Exhibit 10.6

 

GREEN MOUNTAIN COFFEE ROASTERS, INC.
PERFORMANCE STOCK UNIT AWARD AGREEMENT

 

This Performance Stock Unit Award Agreement (this “Agreement”) is made and
entered into as of [·] (the “Grant Date”) by and between Green Mountain Coffee
Roasters, Inc. (the “Company”) and [·] (the “Participant”), pursuant to the
terms of the Green Mountain Coffee Roasters, Inc. 2006 Incentive Plan (as
amended from time to time, the “Plan”).

 

Participant:

 

<<Participant Name>> (the “Participant”)

 

 

 

Grant Date:

 

<<Grant Date>> (the “Grant Date”)

 

 

 

Target Number of Performance Stock Units:

 

<<Number of Target Performance Stock Units>> (the “Target Award”)

 

 

 

Performance-Based Vesting Conditions:

 

See Annex A

 

 

 

Performance Period:

 

See Annex A

 

 

 

Time-Based Vesting Schedule:

 

See Section 4

 

1.     Grant of Performance Stock Units.  The Company hereby grants to the
Participant on the Grant Date a Performance Award (the “Award”) consisting of
the target number of Stock Units (the “Performance Stock Units”) set forth above
(the “Target Award”).  Each Performance Stock Unit represents the conditional
right to receive, without payment but subject to the conditions and limitations
set forth in this Agreement and the Plan, one share of Stock (each, a “Share” or
together, the “Shares”).

 

2.     Award Subject to Plan.  The Award is subject in its entirety to the
provisions of the Plan, which are incorporated herein by reference.  In the
event of any conflict, the terms of the Plan will control.  Capitalized terms
not explicitly defined in this Agreement but defined in the Plan will have the
meanings ascribed to them in the Plan.

 

3.     Percentage of Target Award that May be Earned.  Except as otherwise
provided herein, the percentage of the Target Award that that may be earned by
the Participant will be determined in accordance with Annex A hereto (which
Annex A is incorporated by reference and is made part of this Agreement).

 

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4.     Vesting of Earned Stock Units; Effect of Termination of Employment.

 

4.1     Except as otherwise provided herein, provided that the Participant
remains in continuous Employment  through the applicable vesting date, fifty
percent (50%) of the Earned Stock Units will vest on the Initial Vesting Date
and fifty percent (50%) of the Earned Stock Units will vest on the one-year
anniversary of the Initial Vesting Date.  The Earned Stock Units that vest on
the Initial Vesting Date will be settled by the Company not later than
December 31, 2014 and the Earned Stock Units that vest on the one-year
anniversary of the Initial Vesting Date will be settled by the Company in
calendar year 2015 and not later than December 31, 2015.  Subject to Section 4.2
of this Agreement, if the Participant’s Employment is terminated prior to a
vesting date, any then unvested Performance Stock Units or Earned Stock Units,
as the case may be, will terminate without any consideration therefore due or
payable to the Participant.

 

4.2     Notwithstanding the foregoing vesting schedule, and subject to
compliance with Section 11, the following provisions will apply:

 

(a)    Termination upon Participant’s Death.  If the Participant’s Employment
terminates as a result of the Participant’s death prior to the last day of the
Performance Period (such last day of the Performance Period, the “Measurement
Date”), the Performance Stock Units will immediately vest in full as of the date
of the Participant’s death as if 100% of the Target Award had been earned in
accordance with Annex A (and such Performance Stock Units that so vest as
provided for in this sentence will be deemed to be “Earned Stock Units” for
purposes of the remaining sections of this Agreement).  If such termination
occurs after the Measurement Date, subject to the Administrator’s determination
and certification of the achievement of the Performance Targets in Accordance
with Annex A, any Earned Stock Units that are unvested as of the date of the
Participant’s death will immediately vest as of such date.

 

(b)    Vesting due to Disability.  If a Participant becomes disabled prior to
the Measurement Date, the Performance Stock Units will immediately vest in full
as of the date the Participant becomes disabled as if 100% of the Target Award
had been earned in accordance with Annex A (and such Performance Stock Units
that so vest as provided for in this sentence will be deemed to be “Earned Stock
Units” for purposes of the remaining sections of this Agreement).  If the
Participant becomes disabled after the Measurement Date, subject to the
Administrator’s determination and certification of the achievement of the
Performance Targets in Accordance with Annex A, any Earned Stock Units that are
unvested as of the date the Participant becomes disabled will immediately vest
as of such date.  For purposes of this Agreement, a Participant will be
considered “disabled” at such time as the Administrator determines that the
Participant is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, (i) unable to engage in any
substantial gainful activity, or (ii) receiving income replacement benefits for
a period of not less than three months under a Company disability plan.

 

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(c)     Termination upon Participant’s Retirement.  If a Retirement-Eligible
Participant’s Employment terminates for any reason other than death, disability
(within the meaning of Section 4.2(b) of this Agreement) or a termination for
Cause (“Retirement”) prior to the Measurement  Date, subject to the
Administrator’s determination and certification of the achievement of the
Performance Targets in Accordance with Annex A, as of the Measurement Date, a
number of Performance Stock Units will vest equal to the product obtained by
multiplying (x) the number of Earned Stock Units by (y) a fraction, the
numerator of which is the number of days the Participant was continuously
employed during the period beginning on the Measurement Start Date and ending on
the date of such termination of Employment, and the denominator of which is the
number of days from the Measurement Start Date until the Measurement Date.  If
such termination occurs after the Measurement Date, subject to the
Administrator’s determination and certification of the achievement of the
Performance Targets in Accordance with Annex A, any Earned Stock Units that are
unvested as of the date of such termination of Employment will immediately vest
as of such date.  For purposes of this Agreement, a Participant will be
considered a “Retirement-Eligible Participant” from and after the earliest date,
if any, on which the Participant either (i) is at least fifty-five (55) years of
age and has at least fifteen (15) years of service with the Company or any
subsidiary of the Company (counting service with any entity that is a subsidiary
of the Company only during such periods as it is a subsidiary of the Company,
except as the Administrator may otherwise determine) (“retirement-eligibility
service”), or (ii) is at least sixty (60) years of age and has at least five
(5) years of retirement-eligibility service.

 

(d)    Termination upon Participant’s Involuntary Termination Not-for-Cause.  If
the Employment of a Participant who is not a Retirement-Eligible Participant
terminates as a result of the Participant’s involuntary termination
not-for-Cause prior to the Measurement Date, subject to the Administrator’s
determination and certification of the achievement of the Performance Targets in
accordance with Annex A, as of the Measurement Date, a number of Performance
Stock Units will vest equal to the product obtained by multiplying (x) the
number of Earned Stock Units by (y) a fraction, the numerator of which is the
number of days the Participant was continuously employed during the period
beginning on the Measurement Start Date and ending on the date of such
termination of Employment, and the denominator of which is the number of days
from the Measurement Start Date until the Measurement Date.  If such termination
occurs after the Measurement Date, subject to the Administrator’s determination
and certification of the achievement of the Performance Targets in accordance
with Annex A, any Earned Stock Units that are unvested as of the date of such
termination of Employment will immediately vest as of such date.

 

(e)     Termination upon Participant’s Voluntary Termination or for Cause.  If
the Employment of a Participant who is not a Retirement-Eligible Participant
terminates due to the Participant’s voluntary termination or if the Employment
of the Participant (whether or not a Retirement-Eligible Participant) is
terminated by the Company for Cause, any then unvested or unearned portion of
the Award will be immediately forfeited upon the date of such termination
without any payment or consideration due by the Company.  For purposes of this
Agreement, other than Section 4.2(f) and the definition of “Qualifying
Termination,” “Cause” has the meaning, if any, ascribed to it in an employment
agreement between the Participant and the Company in effect on the date the
Participant terminates Employment, or if no such definition exists, means any or
any combination of the following: (i) commission by the Participant of a crime
involving moral turpitude, or of a felony; (ii) gross neglect by the Participant
of his or her duties (other than as a result of incapacity resulting from
physical or mental illness or injury) that continues for thirty (30) days after
the Company gives written notice to the Participant thereof; or (iii) an act of
dishonesty or breach of faith in the conduct by the Participant of his or her
duties for the Company that is materially injurious to the Company.

 

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(f)     Change in Control.  In the event the Participant experiences a
“Qualifying Termination” as defined in the Company’s 2008 Change-in-Control
Severance Benefit Plan, as amended from time to time (the “CIC Severance Plan”),
prior to the Measurement Date, the Performance Stock Units will immediately vest
in full as of the date of such Qualifying Termination as if 100% of the Target
Award had been earned in accordance with Annex A (and such Performance Stock
Units will be deemed to be “Earned Stock Units “ for purposes of the remaining
sections of this Agreement).  If the Participant’s Qualifying Termination occurs
after the Measurement Date, subject to the Administrator’s determination and
certification of the achievement of the Performance Targets in accordance with
Annex A, any Earned Stock Units that are unvested as of the date of such
termination of Employment will immediately vest as of such date.

 

5.     Settlement.  Subject to Sections 4.1 and 7 hereof, promptly following the
applicable vesting date, and in any event no later than sixty (60) days
following such vesting date, the Company will (i) issue and deliver to the
Participant the number of shares of Stock equal to the applicable number of
Earned Stock Units; and (ii) enter the Participant’s name on the books of the
Company as the shareholder of record with respect to the shares of Stock so
delivered to the Participant.

 

6.     Rights as Shareholder; Limits on Transfer.  Each Performance Stock Unit
represents an unfunded and unsecured promise by the Company to deliver one Share
to the Participant upon vesting of the Performance Stock Unit.  The Participant
will not have any rights of a shareholder with respect to any Performance Stock
Units (including any voting rights or rights with respect to dividends) unless
and until the Performance Stock Unit is earned and vests and is settled by the
issuance of one or more shares of Stock.  Neither the Performance Stock Units
nor the rights relating thereto may be assigned, alienated, pledged, attached,
sold or otherwise transferred or encumbered by the Participant except upon the
Participant’s death to a beneficiary designated in writing by the Participant in
accordance with procedures established by the Administrator, or if none, to the
person to whom the Award passes by will or the laws of descent and distribution.

 

7.     Withholding; Section 409A; Tax Liability.

 

7.1     The Participant will be required to pay to the Company, and the Company
will have the right to deduct from any compensation paid to the Participant
pursuant to this Agreement or otherwise, the amount of any required withholding
or other applicable taxes in respect of the Performance Stock Units or the
Earned Stock Units, and to take all such other action as the Administrator deems
necessary to satisfy all obligations for the payment of such withholding or
other applicable taxes.  The Administrator may permit the Participant to satisfy
any federal, state or local tax withholding obligation (income or employment) by
authorizing the Company to withhold shares of Stock from the shares of Stock
otherwise issuable or deliverable to the Participant as a result of the vesting
and/or settlement of the Earned Stock Units; provided, however, that no shares
of Stock will be withheld with a value exceeding the minimum amount of tax
required to be withheld by law.

 

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7.2     If the Participant is determined to be a “specified employee” within the
meaning of Section 409A, and the Treasury regulations thereunder, as determined
by the Administrator, at the time of the Participant’s “separation from service”
within the meaning of Section 409A and the Treasury regulations thereunder, then
to the extent necessary to prevent any accelerated or additional tax under
Section 409A, the settlement and delivery of any Shares hereunder upon such
separation from service will be delayed until the earlier of (a) the date that
is six months and one day following the Participant’s separation from service
and (b) the Participant’s death.  For purposes of this Agreement, all references
to “termination of employment” and correlative phrases will be construed to
require a “separation from service” (as defined in Section 1.409A-1(h) of the
Treasury regulations after giving effect to the presumptions contained
therein).  Each payment made under this Agreement shall be treated as a separate
payment.

 

7.3     This Agreement is intended to comply with Section 409A or an exemption
thereunder, and will be construed and interpreted in a manner that is consistent
with the requirements for avoiding additional taxes or penalties under
Section 409A.  Notwithstanding the foregoing, the Company makes no
representations that the payments and benefits provided under this Agreement
comply with Section 409A, and in no event will the Company be liable for all or
any portion of any taxes, penalties, interest or other expenses that may be
incurred by the Participant on account of non-compliance with Section 409A.

 

8.     Compliance with Law.  The issuance and transfer of the Shares will be
subject to compliance by the Company and the Participant with all applicable
requirements of federal and state securities laws and with all applicable
requirements of any stock exchange on which the Stock may be listed.  No shares
of Stock will be issued or transferred unless and until any then applicable
requirements of state and federal law and regulatory agencies have been fully
complied with to the satisfaction of the Company and its counsel.

 

9.     Data Privacy.  By accepting this Award, the Participant hereby explicitly
consents to the collection, use and transfer, in electronic or other form, of
the Participant’s personal data as may be necessary to administer or give effect
to this Agreement.  The Participant understands that the Company and its
Affiliates may hold certain personal information about the Participant,
including, but not limited to, the Participant’s name, home address and
telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Stock or directorships held in the
Company, details of all Performance Stock Units or any other entitlement to
Stock awarded, cancelled, vested, unvested or outstanding in the Participant’s
favor, for the purpose of implementing, administering and managing the Plan
(“Data”).  The Participant understands that Data may be transferred to any third
parties assisting in the implementation, administration and management of the
Plan, that these recipients may be located in the Participant’s country, or
elsewhere, and that the recipient’s country may have different data privacy laws
and protections than the Participant’s country.  The Participant authorizes the
recipients to receive, possess, use, retain and transfer the Data, in electronic
or other form, for the purposes of implementing, administering and managing his
or her participation in the Plan, including any transfer of such Data as may be
required to a broker, escrow agent or other third party with whom the Shares
received upon vesting of the Performance Stock Units may be deposited.  The
Participant understands that Data will be held only as long as is reasonably
necessary to implement, administer and manage his or her participation in the
Plan.  The Participant understands that refusal or withdrawal of consent may
affect his or her ability to participate in the Plan.

 

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10.  Electronic Delivery.  The Company may, in its sole discretion, deliver by
electronic means any documents related to current or future participation in the
Plan.  The Participant hereby consents to receive such documents by electronic
delivery and agrees to participate in the Plan through an on-line or electronic
system established and maintained by the Company or another third party
designated by the Company.

 

11.  Non-competition and Non-solicitation.

 

11.1   In consideration of the grant of the Performance Stock Units, the
Participant agrees and covenants not to, without the explicit written permission
of the Company’s General Counsel:

 

(a)    work for, be employed or engaged by, or in any manner contribute his or
her knowledge or services to, directly or indirectly, in whole or in part, as an
employee, officer, owner, manager, advisor, consultant, agent, partner,
director, shareholder, volunteer, intern or in any other similar capacity, any
entity engaged in the same or similar business as the Company and its
Affiliates, for a period of twelve (12) months following the termination of the
Participant’s Employment (howsoever caused);

 

(b)    directly or indirectly, solicit, hire, recruit, attempt to solicit, hire
or recruit, or otherwise induce the termination of employment of, any employee
of the Company or its Affiliates, or assist any other person or entity to do any
of the foregoing, for a period of twelve (12) months following the termination
of the Participant’s Employment (howsoever caused); or

 

(c)     directly or indirectly, solicit, contact (including, but not limited to,
by e-mail, regular mail, express mail, telephone, fax, or instant message),
attempt to contact or meet with any of the then current customers of the Company
or any of its Affiliates for purposes of offering, accepting or delivering any
goods or services similar to or competitive with those currently offered by the
Company or any of its Affiliates, or known by the Participant to be in
development by the Company or any of its Affiliates, for a period of twelve (12)
months following the termination of the Participant’s Employment (howsoever
caused).

 

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11.2   In the event of a breach of any of the covenants contained in
Section 11.1:

 

(a)    any unvested or unearned portion of the Performance Stock Units or Earned
Stock Units will be forfeited effective as of the date of such breach, unless
sooner terminated by operation of another term or condition of this Agreement or
the Plan; and

 

(b)    the Participant hereby consents and agrees that the Company will be
entitled to a temporary restraining order and preliminary or permanent
injunction or other equitable relief against such breach or threatened breach
from any court of competent jurisdiction, without the necessity of showing any
actual damages or that money damages would not afford an adequate remedy, and
without the necessity of posting any bond or other security, and to an award of
its reasonable attorney’s fees incurred in securing such relief.  The
aforementioned equitable relief will be in addition to, and not in lieu of, any
legal remedies, monetary damages or other available forms of relief.

 

11.3   Provisions of this Agreement will survive any termination of this
Agreement or the expiration or settlement of the Performance Stock Units if so
provided herein or if necessary or desirable to accomplish the purposes of other
surviving provisions, including, without limitation, the obligations of the
Participant under this Section 11 and the provisions of Section 12 below.

 

12.  Recovery of Compensation.  The Performance Stock Units, the Earned Stock
Units any Shares delivered hereunder and any gains realized or other amounts in
respect of such Performance Stock Units or Earned Stock Units will be subject to
recoupment by the Company to the extent required to comply with applicable law
or regulation or the rules of the stock exchange on which the Company’s Stock is
traded.

 

13.  Notices.  Any notice required to be delivered to the Company under this
Agreement will be in writing and addressed to the Secretary of the Company at
the Company’s principal corporate offices.  Any notice required to be delivered
to the Participant under this Agreement will be in writing and addressed to the
Participant at the Participant’s address as shown in the records of the
Company.  Either party may designate another address in writing (or by such
other method approved by the Company) from time to time.

 

14.  Governing Law.  This Agreement will be construed and interpreted in
accordance with the laws of the State of Vermont without regard to conflict of
law principles.

 

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15.  Interpretation.  Any dispute regarding the interpretation of this Agreement
will be submitted by the Participant or the Company to the Administrator for
review.  The resolution of such dispute by the Administrator will be final and
binding on the Participant and the Company.

 

16.  Successors and Assigns.  The Company may assign any of its rights under
this Agreement.  This Agreement will be binding upon and inure to the benefit of
the successors and assigns of the Company.  Subject to the restrictions on
transfer set forth herein, this Agreement will be binding upon the Participant
and the Participant’s beneficiaries, executors or administrators.

 

17.  Severability.  The invalidity or unenforceability of any provision of the
Plan or this Agreement will not affect the validity or enforceability of any
other provision of the Plan or this Agreement, and each provision of the Plan
and this Agreement will be severable and enforceable to the extent permitted by
law.

 

18.  Limitation on Rights; No Right to Future grants; Extraordinary Item.  By
entering into this Agreement and accepting the Award, the Participant
acknowledges that: (a) the Plan is discretionary and may be modified, suspended
or terminated by the Company at any time as provided in the Plan; (b) the grant
of this Award is a discretionary one-time benefit and does not create any
contractual or other right to receive future grants of awards or benefits in
lieu of awards; (c) all determinations with respect to any such future grants,
including, but not limited to, the times when awards will be granted, the number
of shares subject to each award, the award price, if any, and the time or times
when each award will be settled, will be at the sole discretion of the Company;
(d) the Participant’s participation in the Plan is voluntary; (e) the value of
this Award is an extraordinary item which is outside the scope of the
Participant’s employment contract, if any; (f) this Award is not part of normal
or expected compensation for any purpose, including without limitation for
calculating any benefits, severance, resignation, termination, redundancy, end
of service payments, bonuses, long-service awards, welfare, insurance, pension
or retirement benefits or similar payments; (g) the future value of the Shares
subject to this Award is unknown and cannot be predicted with certainty;
(h) neither the Plan, this Award nor the issuance of the Shares will (1) confer
upon the Participant any right to continue in the employ of (or any other
relationship with) the Company or any subsidiary of the Company, (2) if the
Participant is an employee, alter in any way the Participant’s “at will”
employment, or (3) limit in any respect the right of the Company or any
subsidiary to terminate the Participant’s Employment or other relationship with
the Company or any subsidiary, as the case may be, at any time, and (i) in the
event that the Participant is not a direct employee of the Company, the grant of
this Award will not be interpreted to form an employment relationship with the
Company; and furthermore, the grant of this Award will not be interpreted to
form an employment contract with the Participant’s employer, the Company or any
subsidiary.  For the avoidance of doubt, language relating to termination for
“Cause” or “not-for-Cause” pertains solely to the opportunity to vest and earn
the Performance Stock Units as provided in this Agreement, and does not require
the Company to establish “Cause” for the termination of the Participant’s
Employment.

 

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19.  Amendment.  The Administrator has the right to amend, alter, suspend,
discontinue or cancel the Performance Stock Units prospectively or
retroactively; provided, that, no such amendment will adversely affect the
Participant’s material rights under this Agreement without the Participant’s
consent.

 

20.  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 instrument.  Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in portable document
format (.pdf), or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same
effect as physical delivery of the paper document bearing an original signature.

 

21.  Acceptance.  The Participant hereby acknowledges receipt of a copy of the
Plan and this Agreement.  The Participant has read and understands the terms and
provisions thereof, and accepts the Performance Stock Units subject to all of
the terms and conditions of the Plan and this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth below.

 

 

 

GREEN MOUNTAIN COFFEE ROASTERS, INC.

 

 

 

 

 

 

By:

 

 

 

Linda Longo-Kazanova

 

 

Chief Human Resources Officer

 

 

 

 

Date:

 

 

 

 

 

[PARTICIPANT]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

 

Date:

 

 

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