Exhibit 10.2

 

KEURIG GREEN MOUNTAIN, INC.
2015 SEVERANCE BENEFIT PLAN

 

1.                   PURPOSE

 

Keurig Green Mountain, Inc. (the “Company”) adopts this 2015 Severance Benefit
Plan with the intent of providing financial assistance through severance
payments and other benefits to certain designated employees whose employment
with the Company is terminated in a Qualifying Termination.

 

2.                   DEFINITIONS

 

“Accountants”: the independent public accounting firm most recently serving as
the Company’s outside auditors, or such other accounting or benefits consulting
firm as the Company may designate.

 

“Base Salary”: in the case of any Participant, the Participant’s annual rate of
base salary as in effect immediately prior to the date of the Participant’s
Qualifying Termination.

 

“Benefits”: the payments and benefits described in Section 5 of the Plan.

 

“Board”: the Board of Directors of the Company.

 

“Cause”: in the case of any Participant, any or any combination of the
following: (i) indictment or conviction of 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; (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, in all cases as determined,
as applicable, in good faith by the Compensation and Organizational Development
Committee.

 

“Chief Executive Officer”: the Company’s President and Chief Executive Officer.

 

“Code”: the federal Internal Revenue Code of 1986, as amended. References to the
Code shall be deemed to incorporate applicable Treasury Regulations and other
applicable Internal Revenue Service guidance.

 

“Effective Date”: April 24, 2015.

 

“Exchange Act”: the Securities Exchange Act of 1934, as amended.

 

“Good Reason”: for purposes of the definition of “Qualifying Termination” shall

 

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mean with respect to the Level I Participant only (i) any action by the Company
which results in a material diminution in a Level I Participant’s position,
authority, duties or responsibilities immediately prior to the Qualifying
Termination; provided, however, that any reduction in size or nature of the
Company’s business by reason of a sale or transfer of some or all of the
business of the Company or any of its subsidiaries or other reduction in its
business or that of its subsidiaries, or the fact that the Company shall become
a subsidiary of another company, shall not, in and of itself, constitute Good
Reason hereunder, other than if such Level I Participant is no longer the
President and Chief Executive Officer of a publicly traded company; (ii) any
material reduction in the Level I Participant’s rate of annual base salary or
target incentive bonus; (iii) failure by the Board to nominate as necessary and
recommend the Level I Participant to serve as a member of the Board; or (iv) any
requirement by the Company that the Level I Participant be based at any office
or location that is more than 50 miles distant from the Level I Participant’s
base office or work location.

 

“Level I Participant”: the Chief Executive Officer whom the Plan Administrator
has selected to participate in the Plan.

 

“Level II Participant”: the officers and other management of the Company or a
subsidiary of the Company whom the Plan Administrator has selected to
participate in the Plan and designated as Level II Participants.

 

“Level III Participant”: the officers and other management of the Company or a
subsidiary of the Company whom the Plan Administrator has selected to
participate in the Plan and designated as Level III Participants.

 

“Participant”: subject to Section 3 of the Plan, any Level I Participant, Level
II Participant or Level III Participant.

 

“Plan”: the Keurig Green Mountain, Inc. 2015 Severance Benefit Plan set forth
herein, as the same may from time to time be amended and in effect. As applied
to any Participant, the Plan shall be deemed modified by the provisions of the
Participant’s Plan Agreement, if any.

 

“Plan Administrator”: the Compensation and Organizational Development Committee
of the Board.

 

“Plan Agreement”: an agreement described in Section 4 of the Plan.

 

“Qualifying Termination”: in the case of any Participant, termination of the
Participant’s employment with the Company and its subsidiaries by reason of (i)
an involuntary separation by the Company other than for Cause; or (ii) solely in
the case of a Level I Participant, a voluntary separation by the Participant for
Good Reason.  A termination will be treated as one described in clause (ii) of
the preceding sentence only if the Level I Participant gives the Company written
notice of the events or circumstances constituting Good Reason within ninety
(90) days of the initial

 

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existence or occurrence of those events or circumstances, the Company fails to
cure within thirty (30) days of receipt of such notice, and the Level I
Participant’s separation occurs not later than thirty (30) days after the end of
the cure period.

 

“Section 280G”: Section 280G of the Code.

 

“Section 409A”: Section 409A of the Code.

 

“Section 4999”: Section 4999 of the Code.

 

3.                   PARTICIPATION

 

An employee once designated a Participant shall continue to be a Participant
(subject to satisfaction of the requirements set forth in Section 4 below, if
required by the Plan Administrator in its sole and absolute discretion) until
the earlier of (a) the date on which the Plan Administrator determines, in its
sole discretion, that he or she is no longer eligible to participate in the Plan
(as evidenced by written notice thereof), and (b) the date he or she ceases to
be employed by the Company; provided, that a Participant who ceases to be
employed by the Company by reason of a Qualifying Termination shall continue to
be treated as a Participant with respect to any benefits related to such
Qualifying Termination until they have been paid or provided in full.

 

4.                   AGREEMENT OF PARTICIPANTS

 

As a precondition to participation in the Plan, the Plan Administrator may
require that an employee who is designated a Participant enter into a written
agreement (a “Plan Agreement”) in accordance with procedures prescribed by and
in a form acceptable to the Plan Administrator.  Each Plan Agreement shall
contain such terms, if any, as the Plan Administrator may specify, which may (if
the Plan Administrator so provides) deviate from the terms generally set forth
in the Plan.

 

5.                   BENEFITS

 

(a)                                 A Participant who separates from the service
of the Company and its subsidiaries by reason of a Qualifying Termination shall
receive the following:

 

(i)                                     Level I Participant:

 

The Company shall pay to a Level I Participant, in cash, (A) within five (5)
business days of the date the Participant’s Release and Non-Competition and
Non-Solicitation Agreement (as described in Section 6 below) become effective
(and no longer revocable) (the “Release Date”), the Level I Participant’s Base
Salary earned as of the date of termination but not yet paid; plus (B) on the
date that annual bonuses are paid to other employees by the Company for the
subject fiscal year as provided under the Company’s bonus plan, an amount equal
to the

 

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Participant’s earned incentive bonus, if any, for the fiscal year in which
termination occurs, multiplied by a fraction, the numerator of which is the
number of days elapsed between the beginning of such fiscal year and the date of
termination and the denominator of which is the number of days in such fiscal
year; plus (C) in substantially equal installments, over a twelve (12) month
period in accordance with the Company’s payroll policy, an amount equal to the
product obtained by multiplying (x) one and one half (1.5) by (y) the sum of the
Level I Participant’s Base Salary plus the Participant’s target incentive bonus
for the fiscal year in which the Qualifying Termination occurs.  The Benefit
payments set forth in Section 5(a)(i)(C) shall commence within 10 days after the
Release Date and, once they commence, shall be retroactive to the date of the
Qualifying Termination.

 

(ii)                                  Level II Participant:

 

The Company shall pay to a Level II Participant, in cash, (A) within five (5)
business days of the Release Date, the Level II Participant’s Base Salary earned
as of the date of termination but not yet paid; plus (B) on the date that annual
bonuses are paid to other employees by the Company for the subject fiscal year
as provided under the Company’s bonus plan, an amount equal to the Participant’s
earned incentive bonus, if any, for the fiscal year in which termination occurs,
multiplied by a fraction, the numerator of which is the number of days elapsed
between the beginning of such fiscal year and the date of termination and the
denominator of which is the number of days in such fiscal year; plus (C) in
substantially equal installments, over an eighteen (18) month period if
designated as noted in Section 5(a)(ii)(C)(x), or a twenty-four (24) month
period if designated as noted in Section 5(a)(ii)(C)(y), an amount equal to the
product obtained by multiplying either, as solely determined by the Plan
Administrator at the time the Level II Participant is designated as a
Participant in the Plan (x)(aa) one and one half (1.5) by (bb) the Level II
Participant’s Base Salary, or (y)(aa) two (2.0) by (bb) the Level II
Participant’s Base Salary.  The Benefit payments set forth in Section
5(a)(ii)(C) shall commence within 10 days after the Release Date and, once they
commence, shall be retroactive to the date of the Qualifying Termination.

 

(iii)                               Level III Participant:

 

The Company shall pay to a Level III Participant, in cash, (A) within five (5)
business days of the Release Date, the Level III Participant’s Base Salary
earned as of the date of termination but not yet paid; plus (B) on the date that
annual bonuses are paid to other employees by the Company for the subject fiscal
year as provided under the Company’s bonus plan, an amount equal to the
Participant’s earned incentive

 

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bonus, if any, for the fiscal year in which termination occurs, multiplied by a
fraction, the numerator of which is the number of days elapsed between the
beginning of such fiscal year and the date of termination and the denominator of
which is the number of days in such fiscal year; plus (C) in substantially equal
installments, over a twelve (12) month period in accordance with the Company’s
payroll policy, an amount equal to the product obtained by multiplying (x) one
(1) by (y) the Level III Participant’s Base Salary.  The Benefit payments set
forth in Section 5(a)(iii)(C) shall commence within 10 days after the Release
Date and, once they commence, shall be retroactive to the date of the Qualifying
Termination.

 

(b)         All Participants:  Provided that he or she elects so-called “COBRA”
continuation coverage, if available, the Company shall pay to the Participant,
in cash, and as additional consideration for the Participant’s execution of a
non-compete and non-solicit agreement with the Company in a form provided by the
Company, a lump-sum payment equal to the amount of the premiums required to
continue the Participant’s, and the Participant’s dependents’, participation in
the Company’s health insurance plans or programs for the Coverage Continuation
Period.  For purposes of this subsection, the “Coverage Continuation Period”
means (i) for Level I Participants and Level II Participants, the eighteen (18)
month period, and (ii) for Level III Participants, the twelve (12) month period,
in each case following the Participant’s Qualifying Termination.

 

6.              RELEASE OF CLAIMS

 

The Participant acknowledges and agrees that in exchange for the Benefits under
Section 5, the Participant shall be required to execute and not revoke (a) a
general release, in a form provided by the Company (the “Release”), of the
Company and its subsidiaries, stockholders, directors, officers, employees, and
assigns, of any claims or causes of action, whether or not then known, with
respect to any matter, including, without limitation, any matter related to
employment with the Company, including, without limitation, claims of wrongful
discharge, constructive discharge, emotional distress, defamation, invasion of
privacy, fraud, breach of contract or breach of the covenant of good faith and
fair dealing and any claims of discrimination or harassment based on sex, age,
race, national origin, disability or any other basis and (b) a general
non-competition and non-solicitation agreement in a form provided by the Company
(the “Non-Competition and Non-Solicitation Agreement”), then Participant shall
be entitled to receive the Benefits.  Participant shall execute and return the
Release and Non-Competition and Non-Solicitation Agreement within five (5)
business days following the date of the Qualifying Termination.  Notwithstanding
the foregoing, the Participant shall not release (i) any rights to be
indemnified by the Company, (ii) rights to enforce the Company’s obligations
under this Plan, or (iii) rights under any employee benefit plan or to any
equity based awards.  In the event that the Participant’s entitlement to
Benefits under the Plan arise in one calendar year and the consideration period
under any law to consider and to revoke a release of claims expires in the
following calendar year, then

 

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notwithstanding anything herein to the contrary, the payment of Benefits (other
than accrued and earned vacation pay and salary) shall be made on the first
business day following expiration of the consideration and/or revocation period
in the following calendar year.

 

7.                   COORDINATION WITH CERTAIN CODE PROVISIONS

 

Payments under Section 5 shall be made without regard to whether the
deductibility of such payments (or any other “parachute payments,” as that term
is defined in Section 280G, to or for the benefit of the Participant) would be
limited or precluded by Section 280G and without regard to whether such payments
(or any other “parachute payments” as so defined) would subject the Participant
to the federal excise tax levied on certain “excess parachute payments” under
Section 4999; provided, that if the total of all payments to or for the benefit
of the Participant, after reduction for all federal taxes (including the tax
described in Code Section 4999, if applicable, with respect to such payments)
(the “Participant’s total after tax payments”), would be increased by the
limitation or elimination of any payment under Section 5, such amounts payable
hereunder shall be reduced to the extent, and only to the extent, necessary to
maximize the Participant’s total after tax payments.

 

The determination as to whether and to what extent payments under Section 5 are
required to be reduced in accordance with the preceding sentence shall be made
at the Company’s expense by the Accountants. In the event that any payments
under Section 5 are required to be reduced as described in this Section 7, the
adjustment will be made, first, by reducing the cash payments, if any, due to
the Participant pursuant to Section 5(a)(i)-(iii), as applicable; and second, if
additional reductions are necessary, by reducing the benefits due to the
Participant under Section 5(b).  In the event of any underpayment or overpayment
under Section 5 as determined by the Accountants, the amount of such
underpayment or overpayment shall forthwith be paid to the Participant or
refunded to the Company, as the case may be, with interest at the applicable
federal rate provided for in Section 7872(f)(2) of the Code.

 

8.                   BINDING EFFECT ON SUCCESSOR ENTITY

 

The Plan and the Company’s obligations under the Plan shall be binding upon, and
the Company shall require the Plan and the Company’s obligations thereunder to
be assumed by, any successor to all or substantially all of the Company’s
business (whether by merger, consolidation, stock sale, sale of assets or
otherwise).

 

9.                   DISPUTES

 

In the event that Participant brings an action to contest the validity or
enforceability of the Participant’s rights or the Company’s obligations under
the Plan and prevails in such action, then the company agrees to reimburse the
Participant for all reasonable legal fees and expenses which the Participant may
incur as a result of such action.

 

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10.            PAYMENT OBLIGATIONS ABSOLUTE

 

Upon a Qualifying Termination the Company’s obligations to pay the Benefits
described in Section 5 shall be absolute and unconditional and shall not be
affected by any circumstances, including, without limitation, any set-off,
counterclaim, recoupment, defense or other right which the Company may have
against any Participant.  In no event shall a Participant be obligated to seek
other employment or take any other action by way of mitigation of the amounts
payable to a Participant under any of the provisions of the Plan and in no event
shall the amount of any payment hereunder be reduced by any compensation earned
by a Participant as a result of employment by another employer.

 

11.            LIMITED EFFECT

 

Nothing herein or in any Plan Agreement shall be construed as giving any
Participant a right of continued employment or as limiting the Company’s right
to terminate a Participant’s employment, subject, in the case of any Qualifying
Termination, to the payment of the Benefits.

 

12.            DELEGATION/ADMINISTRATION

 

To the extent permitted by applicable law, the Plan Administrator may delegate
any of its authority to administer the Plan to any person or persons selected by
the Plan Administrator, including one or more members of the Compensation and
Organizational Development Committee of the Board or one or more officers of the
Company, and such person or persons shall be deemed to be the Plan Administrator
with respect to, and to the extent of its or their authority. In this regard and
to the extent permitted under applicable law, the Compensation and
Organizational Development Committee hereby delegates its power, authority and
responsibilities under the Plan to the Company’s Chief Human Resources Officer
(or the individual holding equivalent duties and responsibilities).  Any
authority granted to the Plan Administrator may also be exercised by the full
Board.  To the extent that any permitted action taken by the Board conflicts
with action taken by the Plan Administrator, the Board action shall control.

 

The Plan Administrator shall have the ability to interpret and construe the Plan
in its reasonable discretion; to determine all questions arising in the
administration, interpretation and application of the plan; and to take all
necessary and proper actions it may deem necessary to fulfill its duties as Plan
Administrator.

 

13.            AMENDMENT AND TERMINATION

 

The Board may amend the Plan at any time and from time to time, and may
terminate the Plan at any time; provided, however, that the Board or Plan
Administrator, as applicable, shall not (other than as may be provided by
applicable law or regulation) within any one-year period following (a) the
Effective Date, or (b) the effective date of an amendment of this Plan, make any
amendments to this Plan that would reduce or

 

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negatively affect the Benefits provided to a Participant hereunder without the
express written consent of such Participant.

 

14.            OTHER BENEFITS

 

Notwithstanding anything herein to the contrary, by participating in the Plan,
the Participant and the Company acknowledge and agree that in the event of any
conflict or inconsistency between the terms of any employment agreement or offer
letter between the Participant and the Company (such agreements or letters, the
“Employment Arrangements”) and the terms of this Plan, whichever term is most
beneficial to the Participant (including, for example, the amount of Benefits or
governing definitions) between this Plan and those Employment Arrangements shall
prevail and the amount of Benefits paid to the Participant shall be capped at
the amounts provided by such prevailing terms.  In no event shall a Participant
hereunder be entitled to Benefits under this Plan and any severance payments
under the Company’s Amended and Restated 2008 Change in Control Severance
Benefit Plan (“CIC Plan”) for the same Qualifying Termination.  This Plan and
the CIC Plan are mutually exclusive.

 

15.            SECTION 409A

 

The Plan and the Benefits, if any, payable hereunder are intended to qualify for
the short-term exception to the requirements of Section 409A, and the Plan
(including all Plan Agreements) shall be construed accordingly.  Notwithstanding
anything to the contrary in the Plan (including any Plan Agreement), neither the
Company, nor any subsidiary, nor any person acting on behalf of the Company, or
any subsidiary, shall be liable to any Participant or to the estate or
beneficiary of any Participant by reason of any acceleration of income, or any
additional tax, asserted by reason of the failure of a payment of the Benefits
to satisfy the requirements of Section 409A.

 

16.            WITHHOLDING

 

Anything to the contrary notwithstanding, all payments required to be made by
the Company hereunder to a Participant shall be subject to the withholding of
such amounts, if any, relating to tax and other payroll deductions as the
Company may reasonably determine it should withhold pursuant to any applicable
law or regulation.

 

17.            NO ASSIGNMENT

 

The rights of Participants and beneficiaries under the Plan are not subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment, or garnishment by creditors of such Participants and
beneficiaries.

 

18.            PLAN TO BE UNFUNDED, ETC.

 

The Plan is intended to create an unfunded incentive compensation arrangement.
Nothing contained in the Plan, and no action taken pursuant to the Plan, shall
create or be

 

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construed to create a trust of any kind.  A Participant’s right to receive the
Benefits shall be no greater than the right of an unsecured general creditor of
the Company.  All Benefits shall be paid from the general funds of the Company,
and no special or separate fund shall be established and no segregation of
assets shall be made to assure payment of such Awards.  There shall not vest in
any Participant or beneficiary any right, title, or interest in and to any
specific assets of the Company.

 

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