Document:

FY 2006 Company-wide Profit Sharing Program

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.Key Management Bonus Plan

Green Mountain Coffee Roasters, Inc.

Key Management Bonus Plan for FY 2006

	INTENT

The Key Management Bonus Plan for fiscal year 2006 (the period from September 25, 2005 to September 30, 2006) is designed to recognize the contributions of key management employees to the achievement of business goals and objectives through a monetary bonus.

	PLAN FORMULA

	Qualifier

In order for a participant to qualify for a bonus award, the participant must have performed their duties satisfactorily, in accordance with policies and procedures and in a manner that will enhance the quality of the working experience at, the image of and reputation of Green Mountain Coffee Roasters (GMCR).

	Payout

The participant may earn a bonus on an annual basis during the plan year based on a combination of the organization reaching the Operating Profit target, and the achievement of individualized goals.  See the attached cover letter for specifics.

	Fiscal Year 2006 Program

Bonus target numbers will be individually communicated in the cover letter sent with this plan description.  Bonuses will be paid out on two sets of targets:

	Great Game of Business.  See the FY 2006 Company-wide Profit Sharing Plan for details.

	Individual Goals.  Please refer to individuals' FY 2006 Personal Performance Action Plans and Goal Agreement Sheets.

	EFFECTIVE DATE

The terms and conditions of this Plan are for fiscal year 2006 of Green Mountain Coffee Roasters, Inc. (September 25, 2005 to September 30, 2006).

	ELIGIBLE EMPLOYEES

	Participation is limited to executive management employees of Green Mountain Coffee Roasters identified by the CEO and Human Resources.  Key management employees are characteristically defined as:

	Employees reporting directly to a Senior Leadership Team Member with broad organizational impact, or
	Employees with broad impact of the success of the organization identified by the President and Vice President of Human Resources and Organizational Development.

	To be eligible, a participant must be employed in an identified key management position for a minimum of six months during each applicable fiscal year.  Bonus payments to participants with at least six months service but less than twelve full months service in an identified key management position will be prorated based on the number of months in the identified key management.  One half month is considered a full month.
	A participant who retires, dies, transfers to a position not covered by this Plan, or is placed on a leave of absence or lay-off, receives a prorated bonus payment under this plan provided IV (b) above is satisfied.
	A participant who resigns or is terminated for cause or unsatisfactory performance prior to receipt of payment receives no bonus payment under this Plan.  A participant under a corrective action plan at the time of payout will not receive a payout.
	BONUS TERMS, CONDITIONS, AND PAYMENTS

	The provisions of this Plan do not constitute a contract of employment.
	Bonus payments are made as soon as practical following the issuance of the audited financial statements of GMCR for the applicable fiscal year, but no later than December 31, 2006.
	Annual payouts are made in accordance with GMCR's financial policies and procedures. 
	Taxes will be withheld in accordance with Local, State, and Federal laws.

	ADMINISTRATION

	This Plan is administered by Human Resources of GMCR.   The HR team reviews and approves all individual bonus payments.  Human Resources is guided by the intent of this Plan to provide a motivating bonus that rewards employees for their contributions to GMCR.
	The CEO and VP of Human Resources/Organizational Development have full power to construe or interpret this Plan and to make adjustments when, in its opinion, inequities may result.  Their decision will prevail in all disputes.
	Because business conditions may change, the Compensation Committee of the Board of Directors of GMCR reserve the right to amend, modify, or cancel this Plan at anytime with written notice to the participants.Executives Bonus Plan

Green Mountain Coffee Roasters, Inc.

Executive Management Bonus Plan for FY 2006

	INTENT

The Executive Management Bonus Plan for fiscal year 2006 (the period from September 25, 2005 to September 30, 2006) is designed to recognize the contributions of key management employees to the achievement of business goals and objectives through a monetary bonus.

	PLAN FORMULA

	Qualifier

In order for a participant to qualify for a bonus award, the participant must have performed their duties satisfactorily, in accordance with policies and procedures and in a manner that will enhance the quality of the working experience at, the image of and reputation of Green Mountain Coffee Roasters (GMCR).

	Payout

The participant may earn a bonus on an annual basis during the plan year based on a combination of the organization reaching the Operating Profit target, the Earnings Per Share target, and the achievement of individualized goals. See Schedule A for details.

	Fiscal Year 2006 Program

Bonus target numbers will be individually communicated in the cover letter sent with this plan description.  Bonuses will be paid out on three sets of targets:

	Great Game of Business. The target for FY 2006 is an Operating Profit
target, which is set forth on Schedule A.

	Earnings Per Share. The FY 2006 EPS targets are set forth on Schedule A. 

	Individual Goals.  Please refer to individuals' FY 2006 Personal Performance Action Plans and Goal Agreement Sheets.

	EFFECTIVE DATE

The terms and conditions of this Plan are for fiscal year 2006 of Green Mountain Coffee Roasters, Inc. (September 25, 2005 to September 30, 2006).

	ELIGIBLE EMPLOYEES

	Participation is limited to executive management employees of Green Mountain Coffee Roasters identified by the CEO and Human Resources.  Executive management employees are characteristically defined as:

	Chief Executive Officer,
	Members of the Executive Leadership Team, and
	Members of the Senior Leadership Team.

	To be eligible, a participant must be employed in an identified executive management position for a minimum of six months during each applicable fiscal year.  Bonus payments to participants with at least six months service but less than twelve full months service in an identified executive management position will be prorated based on the number of months in the identified executive management.  One half month is considered a full month.
	A participant who retires, dies, transfers to a position not covered by this Plan, or is placed on a leave of absence or lay-off, receives a prorated bonus payment under this plan provided IV (b) above is satisfied.
	A participant who resigns or is terminated for cause or unsatisfactory performance prior to receipt of payment receives no bonus payment under this Plan.  A participant under a corrective action plan at the time of payout will not receive a payout.
	BONUS TERMS, CONDITIONS, AND PAYMENTS

	The provisions of this Plan do not constitute a contract of employment.
	Bonus payments are made as soon as practical following the issuance of the audited financial statements of GMCR for the applicable fiscal year, but no later than December 31, 2006.
	Annual payouts are made in accordance with GMCR's financial policies and procedures. 
	Taxes will be withheld in accordance with Local, State, and Federal laws.
	At the discretion of the plan administrator and based on the availability of equity instruments, the bonus can be taken in stock.

	ADMINISTRATION

	This Plan is administered by Human Resources of GMCR.   The HR team reviews and approves all individual bonus payments.  Human Resources is guided by the intent of this Plan to provide a motivating bonus that rewards employees for their contributions to GMCR.
	The CEO and VP of Human Resources/Organizational Development have full power to construe or interpret this Plan and to make adjustments when, in its opinion, inequities may result.  Their decision will prevail in all disputes.
	Because business conditions may change, the Compensation Committee of the Board of Directors of GMCR reserve the right to amend, modify, or cancel this Plan at anytime with written notice to the participants

Schedule B

Bonus Potential for Participants in the Executive Management Bonus Plan

	
Participant
	
Total % of Salary
	
% of Bonus

tied to

EarningsPer Share 

  	
% of Bonus

tied to

Great Game of Business Profit Sharing

  	
% of Bonus

tied to

Individualized Goal Achievement 

  
	
Chief Executive Officer
	
50%
	
90%
	
5%
	
5%

	
Chief Operating Officer
	
45%
	
90%
	
5%
	
5%

	
Chief Financial Officer
	
40%
	
90%
	
5%
	
5%

	
Vice President, HR & Organizational Development
	
40%
	
90%
	
5%
	
5%

	 	 	 	 	 
	
Vice President, Sales
	
20%
	
15%
	
5%
	
* other plan

	
Chief Information Officer
	
30%
	
75%
	
5%
	
20%

	
Vice President, Supply Chain
	
30%
	
75%
	
5%
	
20%

	
Vice President, Marketing
	
30%
	
75%
	
5%
	
20%

	
Vice President, Environmental Affairs
	
15%
	
75%
	
5%
	
20%

	
Vice President, Social Responsibility
	
15%
	
75%
	
5%
	
20%

	
Vice President, Branded Sales
	
15%
	
75%
	
5%
	
20%

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