Document:

exv10w1

Exhibit 10.1

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is made and entered into as of the 9th
day of September, 2008 (the “Effective Date”) by and between Caribou Coffee Company, Inc.,
(the “Company”) and Timothy J. Hennessy (“Employee”).

R E C I T A L S

     WHEREAS, The Company desires to employ Employee and to have the benefit of his skills and
services, and Employee desires to accept employment with the Company, on the terms and conditions
set forth herein.

     NOW, THEREFORE, in consideration of the mutual promises, terms, covenants, and conditions set
forth herein, and the performance of each, the parties hereto, intending to be legally bound, agree
as follows:

AGREEMENTS

     § 1. Term. The term of this Agreement shall begin on the Effective Date and shall end
on the fourth anniversary of the Effective Date (the “Initial Term”), unless extended or
earlier terminated in accordance with the terms of this Agreement (the Initial Term and any
extension or earlier termination thereof is referred to as the “Term”). If not earlier
terminated, the Term of this Agreement shall be automatically extended for an additional one (1)
year on the fourth anniversary of the Effective Date and on each anniversary of such date unless,
at least sixty (60) days before the fourth anniversary of the Effective Date or on any subsequent
anniversary thereof, one party has given the other party written notice of its or his intention not
to extend the Term, in which case the Term and Employee’s employment shall automatically terminate
at the end of the Initial Term or applicable anniversary thereof.

     § 2. Position and Duties. The Company hereby employs Employee as the Chief Financial
Officer of the Company. Employee shall have such responsibilities, duties, and authorities as are
typically commensurate with that position and as are assigned to him by the Company’s President and
Chief Executive Officer (or equivalent position) (the “CEO”. Employee shall fulfill his duties and
responsibilities in a reasonable and appropriate manner and in compliance with the Company’s
policies and practices and the laws and regulations that apply to the Company’s operation and
administration. During the Term, Employee shall devote his full business time and attention to the
business and affairs of the Company and shall not be engaged in, or employed by or provide services
to, any other business enterprise without the written approval of the CEO. Employee warrants and
represents that he is under no fiduciary or contractual obligation to another business or employer
that would prevent Employee from being employed by the Company as set forth herein; provided,
however, that nothing herein shall be construed as precluding Employee from devoting a
reasonable amount of time to civic, charitable, or similar activities, so long as such activities
do not materially interfere with the performance of Employee’s duties hereunder.

 

 

     § 3. Compensation. For all services rendered by Employee, the Company shall (subject
to applicable tax withholding requirements) compensate Employee as follows:

          (a) Base Salary. As of the Effective Date, the gross annual salary payable to Employee shall
be at least Three Hundred Thousand Dollars ($300,000.00) per year payable on a regular basis in
accordance with the Company’s standard payroll policies and procedures (the “Base Salary”).
The Base Salary shall be subject to adjustment by the Company’s Board of Directors (“Board”) (or a
properly formulated committee of the Board to which such responsibility is delegated) from
time-to-time in its discretion.

          (b) Perquisites, Benefits, and Other Compensation. Employee shall be eligible for the same
perquisites and benefits as are made available to other senior executive employees of the Company,
as well as such other perquisites or benefits as may be specified from time to time by the Company.
The Company reserves the right at any time and from time to time to change, amend, or terminate
any such perquisites and benefits as the Company in its discretion deems appropriate or necessary
under the circumstances.

          (c) Annual Bonus. Employee shall be eligible for an annual bonus each fiscal year
(“Annual Bonus”) of up to sixty percent (60%) of Employee’s then-existing Base Salary paid
for such year, as determined by the Board based upon the Company’s achievement of financial and
other goals approved by the Board, provided Employee remains employed by the Company through the
end of such fiscal year. Employee’s Annual Bonus for each fiscal year shall be paid in accordance
with the Company’s customary practices for payment of annual bonuses, but shall be paid in any
event no later than March 15 immediately following the end of such fiscal year. For the 2008
fiscal year, the target Annual Bonus will be a pro-rata percentage of Base Salary equal to 100%
times the number of days remaining in the calendar year as of the Effective Date divided by 365.

          (d) Stock Options and Restricted Stock. Employee shall be eligible for grants of equity-based
compensation under the Caribou Coffee Company, Inc. 2005 Equity Incentive Plan and any successor
plan thereto (the “Plan”), as such grants are determined by the committee administering the
Plan in its sole discretion.

          (e) Signing Bonus. Employee shall be paid a one-time signing bonus in the gross amount of
$25,000 on the Company’s first normal payday following the full and complete execution of this
Agreement (the “Signing Bonus”). The Signing Bonus shall be repaid to the Company if Employee’s
employment terminates pursuant to Sections 6(a) or 6(e) within the first six (6) months of
Employee’s employment.

     § 4. Expense Reimbursement. The Company shall reimburse Employee for (or, at the
Company’s option, pay) all reasonable and proper business travel and other out-of-pocket expenses
incurred by Employee in the performance of his duties and responsibilities to the Company under § 2
during the Term. All reimbursable expenses shall be appropriately documented in reasonable detail
by Employee upon submission of any request for reimbursement, and in a format and manner consistent
with the Company’s expense reporting and reimbursement policies and applicable federal and state
tax recordkeeping requirements. All

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approved expenses shall be paid within a reasonable time (not
later than March 15 of Employee’s taxable year following the taxable year in which an expense was
incurred following the presentation of appropriate invoices to the Company). Any expenses paid
during any taxable year of Employee will not affect the expenses paid by the Company in another
taxable year. Employee’s right to reimbursement of expenses is not subject to liquidation or
exchange for another benefit.

     § 5. Place of Performance. Employee shall carry out his duties and responsibilities
under § 2 principally in and from the Company’s headquarters, which currently is in Minneapolis,
Minnesota. Employee acknowledges and agrees his position may involve substantial business travel.

     § 6. Termination; Rights on Termination. Employee’s employment and the Term may be
terminated in any one of the following ways:

          (a) Termination by the Company for Good Cause. The Company may terminate the Term and
Employee’s employment for Good Cause. For purposes of this Agreement, “Good Cause” shall
be determined by the Board acting in good faith and shall mean: (i) Employee’s breach of any
material provision of this Agreement, or Employee’s negligence in the performance or nonperformance
of any of Employee’s material duties or responsibilities after (x) the Board has in good faith
issued Employee a written statement identifying the breach or negligence; (y) the Board has
provided the Employee 10 business days in which to cure the breach or negligence; and (z) Employee
fails to cure the breach or negligence; (ii) Employee’s dishonesty, fraud, or detrimental
misconduct with respect to the business or affairs of the Company; (iii) Employee’s conviction of a
felony or conviction of a misdemeanor involving theft, fraud, dishonesty or act of moral turpitude,
or a plea of “guilty,” “no contest,” or “nolo contendre” to the same; or (iv) Employee’s failure to
implement and monitor compliance with policies reasonably designed to comply with the requirements
of the Sarbanes-Oxley Act of 2002 to the extent such law is applicable to the Company. In the event
of termination of Employee’s employment for Good Cause, no compensation or benefits shall be
payable to Employee after the date of termination, except as provided for in § 6(f).

          (b) Termination for Employee’s Death or Disability. In the event that Employee dies or
becomes Disabled, no compensation or benefits shall be payable to Employee or his estate after the
date of termination, except as provided for in § 6(f). “Disabled” shall mean that the
Employee has a physical or mental disability that the Board reasonably determines is preventing
Employee, even after reasonable accommodation, from performing the essential functions of his
position.

          (c) Termination by the Company Without Good Cause. At any time during the Term, the Company
may, without Good Cause and for any reason whatsoever, terminate the Term and Employee’s
employment. Termination by the Company without Good Cause shall include the Company deciding not
to extend this Agreement under §1. In the event Employee’s employment is terminated during the
Term without Good Cause, and provided that Employee fully complies with his obligations under §7
through §10 of this Agreement, then Employee shall be entitled to compensation pursuant to § 6(g).

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          (d) Termination by Employee For Good Reason. Employee may terminate the Term and resign for
Good Reason. “Good Reason” shall mean: (i) a reduction in or material delay in payment of
Base Salary to which Employee has not consented; or (ii) Employee ceases to hold position and title
of Chief Financial Officer as contemplated by § 2, or a position and title of a lateral or more
senior position which Employee accepts; (iii) Employee is assigned, without Employee’s consent,
authority or responsibility materially inconsistent with authority and responsibility as
contemplated by § 2; (iv) any requirement is imposed by the Company, the CEO or under direction of
the Board or any person controlling the Company for Employee to reside outside of the Minneapolis,
Minnesota metropolitan area; (v) a determination by Employee acting in good faith that there has
been a breach by the Company of a material provision of this Agreement; or (vi) any resignation by
Employee within one year from the occurrence of a “Change in Control” as defined in the Plan;
provided, however, Good Reason shall not exist unless (x) Employee, before his
resignation, gives the Board a written statement of the basis for Employee’s determination that
Good Reason exists, (y) Employee gives the Board at least ten (10) business days after receipt of
such statement to cure the basis for such determination and (z) the Board fails cure the basis for
such determination. In the event Employee resigns for Good Reason, and provided that Employee fully
complies with his obligations under §7 through §10 of this Agreement, then Employee shall be
entitled to compensation pursuant to § 6(g).

          (e) Termination by Employee Without Good Reason. Employee may resign for any reason or no
reason, effective thirty (30) days after he provides written notice of his intent to resign to the
Company. In such event, no compensation or benefits shall be payable to Employee after the date of
termination, except as provided for in § 6(f).

          (f) Payment Through Termination. Upon termination of Employee’s employment for any reason
except a termination by the Company without Good Cause or a resignation by Employee for Good
Reason, Employee shall be entitled to receive all compensation earned and all benefits and
reimbursements due under this Agreement through the effective date of his termination of
employment. No other compensation or benefits will be due or payable to Employee pursuant to this
Agreement subsequent to such termination except as expressly provided by this § 6 or as otherwise
required by law or agreements with the Company which are independent of this Agreement.

          (g) Payment for Termination Without Good Cause or For Good Reason. In the event Employee’s
employment is terminated by the Company without Good Cause or Employee resigns for Good Reason, and
provided that Employee fully complies with his obligations under §7 through §10 of this Agreement,
then Employee shall be entitled to: (i) all compensation earned and all benefits and reimbursements
due under this Agreement through the effective date of his termination; (ii) the payment of
Employee’s then current monthly Base Salary on the Company’s regularly scheduled monthly pay dates
for a period of twelve (12) months from the date Employee incurs a “separation from service”
(within the meaning of Internal Revenue Code (“Code”) Section 409A (“Separation from Service”),
pursuant to the Company’s standard payroll policies and procedures; (iii) an amount equal to the
average of the Annual Bonuses (including no Annual Bonus, if applicable) paid to Employee for the
two full fiscal years most recently concluded prior to the Separation from Service, payable in a
lump sum

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within thirty (30) days from such Separation from Service; provided further,
however, to the extent Employee is a “specified employee” (within the meaning of Code Section
409A) no such payments of Base Salary or Annual Bonus as provided herein shall be made until the
first regularly scheduled pay date that occurs after the date which is six (6) months and one day
after Employee incurs a Separation from Service and on such pay date, the Company shall pay
Employee all payments that otherwise would have been paid during such six-month period but for the
fact that the Employee is a “specified employee”; and (iv) if Employee exercises his right under
applicable law to elect continued coverage under the Company’s health insurance plan (“COBRA
Coverage”), the Company shall reimburse Employee each month for his cost to purchase such COBRA
Coverage until the earlier of twelve (12) months from the date of a Separation from Service, such
time as Employee becomes eligible for coverage under a subsequent employer’s group health plan.
However, if Employee breaches any of his obligations under §7 through §10 of this Agreement,
Employee, in addition to being subject to any remedies and sanctions available under §16, shall (x)
forfeit his right to his salary continuation under clause (ii) of this §6(g) and his right to
reimbursement for his cost to purchase COBRA Coverage under clause (iii) of this § 6(g), and (y)
shall have an obligation to immediately repay the Company for all such salary continuation payments
and COBRA Coverage reimbursements previously made by the Company and, (z) shall immediately forfeit
Employee’s right to exercise any and all unexercised stock options granted to Employee under the
Plan, whether then vested or unvested. Notwithstanding any other provision in this Agreement, as a
condition to the Company’s payment of any post-employment amounts to Employee pursuant to this §
6(g), Employee shall execute a full and complete release, in the form attached hereto as
Exhibit A, on behalf of himself and his heirs, executors, administrators, trustees and
assigns, releasing all claims, actions and causes of action against the Company and each subsidiary
and affiliate of the Company, and their respective predecessors, successors, current and former
directors, officers, administrators, trustees, employees, agents and other representatives.

          (h) Provisions that Survive Termination or Expiration of Agreement. All rights and
obligations of the Company and Employee under this Agreement shall cease as of the effective date
of the termination of Employee’s employment or the expiration of this Agreement, except that (i)
the Company’s payment obligations under § 6 shall survive such termination or expiration in
accordance with their terms, and (ii) Employee’s obligations under §7 through §10 and the Company’s
rights under § 16 shall survive such termination or expiration in accordance with their terms.

          (i) Right to Offset. In the event of any termination of Employee’s employment under this
Agreement for any reason, the Company’s obligation to make any payments under this Agreement shall
be subject to offset for, among other items, any loans or other obligations that Employee has with
the Company. All payments and benefits payable under this Agreement are gross payments subject to
applicable withholdings.

          (j) Compliance with Code Section 409A. The parties intend for all payments and benefits
described in this Agreement to be either exempt from, or fully compliant with, Code Section 409A.

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     § 7. Employee Covenants.

          (a) During Employee’s employment with the Company and for a period of twelve (12) months
thereafter, Employee shall not, either directly or indirectly, for himself or on behalf of or in
conjunction with any other person, company, partnership, corporation, business, group, or other
entity (each, a “Person”):

               (i) engage, within the Territory, as an officer, director, a five percent or greater
shareholder or equity owner, partner, member, joint venturer, or in a managerial capacity (whether
as an employee, independent contractor, or consultant), in any business engaged in the Business (as
defined below) of the Company;

               (ii) solicit or attempt to solicit, recruit or attempt to recruit to leave the Company’s
employ any employee, agent, or contract worker of the Company or the Associated Companies (as
defined below) with whom Employee had contact during the course of his employment with the Company;

               (iii) solicit or attempt to solicit any business related to the Business of the Company from
any Person who, as of the date of the solicitation or attempted solicitation or within twelve (12)
months prior to that date, is or was a commercial customer of the Company or an actively sought
prospective commercial customer with whom Employee had contact (through sales calls, presentations,
or other business dealings) during the course of his employment with the Company; or

               (iv) solicit or attempt to solicit, recruit or attempt to recruit any employee, agent, or
contract worker of a material supplier of the Company who, as of or within the prior twelve (12)
months is or was a material supplier of the Company with whom Employee had contact through business
dealings during the course of his employment with the Company.

          (b) For purposes of §7 through §10:

               (i) References to the “Territory” shall mean the states or provinces in which the
Company does business as of the date Employee’s employment with the Company terminates. Employee
acknowledges and agrees that Employee’s duties and responsibilities for the Company as Chief
Financial Officer include the management of the entire business and therefore encompass and include
the entire geographic area in which the Company does business. The covenants contained in this
subsection shall be construed as a series of separate covenants, one for each state, province,
and/or county of any geographic area in the Territory. Except for geographic coverage, each such
separate covenant shall be deemed identical. If, in any judicial proceeding, a court refuses to
enforce any of such separate covenants (or any part thereof), then such unenforceable covenant (or
such part) shall be eliminated from this Agreement to the extent necessary to permit the remaining
separate covenants (or portions thereof) to be enforced.

               (ii) References to the “Associated Companies” shall mean the Company’s direct and
indirect subsidiaries, and any company in which the Company has a

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twenty percent (20%) or greater
ownership interest.

               (iii) References to the “Business of the Company” shall mean the operation of retail
coffee shops, the retail sale of coffee products in stores or online, commercial office coffee
service and the wholesale distribution of coffee products for retail, institutional and commercial
markets. Employee acknowledges that the Business of the Company may expand or change as the
Company grows or makes acquisitions in the future and agrees that he will not unreasonably withhold
consent to the modification of this definition resulting from such growth or acquisitions.

          (c) The covenants in this § 7 are severable and separate, and the unenforceability of any
specific covenant shall not affect the provisions of any other covenant. If any provision of this
§ 7 relating to the time period, scope, or geographic areas of the restrictive covenants shall be
declared by a court of competent jurisdiction to exceed the maximum time period, scope, or
geographic area, as applicable, that such court deems reasonable and enforceable, then this
Agreement shall automatically be considered to have been amended and revised to reflect such
determination.

          (d) All of the covenants in this § 7 shall be construed as an agreement independent of any
other provisions in this Agreement, and the existence of any claim or cause of action Employee may
have against the Company, whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.

          (e) Employee has carefully read and considered the provisions of this § 7 and, having done so,
agrees that the restrictive covenants in this § 7 impose a fair and reasonable restraint on
Employee and are reasonably required to protect the interests of the Company and its officers,
directors, employees, and stockholders.

     § 8. Trade Secrets and Confidential Information.

          (a) For purposes of this § 8, “Confidential Information” means any data or information
(other than Trade Secrets) that is valuable to the Company (or, if owned by someone else, is
valuable to that third party) and not generally known to the public or to competitors in the
industry, including, but not limited to, any non-public information (regardless of whether in
writing or retained as personal knowledge) pertaining to research and development; product costs
and processes; stockholder information; pricing, cost, or profit factors; quality programs; annual
budget and long-range business plans; marketing plans and methods; contracts and bids; and
personnel. “Trade Secret” means any item or information that is protectable or defined as
a trade secret under applicable law. In the absence of such a definition, Trade Secret means
information including, but not limited to, any technical or nontechnical data, formula, pattern,
compilation, program, device, method, technique, drawing, process, financial data, financial plan,
product plan, list of actual or potential customers or suppliers or other information similar to
any of the foregoing, which (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by, other persons who can
derive economic value from its disclosure or use and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.

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          (b) Employee acknowledges that in the course of his employment with the Company, he has
received or will receive and has had or will have access to Confidential Information and Trade
Secrets of the Company and the Associated Companies. Accordingly, he is willing to enter into the
covenants contained in § 7, § 8 and § 9 of this Agreement in order to provide the Company with what
he considers to be reasonable protection for its interests.

          (c) Employee hereby agrees that, during his employment and for a period of three (3) years
thereafter, he will hold in confidence all Confidential Information of the Company and the
Associated Companies that came into his knowledge during his employment by the Company and will not
disclose, publish or make use of such Confidential Information without the prior written consent of
the Company.

          (d) Employee hereby agrees to hold in confidence all Trade Secrets of the Company and the
Associated Companies that came into his knowledge during his employment by the Company and shall
not disclose, publish, or make use of at any time after the date hereof such Trade Secrets without
the prior written consent of the Company for as long as the information remains a Trade Secret.

          (e) Notwithstanding the foregoing, the provisions of this § 8 will not apply to (i)
information required to be disclosed by Employee in the ordinary course of his duties to the
Company, or (ii) Confidential Information or Trade Secrets that otherwise lawfully becomes
generally known in the industry or to the public through no act of Employee or any person or entity
acting by or on Employee’s behalf.

          (f) The parties agree that the restrictions stated in this § 8 are in addition to and not in
lieu of protections afforded to trade secrets and confidential information under applicable state
law. Nothing in this Agreement is intended to or shall be interpreted as diminishing or otherwise
limiting the Company’s rights under applicable state law to protect its trade secrets and
confidential information.

     § 9. Return of Company Property. All records, designs, patents, business plans,
financial statements, manuals, memoranda, customer lists, computer data, customer information, and
other property or information delivered to or compiled by Employee by or on behalf of the Company
(including the respective subsidiaries thereof) or its representatives, vendors or customers shall
be and remain the property of the Company, and be subject at all times to its discretion and
control. Upon the request of the Company and, in any event, upon the termination of Employee’s
employment with the Company, Employee shall deliver all such materials to the Company.

     § 10. Work Product and Inventions.

          (a) Works. Employee acknowledges that Employee’s work on and contributions to documents,
programs, methodologies, protocols, and other expressions in any tangible medium which have been or
will be prepared by Employee, or to which Employee has contributed or will contribute, in
connection with Employee’s services to the Company (collectively, “Works”), are and will be
within the scope of Employee’s employment and part of

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Employee’s duties and responsibilities.
Employee’s work on and contributions to the Works will be rendered and made by Employee for, at the
instigation of, and under the overall direction of, the Company, and are and at all times shall be
regarded, together with the Works, as “work made for hire” as that term is used in the United
States Copyright Laws. However, to the extent that any court or agency should conclude that the
Works (or any of them) do not constitute or qualify as a “work made for hire”, Employee hereby
assigns, grants, and delivers exclusively and throughout the world to the Company all rights,
titles, and interests in and to any such Works, and all copies and versions, including all
copyrights and renewals. Employee agrees to cooperate with the Company and to execute and deliver
to the Company, its successors and assigns, any assignments and documents the Company requests for
the purpose of establishing, evidencing, and enforcing or defending its complete, exclusive,
perpetual, and worldwide ownership of all rights, titles, and interests of every kind and nature,
including all copyrights, in and to the Works, and Employee constitutes and appoints the Company as
its agent to execute and deliver any assignments or documents Employee fails or refuses to execute
and deliver, this power and agency being coupled with an interest and being irrevocable. Without
limiting the preceding provisions of this § 10(a), Employee agrees that the Company may edit and
otherwise modify, and use, publish and otherwise exploit, the Works in all media and in such manner
as the Company, in its sole discretion, may determine.

          (b) Inventions and Ideas. Employee shall disclose promptly to the Company (which shall
receive it in confidence), and only to the Company, any invention or idea of Employee in any way
connected with Employee’s services or related to the Business of the Company, the Company’s
research or development, or demonstrably anticipated research or development (developed alone or
with others), conceived or made during the Term or within three (3) months thereafter and hereby
assigns to the Company any such invention or idea. Employee agrees to cooperate with the Company
and sign all papers deemed necessary by the Company to enable it to obtain, maintain, protect and
defend patents covering such inventions and ideas and to confirm the Company’s exclusive ownership
of all rights in such inventions, ideas and patents, and irrevocably appoints the Company as its
agent to execute and deliver any assignments or documents Employee fails or refuses to execute and
deliver promptly, this power and agency being coupled with an interest and being irrevocable. This
constitutes the Company’s written notification that this assignment does not apply to an invention
for which no equipment, supplies, facility or trade secret information of the Company was used and
which was developed entirely on Employee’s own time, unless (i) the invention relates (A) directly
to the Business of the Company, or (B) to the Company’s actual or demonstrably anticipated research
or development, or (ii) the invention results from any work performed by Employee for the Company.

     § 11. No Prior Agreements. Employee hereby represents and warrants to the Company
that the execution of this Agreement by Employee and his employment by the Company and the
performance of his duties under this Agreement will not violate or be a breach of any agreement
with a former employer, client, or any other person or entity.

     § 12. Assignment; Binding Effect. Employee understands that he has been selected for
employment by the Company on the basis of his personal qualifications, experience, and skills.
Employee agrees, therefore, that he cannot assign all or any portion of his performance

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under this
Agreement. The Company may assign this Agreement to the purchaser of substantially all of the
assets of the Company, or to any subsidiary or parent company of the Company. Subject to the
preceding two sentences, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective heirs, legal representatives, successors, and
assigns.

     § 13. Complete Agreement; Waiver; Amendment. Employee has no oral representations,
understandings, or agreements with the Company or any of its officers, directors, or
representatives covering the same subject matter as this Agreement. This Agreement is the final,
complete, and exclusive statement of expression of the agreement between the Company and Employee
with respect to the subject matter hereof, and cannot be varied, contradicted, or supplemented by
evidence of any prior or contemporaneous oral or written agreements. This written Agreement may
not be later modified except by a further writing signed by a duly authorized officer of the
Company or member of the Board and Employee, and no term of this Agreement may be waived except by
a writing signed by the party waiving the benefit of such term.

     § 14. Notice. Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:

	 	 	 	 	 
	 

	 	To the Company:
	 	Caribou Coffee Company, Inc.

Attn: President and Chief Executive Officer

3900 Lakebreeze Avenue

Brooklyn Center, Minnesota 55429

Telephone No.: (763) 592-2200

Facsimile No.: (763) 592-2300
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Arcapita Inc.

Attn.: Mr. Charles H. Ogburn

75 Fourteenth Street, 24th Floor

Atlanta, Georgia 30309

Telephone No.: (404) 920-9000

Facsimile No.: (404) 920-9001
	 
	 	 	 	 
	 

	 	To Employee:
	 	Mr. Timothy J. Hennessy

7553 Black Oaks Lane N.

Maple Grove, Minnesota 55311

Telephone No.: (763) 416-0323
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Mr. Robert T. York

Kaplan, Strangis and Kaplan, P.A.

90 South Seventh Street, Suite 5500

Minneapolis, Minnesota 55402

Telephone No.: (612) 375-1138

Facsimile No.: (612) 375-1143

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     § 15. Severability; Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and operative and, so far
as is reasonable and possible, effect shall be given to the intent manifested by the portion held
invalid or inoperative. This severability provision shall be in addition to, and not in place of,
the provisions of § 7(b)(i) and/or 7(c) above. The section headings are for reference purposes
only and are not intended in any way to describe, interpret, define or limit the extent of the
Agreement or of any part hereof.

     § 16. Equitable Remedy. Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the covenants set forth in §7 through §10, and because of the
immediate and irreparable damage that would be caused to the Company for which monetary damages
would not be a sufficient remedy, it is hereby agreed that in addition to all other remedies that
may be available to the Company, at law or in equity, the Company shall be entitled to specific
performance and any injunctive or other equitable relief as a remedy for any breach or threatened
breach by Employee of any provision of §7 through §10. The Company may seek temporary and/or
permanent injunctive relief for an alleged violation of §7 through §10 without the necessity of
posting a bond.

     § 17. Governing Law. This Agreement, and all other disputes or issues arising from or
relating in any way to the Company’s relationship with Employee, shall be governed by the internal
laws of the State of Minnesota, irrespective of the choice of law rules of any jurisdiction.
All disputes arising from or relating to this Agreement shall be subject to the exclusive
jurisdiction of and be litigated in the state or federal courts located in the State of Minnesota.
All parties hereby consent to the exclusive jurisdiction and venue of such courts for the
litigation of all disputes and waive any claims of improper venue, lack of personal jurisdiction,
or lack of subject matter jurisdiction as to any such disputes.

     § 18. Construction. Headings in this Agreement are for convenience only and shall not
control the meaning of this Agreement. Whenever applicable, masculine and neutral pronouns shall
equally apply to the feminine genders; the singular shall include the plural and the plural shall
include the singular. The parties have reviewed and understand this Agreement, and each has had a
full opportunity to negotiate the Agreement’s terms and to consult with counsel of their own
choosing. Therefore, the parties expressly waive all applicable common law and statutory rules of
construction that any provision of this Agreement should be construed against the agreement’s
drafter, and agree that this Agreement and all amendments thereto shall be construed as a whole,
according to the fair meaning of the language used.

     § 19. Director and Officer Liability Insurance; Indemnification. The Company shall
provide the Employee (including his heirs, executors, and administrators) with coverage under a
standard directors’ and officers’ liability insurance policy, at the Company’s expense, in amounts
consistent with amounts provided by peer corporations to their directors and officers, and shall
indemnify him as an officer and, when and if applicable, a director (and his heirs, executors, and
administrators) to the fullest extent permitted under Minnesota law against all expenses and
liabilities reasonably incurred by his in connection with or arising out of any action, suit, or
proceeding in which he may be involved by reason of his having been an officer of the Company or
Associated Companies (whether or not he continues to be such an officer at the time of

11

 

incurring such expenses or liabilities). Such expenses and liabilities shall include, but not be limited to,
judgments, court costs, and attorneys’ fees, and the costs of reasonable settlements.

     § 20. Counterparts. This Agreement may be executed in one or more counterparts, each
of which when executed and delivered shall be an original, and all of which when executed shall
constitute one and the same instrument.

     IN WITNESS WHEREOF, the Company and Employee have caused this Employment Agreement to be duly
executed as of the Effective Date.

	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CARIBOU COFFEE COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	Name:
	 	 

Michael Tattersfield
	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Timothy J. Hennessy	 	 

12

 

EXHIBIT A

FORM OF RELEASE

     THIS RELEASE (this “Release”), effective as of                     , ___, is made by and
between Caribou Coffee Company, Inc., (the “Company”) and Timothy J. Hennessy
(“Employee”). Capitalized terms used herein but not otherwise defined herein shall have
the meanings given such terms in the Employment Agreement (as defined below).

R E C I T A L S 

     WHEREAS, the Company and Employee are party to the Employment Agreement, dated August 1, 2008,
as may be amended from time to time (the “Employment Agreement”); and

     WHEREAS, pursuant to the terms of the Employment Agreement, as a condition to the Company’s
payment of any post-employment amounts to Employee pursuant to § 6(g) thereof, Employee is required
to execute a full and complete release, on behalf of himself and his heirs, executors,
administrators, trustees and assigns releasing all claims, actions and causes of action against the
Company and each subsidiary and affiliate of the Company, and their respective predecessors,
successors, current and former directors, officers, administrators, trustees, employees, agents and
other representatives.

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereby agree as follows:

     1. Release. Employee, on his behalf and on behalf of his heirs, executors,
administrators, trustees and assigns hereby fully, knowingly and voluntarily, releases and forever
discharges the Company and the Company’s past and present agents, representatives, employees,
officers, directors, affiliates, controlling persons, stockholders, subsidiaries, successors and
assigns (collectively, the “Releasees”), collectively, separately, and severally, from or
for any and all state, local or federal claims, causes of action, liabilities, and judgments of
every type and description whatsoever, known and unknown (including, but not limited to, claims
arising under Title VII of the Civil Rights Act of 1964, as amended; the Rehabilitation Act of
1973, as amended; the Employee Retirement Income Security Act of 1974, as amended; the Fair Labor
Standards Act of 1938, as amended; the Americans with Disabilities Act; the Minnesota Human Rights
Act; Minn. Stat. § 181.81; the Minneapolis Code of Ordinances; wrongful discharge; violation of
Minn. Stat. § 176.82; breach of contract; tortious interference with contractual relations;
promissory estoppel; breach of the implied covenant of good faith and fair dealing; breach of
express or implied promise; breach of manuals or other policies; assault; battery; fraud; false
imprisonment; invasion of privacy; intentional or negligent misrepresentation; defamation,
including libel, slander, discharge defamation and self-publication defamation; discharge in
violation of public policy; whistleblower claims; intentional or negligent infliction of emotional
distress; or any other theory, whether legal or equitable) which he, his heirs, administrators,
executors, personal representatives, beneficiaries, and assigns may have or claim to have against
Releasees related to Employee’s employment or the termination thereof. Employee warrants that

1

 

Employee has been provided all leave under the Family and Medical Leave Act to which he is or may
have been entitled, and that the Company has not interfered with his rights thereunder. Employee
specifically waives the benefit of any statute or rule of law which, if applied to this Agreement,
would otherwise exclude from its binding effect any claims not now known by him to exist.

2. Employee also hereby knowingly and voluntarily releases and discharges Releasees, collectively,
separately and severally, from or for any and all liability, claims, allegations, and causes of
action arising under the Age Discrimination in Employment Act of 1967, as amended (“ADEA”), which
Employee, Employee’s heirs, administrators, executors, personal representatives, beneficiaries, and
assigns may have or claim to have against Releasees. Notwithstanding any other provision or
section of this Agreement, Employee does not hereby waive any rights or claims under the ADEA that
may arise after the date on which the Agreement is signed by him.

3. Employee further understands that he is releasing, and does hereby release, any claims for
damages, by charge or otherwise, whether brought by him or on his behalf by any other party,
governmental or otherwise, and agrees not to institute any claims for damages via administrative or
legal proceedings against any of the Releasees. Employee also waives and releases any and all
right to money damages or other legal relief awarded by any governmental agency related to any
charge or other claim against any of the Releasees.

4. This Release does not apply to any post-termination claim that Employee may have for benefits
under the provisions of any employee benefit plan maintained by the Company, or to any payments to
which Employee is or may hereafter be entitled under Paragraphs 6(c), 6(d) or 6(g), as applicable,
of the Employment Agreement. Employee’s release of claims shall not apply to any claims Employee
might have to indemnification under Minnesota Statute § 302A.521, any other applicable statute or
regulation, or the Company’s by-laws.

5. Employee hereby acknowledges and represents that (a) he has been given a period of at least
twenty-one (21) days to consider the terms of this Agreement, (b) the Company has advised or hereby
advises him in writing to consult with an attorney prior to executing this Agreement, and (c) he
has received valuable and good consideration to which he is otherwise not entitled in exchange for
his execution of this Agreement.

6. Employee and the Company hereby acknowledge this Agreement shall not become effective or
enforceable until the fifteenth (15th) day after it is executed by Employee (“Effective Date”) and
that Employee may revoke this Agreement at any time before the Effective Date. Employee has been
informed and understands that any such revocation must be in writing and delivered to the Company
by hand, or sent by mail within the 15-day period. If delivered by mail, the revocation must be:
(1) postmarked within the 15-day period, (2) properly addressed as set forth below, and (3) sent by
certified mail, return receipt requested.

2

 

Proper Notice Address for Revocation Purposes

Caribou Coffee Company, Inc.

Attn: President and Chief Executive Officer

3900 Lakebreeze Avenue

Brooklyn Center, Minnesota 55429

Telephone No.: (763) 592-2200

Facsimile No.: (763) 592-2300

7. Employee agrees that he has not heretofore assigned, transferred or hypothecated nor attempted
to assign, transfer or hypothecate any interest he may have in the released claims.

8. Employee agrees not to make any statement, written or verbal, to any person or entity, including
in any forum or media, or take any action, in disparagement of the Company, Arcapita Inc. or any of
their respective affiliates, or any of the current, former or future partners, managers, members,
officers, directors and employees of any of the foregoing (individually, an “Arcapita
Party” and collectively the “Arcapita Parties”), including negative references to or
about any Arcapita Party’s services, policies, practices, documents, methods of doing business,
strategies, objectives, partners, managers, members, or employees, or take any other action that
may disparage any Arcapita Party to the general public and/or any Arcapita Party’s employees,
clients, franchisees, potential franchisees, suppliers, investors, potential investors, business
partners or potential business partners, unless compelled to do so under oath. Provided Employee
directs all requests for references to the Company’s General Counsel, the Company agrees that the
board of directors and corporate officers of the Company will not knowingly make any statement,
written or verbal, to any person or entity, including in any forum or media, or take any action, in
disparagement of Employee.

9. This Agreement shall in all respects be governed and construed in accordance with the laws of
the State of Minnesota without regard to choice of law principles.

EMPLOYEE:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	Timothy J. Hennessy	 	 	 	Date	 	 
	 
	 	 	 	 	 	 	 	 
	CARIBOU COFFEE COMPANY, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 
	By:

	 	 	 	 	 	Date	 	 
	 

	 	 	 	 	 	 	 	 
	Title:
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

3exv10w2

Exhibit 10.2

CARIBOU COFFEE COMPANY, INC.

2005 EQUITY INCENTIVE PLAN

STOCK OPTION GRANT AND AGREEMENT

     Caribou Coffee Company, Inc., a Minnesota corporation (“Caribou”), in accordance with the
Caribou Coffee Company, Inc. 2005 Equity Incentive Plan (“Plan”), hereby grants an Option to
Timothy J. Hennessy (“Optionee”) to purchase from Caribou 275,000 shares of Stock at an Option
Price per share of $3.22. This Option is subject to all of the terms and conditions set forth in
this Option Agreement and in the Plan and is granted effective as of September 9, 2008 (the “Grant
Date”).

TERMS AND CONDITIONS

          § 1 Plan. This Option is subject to all the terms and conditions set forth in this
Option Agreement and in the Plan, which is herein incorporated by reference. All capitalized terms
not otherwise defined in this Option Agreement shall have the respective meaning of such terms as
defined in the Plan. If a determination is made that any term or condition set forth in this
Option Agreement is inconsistent with the Plan, the Plan shall control. A copy of the Plan will be
made available to Optionee upon written request to the Committee.

          § 2 Exercise Right.

	 	(a)	 	Vesting. Optionee shall vest in this Option in
accordance with the following vesting schedule:

	 	(1)	 	Optionee shall be vested with respect to 25% of
the shares of Stock subject to this Option (rounding down to the
nearest whole number) if he remains an Employee until the first
anniversary of the Grant Date;
	 
	 	(2)	 	Optionee shall be vested with respect to
another 25% of the shares of Stock subject to this Option (rounding
down to the nearest whole number) if he remains an Employee until the
second anniversary of the Grant Date;
	 
	 	(3)	 	Optionee shall be vested with respect to
another 25% of the shares of Stock subject to this Option (rounding
down to the nearest whole number) if he remains an Employee until the
third anniversary of the Grant Date; and
	 
	 	(4)	 	Optionee shall be vested with respect to the
remaining shares of Stock subject to this Option (rounding down to the

 

	 	 	 	nearest whole number) if he remains an Employee until the fourth
anniversary of the Grant Date.

Notwithstanding the vesting schedule set forth in this § 2, Optionee shall
be fully vested with respect to 100% of the shares of Stock subject to this
Option if he remains an Employee until the date of a Change in Control. If
Optionee continues to hold this Option following termination of Optionee’s
employment as provided in § 2(d), the vested interest in the Option shall
not be increased by the occurrence of a Change in Control that occurs after
the effective date of the termination of Optionee’s employment.

	 	(b)	 	Change in Control. In the case of a Change in Control,
the Option shall be subject to the provisions of § 14 of the Plan with respect
to such Change in Control.
	 
	 	(c)	 	Life of Option. Except for the right to exercise the
Option (to the extent vested) for the period provided in § 2(d) following the
termination of Optionee’s employment, Optionee shall have the right to exercise
this Option (to the extent it is vested under the vesting schedule in § 2(a) on
such date) until the earlier of (i) the date that the Option is exercised,
cancelled in full or otherwise expires, or (ii) the tenth anniversary of the
Grant Date.
	 
	 	(d)	 	Termination of Employment. If Optionee ceases to be an
Employee of Caribou and all of its Affiliates and Subsidiaries for any reason
prior to the date Optionee is permitted to exercise this Option, Optionee shall
retain this Option to the extent it is vested under the vesting schedule in §
2(a) as of the date the Optionee’s employment terminated, and shall be
permitted to exercise this Option to the extent vested during the ninety (90)
day period following the effective date of Optionee’s termination of
employment, provided, however, if the Optionee’s employment is terminated due
to death, his personal representative or beneficiary shall have the ninety (90)
day period extended to a one year period beginning on the date of the
Optionee’s death. The Option, to the extent not exercised, shall expire at the
end of the ninety (90) day period following the effective date of Optionee’s
termination of employment, or the one year period in the case of the Optionee’s
death.
	 
	 	(e)	 	Other Conditions. At the discretion of the Committee,
the grant of this Option may be conditioned on Optionee’s execution of a
non-disclosure agreement, a non-solicitation agreement and/or a noncompete
agreement in the form(s) presented to Optionee. If the grant of this Option is
conditioned on such agreement(s) and any such agreement is not executed on or
prior to the date the

-2-

 

	 	 	 	Optionee executes this Option, this Option shall automatically expire on
such date.

          § 3 Method of Exercise of Option. Optionee may exercise this Option in whole or in
part (to the extent this Option is otherwise exercisable under § 2) on any normal business day of
Caribou by (1) delivering a written notice of the exercise of the Option to Caribou; and (2)
simultaneously paying to Caribou the Option Price plus such sum, if any, as the Committee deems
necessary to satisfy Optionee’s federal, state and other tax withholding requirements resulting
from any compensation attributable to the exercise of the Option. The payment of such Option Price
and withholding taxes shall be made either in cash or by check acceptable to Caribou, or in any
combination of cash and such check which results in payment in full of the Option Price and
withholding taxes. The Committee, at its sole discretion, may also permit payment of the Option
Price with shares of Stock held at least six (6) months, or in any combination of cash, check, or
Stock. At the discretion of the Committee, the Option Price may also be effected through any
cashless exercise procedure which is effected by an unrelated broker through a sale of Stock in the
open market. At the sole discretion of the Committee, an Optionee may be permitted to pay
applicable withholding taxes through a reduction in the number of shares of Stock transferred to
the Optionee through the exercise of this Option.

          § 4 Delivery. Caribou shall deliver a properly issued certificate representing each
share of Stock purchased pursuant to the exercise of this Option as soon as practicable after such
exercise, and such delivery shall discharge Caribou of all of its duties and responsibilities with
respect to this Option to the extent it is so exercised.

          § 5 Transferability. No rights granted under this Option shall be transferable by
Optionee other than by will or by the laws of descent and distribution, and the rights granted
under this Option shall be exercisable during Optionee’s lifetime only by Optionee. The person or
persons, if any, to whom this Option is transferred due to the death of Optionee shall be treated
after Optionee’s death the same as Optionee under this Option Agreement, provided that the Option
shall expire on the last day of the one year period that begins on the date of the Optionee’s
death, unless it is exercised, cancelled or expires prior to such date.

          § 6 No Right to Continue Employment. Neither the Plan, this Option, nor any related
material shall give Optionee the right to continue in employment by Caribou or any Subsidiary or
other Affiliate, nor shall the Plan, this Option, nor any related material adversely affect or in
any way limit the right of Caribou or any Subsidiary or Affiliate to terminate Optionee’s
employment with or without cause at any time.

          § 7 Stockholder Status. Optionee shall have no rights as a stockholder with respect
to any shares of Stock subject to this Option until such shares of Stock have been duly issued and
delivered to Optionee pursuant to a proper exercise of this Option, and no adjustment shall be made
for dividends of any rights or any kind or

-3-

 

description whatsoever or for distributions of other rights of any kind or description
whatsoever respecting such shares of Stock, except as expressly set forth in the Plan.

          § 8 Other Laws. Caribou shall have the right to refuse to issue or transfer any
shares of Stock under this Option if Caribou, acting in its absolute discretion, determines that
the issuance or transfer of such shares of Stock might violate any applicable law or regulation.
In such event, any payment tendered to exercise this Option shall be promptly refunded to Optionee,
and Caribou at that point shall have the right to cancel this Option or to take such other action
with respect to this Option as Caribou deems appropriate under the circumstances.

          § 9 Governing Law. The Plan and this Option shall be governed by the laws of the
State of Minnesota, without regard to the choice of law rules thereof.

          § 10 Modification, Amendment and Cancellation. The Board shall have the right
unilaterally to modify, amend or cancel this Option in accordance with the terms of the Plan. The
number of shares of Stock and the Option Price may be adjusted in accordance with the terms of the
Plan to reflect any change in the capitalization of Caribou or a corporate transaction described in
Section 424(a) of the Code which does not constitute a Change in Control of the Company. The
Committee shall also have the right to amend the Option or withhold or restrict the transfer of any
share of Stock to Optionee hereunder if the Committee deems it appropriate in order to satisfy any
condition or requirement under applicable securities laws.

          § 11 Binding Effect. This Option shall be binding upon Caribou and Optionee and their
respective heirs, executors, administrators, successors and assigns.

          § 12 References. Any references to sections (§) in this Option Agreement shall be to
sections (§) of this Option Agreement unless otherwise expressly stated as part of such reference.

     By execution of this Option Agreement, Optionee and Caribou agree to be bound by the terms and
conditions of the Plan and this Option Agreement.

	 	 	 	 	 	 	 
	 

	 	 OPTIONEE:	 	 	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 	 	CARIBOU COFFEE COMPANY, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 

	 	 

-4-

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