This excerpt taken from the GMCR DEF 14A filed Jan 28, 2008.
If Mr. Lazaris is terminated before June 15, 2008, as a result of a Termination Event (as defined below), he would be entitled to receive (i) a lump-sum payment equal to 18 months of base salary, (ii) a bonus payment equal to 1.5 times his average (twelve month) annual bonus paid for the previous three full calendar years (or smaller number of full calendar periods if employed for a shorter period), and (iii) an amount equal to the positive difference (if any) between (1) the total cash bonus amount recommended by the compensation committee and approved by the Companys Board of Directors for payment and (2) the amount of the cash bonus previously received by Mr. Lazaris; and (iv) participation in the Companys health and other welfare benefit plans until the earlier of nine months following the Terminating Event or the date the Mr. Lazaris is eligible to become covered under another comparable group health plan.
Termination Event is defined as (i) termination by the Company of the employment of Mr. Lazaris for any reason other than death, disability, or Cause (as hereinafter defined); or (ii) resignation of Mr. Lazaris from the employ of the Company within 90 days subsequent to the Executive becoming aware (or the date Mr. Lazaris reasonably should have become aware) of the occurrence, without Mr. Lazariss express written consent, of any of the following events: (a) a significant reduction in the nature or scope of Mr. Lazariss responsibilities, authorities, powers, functions or duties from the responsibilities, authorities, powers, functions or duties exercised, (b) a decrease greater than ten percent 10% in the annual salary payable by the Company to Mr. Lazaris from the annual salary payable to Mr. Lazaris as of the date of Change in Control, or a decrease greater than ten percent 10% in the Executives target cash bonus or level of participation in other incentive programs of the Company from the target cash bonus and level of participation in other incentive programs of the Company as of the date of the Companys acquisition of Keurig; provided, however, no such decrease in salary, target bonus or level of participation shall entitle Mr. Lazaris to resign from the employ of the Company and have such resignation be deemed a Terminating Event if the salary, target bonus or level of participation, as applicable, of all senior executives of the Company are similarly decreased based on a good faith determination by the Board of Directors of the Company that such decreases are reasonably necessary to address ongoing material cash flow issues that threaten the sustainability of the Companys operations; or (c) the relocation of Mr. Lazariss primary work location by more than 50 miles from its location.
Cause for purposes of a termination occurring prior to June 15, 2008 is defined as a willful act of dishonesty by Mr. Lazaris with respect to any matter involving the Company or any subsidiary or affiliate, engagement by Mr. Lazaris in illegal conduct or gross misconduct which is materially and demonstrably injurious to the Company, the conviction of Mr. Lazaris for any felony or any crime involving dishonesty, the violation by Mr. Lazaris of any obligation of Mr. Lazaris under his confidentiality obligations to the Company, the unauthorized direct or indirect solicitation by Mr. Lazaris of one or more individual entities or groups for purposes of interesting such groups in a change of control of the Company , the gross or willful failure by
Mr. Lazaris to substantially perform his duties with the employer, or the willful failure by the executive to carry out a legal direction of the Board of Directors of the Company.
In the event Mr. Lazaris is terminated after June 15, 2008, by the Company without cause (as defined below) or Mr. Lazaris terminates his employment for good reason (as defined below) he would be entitled to receive (i) severance equal to a continuation of 12 months of base salary at the rate in effect upon termination, (ii) a prorated portion of the annual bonus he would have been entitled to in the year of termination, paid at the time bonuses are paid to other executives of the Company generally (iii) continued participation in the Companys group medical and dental insurance plans under COBRA for a period up to twelve months from the date of termination and (iv) up to $10,000 dollars in outplacement services.
Cause for purposes of a termination occurring after June 15, 2008 is defined as Mr. Lazariss failure to perform in all material respects (other than by reason of disability), or gross negligence in the performance of, his duties and responsibilities to the Company or any of its affiliates which remains uncured, continues or recurs after twenty (20) days notice from the Company specifying in reasonable detail the nature of the failure or negligence; (ii) Mr. Lazariss fraud, embezzlement, theft or other dishonesty related to the Company; (iii) material breach by Mr. Lazaris of any provision of his employment agreement or of any other agreement with the Company; provided, however, that, if such breach is curable, such breach remains uncured, continues or recurs after twenty (20) days notice from the Company specifying in reasonable detail the nature of the breach; (iv) Mr. Lazariss indictment or conviction of, or plea of nolo contendere to, a felony or any other crime involving moral turpitude or resulting in incarceration post-conviction or plea.
Good Reason is defined as the (i) removal of Mr. Lazaris from the position of President of Keurig, Incorporated (or a successor corporation); (ii) material diminution in the nature or scope of Mr. Lazariss responsibilities, duties or authority; provided, however, that any diminution of the business of the Company or any of its affiliates or any sale or transfer of equity, property or other assets of the Company or any of its affiliates shall not constitute Good Reason; (iii) material failure of the Company to provide the base salary, annual bonus and benefits in accordance Mr. Lazariss employment agreement; or (iv) relocation of the Mr. Lazariss primary office more than thirty-five (35) miles from its then-current location.