SEPARATION AGREEMENT
Exhibit 10.1
THIS SEPARATION AGREEMENT (this “Agreement”), effective as of August 29,
2008, is made by and between Caribou Coffee Company, Inc., (the “Company”) and Xxxxxxx
Xxxxxx (“Employee”).
RECITALS
WHEREAS, Employee was formerly the Company’s President, and Chief Operations Officer; and
Interim Chief Executive Officer and
WHEREAS, the Company has appointed a new President and Chief Executive Officer, and as a
result Employee is no longer serving as President and Interim Chief Executive Officer, but Employee
is continuing to serve as Chief Operations Officer;
WHEREAS, the Company and Employee are party to an Employment Letter, dated March 5, 2007 (the
“Employment Letter”); and
WHEREAS, pursuant to the terms of the Employment Letter, Employee is entitled to twelve (12)
months of base salary as a severance if her employment is terminated by the Company without Cause;
and
WHEREAS, the Company has informed Employee that her employment with the Company will
terminate, without Cause, but desires to enter into this Agreement to provide Employee additional
compensation to which she would not otherwise be entitled, in return for Employee’s covenants and
promises as contained in this Agreement; and
WHEREAS, Employee has agreed to remain employed with the Company in the role of Chief
Operations Officer as an employee for a transitional period not to exceed 90 days from August 1,
2008 (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:
1. Transition Period. Employee agrees to perform executive and consulting services as
an employee for the Company during the Transition Period, and shall continue to be paid Employee’s
regular base salary ($360,000 per annum — “Base Salary”) during the Transition Period.
Employee’s employment remains “at will” during the Transition Period and shall terminate on the
last day of the Transition Period. The Transition Period shall last for no more than ninety (90)
days, but may be shortened by the Company in its sole discretion; provided, however, if the Company
shortens the Transition Period at its sole discretion, it shall continue to pay the Base Salary to
Employee through and including Friday, October 31, 2008 even though Employee’s employment
terminates on the last day of the Transition Period.
2. 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 to perform services throughout the Transition Period
and the Employee Disclosure, Non-Compete, and Non-Solicitation Agreement referenced below) the
Company agrees to pay Employee the following amounts:
A. A lump sum of $100,000, less applicable withholdings (the “Lump-Sum Payment”), 5
business days after the Effective Date (as defined below); provided, however, in no event shall
such payment be made later than March 15, 2009.
B. Provided that Employee executes a second release in the form attached hereto as Exhibit
A (the “Second Release”), the Company shall make severance payments as follows:
1. Three (3) months Base Salary (less applicable withholdings), shall be paid to Employee in a
lump sum on the Company’s next regular pay date following the later of (i) the termination or
expiration of the Transition Period; (ii) Employee’s signing the Second Release, and (iii) the
expiration of any revocation periods contained in the Second Release: provided, however, in no
event shall such payment be made later than March 15, 2009; and
2. Twelve (12) months Base Salary (less applicable withholdings) shall be paid to Employee in
a lump sum on the Company’s next regular pay date 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 the extent necessary to comply with the restriction in Section 409A of the Code
concerning payments to specified employees, the payment to Employee pursuant to Paragraph 2.B.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).
C. The Company and Employee intend that the payments made pursuant to Paragraph 2.A and 2.B.1
comply with the short term deferral exception to Section 409A of the Code and that the payments
made pursuant to Paragraph 2.B.2 comply with the requirements of Section 409A of the Code and this
Agreement shall be construed to effect such 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,
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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. Subject to the terms set forth in Employee’s Stock Option Agreements, Employee shall have
ninety (90) days from the last day of her employment to exercise all options vested on the last day
of her employment. All options not vested on the last day of Employee’s employment shall
immediately and automatically be forfeited on such date. Employee’s outstanding options as of the
date this Agreement is executed are set forth on Exhibit B.
5. 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 her.
6. Employee further understands that she is releasing, and does hereby release, any claims for
damages, by charge or otherwise, whether brought by her or on her 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.
7. This Agreement 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. Employee’s
release of claims shall not apply to any claims Employee might have to indemnification under
Minnesota Statute § 302A.521, any other applicable statute or regulation, or the Company’s by-laws.
8. Employee hereby acknowledges and represents that (a) she 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 her in writing to consult with an attorney prior to executing this Agreement, and
(c) she has received valuable and good consideration to which she is otherwise not entitled in
exchange for her execution of this Agreement.
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9. 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.
| To the Company: | Caribou Coffee Company, Inc. Attn: Chief Financial 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 |
10. Employee agrees that she has not heretofore assigned, transferred or hypothecated nor
attempted to assign, transfer or hypothecate any interest she may have in the released claims.
11. Employee agrees not to make any statement, written or verbal, to any person or entity,
including in any forum or media, or take any action, in disparagement of the Company, Arcapita Inc.
or any of their respective affiliates, or any of the current, former or future partners, managers,
members, officers, directors and employees of any of the foregoing (individually, a “Company
Party” and collectively the “Company Parties”), including negative references to or
about any Company Party’s services, policies, practices, documents, methods of doing business,
strategies, objectives, partners, managers, members, or employees, or take any other action that
may disparage any Company Party to the general public and/or any Company Party’s employees,
clients, franchisees, potential franchisees, suppliers, investors, potential investors, business
partners or potential business partners, unless compelled to do so under oath.
12. Employee has no oral representations, understandings, or agreements with the Company or
any of its officers, directors, or representatives covering the same subject matter as this
Agreement. This Agreement is the final, complete, and exclusive statement of expression of the
agreement between the Company and Employee with respect to the subject matter hereof, and cannot be
varied, contradicted, or supplemented by evidence of any prior or contemporaneous oral or written
agreements. This Agreement may not be later modified except by a further writing signed by a duly
authorized officer of the Company or member of the Board and Employee, and no term of this
Agreement may be waived except by a writing signed by the party waiving the benefit of such term.
This Agreement supersedes all other agreements between Employee and the Company related to
Employee’s employment with the Company or the termination thereof, provided,
however, that this Agreement does not supersede or replace
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the Employee Disclosure, Non-Compete, and Non-Solicitation Agreement between Employee and the
Company dated March 5, 2008, nor does it supersede or replace any agreement related to Employee as
a holder of securities or options of the Company, all of which shall survive this Agreement and the
Second Release in accordance with their terms.
13. If any portion of this Agreement is held invalid or inoperative, the other portions of
this Agreement shall be deemed valid and operative and, so far as is reasonable and possible,
effect shall be given to the intent manifested by the portion held invalid or inoperative.
14. This Agreement, and all other disputes or issues arising from or relating in any way to
the Company’s relationship with Employee, shall be governed by the internal laws of the State of
Minnesota, irrespective of the choice of law rules of any jurisdiction. All disputes arising from
or relating to this Agreement shall be subject to the exclusive jurisdiction of and be litigated in
the state or federal courts located in the State of Minnesota. All parties hereby consent to the
exclusive jurisdiction and venue of such courts for the litigation of all disputes and waive any
claims of improper venue, lack of personal jurisdiction, or lack of subject matter jurisdiction as
to any such disputes.
15. Additional Payments and Consideration by the Company. In addition to the other
payments, salary continuation and benefits herein provided, the Company shall make the following
payments to the Employee:
A. Employee shall be reimbursed for her actual relocation expenses from Minnesota to Texas (in
an amount up to $25,000) on or before the end of the first payroll cycle following October 31,
2008, or the first payroll cycle following the last day of her employment, whichever is earlier.
B. The Company shall reimburse the Employee her reasonable and necessary attorney’s fees
incurred by her in negotiating the terms of the Agreement in an amount up to $5,000.
C. To the extent Employee timely and properly elects COBRA coverage upon her termination of
employment, the Company shall timely pay for fifteen (15) months of Employee’s individual COBRA
coverage from the Company for the period starting on the date her employment terminates; provided,
however, such payment shall cease at such time as Employee ceases to be entitled to COBRA coverage
for any reason whatsoever from the Company.
D. The Company shall indemnify and hold harmless Employee for all losses related to the
inaccurate reporting on Form 1099 for income in calendar year 2006, including without limitation,
the taxes and penalties assessed by the Internal Revenue Service and accounting fees reasonably and
necessarily related thereto.
E. Employee shall retain her current Blackberry, and telephone number related thereto.
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F. The Company shall provide at its expense, outplacement services from an outplacement firm
selected by Employee, in an amount not to exceed $2,000 per month for a period of up to 90 days
from the date of this Agreement.
16. Headings in this Agreement are for convenience only and shall not control the meaning of
this Agreement. Whenever applicable, masculine and neutral pronouns shall equally apply to the
feminine genders; the singular shall include the plural and the plural shall include the singular.
The parties have reviewed and understand this Agreement, and each has had a full opportunity to
negotiate the Agreement’s terms and to consult with counsel of their own choosing. Therefore, the
parties expressly waive all applicable common law and statutory rules of construction that any
provision of this Agreement should be construed against the agreement’s drafter, and agree that
this Agreement and all amendments thereto shall be construed as a whole, according to the fair
meaning of the language used.
17. This Agreement may be executed in one or more counterparts, each of which when executed
and delivered shall be an original, and all of which when executed shall constitute one and the
same instrument.
| EMPLOYEE: | ||||||
| /s/ Xxxxxxx Xxxxxx | 0/0/00 | |||||
| Xxxxxxx Xxxxxx | Date | |||||
| CARIBOU COFFEE COMPANY, INC. | ||||||
| /s/ Xxxxxxx X. Logburn | 8/29/08 | |||||
By:
|
Xxxxxxx X. Logburn | Date | ||||
Title:
|
Director | |||||
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EXHIBIT A
FORM OF SECOND RELEASE
THIS RELEASE (this “Release”), effective as of August , 2008, is made by and
between Caribou Coffee Company, Inc., (the “Company”) and Xxxxxxx Xxxxxx
(“Employee”).
RECITALS
WHEREAS, the Company and Employee are party to a Separation Agreement, dated August 29, 2008, (the
“First Agreement”); and
WHEREAS, pursuant to the terms of the First Agreement, as a condition to the Company’s payment
of certain post-employment amounts to Employee pursuant to Paragraph 2.B. thereof, Employee is
required to execute a full and complete release, on behalf of herself and her heirs, executors,
administrators, trustees and assigns releasing all claims, actions and causes of action against the
Company and each subsidiary and affiliate of the Company, and their respective predecessors,
successors, current and former directors, officers, administrators, trustees, employees, agents and
other representatives.
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:
1. 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.
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 her.
3. Employee further understands that she is releasing, and does hereby release, any claims for
damages, by charge or otherwise, whether brought by her or on her 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. Employee’s
release of claims shall not apply to any claims Employee might have to indemnification under
Minnesota Statute § 302A.521, any other applicable statute or regulation, or the Company’s by-laws.
5. Employee hereby acknowledges and represents that (a) she 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 her in writing to consult with an attorney prior to executing this Agreement, and
(c) she has received valuable and good consideration to which she is otherwise not entitled in
exchange for her 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:
| To the Company: | Caribou Coffee Company, Inc. Attn: Chief Financial Officer 0000 Xxxxxxxxxx Xxxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx 00000 Telephone No.: (000) 000-0000 Facsimile No.: (000) 000-0000 |
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| 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 |
7. Employee agrees that she has not heretofore assigned, transferred or hypothecated nor
attempted to assign, transfer or hypothecate any interest she may have in the released claims.
8. Employee agrees not to make any statement, written or verbal, to any person or entity,
including in any forum or media, or take any action, in disparagement of the Company, Arcapita Inc.
or any of their respective affiliates, or any of the current, former or future partners, managers,
members, officers, directors and employees of any of the foregoing (individually, an “Company
Party” and collectively the “Company Parties”), including negative references to or
about any Company Party’s services, policies, practices, documents, methods of doing business,
strategies, objectives, partners, managers, members, or employees, or take any other action that
may disparage any Company Party to the general public and/or any Company Party’s employees,
clients, franchisees, potential franchisees, suppliers, investors, potential investors, business
partners or potential business partners, unless compelled to do so under oath.
9. 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.
10. Employee agrees that she will direct all inquiries concerning her employment at the
Company to the Vice President of Human Resources of the Company, and the Company agrees that all
future employment references by the Vice President of Human Resources of the Company concerning
Employee shall be limited to providing third parties her (a) dates of employment, (b) job title(s),
and (c) date of separation, and indicating that the Employee concluded the employment relationship
with the Employer on mutually agreeable terms.
| EMPLOYEE: | ||||||||
| Xxxxxxx Xxxxxx | Date | |||||||
| CARIBOU COFFEE COMPANY, INC. | ||||||||
By:
|
Date | |||||||
Title: |
||||||||
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EXHIBIT B
Xxxxxxx Xxxxxx
Total Outstanding Stock Options on August 29, 2008
| Grant | Number of | Strike | Shares Vested on | |||||||||||||||||
| Date | Granted Shares | Vested % | Price | August 29, 2008 | ||||||||||||||||
| 5/25/2006 | 10,000 | 50 | % | 8.53 | 5,000 | |||||||||||||||
| 4/2/2007 | 200,000 | 25 | % | 7.54 | 50,000 | |||||||||||||||
| 9/7/2007 | 14,590 | 0 | % | 6 | — | |||||||||||||||
| 2/6/2008 | 35,000 | * | 100 | % | 2.78 | 35,000 | ||||||||||||||
TOTAL |
259,590 | 90,000 | ||||||||||||||||||
| * | Note: This set of options has not yet vested, but in accordance with the option grant, the options will vest upon the earlier of the date Xx. Xxxxxx is terminated by the Company or November 12, 2008. |
