Exhibit 10.15

 

AMENDMENT NO. 1
to
EMPLOYMENT AGREEMENT

 

THIS AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (this “Amendment”) is dated as of
December 31, 2008, by and between Farmer Bros. Co., a Delaware corporation (the
“Company”), and Drew H. Webb (“Webb”).

 

WHEREAS, Webb is currently employed by the Company pursuant to that certain
Employment Agreement, dated as of March 3, 2008 (the “Agreement”); and

 

WHEREAS, the Company and Webb desire to amend the Agreement, as provided herein,
to incorporate certain changes deemed advisable in light of Section 409A of the
U.S. Internal Revenue Code.

 

NOW, THEREFORE, the parties agree as follows:

 

1.             THE LAST PARAGRAPH OF SECTION 7B OF THE AGREEMENT IS HEREBY
AMENDED AND RESTATED TO READ IN ITS ENTIRETY AS FOLLOWS:

 

“ “Good Reason” shall consist only of (i) the Company’s material breach of this
Agreement, (ii) a material reduction in Webb’s responsibilities, duties or
authority, or (iii) a material relocation of Webb’s principal place of
employment more than fifty (50) miles from its present location; provided,
however, that any such condition shall not constitute “Good Reason” unless both
(x) Webb provides written notice to the Company describing the condition claimed
to constitute Good Reason in reasonable detail within ninety (90) days of the
initial existence of such condition, and (y) the Company fails to remedy such
condition within thirty (30) days of receiving such written notice thereof; and
provided, further, that in all events the termination of Webb’s employment with
the Company shall not be treated as a termination for “Good Reason” unless such
termination occurs not more than one (1) year following the initial existence of
the condition claimed to constitute “Good Reason.” ”

 

2.             SECTION 8B OF THE AGREEMENT IS HEREBY AMENDED AND RESTATED TO
READ IN ITS ENTIRETY AS FOLLOWS:

 

“B.          IF TERMINATION OCCURS AT THE ELECTION OF THE COMPANY WITHOUT CAUSE
OR BY WEBB’S RESIGNATION WITH GOOD REASON:  WEBB WILL RECEIVE AS SEVERANCE
(I) AN AMOUNT EQUAL TO HIS BASE SALARY AT THE RATE IN EFFECT ON THE DATE OF
TERMINATION FOR A PERIOD OF ONE (1) YEAR, (II) PARTIALLY COMPANY-PAID COBRA
COVERAGE UNDER THE COMPANY’S HEALTH CARE PLAN FOR HIMSELF AND HIS SPOUSE FOR ONE
(1) YEAR AFTER THE EFFECTIVE TERMINATION DATE (THE COMPANY WILL PAY THE SAME
PERCENTAGE OF THE COVERAGE COST THAT IT WOULD HAVE PAID HAD WEBB’S EMPLOYMENT
NOT TERMINATED) AND (III) AN AMOUNT EQUAL TO ONE HUNDRED PERCENT (100%) OF
WEBB’S TARGET AWARD FOR THE FISCAL YEAR IN WHICH THE DATE OF TERMINATION OCCURS
(OR, IF NO TARGET AWARD HAS BEEN ASSIGNED TO WEBB AS OF THE DATE OF TERMINATION,
THE AVERAGE BONUS PAID BY THE COMPANY TO WEBB FOR THE LAST THREE (3) COMPLETED
FISCAL YEARS OR FOR THE NUMBER OF COMPLETED FISCAL YEARS THAT WEBB HAS BEEN IN
THE EMPLOY OF

 

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THE COMPANY IF FEWER THAN THREE, PRIOR TO THE TERMINATION DATE), SUCH AMOUNT TO
BE PRORATED FOR THE PARTIAL FISCAL YEAR IN WHICH THE TERMINATION OCCURS.  WEBB
IS NOT OBLIGATED TO SEEK OTHER EMPLOYMENT AS A CONDITION TO RECEIPT OF THE
PAYMENTS CALLED FOR BY THIS SECTION 8B, AND WEBB’S EARNINGS, INCOME OR PROFITS
FROM OTHER EMPLOYMENT OR BUSINESS ACTIVITIES AFTER TERMINATION OF HIS EMPLOYMENT
SHALL NOT REDUCE THE COMPANY’S PAYMENT OBLIGATIONS UNDER THIS SECTION 8B. 
SUBJECT TO SECTION 8C AND SECTION 12K(II), THE AMOUNT REFERRED TO IN CLAUSE
(I) ABOVE SHALL BE PAID IN INSTALLMENTS IN ACCORDANCE WITH THE COMPANY’S
STANDARD PAYROLL PRACTICES COMMENCING IN THE MONTH FOLLOWING THE MONTH IN WHICH
WEBB’S SEPARATION FROM SERVICE OCCURS, AND THE AMOUNT REFERRED TO IN CLAUSE
(III) ABOVE SHALL BE PAID IN A LUMP SUM WITHIN THIRTY (30) DAYS AFTER THE END OF
THE COMPANY’S FISCAL YEAR IN WHICH WEBB’S SEPARATION FROM SERVICE OCCURS.  AS
USED HEREIN, A “SEPARATION FROM SERVICE” OCCURS WHEN WEBB DIES, RETIRES, OR
OTHERWISE HAS A TERMINATION OF EMPLOYMENT WITH THE COMPANY THAT CONSTITUTES A
“SEPARATION FROM SERVICE” WITHIN THE MEANING OF TREASURY REGULATION
SECTION 1.409A-1(H)(1), WITHOUT REGARD TO THE OPTIONAL ALTERNATIVE DEFINITIONS
AVAILABLE THEREUNDER.”

 

3.             SECTION 8C OF THE AGREEMENT IS HEREBY AMENDED AND RESTATED TO
READ IN ITS ENTIRETY AS FOLLOWS:

 

“C.          As a condition to receiving the severance payments under Section 8B
above, Webb must execute and deliver to the Company within twenty-one (21) days
following the termination of his employment (or such longer period as may be
required under applicable law) a general release of claims against the Company
other than claims to the payments called for by this Agreement, such release to
be in form and content substantially as attached hereto as Exhibit A, and said
release shall have become effective under applicable laws, including the Age
Discrimination in Employment Act of 1967, as amended.”

 

4.             A NEW SECTION 12K IS HEREBY ADDED TO THE AGREEMENT TO READ IN ITS
ENTIRETY AS FOLLOWS:

 

“K           Section 409A.

 

(i)                                     It is intended that any amounts payable
under this Agreement shall either be exempt from or comply with Section 409A of
the Code (including the Treasury regulations and other published guidance
relating thereto) (“Code Section 409A”) so as not to subject Webb to payment of
any additional tax, penalty or interest imposed under Code Section 409A.  The
provisions of this Agreement shall be construed and interpreted to avoid the
imputation of any such additional tax, penalty or interest under Code
Section 409A yet preserve (to the nearest extent reasonably possible) the
intended benefit payable to Webb.

 

(ii)                                  Notwithstanding any provision of this
Agreement to the contrary, if Webb is a “specified employee” within the meaning
of Treasury Regulation Section 1.409A-1(i) as of the date of Webb’s Separation
from Service, Webb shall not be entitled to any payment or benefit pursuant to

 

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Section 8B until the earlier of (i) the date which is six (6) months after
Webb’s Separation from Service for any reason other than death, or (ii) the date
of Webb’s death.  Any amounts otherwise payable to Webb upon or in the
six (6) month period following Webb’s Separation from Service that are not so
paid by reason of this Section 12K(ii) shall be paid (without interest) as soon
as practicable (and in all events within thirty (30) days) after the date that
is six (6) months after Webb’s Separation from Service (or, if earlier, as soon
as practicable, and in all events within thirty (30) days, after the date of
Webb’s death).  The provisions of this Section 12K(ii) shall only apply if, and
to the extent, required to avoid the imputation of any tax, penalty or interest
pursuant to Code Section 409A.

 

(iii)                               To the extent that any benefits pursuant to
Section 8B(ii) or reimbursements pursuant to Section 6 or Section 12J are
taxable to Webb, any reimbursement payment due to Webb pursuant to any such
provision shall be paid to Webb on or before the last day of Webb’s taxable year
following the taxable year in which the related expense was incurred.  The
benefits and reimbursements pursuant to such provisions are not subject to
liquidation or exchange for another benefit and the amount of such benefits and
reimbursements that Webb receives in one taxable year shall not affect the
amount of such benefits or reimbursements that Webb receives in any other
taxable year.”

 

5.             EXCEPT AS EXPRESSLY MODIFIED HEREIN, THE AGREEMENT SHALL REMAIN
IN FULL FORCE AND EFFECT IN ACCORDANCE WITH ITS ORIGINAL TERMS.

 

6.             CAPITALIZED TERMS THAT ARE NOT DEFINED HEREIN SHALL HAVE THE
MEANINGS ASCRIBED TO THEM IN THE AGREEMENT.

 

7.             THIS AMENDMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH
OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF WHICH TOGETHER SHALL CONSTITUTE
ONE AND THE SAME INSTRUMENT.

 

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IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered on the day and year first above written.

 

 

FARMER BROS. CO.

 

 

 

 

 

By:

     /s/ Roger M. Laverty III

 

       Roger M. Laverty III

 

       Chief Executive Officer

 

 

 

 

 

WEBB

 

 

 

 

 

             /s/ Drew H. Webb

 

Drew H. Webb

 

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