reduction in Employee's position, authority,
duties or responsibilities;
(2) A reduction in Employee Base Salary under Section 3.1;
(3) A failure by the Company to maintain or substitute a
benefit program that is material to Employee's overall compensation;
(4) The Company transfers Employee's primary work site more
than 50 miles (measured along a straight line) from 0000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxx 00000, Employee's primary work
site on the Effective Date, or, if Employee subsequently consents in
-4-
writing to such a transfer under this Agreement, from the primary
work site which was the subject of such consent, to a new primary
work site which is more than 50 miles (measured along a straight
line) from Employee's then current primary work site unless such new
primary work site is closer (measured along a straight line) to
Employee's primary residence than Employee's then current primary
work site; or
(5) A material breach of the terms or conditions of this
Agreement by the Company which the Company fails to promptly correct
within 30 days after Employee gives written notice of such failure
to the Chairman of the Board.
6.3. Termination By The Company For Cause or By Employee Other Than For
Good Reason. If the Company terminates Employee's employment for Cause or
Employee resigns other than for Good Reason, the Company's only obligation to
Employee under this Agreement shall be to pay Employee's Base Salary and bonus,
if any, which were due and payable on the date Employee's employment terminated.
6.4. Termination for Disability or Death.
(a) General. The Company shall have the right to terminate
Employee's employment on or after the date Employee has a Disability, and
Employee's employment shall terminate at Employee's death.
(b) Base Salary and Bonus. If Employee's employment terminates under
this Section 6.4, the Company's only obligation under this Agreement shall
be to pay Employee or, if Employee dies, Employee's estate, the Base
Salary and bonus, if any, which were due and payable on the date
Employee's employment terminated.
6.5. Accrued Obligations and Other Benefits. Employee upon Employee's
termination of employment for any reason provided under this Agreement shall
have the right to receive any benefits payable under the Company's employee
benefit plans, programs and policies which Employee otherwise has a
nonforfeitable right to receive under the terms of such plans, programs and
policies independent of Employee's rights under this Agreement; however, if a
payment is made to Employee under Section 6.2, such payment shall be in lieu of
any severance pay under any severance pay plan, program or policy. No other
compensation or benefits will be due or payable to Employee subsequent to
termination, except as provided by law or this Agreement.
6.6. Provisions that Survive Termination of Agreement. All rights and
obligations of the Company and Employee under this Agreement shall cease as of
the effective date of a termination of Employee's employment, except that (i)
the Company's obligations under this Section 6 shall survive such termination in
accordance with its terms and (ii) Employee's obligations under Sections 8, 16,
and 17 shall survive such termination in accordance with their terms.
-5-
6.7. Right to Offset. In the event of any termination of Employee's
employment under this Agreement for any reason, the Company's obligation to make
any payments under this Agreement shall be subject to offset for, among other
items, any loans or other obligations that Employee has to the Company. All
payments and benefits payable under this Agreement are gross payments subject to
applicable withholdings.
6.8. Limitation on 280G Compensation; Gross Up Payment for Golden
Parachute Excise Taxes Before a Qualified Public Offering. All payments and
compensation paid or payable to or for the benefit of Employee (whether paid or
payable pursuant to the terms of this Agreement or otherwise) that are payable
before a Qualified Public Offering as that term is defined in the Caribou Coffee
Company, Inc. 2001 Stock Option Plan ("2001 Stock Option Plan") and that would
be included in the calculation of a "parachute payment" to Employee as defined
in Code Section 280G(b)(2) are referred to in this Section 6.8 as "280G
Compensation." The amount equal to three times Employee's "base amount" (as
defined in Code Section 280G(b)(3)), less one hundred dollars ($100.00), shall
be referred to in this Section 6.8 as the "280G Limit."
Regardless of the outcome of the shareholder vote described below in this
Section 6.8, Employee will be entitled to receive the amount of 280G
Compensation that does not exceed the 280G Limit. In accordance with the
shareholder approval requirements of Code Section 280G(b)(5), the Company may
seek shareholder approval with respect to Employee's right to receive the amount
of 280G Compensation, if any, that exceeds the 280G Limit. If such shareholder
approval is not obtained, Employee shall not be entitled to receive the amount
of 280G Compensation, if any, that exceeds the 280G Limit.
If the foregoing shareholder approval is obtained and payment of the 280G
Compensation is made, and following such payment it is determined by the
Company's independent accountants or the Internal Revenue Service that the
shareholder approval requirements of Code Section 280G(b)(5) were not satisfied
or for any other reason an excise tax would be assessed with respect to some or
all of the 280G Compensation under Code Section 4999, Employee agrees to repay
to the Company, or its successor, upon demand the amount of 280G Compensation
which he received that exceeds the 280G Limit but shall not be required to repay
more than $50,000. Employee's obligation to repay 280G Compensation up to
$50,000 shall not apply unless the repayment would reduce the amount of 280G
Compensation below the 280G Limit. If the repayment of the 280G Compensation as
described herein would not avoid the assessment of an excise tax under Code
Section 4999, Employee shall be entitled to retain the 280G Compensation and
receive a Gross Up Payment (as defined herein) from the Company or its successor
promptly after either: (i) the Company's independent accountants determine that
any payments and benefits called for under this Agreement together with any
other payments and benefits made available to Employee by the Company and any
other person will result in Employee's being subject to an excise tax under Code
Section 4999, or (ii) such an excise tax is assessed against Employee, and the
Employee takes such action (in addition to any repayment of 280G Compensation as
provided herein) as the Company reasonably requests under the circumstances to
mitigate or challenge such excise tax.
-6-
The term "Gross Up Payment" as used in this Agreement shall mean a payment
to or on behalf of Employee which shall be sufficient to pay (i) 100% of any
excise tax described in this Section 6.8, (ii)100% of any federal, state and
local income tax and social security and other employment tax on the payment
made to pay such excise tax as well as any additional excise or other taxes on
such payment, and (iii) 100% of any interest or penalties assessed by the
Internal Revenue Service on Employee which are related to the timely payment of
such excise tax (unless such interest or penalties are attributable to
Employee's willful misconduct or negligence with respect to such timely
payment).
Any determinations under Sections 6.8 and 6.9 shall be made in accordance
with Code Section 280G and any applicable related regulations (whether proposed,
temporary or final) and any related Internal Revenue Service rulings and any
related case law. If the Company reasonably requests that Employee take action
to mitigate or challenge, or to mitigate and challenge, any such tax or
assessment (in addition to any repayment of 280G Compensation as provided
herein), the Company or its successor shall provide Employee with such
information and such expert advice and assistance from the Company's independent
accountants, lawyers and other advisors as Employee may reasonably request and
shall pay for all expenses incurred in effecting such compliance and any related
fines, penalties, interest and other assessments.
6.9. Limitation on Post QPO 280G Compensation; Gross Up Payment for
Golden Parachute Excise Taxes After a Qualified Public Offering. All payments
and compensation paid or payable to or for the benefit of Employee (whether paid
or payable pursuant to the terms of this Agreement or otherwise) that are
payable after a Qualified Public Offering ("Post QPO") and that would be
included in the calculation of a "parachute payment" (as defined in Code Section
280G(b)(2)) to Employee are referred to in this Section 6.9 as "Post QPO 280G
Compensation." The amount equal to three times Employee's "base amount" (as
defined in Code Section 280G(b)(3)), less one hundred dollars ($100.00), shall
be referred to in this Section 6.9 as the "Post QPO 280G Limit."
If payment of the Post QPO 280G Compensation is made, and following
such payment it is determined by the Company's independent accountants or the
Internal Revenue Service that an excise tax would be assessed with respect to
some or all of the Post QPO 280G Compensation under Code Section 4999, Employee
agrees to repay to the Company, or its successor, upon demand the amount of Post
QPO 280G Compensation which he received that exceeds the Post QPO 280G Limit but
shall not be required to repay more than $50,000. Employee's obligation to repay
Post QPO 280G Compensation up to $50,000 shall not apply unless the repayment
would reduce the amount of Post QPO 280G Compensation below the Post QPO 280G
Limit. If the repayment of the Post QPO 280G Compensation as described herein
would not avoid the assessment of an excise tax under Code Section 4999,
Employee shall be entitled to retain the Post QPO 280G Compensation and receive
a Gross Up Payment from the Company or its successor promptly after either: (i)
the Company's independent accountants determine that any payments and benefits
called for under this Agreement together with any other payments and benefits
made available to Employee by the Company and any other person will result in
Employee's being subject to an excise tax
-7-
under Code Section 4999, or (ii) such an excise tax is assessed against
Employee, and the Employee takes such action (in addition to any repayment of
Post QPO 280G Compensation as provided herein) as the Company reasonably
requests under the circumstances to mitigate or challenge such excise tax.
Section 7 ACCELERATION OF EQUITY AWARDS
Contemporaneously with the occurrence of a Change of Control (as defined
below), the Board (or its compensation committee) will accelerate, if not
automatically accelerated pursuant to the terms of the awards, all outstanding
stock option and restricted stock grants previously granted to Employee under
any then existing Company stock option, stock appreciation, or other employee
equity incentive plan that are not otherwise exercisable by Employee at the time
the Change of Control occurs. "Change of Control" shall have the meaning
assigned the term "Change of Control Event" in the 2001 Stock Option Plan as in
effect on the Effective Date.
Section 8 COVENANTS BY EMPLOYEE
8.1. Company Property.
(a) General. Employee upon the termination of Employee's employment
for any reason or, if earlier, upon the Company's request shall promptly
return all Property (as defined in Section 8.1(b)) which had been
entrusted or made available to Employee by the Company and, if any copy of
any such Property was made by, or for, Employee, each and every copy of
such Property.
(b) Property. The term "Property" means all records, designs,
patents, business plans, financial statements, manuals, memoranda,
customer lists, customer databases, and other property delivered to or
compiled by Employee by or on behalf of the Company (including the
respective subsidiaries thereof) or its representatives, vendors or
customers which pertain to the Business of the Company (as defined in
Section 8.5(b)(3)) (including the respective subsidiaries thereof) shall
be and remain the property of the Company, and be subject at all times to
its discretion and control.
8.2. Trade Secrets.
(a) General. Employee agrees that Employee will hold in a fiduciary
capacity for the benefit of the Company, and will not directly or
indirectly use or disclose to any person not authorized by the Company,
any Trade Secret (as defined in Section 8.2(b)) of the Company that
Employee may have acquired (whether or not developed or compiled by
Employee and whether or not Employee is authorized to have access to such
information) during the term of, and in the course of, or as a result of
Employee's employment by the Company for so long as such information
remains a Trade Secret.
(b) Trade Secret. The term "Trade Secret" for purposes of this
Agreement means information, including, but not limited to, technical or
-8-
nontechnical data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data, financial plans,
product plans, or a list of actual or potential customers or suppliers that (a)
derives economic value, actual or potential, from not being generally known to,
and not being generally readily ascertainable by proper means by, other persons
who can obtain economic value from its disclosure or use and (b) is the subject
of reasonable efforts by the Company and its affiliates to maintain its secrecy.
(c) Additional Rights. This Section 8.2 is intended to provide rights to
the Company which are in addition to, not in lieu of, those rights the Company
has under the common law or applicable statutes for the protection of trade
secrets.
8.3. Confidential Information.
(a) General. Employee while employed under this Agreement and thereafter
during the Restricted Period (as defined in Section 8.4) shall hold in a
fiduciary capacity for the benefit of the Company, and shall not directly or
indirectly use or disclose to any person not authorized by the Company, any
Confidential Information (as defined in Section 8.3(b)) of the Company that
Employee may have acquired (whether or not developed or compiled by Employee and
whether or not Employee is authorized to have access to such information) during
the term of, and in the course of, or as a result of Employee's employment by
the Company.
(b) Confidential Information. The term "Confidential Information" for
purposes of this Agreement means any secret, confidential or proprietary
information possessed by the Company relating to its business, including,
without limitation, customer lists, details of client or consultant contracts,
current and anticipated customer requirements, pricing policies, price lists,
market studies, business plans, operational methods, marketing plans or
strategies, product development techniques or flaws, computer software programs
(including object codes and source codes), data and documentation, data, base
technologies, systems, structures and architectures, inventions and ideas, past,
current and planned research and development, compilations, devices, methods,
techniques, processes, future business plans, licensing strategies, advertising
campaigns, financial information and data, business acquisition plans and new
personnel acquisition plans (not otherwise included in the definition of a Trade
Secret under this Agreement) that has not become generally available to the
public by the act of one who has the right to disclose such information without
violating any right of the Company.
(c) Additional Rights. This Section 8.3 is intended to provide rights to
the Company which are in addition to, not in lieu of, those rights the Company
has under the common law or applicable statutes for the protection of
confidential information.
-9-
8.4. Restricted Period. The term "Restricted Period" for purposes of this
Agreement shall mean the eighteen (18) consecutive month period which begins on
the date Employee's employment terminates for any reason.
8.5. Noncompetition and Nonsolicitation of Customers or Employees.
(a) During the Restricted Period, Employee shall not, either
directly or indirectly, for himself or on behalf of or in conjunction with
any other person, company, partnership, corporation, business, group, or
other entity (each, a "Person"):
(i) engage, within the Territory, as an officer, director,
owner, partner, member, joint venturer, or in a senior managerial capacity
(whether as an employee, independent contractor, or consultant), in any
business engaged in the Business of the Company, notwithstanding anything
in this Section 8.5 to the contrary, nothing herein shall prohibit
Employee from owning or acquiring a passive investment of five percent
(5%) or less of the outstanding capital stock of a publicly held
corporation or organization engaged in the Business of the Company in the
Territory, provided that Employee does not, directly or indirectly,
participate in the management or operation of such publicly held
corporation or organization; or
(ii) solicit or attempt to solicit, recruit or attempt to
recruit any employee, agent, or contract worker of the Company or the
Associated Companies (as defined below) for the purpose of terminating or
limiting such individual's relationship with the Company or the Associated
Companies with whom Employee had contact during the course of his
employment with the Company; or
(iii) solicit or attempt to solicit any business of the
Company from any Person who, as of the date of the solicitation or
attempted solicitation or within twelve (12) months prior to that date, is
or was a commercial customer of the Company, with whom Employee had
contact (through sales calls, presentations, or other business dealings)
during the course of employment with the Company; or
(iv) solicit or attempt to solicit, recruit or attempt to
recruit any employee, agent, or contract worker of a material supplier of
the Company who, as of or within the prior twelve (12) months is or was a
material supplier of the Company with whom Employee had contact through
business dealings during the course of his employment with the Company.
(b) For purposes of Section 8.5.
(1) References to "the Territory" shall mean the 5 mile radius
surrounding each store owned, licensed or franchised by the Company
or Associated Companies as listed on the Company's website,
xxxxxxxxxxxxx.xxx (or any successor website), including stores under
-10-
construction, locations which the Company is negotiating to lease,
acquire or develop for a store and locations where the Company is
actively considering opening a store at the time of Employee's
termination.
(2) References to "the Associated Companies" shall mean the
Company's direct and indirect subsidiaries and any company in which
the Company has a twenty percent or greater ownership interest.
(3) References to "the Business of the Company" shall mean the
operation of retail coffee shops, the retail sale of coffee products
in stores or online, commercial office coffee service and the
wholesale distribution of coffee products for retail, institutional
and commercial markets.
(c) The covenants in this Section 8.5 are severable and separate,
and the unenforceability of any specific covenant shall not affect the
provisions of any other covenant. If any provision of this Section 8.5
relating to the time period, scope, or geographic areas of the restrictive
covenants shall be declared by a court of competent jurisdiction to exceed
the maximum time period, scope, or geographic area, as applicable, that
such court deems reasonable and enforceable, then this Agreement shall
automatically be considered to have been amended and revised to reflect
such determination.
(d) All of the covenants in this Section 8.5 shall be construed as
an agreement independent of any other provisions in this Agreement, and
the existence of any claim or cause of action Employee may have against
the Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of such covenants.
(e) Employee has carefully read and considered the provisions of
this Section 8.5 and, having done so, agrees that the restrictive
covenants in this Section 8.5 impose a fair and reasonable restraint on
Employee and are reasonably required to protect the interests of the
Company and its officers, directors, employees, and stockholders. The
Company in addition shall have the right to take such other action as the
Company deems necessary or appropriate to compel compliance with the
provisions of this Section 8.
8.6. Remedy for Breach. Employee agrees that the remedies at law of the
Company for any actual or threatened breach by Employee of the covenants in this
Section 8 would be inadequate and that the Company shall be entitled to specific
performance of the covenants in this Section 8, including entry of an ex parte,
temporary restraining order in state or federal court, preliminary and permanent
injunctive relief against activities in violation of this Section 8 or both, or
other appropriate judicial remedy, writ or order, in addition to any damages and
legal expenses which the Company may be legally entitled to recover. Employee
acknowledges and agrees that the covenants in this Section 8 shall be construed
as agreements independent of any other provision of this or any other agreement
between the Company and Employee, and that the existence of any claim or
-11-
cause of action by Employee against the Company, whether predicated upon this
Agreement or any other agreement, shall not constitute a defense to the
enforcement by the Company of such covenants. In the event Employee violates the
provisions in this Section 8, he shall immediately repay any payments made to
him under Section 6.2(b) and Employee shall forfeit his right to any additional
payments to be made to him under Section 6.2(b); provided, however, if Employee
violates Section 8.3 or Section 8.5 but does not violate any of the other
provisions on this Section 8, his obligation to repay any payments made to him
under Section 6.2(b) shall be limited to a fraction of the total amount of such
bonuses and other payments paid, where the numerator of the fraction equals the
number of days remaining in the Restricted Period when he first violates Section
8.3 or Section 8.5, and the denominator equals 547.
Section 9 NOTICES
Notices and all other communications shall be in writing, be deemed
to have been duly given when personally delivered or when mailed by United
States registered or certified mail and addressed to:.
To the Company: Caribou Coffee Company, Inc.
Attn: Chief Executive Officer
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Arcapita, Inc.
Attn.: Xx. Xxxxxxx X. Xxxxxx
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
To Employee: Xx. Xxxxxx X. Xxxxxxxxx
Caribou Coffee Company, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to: Xx. Xxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxx 00000
Telephone No.: (000) 000-0000
-12-
Section 10 NO WAIVER
Except for the notice described in Section 9, no failure by either
the Company or Employee at any time to give notice of any breach by the other
of, or to require compliance with, any condition or provision of this Agreement
shall be deemed a waiver of any provisions or conditions of this Agreement.
Section 11 CHOICE OF LAW AND COURTS
This Agreement shall be governed by Minnesota law (except to the
extent that its choice of law provisions would call for the application of the
law of another jurisdiction), and (subject to Section 15) any action that may be
brought by either the Company or Employee involving the enforcement of this
Agreement or any rights, duties, or obligations under this Agreement, shall be
brought exclusively in the state or federal courts sitting in Minneapolis,
Minnesota, and Employee consents and waives any objection to personal
jurisdiction and venue in these courts for any such action.
Section 12 ASSIGNMENT AND BINDING EFFECT
This Agreement shall be binding upon and inure to the benefit of the
Company and any successor to all or substantially all of the business or assets
of the Company. The Company may assign this Agreement to any affiliate or
successor, and no such assignment shall be treated as a termination of
Employee's employment under this Agreement. Employee's rights and obligations
under this Agreement are personal and shall not be assigned or transferred. Any
such assignment or attempted assignment by Employee shall be null, void, and of
no legal effect.
Section 13 OTHER AGREEMENTS
This Agreement replaces and merges any and all previous agreements
and understandings regarding all the terms and conditions of Employee's
employment relationship with the Company, and this Agreement constitutes the
entire agreement of the Company and Employee with respect to such terms and
conditions.
Section 14 AMENDMENT
Except as provided in Section 15, no amendment or modification to
this Agreement shall be effective unless it is in writing and signed by the
Company and by Employee.
Section 15 SEVERABILITY
If any provision of this Agreement shall be found invalid or
unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render such
provision valid and enforceable, or shall be deemed excised from this Agreement,
as may be required under applicable law, and this Agreement shall be construed
and enforced to the maximum extent permitted by applicable law, as if such
provision had been originally incorporated in this
-13-
Agreement as so modified or restricted, or as if such provision had not been
originally incorporated in this Agreement, as the case may be.
Section 16 ARBITRATION
The Company shall have the right to obtain an injunction or other
equitable relief arising out of the Employee's breach of the provisions of
Section 8 of this Agreement. However, any other controversy or claim arising out
of or relating to this Agreement or any alleged breach of this Agreement shall
be settled by binding arbitration in Minneapolis, Minnesota in accordance with
the rules of the American Arbitration Association then applicable to
employment-related disputes and any judgment upon any award, which may include
an award of damages, may be entered in the highest state or federal court having
jurisdiction over such award. In the event of the termination of Employee's
employment, Employee's sole remedy shall be arbitration and any award of damages
shall be limited to recovery of lost compensation and benefits provided for in
this Agreement. No punitive damages may be awarded to Employee. The
determination and findings of such arbitrator(s) will be binding on all parties
and may be enforced, if necessary, in any court of competent jurisdiction. The
Company shall be responsible for paying all reasonable fees of the arbitrator.
____________________
Employee's
Initials
Section 17 CODE Section 409A
The Company intends that this Agreement meet the requirements of
paragraphs (2), (3) and (4) of Code Section 409A(a) of the Code (and any
successor provisions of the Code) and the regulations and other guidance issued
thereunder (the "Requirements") and be operated in accordance with such
Requirements so that benefits under this Agreement shall not be included in
income under Code Section 409A. Any ambiguities in this Agreement shall be
construed to effect the intent as described in this Section 17. If any provision
of this Agreement is found to be in violation of the Requirements, then such
provision shall be deemed to be modified or restricted to the extent and in the
manner necessary to render such provision in conformity with the Requirements,
or shall be deemed excised from this Agreement, and this Agreement shall be
construed and enforced to the maximum extent permitted by the Requirements as if
such provision had been originally incorporated in this Agreement as so modified
or restricted, or as if such provision had not been originally incorporated in
this Agreement, as the case may be.
Section 18 COUNTERPARTS
This Agreement may be executed in counterparts, each of which will
be deemed an original, but all of which together will constitute one and the
same Agreement.
-14-
Section 19 HEADINGS; REFERENCES
The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement. Any reference to a section (Section) shall be to a section (Section)
of this Agreement absent an express statement to the contrary in this Agreement.
-15-
IN WITNESS WHEREOF, the Company and Employee have executed this Agreement
in multiple originals to be effective on the Effective Date.
CARIBOU COFFEE COMPANY, INC.
/s/ Xxxxxxx X. Xxxxx
---------------------------------------------
By: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer and President
This 18 day of July, 2005
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxx X. Xxxxxxxxx
This 18 day of July, 2005
-16-
EXHIBIT A
GENERAL RELEASE AND COVENANT NOT TO XXX
This GENERAL RELEASE AND COVENANT NOT TO XXX (the "Release") is made as of
________________ ,___,__ (the "Release Date") by and between Caribou
Coffee Company, Inc. (the "Company") and Xxxxxx X. Xxxxxxxxx ("Employee").
1. In consideration of the cash lump sum payment equal to one and one-half times
(a) Employee's current annual Base Salary (as defined in the Agreement
dated July __, 2005 by and between the Company and the Employee; the
"Agreement"), plus
(b) the annual bonus paid to Employee in the calendar year prior to the
date of termination,
the sufficiency of which consideration the parties hereby acknowledge, Employee
hereby releases, discharges, and covenants not to xxx the Company, its
predecessors, successors, parents, subsidiaries, affiliates, divisions, assigns,
employees, officers, directors, shareholders, representatives, benefits plans
and benefits plans administrators, attorneys, or agents (collectively referred
to herein as "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. Section 181.81; the Minneapolis Code of
Ordinances; wrongful discharge; violation of Minn. Stat. Section 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; intentional or negligent infliction of emotional
distress; or any other theory, whether legal or equitable) which he, his heirs,
administrators, executors, personal representatives, beneficiaries, and assigns
may have or claim to have against Releasees for any reason whatsoever. 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 him to exist.
2. 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, administrators, executors, personal representatives,
beneficiaries, and assigns may have or claim to
have against Releasees. Notwithstanding any other provision or section of this
Agreement, Employee does not hereby waive any rights or claims under the ADEA
that may arise after the date on which the Agreement is signed by him.
3. Employee further understands that he is releasing, and does hereby release,
any claims for damages, by charge or otherwise, whether brought by him or on his
behalf by any other party, governmental or otherwise, and agrees not to
institute any claims for damages via administrative or legal proceedings against
any of the Releasees. Employee also waives and releases any and all right to
money damages or other legal relief awarded by any governmental agency related
to any charge or other claim against any of the Releasees.
4. This Release does not apply to any post-termination claim that Employee may
have for benefits under the provisions of any employee benefit plan maintained
by the Company, or to any payments to which Employee is or may hereafter be
entitled under Paragraphs 6(a) or 6(b), as applicable, of the Agreement.
Employee's release of claims shall not apply to any claims Employee might have
to indemnification under Minnesota Statute Section 302A.521, any other
applicable statute or regulation, or the Company's by-laws.
5. Employee hereby acknowledges and represents that (a) he has been given a
period of at least twenty-one (21) days to consider the terms of this Agreement,
(b) the Company has advised or hereby advises him in writing to consult with an
attorney prior to executing this Agreement, and (c) he has received valuable and
good consideration to which he is otherwise not entitled in exchange for his
execution of this Agreement.
6. Employee and the Company hereby acknowledge this Agreement shall not become
effective or enforceable until the fifteenth (15th) day after it is executed by
Employee ("Effective Date") and that Employee may revoke this Agreement at any
time before the Effective Date. Employee has been informed and understands that
any such revocation must be in writing and delivered to the Company by hand, or
sent by mail within the 15-day period. If delivered by mail, the revocation must
be: (1) postmarked within the 15-day period, (2) properly addressed as set forth
below, and (3) sent by certified mail, return receipt requested.
Proper Notice Address for Revocation Purposes
Caribou Coffee Company, Inc.
Attn: Chief Executive Officer
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxxxxx 00000
7. Employee agrees that he has not heretofore assigned, transferred or
hypothecated nor attempted to assign, transfer or hypothecate any interest he
may have in the released claims.
8. This Agreement shall in all respects be governed and construed in accordance
with the laws of the State of Minnesota without regard to choice of law
principles.
- 2 -
EMPLOYEE:
___________________________________ __________________________________
Xxxxxx X. Xxxxxxxxx Date
CARIBOU COFFEE COMPANY, INC.
___________________________________ __________________________________
By: _____________________________ Date
Title:_____________________________
- 3 -
EXHIBIT B
BOARD MEMBERSHIPS
AMERICAN INDEPENDENCE FUNDS (MUTUAL FUND)
2ND SWING GOLF
HOMEPLATE FOODS
COOL CLEAN, INC
