SEPARATION AGREEMENT AND RELEASE
Exhibit 10.4
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (the “Agreement”) is entered into effective for all
purposes and in all respects as of January
7, 2008 by and between Xxxxx X. Xxxxxx (“Xxxxxx”) and Starbucks Corporation (“Starbucks”).
7, 2008 by and between Xxxxx X. Xxxxxx (“Xxxxxx”) and Starbucks Corporation (“Starbucks”).
RECITALS
A. Donald was employed by Starbucks as its president and chief executive officer. Donald’s
employment at Starbucks was terminated by Starbucks on January 7, 2008 (the “Separation Date”); and,
as a consequence thereof, Xxxxxx resigned from the Board of Directors of Starbucks (the “Board”)
effective as of January 7, 2008.
B. Starbucks and Xxxxxx enter this Agreement to clarify their respective rights
and responsibilities arising out of the termination of Donald’s employment
relationship and his resignation as a member of the Board, in exchange for Donald’s
(1) agreement to cooperate in the transition of his executive responsibilities, (2)
reaffirmation and clarification of his existing obligations arising under the
non-competition agreement pursuant to Paragraph 5 (the “Non-Competition Agreement”),
and (3) additional confidentiality agreement set forth in Paragraph 5 (the
“Confidentiality Agreement”).
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises contained
below, the parties hereto, intending legally and equitably to be bound, hereby agree as follows:
1. Separation Date and Responsibilities. Donald’s employment with Starbucks ended on January
7, 2008, and Xxxxxx resigned from the Board effective as of such date. Accordingly, Xxxxxx has no
further duties or responsibilities to Starbucks or the Board, as applicable. Xxxxxx does, however,
agree to remain reasonably available to Starbucks over the course of the subsequent twelve
(12)-month period following the Separation Date to assist on an as-needed basis in transitioning
his executive responsibilities; provided, however, that, in the event that Starbucks calls upon
Xxxxxx to do so, Starbucks shall pay Xxxxxx a mutually agreeable fee and reimburse him for all
associated costs and expenses.
2. Compensation. Except as is expressly provided in this Agreement, Xxxxxx agrees and
acknowledges that he is, and shall be, entitled to no further or additional compensation of any
kind after the Separation Date. If Xxxxxx signs this Agreement and does not revoke it pursuant to
Paragraph 14, then, in exchange for the obligations pursuant to the Non-Competition Agreement and
the Confidentiality Agreement, the transition of executive responsibilities, and the releases and
promises contained in this Agreement, Starbucks shall pay Xxxxxx an amount equal to $1,250,000,
payable in equal amounts on a bi-weekly basis during the twelve (12)-month period immediately
following the Separation Date (with a make-up in the
first payment for the time lag between January 7, 2008 and the latter date of execution of
this Agreement by the parties hereto), subject to customary tax and other withholdings. Starbucks
and Xxxxxx agree that these payments are expressly conditioned on Donald’s strict compliance with
the Non-Competition Agreement (as modified in the second subparagraph of Paragraph 5 hereof) and
the Confidentiality Agreement. Any material violation of either of such Agreements, shall — after
(i) written notice to Xxxxxx of the alleged violation, (ii) a period of ten (10) business days for
Xxxxxx to respond thereto in writing, (iii) if in dispute, a period of thirty (30) days to resolve
the same or submit the same to arbitration and (iv) if submitted to arbitration, a period of ninety
(90) days for the arbitrator (after appointment by the President of the American Arbitration
Association) to reach a conclusion — result in a forfeiture by Xxxxxx of any unpaid compensation
that might otherwise be owing to him pursuant to this Paragraph 2. Subject to the foregoing notice
and resolution provisions, Starbucks may, in addition, pursue whatever other rights or remedies it
may have against Xxxxxx, including, without limitation, enforcing this Agreement, the
Non-Competition Agreement (as modified in the second subparagraph of Paragraph 5 hereof) or the
Confidentiality Agreement, through injunctive relief and/or seeking an award of attorneys’ fees and
costs.
3. Valid Consideration. Xxxxxx and Starbucks agree that the offer of compensation by
Starbucks to Xxxxxx described in the preceding paragraph 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 agreed to by Starbucks and Xxxxxx solely as consideration to Xxxxxx for
entering into and executing this Agreement.
4. Stock Options and Other Compensation and Benefits. Xxxxxx 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, as summarized in Exhibit A
attached hereto, captioned “Options and Awards Summary”. Xxxxxx agrees that he will
conduct any and all market transactions involving Starbucks securities in compliance
with the Starbucks Xxxxxxx Xxxxxxx Policy and Blackout Procedures, if and so long as
the same are applicable to him.
Xxxxxx shall be entitled to certain coverage under the Starbucks group health plans after the
Separation Date to the extent he timely elects and remains eligible for such coverage pursuant to
the Federal law known as “COBRA” and the Starbucks COBRA procedures.
Donald’s continuing 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. Xxxxxx acknowledges and agrees that he shall not be entitled to any compensation
and benefits from and after the Separation Date except as specified in this Agreement, the terms of
the Starbucks 401(k) Plan or the Management Deferred Compensation Plan, as summarized in Exhibit B
attached hereto, captioned “MDCP Savings Statement”.
5. Reaffirmation and Clarification of Non-Competition Agreement and
Confidentiality Agreement. Xxxxxx expressly reaffirms and clarifies his on-going duties and
responsibilities under the Non-Competition Agreement by executing the Non-Competition Agreement
attached to this Agreement.
- 2 -
Starbucks agrees and clarifies that, under Donald’s Non-Competition Agreement, it shall not
seek to limit Donald’s subsequent employment with a grocery chain (such as Pathmark, Albertson’s
or Safeway), or with another retailer the principal business of which is not coffee or coffee
related, or with a fast-food restaurant chains such as Wendy’s, Arby’s or Burger King. However, it
is agreed by both Starbucks and Xxxxxx that McDonald’s and Dunkin’ Donuts are companies that
directly compete with Starbucks field of business, so that Donald’s obligations under the
Non-Competition Agreement will apply.
In addition, Xxxxxx agrees not to use, publish, misappropriate or disclose any Confidential
Information following the Separation Date, except as expressly authorized in writing by the Board.
For this purpose, “Confidential Information” shall have the meaning set forth in the
Non-Competition Agreement and incorporated herein by reference. If Xxxxxx violates his agreement
set forth in this subparagraph, Starbucks shall have (i) the right or remedy, in the event of a
breach or a threatened breach, to have the provisions of this Agreement specifically enforced by
any court having jurisdiction, it being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to Starbucks and that money damages will not provide an
adequate remedy, and (ii) all other rights and remedies available at law or in equity. The agreement
set forth in this paragraph supplements Donald’s other confidentiality agreements with Starbucks,
including obligations imposed under all applicable Starbucks policies and procedures, as well as
those imposed by law.
6. General Release of Claims. Xxxxxx expressly waives any claims against Starbucks, including its affiliates, subsidiaries, stockholders, directors, officers,
managers, representatives, agents, and employees, past and present from any claims, whether known
or unknown, which existed or may have existed at any time up to the date of this Agreement,
including claims related in any way to Donald’s employment with Starbucks or the ending of that
relationship, except as to Starbucks’ current and ongoing obligations set forth in this Agreement.
This release includes, but is not limited to, any claims for wages, bonuses, employment benefits,
stock options, or damages of any kind whatsoever, arising out of any common law torts, arising out
of any contracts, express or implied, any covenant of good faith and fair dealing, express or
implied, any theory of wrongful discharge, any theory of negligence, any theory of retaliation, any
theory of discrimination or harassment in any form, any legal restriction on Starbucks right to
terminate employees, or any Federal, state, or other governmental statute, executive order, or
ordinance.
This waiver and release shall be construed as broadly and comprehensively as applicable law
permits. However, it shall not be construed as releasing or waiving any right that, as a matter of
law, cannot be released or waived, including without limitation the right to file a charge or
participate in an investigation or proceeding conducted by the EEOC pursuant to the Age
Discrimination in Employment Act (“ADEA”); provided that Xxxxxx waives any right to recover
monetary remedies on his own behalf.
Starbucks expressly waives and releases any claim against Xxxxxx related in any way to his
employment with Starbucks, whether known or unknown, which existed or may have existed at any time
up to the date of this Agreement. The only exception to this waiver and release is any claim
Starbucks might have against Xxxxxx for fraud or willful misconduct.
- 3 -
7. Nondisparagement. Xxxxxx agrees to refrain from making any derogatory or
disparaging comments to the press or any individual or entity regarding Starbucks, its
business or related activities, its shareholders, employees or agents or the
relationship between the parties.
Starbucks agrees that its Board members and principal officers shall similarly refrain from
making any derogatory or disparaging comments about Xxxxxx to the press or any individual or
entity.
8. Return of Property. Xxxxxx confirms that he has or will expeditiously return
to Starbucks all files, memoranda, records, credit cards, pagers, computers, computer
files, passwords and pass keys, card keys, or related physical or electronic access
devices, and any and all other property received from Starbucks or any of its current
or former employees or generated by Xxxxxx on behalf of Starbucks in the course of
Donald’s employment. Starbucks shall expeditiously notify Xxxxxx if it believes that
Xxxxxx has not so returned any item or items.
9. Additional Cooperation. Xxxxxx agrees that he will give Starbucks his full
cooperation in connection with any claims, lawsuits or proceedings that relate in any
manner to Donald’s conduct or duties at Starbucks or that are based on facts about
which Xxxxxx obtained personal knowledge while employed at Starbucks. In return,
Starbucks agrees, at its sole cost and expense, to provide legal counsel on Donald’s
behalf and to reimburse Xxxxxx for his direct and reasonable out of pocket expenses
(including reasonable attorney’s fees) incurred by Xxxxxx with respect to rendering
such cooperation. Xxxxxx further agrees that he will not voluntarily become a party
to, or directly aid or encourage any other party in connection with, any lawsuit,
claim, demand, or adversarial or investigatory proceeding of any kind involving
Starbucks or that relates in any material way to his employment with Starbucks or that
is based on facts about which Xxxxxx obtained personal knowledge while employed with
Starbucks. Donald’s compliance with a subpoena or other legally compulsive process
will not be a violation of this provision.
In the event that Starbucks calls upon Xxxxxx to be reasonably available to assist Starbucks
in an advisory capacity regarding Starbucks’ business in 2008, Starbucks shall pay Xxxxxx a
mutually agreeable fee and reimburse him all associated costs and expenses.
10. Failure to Enforce. Any party’s failure to enforce this Agreement on the occurrence of one
or more events that violate (or allegedly violate) this Agreement shall not constitute a waiver or
release of any right to enforce this Agreement against subsequent violations.
11. Severability. The provisions of this Agreement are severable, and, except for Paragraph 6,
if any part of them are found to be unlawful or unenforceable, the other provisions of this
Agreement shall remain fully valid and enforceable to the maximum extent consistent with applicable
law. If the first subparagraph of Paragraph 6 shall be held unlawful or unenforceable, any further
obligations of Starbucks to Xxxxxx under Paragraph 2 shall immediately cease.
12. Entire Agreement. This Agreement sets forth the entire understanding and agreement between Xxxxxx and Starbucks and
supersedes any prior agreements or understandings, express or implied, pertaining to the terms of Donald’s employment
with
- 4 -
Starbucks and the employment relationship, with the exception of (a) the attached Non-Competition
Agreement (as modified in the second subparagraph of Paragraph 5 hereof) and (b) the
Confidentiality Agreement, both of which shall remain fully enforceable and which are incorporated
into this Agreement by reference. Xxxxxx acknowledges that, in executing this Agreement, Xxxxxx
does not rely upon any representation or statement by any representative of Starbucks concerning
the subject matter of this Agreement, except as expressly set forth in the text of this Agreement.
No modification or waiver of this Agreement shall be effective unless evidenced in a writing signed
by both parties. This Agreement, including the attached Non-Competition Agreement, may be executed
in one or more copies or counterparts and each such copy shall constitute a duplicate original of
this Agreement. This Agreement shall be binding upon, and inure to the benefit of, Starbucks, its
successors and assigns, and Xxxxxx, his heirs, executors and administrators, and personal and legal
representatives.
13. Governing Law; Attorney’s Fees. This Agreement will be governed by and construed
exclusively in accordance with the laws of the State of Washington without reference to its choice
of law principles. Any disputes arising under this Agreement, or the attached Non-Compensation
Agreement, shall be brought in a court of competent jurisdiction in King County, Washington. In any
action brought to enforce any obligation arising out of this Agreement, the substantially
prevailing party shall be entitled to recover his or its reasonable attorney’s fees and costs.
14. Knowing and Voluntary Agreement. Xxxxxx agrees that he has carefully read and
fully understands all aspects of this Agreement including the fact that this Agreement
releases any claims that Xxxxxx might have against Starbucks, except any claims under
this Agreement. Xxxxxx agrees that he has not relied upon any representations or
statements not set forth herein or made by Starbucks’ agents or representatives.
Finally, Xxxxxx agrees that he has been advised to consult with an attorney prior to
executing the Agreement, and that Xxxxxx has either done so or knowingly waived the
right to do so, and now enters into this Agreement without duress or coercion from any
source. Xxxxxx agrees that he has been provided the opportunity to consider for
twenty-one (21) days whether to enter into this Agreement, and has voluntarily chosen
to enter into it on this date. Xxxxxx xxx revoke this Agreement for a period of seven
(7) days following the execution of this Agreement by written notice timely delivered
to the Executive Vice President, General Counsel and Secretary of Starbucks. This
Agreement shall become effective following expiration of this seven (7) day
period.
| STARBUCKS CORPORATION | XXXXX X. XXXXXX |
By:
|
/s/ Xxxxx X. Xxxxx
|
/s/ Xxxxx X. Xxxxxx
|
|||
Its:
|
evp,general counsel & secretary | ||||
| Dated: January 22, 2008 | Dated: January 22, 2008 |
- 5 -
