FY 2006 Company-wide Profit Sharing Plan

 

The following profit sharing plan is effective as of September 25, 2005 through
September 30, 2006.

Plan Objectives

The overall objective of the profit sharing plan is to provide all eligible
employees with an opportunity to share in the company's success and to reinforce
our desire to work toward measurable goals.

Performance Measures

The performance goal for Fiscal Year 2006 is the Operating Profit of GMCR. The
performance measures, along with the details of this plan, will be reviewed on
an annual basis. The Chief Financial Officer determined the target number with
guidance from the Senior Leadership Team. See Schedule A for details on target
performance measures.

Award Opportunities

Bonus payments are calculated on an annualized equivalent of base pay only.
Overtime and other differentials or adjustments are not included in the
calculation. For part time employees the calculation will be based on average
hours worked per week.

 

Award payout opportunities will be determined based on the following group
criteria.

Bonus Group

Description

Payout Opportunity

Group A

Full-time and Part-time, Non-exempt & Exempt Employees

5% of Base Salary

Paid Quarterly based on Quarterly & Year End Goals *

Q1 -- 20 %

Q2 -- 20 %

Q3 -- 20 %

Q4 / Year End -- 40 %

Group B

Key Management Team -- Employees reporting to a Senior Leadership Team Member
with broad organizational impact, or employees with broad impact on the success
of the organization identified by the President and Vice President of Human
Resources & Organizational Development

 

5% of Base Salary

Paid Annually based on Year End Goal

Year End -- 100 %

 

Group C

Executive Management Team -- Executive Leadership Team and Senior Leadership
Team Members

5% of Base Salary

Paid Annually based on Year End Goal

Year End -- 100 %

 

* Quarterly targets must be met at 100% in order to receive payout.

Group A will be eligible for quarterly payouts if quarter targets are met at
100%. They will be eligible for year-end threshold and multiplier opportunities.

Group B and C will not be eligible for quarterly payouts. They will be eligible
for year-end threshold and multiplier opportunities.

Year End Threshold

-- there will be a year-end threshold, or point at which payments begin, which
is set forth on Schedule A. There will be no year-end payout below the 95%
target. The threshold is not available on any quarterly payouts. 

Year End Multiplier

-- there will be a year-end multiplier for achievement above the operating
profit target, which is set forth on Schedule A.

 

Program Eligibility and Employment Changes

Participation in this plan is not a guarantee of employment for any specified
period of time, and the company reserves the right to dismiss or discharge any
participant at any time.

New Hires

-- must be employed since the beginning of the Quarter being paid to receive
award.

Q1 Payout -- employed prior to September 25, 2005

Q2 Payout -- employed prior to January 15, 2006

Q3 Payout -- employed prior to April 9, 2006

Q4 Payout -- employed prior to July 2, 2006

Leave of Absence, Disability, or Death

-- award prorated based on active time at work during the quarter in which leave
is taken.

Corrective Action Plans

-- an employee on a formal corrective action plan will not be eligible for award
payments at any time during the quarter.

Voluntary Termination

-- award forfeited except in case of death, disability, or retirement. Must be
active status and on payroll on date award is paid to receive payment.

Involuntary Termination or Layoff

-- if termination occurs after the end of the plan year, but before payout, no
award is paid. Must be active status and on payroll on date award is paid to
receive payment.

Program Exceptions & Authority

The company reserves the rights to amend, modify, and revoke the plan, in whole
or in part, at any time. The authority to make changes to the plan rests jointly
with the Chief Financial Officer and the Vice President of Human Resources.

Plan Administration

The Finance Department will utilize the Continued Operations Profit and Loss
Statement to determine achievement to the target and is responsible for
calculating results of the profit sharing plan each quarter and assuring an
accrual rate is maintained.

The calculations will be based on the Operating Profit number and employees'
base pay on the last day of the quarter.