Summary of Employment Terms - Coffee People Inc., Second Cup Inc. and Taylor H. Devine
SUMMARY OF EMPLOYMENT TERMS BETWEEN COFFEE PEOPLE, INC. AND SECOND CUP INC. AND TAYLOR H. DEVINE These summary employment terms are effective from the Closing Date of the transaction contemplated by the Acquisition Agreement between Coffee People, Inc. ("Company") and Second Cup Inc., dated November 13, 1997 (the "Transaction"). All salary and bonus provisions contained herein shall replace any then existing compensation as at the Closing Date. 1. TERM: One year from the Closing Date of the Transaction. The Closing Date is expected to be on or before March 31, 1998. 2. LOCATION: Portland, Oregon with expense paid travel as required. 3. TITLE: President and Chief Operating Officer, Coffee People. 4. DUTIES: Reporting to the CEO of Coffee People, Inc., the President, Coffee People is responsible overall, for all day-to-day operations for the Oregon stores and during a transition period, to be determined, will have overall responsibility for all day-to-day operations for the Arizona stores. In addition, the President, Coffee People will be responsible for the development of the non-traditional business for all brands within Coffee People, Inc. 5. COMPENSATION: Annual Salary: Base salary fixed at $150,000.00 per annum. Success Fee: $25,000.00 payable six months following the Closing Date, provided the employee has not voluntarily resigned from the employment of the Company prior to this date. Bonus: $18,750.00 payable six months following the Closing Date, provided the employee has not voluntarily resigned from the employment of the Company prior to this date. $18,750.00 payable twelve months following the Closing Date, provided the employee has not voluntarily resigned from the employment of the Company prior to this date. 6. BENEFITS: To be no less favorable than those currently in place, including without limitation, continuation of existing medical coverage and $100,000.00 term life insurance coverage with employee's designated beneficiary. 7. TERMINATION WITH CAUSE: Wages paid through termination date plus one month severance paid. Bonus and success fee entitlement forfeited, unless termination occurs subsequent to payment dates. There shall be no accrual calculation of bonus or success fee--these payments vest on a lump sum basis on the payment dates. Life Insurance/Medical Coverage canceled at employer's option. <PAGE> 8. TERMINATION WITHOUT CAUSE: Wages paid through termination date and the later of twelve months following the Closing Date or six months following termination, paid as a lump sum less all applicable withholding taxes. All outstanding bonus and success fee payments vest upon termination and are to be paid, less applicable withholding taxes. Life Insurance/Medical Coverage remains in effect for the severance period. 9. VOLUNTARY RESIGNATION: Employee agrees to provide 90 days' written notice of resignation. Wages paid through last date of employment, which shall be 90 days after employee has provided written notice of resignation, unless at its option, the Company determines an earlier effective date of resignation in which case, wages shall only be paid to the effective date of resignation. No additional bonus or success fee monies paid if not otherwise payable by last date of employment. All benefits, including Life Insurance/Medical Coverage cease as of last date of employment. 10. NON-COMPETE: For three years following cessation of employment with the Company, the employee agrees not to, without the express written consent of the Company, directly or indirectly engage in, as owner, operator or employee of any business which competes with the business of Coffee People, Inc. in the United States. Competitors of Coffee People, Inc. are those retail operations for which 50% or more of total sales are derived from coffee (in liquid or whole been form) or coffee related products. These terms of employment, effective from the Closing Date of the Transaction, are hereby agreed by: COFFEE PEOPLE, INC. /s/ Taylor H. Devine By: Kenneth B. Ross, CFO --------------------- ------------------- Taylor H. Devine Coffee People, Inc. KA Welsh ----------------- Second Cup Inc.