SEPARATION AGREEMENT AND RELEASE
Exhibit 10.5
This Separation Agreement and Release (the “Agreement”)
is entered into by Xxxxx
Xxxxxxx (“Xxxxxxx”) and Starbucks Corporation (“Starbucks”).
RECITALS
X. Xxxxxxx has been employed by Starbucks as president, Starbucks Coffee U.S..
Xxxxxxx’x employment at Starbucks will terminate on
March 3, 2008 (the “Separation Date”).
B. Starbucks and Xxxxxxx enter this Agreement to clarify their respective rights
and responsibilities arising out of the conclusion of Xxxxxxx’x employment relationship,
including Xxxxxxx’x reaffirmation of post-separation commitments
arising under the non-competition agreement between Starbucks and Xxxxxxx (the “Non-Competition Agreement”)
and the confidentiality agreement set forth in Paragraph 7 (the “Confidentiality
Agreement”).
AGREEMENTS
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises contained below, it is agreed as follows:
1. Separation Date and Responsibilities. Xxxxxxx’x employment with Starbucks will end on
March 3, 2008. Xxxxxxx thereafter will have no further duties or responsibilities to
Starbucks.
2. Compensation. Except as may be expressly provided for in this Agreement, Xxxxxxx agrees and
acknowledges that she is and shall be entitled to no further or additional compensation of any kind
after the Separation Date. If Xxxxxxx signs this Agreement and does not revoke it pursuant to
Paragraph 19, Starbucks will pay Xxxxxxx the equivalent of twelve months of her base salary,
payable in a lump sum immediately following the revocation period set forth in Paragraph 19,
subject to customary tax and other withholdings.
Starbucks and Xxxxxxx agree that these payments are expressly conditioned on Xxxxxxx’x strict
compliance with the terms of this Agreement, the Non-Competition Agreement and the Confidentiality
Agreement. Any violation of any of these agreements, whether material or not, shall result in (a) a
forfeiture by Xxxxxxx of any unpaid compensation that might otherwise be owing to Xxxxxxx pursuant
to this Paragraph 2, and (b) an obligation by Xxxxxxx to immediately repay to Starbucks any and all
compensation previously paid to Xxxxxxx by Starbucks pursuant to this Paragraph 2. Starbucks may,
in addition, pursue whatever other rights or remedies it may have against Xxxxxxx, including,
without limitation, enforcing this Agreement, the Non-Competition Agreement or the Confidentiality
Agreement, through injunctive relief and/or seeking an award of attorneys fees and costs.
3. Medical
Coverage. Starbucks agrees to provide Xxxxxxx with a lump sum payment equal to the
cost of COBRA continuation coverage under the applicable Starbucks medical, dental and vision
programs for a period of twelve months, less applicable withholding taxes. This payment may be used
by Xxxxxxx at her discretion to pay for the post-employment continuation of medical, dental and/or
vision coverage pursuant to COBRA if Xxxxxxx properly elects such coverage. Xxxxxxx agrees and
acknowledges that Xxxxxxx will be solely responsible for remitting all COBRA payments, and will be
solely responsible for the cost of any additional COBRA coverage at the standard COBRA rate and in
accordance with the terms and conditions of COBRA and the Starbucks COBRA procedures.
4. Outplacement Services. Starbucks will provide Xxxxxxx with twelve months of outplacement
services (until March 3, 2009) through the firm of Xxx Xxxxx Xxxxxxxx, up to a maximum of $14,000.
Such services shall commence as of the Separation Date.
5. Starbucks Partner Card. Starbucks will provide Xxxxxxx a Partner Card that will entitle
Xxxxxxx to the markout and merchandise discount for her lifetime.
6. Valid Consideration. Xxxxxxx and Starbucks agree that the offer of compensation by
Starbucks to Xxxxxxx described in Paragraph 2 is not required by Starbucks policies or procedures
or by any pre-existing contractual obligation of Starbucks or by any statute, regulation or
ordinance, and is offered by Starbucks solely as consideration for
this Agreement.
7. Stock Options and Other Compensation and Benefits. Xxxxxxx
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. Xxxxxxx agrees that
Xxxxxxx will conduct any and all market transactions involving Starbucks securities in
compliance with the Starbucks Xxxxxxx Xxxxxxx Policy and Blackout Procedures.
Xxxxxxx’x 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. Xxxxxxx acknowledges and agrees that Xxxxxxx shall not be entitled to any
compensation and benefits after the Separation Date except as specified in this Agreement or by the
terms of the Starbucks 401(k) Plan or Management Deferred Compensation Plan.
8. Post-Separation Commitments. Xxxxxxx expressly reaffirms Xxxxxxx’x on
going duties and responsibilities under the Non-Competition Agreement following the
Separation Date.
In addition, Xxxxxxx 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 Xxxxxxx violates the agreement set forth in this
Paragraph 8, Starbucks and its successors and assigns
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shall have (a) 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 (b) all other rights and
remedies available at law or in equity. The agreement set forth in this Paragraph 8 supplements
Xxxxxxx’x other confidentiality agreements with Starbucks, including obligations imposed under all
applicable Starbucks policies and procedures, as well as those imposed by law.
9. Additional Confidentiality. Xxxxxxx agrees to keep the fact, terms and amount of this
Agreement completely confidential and further agrees that disclosure to the public or to any
employee of Starbucks of the terms of this Agreement will constitute a material breach. Xxxxxxx
will be permitted to provide information concerning this Agreement to Xxxxxxx’x attorneys,
accountants, immediate family members, or to make other disclosures which are required by law, but
Xxxxxxx must first inform any such person of this confidentiality provision and instruct them that
they are bound by it and have an obligation to abide by it.
10. General Release of Claims. Xxxxxxx 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 Xxxxxxx’x employment with Starbucks or the ending of that relationship. 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 Xxxxxxx waives any right to recover
monetary remedies on Xxxxxxx’x own behalf.
11. No
Sale, Transfer or Assignment of Interest. Xxxxxxx warrants and affirms that she has not
sold, transferred, or otherwise assigned all or any of her interest in any of the claims or causes
of action released in this Agreement and that Xxxxxxx is the only person empowered to release such
claims.
12. Nondisparagement. Xxxxxxx agrees to refrain from making any derogatory or disparaging
comments to the press or any individual or entity regarding Starbucks, its
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business or related activities, its shareholders, employees or agents or the relationship
between the parties.
13. Return of Property. Xxxxxxx confirms that she has or will immediately, upon the Separation
Date, 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 Xxxxxxx in the course of employment.
14. Additional Cooperation. Xxxxxxx agrees to give Starbucks her full cooperation in
connection with any claims, lawsuits or proceedings that relate in any manner to Xxxxxxx’x conduct
or duties at Starbucks or that are based on facts about which Xxxxxxx obtained personal knowledge
while employed at Starbucks. In return, Starbucks agrees to provide legal counsel on Xxxxxxx’x
behalf and to reimburse Xxxxxxx for her direct and reasonable out of pocket expenses (including
reasonable attorney’s fees) incurred with respect to rendering such cooperation. Xxxxxxx further
agrees that she will not voluntarily become a party to, or directly or indirectly 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 Xxxxxxx’x
employment with Starbucks or that is based on facts about which Xxxxxxx obtained personal knowledge
while employed with Starbucks. Xxxxxxx’x compliance with a subpoena or other legally compulsive
process will not be a violation of this provision.
15. Breach
or Default. Any party’s failure to enforce this Agreement in
the event of one or
more events that violate this Agreement shall not constitute a waiver of any right to enforce this
Agreement against subsequent violations.
16. Severability.
The provisions of this Agreement are severable, and except for Paragraph 10,
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. Should Paragraph 10 be held unlawful or unenforceable, Starbucks obligations to Xxxxxxx under
Paragraph 2 shall cease, and Xxxxxxx shall immediately return to Starbucks any monetary payments
Xxxxxxx may have received pursuant to Paragraph 2.
17. Entire
Agreement. This Agreement sets forth the entire understanding between Xxxxxxx and
Starbucks and supersedes any prior agreements or understandings, express or implied, pertaining to
the terms of Xxxxxxx’x employment with Starbucks and the employment relationship, with the
exception of (a) the Non-Competition Agreement and (b) the Confidentiality Agreement, both of which
shall remain fully enforceable and which are incorporated into this Agreement by reference. Xxxxxxx
acknowledges that in executing this Agreement, Xxxxxxx 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 the Agreement. No modification or waiver of this
Agreement shall be effective unless evidenced in a writing signed by both parties. This
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Agreement may be executed in one or more copies or counterparts and each such copy shall constitute
a duplicate original of this Agreement.
18. 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 Non-Competition 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 reasonable attorney’s fees and costs.
19. Knowing
and Voluntary Agreement. Xxxxxxx agrees that she has carefully read and fully
understands all aspects of this Agreement including the fact that this Agreement releases any
claims that Xxxxxxx might have against Starbucks. Xxxxxxx agrees that she has not relied upon any
representations or statements not set forth herein or made by Starbucks agents or representatives.
Finally, Xxxxxxx agrees that she has been advised to consult with an attorney prior to executing
the Agreement, and that Xxxxxxx 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. Xxxxxxx agrees that she 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. Xxxxxxx may 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 XXXXXXX | |||||||||||||
By:
|
/s/ Xxxx Xxxxxxxx | /s/ Xxxxx Xxxxxxx | ||||||||||||
Its: |
evp, partner resources | |||||||||||||
Dated:
|
March 3, 2008 | Dated: | March 3, 2008 | |||||||||||
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