Employment Agreement - Coffee People Inc. and Matt Kimble
[COFFEE PEOPLE LOGO]
TO: Matt Kimble
CONFIDENTIAL
FROM: Taylor Devine
DATE: 9 January 1997
SUBJECT: Welcome to Coffee People & Making Record of Some Details
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PURPOSE
The purpose of this note to you is to welcome you to Coffee People and to make
record of compensation and other necessary details relative to you joining us.
INFORMATION
1. Before going any further, Jim, Patty and I want to say how excited we are
about you joining us. We have the opportunity to build on that which has put in
place in the past so as to create an even greater future. The single most
important ingredient in creating the recipe for success is having enough of the
right people on our team. People create success. One (1) of the most key
positions in this creation of success is the position you are going into as our
Vice-President, Human Resources
2. POSITION: Vice-President, Human Resources. As such you will be an officer of
Coffee People, Inc.
3. TIMING: Start Monday, 20 January, 1997
4. BASE COMPENSATION: Base Salary is sixty-five thousand dollars ($65,000)
annually.
5. INCENTIVE COMPENSATION: You will be participating in an Incentive
Compensation Plan that affords you the opportunity to earn up to ten thousand
dollars ($10,000) per year. This plan is broken down into four (4) quarters,
with the Incentive Compensation potential of twenty-five hundred dollars
($2,500) per quarter.
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Relative to the first quarter you are with Coffee People, to be eligible for
that quarters Incentive Compensation, within the first thirty (30) days your are
with us, you will provide me with a list of weighted Objectives (Objectives =
measurable Goals) to be accomplished that first quarter. I reserve the ability
to add or otherwise edit these Objectives to the point where we arrive at a
written plan which I accept. At the end of the first quarter, we will score the
plan in a percentage of completion or attainment sense. That percentage of
attainment or completion will then equal the percentage applied against the
$2,500 quarterly potential amount. Example: If the percentage of completion or
attainment is 95%, the $ amount paid is 95% of $2,500 or $2,375. Amounts not
earned in one quarter are not carried forward into the subsequent quarter.
Relative to the second quarter and subsequent quarters you are with Coffee
People to be eligible for that quarters Incentive Compensation, on or before the
fifteenth (15th) day of the first month of each quarter, you will provide me
with a list of weighted Objectives (Objectives = measurable Goals) to be
accomplished that first quarter. I reserve the ability to add or otherwise edit
these Objectives to the point where we arrive at a written plan which I accept.
At the end of the quarter, we will score the plan in a percentage of completion
or attainment sense. That percentage of attainment or completion will then equal
the percentage applied against the $2,500 quarterly potential amount. Example:
if the percentage of completion or attainment is 95%, the $ amount paid is 95%
of $2,500 or $2,375. Amounts not earned in one quarter are not carried forward
into the subsequent quarter.
6. HEALTH CARE: This pertains to your medical and dental care. You are eligible
for the standard health care coverage that all officers of the company
participate in.
We are making an exception for you however when it comes to bridging your health
care costs as you move from your current employer to Coffee People. As we have
discussed, your current employer will offer you COBRA coverage for a certain
time period subsequent to your employment with them. We know that you plan to
utilize the COBRA coverage so that you and your family continue medical coverage
between the time you leave your current employer and your insurance with Coffee
People activates. The cost of the premium associated with COBRA needs to be paid
by either you, your current employer or Coffee People. We have said we will pay
your COBRA premium until you become eligible for your Coffee People insurance.
This period of time is thought to be approximately the first full month after
joining us. We will either reimburse you for the premium you pay or we will pay
the premium directly for you. Your choice.
7. SALARY CONTINUANCE. You have asked for salary continuance if you sustain
illness or injury not related to work. We do not currently have such coverage
for anyone in the company and, per our discussion, are not in a position to make
an exception for you. What we will pledge to you, is that should we make this
kind of insurance available to the officer group in the future, as long as you
are an officer of the company, we will extend the same opportunity to you as we
extend to other officers of the company.
<PAGE>
8. LIFE INSURANCE. Our standard coverage is $25,000. This is far cry from the
three (3) times annual salary you currently have. We have agreed that you will
secure the cost of a one hundred thousand dollar ($100,000) term policy. As a
point of reference, we can secure such coverage for approximately $500 per year
premium. Our intent is to "gross up" your base salary so that you can secure a
$100,000 term life insurance policy on your own with the "grossed up" amount of
your base salary taking care of that life insurance premium.
9. VACATION: Our standard vacation is two (2) weeks (equaling 10 days) after one
year of employment. However, in your case, Coffee People will grant you fifteen
(15) days during your first year of employment. Your eligible vacation time will
stay at 15 days until your length of service with Coffee People qualifies you
for additional time under the Coffee People vacation plan program.
10. 401K PLAN: You will become eligible to participate in the 401K Plan within
the same time period as the plan calls for. (We are currently verifying this
timing) We believe that our plan is written such that a person must be with us
six (6) months before they become eligible to participate. Once the six (6)
month tenure is satisfied, we believe that a person can participate beginning
the next full pay period.
11. STOCK PURCHASE PLAN: You will become eligible to participate in our Stock
Purchase Plan as is written into the plan of all participants. After you fulfill
a four (4) month employment, you will be eligible to participate on the next
available enrollment date. Given that you join Coffee People approximately 20
January, 1997, your eligibility would work like:
20 Jan - 20 Feb = 1 month
20 Feb - 20 Mar = 2nd month
20 Mar - 20 Apr = 3rd month
20 Apr - 20 May = 4th month
................. with the next available enrollment date being 1 September
1997.
12. STOCK OPTION GRANT: As we have discussed, the Board of Directors are the
only entity that can legally grant your Stock Option Grant. However, I have
assured you that I will request fifteen thousand (15,000) shares for you,
vesting at the rate of twenty percent (20%) over a five (5) year period. The
price of the stock option grant will be the price of the stock the day the Board
grants you the option.
<PAGE>
I intend to request your option grant as part of the business conducted at our
next regularly scheduled Board meeting on Friday 24 January, 1997. Given
approval, your vesting schedule will be:
- Board approval date, 1998 = 20%
- Board approval date, 1999 = 20%
- Board approval date, 2000 = 20%
- Board approval date, 2001 = 20%
- Board approval date, 2002 = 20%
13. CONFIDENTIALITY OF INFORMATION: You acknowledge that you may receive
confidential information about the Company's blends, recipes, formulas,
processes, business plans, pricing data, supplier relationships, site selection
and marketing information as well as other proprietary information which the
Company has identified as confidential or which in the exercise of reasonable
judgement should be considered confidential. You acknowledge that all such
confidential information is and shall continue to be the property of Coffee
People and agree to exercise the highest degree of care in safeguarding such
information against loss, theft or other inadvertent disclosure.
You agree not to disclose any confidential or proprietary information about
Coffee People, directly or indirectly, under any circumstances or by any means,
to any third person without express written consent of the Board, except as may
be necessary to accomplish the business goals and objectives of Coffee People
over which you have responsibility and authority. You agree that you will not
make any commercial use whatsoever of confidential or proprietary information of
Coffee People, except as may be necessary to accomplish the Coffee People
business goal & objectives.
Upon termination of your employment for any reason or as otherwise requested,
you will promptly return all such confidential or proprietary information to
Coffee People, in whatever form it may be in.
The obligations contained in this section shall survive beyond the date of any
termination of the business relationship between you and Coffee People and shall
continue for as long as you possess any confidential or proprietary information
of Coffee People.
14. COVENANT NOT TO COMPETE: You agree that during the time of your employment
and for a period of four (4) years following the date of termination of your
employment for any reason, you will not directly or indirectly, in any form or
through any entity engage in or assist a business which competes with or may
compete with Coffee People within the United States. For purposes of definition,
competitors are those retail stores which derive fifty percent (50%) or more of
their retail sales from the sale of coffee by the drink and/or bean.
<PAGE>
15. AGREEMENT: This is between Matt Kimble (hereafter the "Employee") and Coffee
People, Inc., (hereafter the "Company") have reached an agreement as set forth
below.
A. Each provision of this Agreement is severable. If any provision of this
Agreement is legally invalid, the remainder of the Agreement remains in full
force and effect.
B. The document sets forth the entire agreement between the parties, and
supersedes all prior agreements, whether written or oral, express or implied.
The Agreement may not be amended, modified or waived except in writing, unless
duly signed by both the Employee and authorized by the President and COO or by
the Board of Directors of the Company.
C. If the Employee and the Company cannot resolve a dispute (whether
arising in the contract or tort or any other legal theory and whether based on
federal, state or local statutes or common law and regardless of the identities
of any other defendants) that in a way relates to, arises out of, or is
connected with the Employee's employment relationship or the termination
thereof, or this Agreement (a "Dispute"), then that Dispute shall be resolved
through binding arbitration in Portland, Oregon. The arbitration shall be
conducted in accordance with the current rules of the United States Arbitration
and Mediation Service (USAMS). The arbitrator selected will be mutually agreed
to by the parties, but if the parties are unable for any reason whatsoever to
mutually agree upon the selection of an arbitrator, then the arbitrator shall be
selected by the USAMS. In the event that a Dispute involves a claim which either
the Employee or the Company seeks to assert against a third party, the parties
further agree that arbitration shall be the exclusive remedy against any such
third party (including, but not limited to, any officer, director, agent,
shareholder, affiliate or advisor of the Company), provided that such third part
consents to participate in and be bound by such arbitration.
The parties filing a claim for arbitration must present it in writing to
the other party and USAMS within six months of the date the party filing the
claim knew or should have known of it or the date of termination, which ever is
earlier. Any claim not brought within the required time period will be waived
forever. Judgment on the award rendered in the arbitration may be entered in any
court having jurisdiction and enforced accordingly.
D. Not withstanding anything herein to the contrary, the Employee's
employment with the Company is terminable at will, with or without cause;
provided, however, that the termination of the Employee's employment shall be
governed in accordance with the terms hereof.
E. If the Employee is terminated by the Company for CAUSE or voluntarily
terminates employment with the Company, then there is no severance benefits or
obligations. If the Employee is terminated by the Company other than for Cause,
then the Employee is entitled to severance as follows:
<PAGE>
a. The Company shall pay the Employee's base salary through the month
during which the termination occurs; plus,
b. The company shall pay a pro-rata share of any earned bonus amount
based upon the Employee's time-in-position and the criteria established under
any bonus plan of the Company in which the Employee is a participant, using a
calculation from the most recent year-to-date figures at the time of
termination; and,
c. The Company shall make monthly severance payment for a period of
six (6) months equal to the Employee's monthly base salary at the time of
termination and shall be equal to the Employee's monthly base salary at the time
of termination. The severance payments will commence in the month following
termination, to be paid with the same frequency as other pay checks are issued
to those still employed with the Company at that time. (ie: every other week,
bi-monthly, monthly or whatever frequency is practice for other salaried people
at that time.); and,
All severance payments herein shall be subject to applicable withholding and
deductions.
Termination by the Company for "Cause" mean termination based on (i) conduct
which is a material violation of Company policy or which is fraudulent or
unlawful or which materially interferes with the Employee's ability to perform
their duties, (ii) misconduct which damages or injures the Company or
substantially damages its reputation, or (iii) gross negligence in the
performance of, or willful failure to perform, the Employee's duties and
responsibilities.
d. The Company shall continue to pay its portion of the health or
dental premium through the date severance pay ends, if the Employee elects
coverage and is not covered under another plan; subject to earlier termination
of coverage at such time as they become eligible to receive medical and/or
dental benefits due to coverage by a new employer.
F. The severance benefits under this Agreement shall not be transferred,
assigned or encumbered in any way, either voluntarily or involuntarily. In the
event the Employee dies during the term of the severance agreement, any further
payments shall be made to the Employee's estate.
G. Any severance benefits contained in this Agreement are expressly
contingent on the execution and delivery to the Company of a full release in a
form satisfactory to the Company at the time of termination with respect to any
and all claims relative to the Employee's employment or the termination of the
employment.
16. "AT-WILL" EMPLOYER: Coffee People, Inc. is an "at-will" employer. The terms
of this offer will not change or modify the Company's at-will relationship.
<PAGE>
Now that we have all the necessary language behind us, we can get on with
continuing to build our company. We all look forward to having you join us.
Best Wishes - Taylor
Dated Signature Lines:
/s/Taylor H. Devine 9 Jan 97 /s/Matt Kimble 1/10/97
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Coffee People, Inc. Matt Kimble, date
Taylor H. Devine, date
attachment
Coffee People, Inc. Stock Option Plan (11 pages)
cc with the Coffee People, Inc. Stock Option Plan (11 pages): K. Ross
cc without the Coffee People, Inc. Stock Option Plan:
J. Roberts