Employment Agreement - Diedrich Coffee and Martin R. Diedrich
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
as of June 29, 1995, by and between DIEDRICH COFFEE, a California corporation
("Employer"), and MARTIN R. DIEDRICH ("Employee").
R E C I T A L S :
Employer and Employee desire to enter into this Agreement to establish
the terms and conditions of Employee's employment by Employer during the term
hereof.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing recital, and subject
to the conditions and covenants set forth herein, the parties agree as follows:
1. Employment and Term.
(a) Employer hereby employs Employee as its Vice
President, Quality Control, and Corporate Spokesperson and Employee
hereby accepts such employment upon the terms and subject to the
conditions set forth in this Agreement. Unless earlier terminated as
provided in this Agreement, the term of Employee's employment under
this Agreement shall commence on the date hereof and shall continue
for a period of three (3) years from the date hereof (the "Term").
(b) Employee shall perform such duties and functions
consistent with his role as Vice President, Quality Control, and
Corporate Spokesperson of Employer as may from time to time be
assigned to him by the Chief Executive Officer or the Board of
Directors of the Employer (the "Board") which duties and functions are
intended to include oversight of all material aspects of the following
matters as they relate to the Employer's business and products sold or
otherwise distributed by Employer: (i) product quality control, (ii)
new product development, (iii) logos, trade names and imagery, and
(iv) selection of additional spokespersons for Employer. Employee
agrees that during the course of the Employer's business hours
throughout the Term, he will devote the whole of his time, attention
and efforts to the performance of his duties and obligations
hereunder. Employee shall not, during the Term, without the written
approval of the Board first had and obtained in each instance,
directly or indirectly (A) accept employment or receive any
compensation for the performance of services from any business
enterprise other than Employer or (B) enter into or be concerned or
interested in any trade or business or public or private work (whether
for profit or otherwise and whether as partner, principal, shareholder
or otherwise), which may, in the absolute discretion of the Board,
hinder or otherwise interfere with the performance by the Employee of
his duties and obligations hereunder, except as a holder of not more
than five percent (5%) of any class of stock or other securities in
any company which is listed and/or traded on any securities market.
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2. Compensation. Employee shall be paid a salary (the "Base
Salary") in an amount that initially shall be equal to One Hundred Thousand
Dollars ($100,000) per year, payable in semi-monthly installments, less all
amounts required by law to be withheld or deducted. During the Term of this
Agreement, the Board shall review Employee's Base Salary on or about each
anniversary date of the date of this Agreement. The Board, in its sole and
absolute discretion from time to time, may increase (but not decrease without
Employee's written consent) Employee's Base Salary. The Board, in its sole and
absolute discretion, also may pay Employee performance bonuses based on
Employer's performance and Employee's contribution thereto in such amounts and
at such times as the Board may determine.
3. Employee Benefits. During the Term of Employee's employment
hereunder:
(a) Employee shall be entitled to vacation leave
consistent with Employer's policies for other senior executives of
Employer.
(b) Employer shall pay or reimburse Employee for all
reasonable and necessary travel and other business expenses incurred
or paid by Employee in connection with the performance of his services
under this Agreement consistent with Employer's policies for other
senior executives of Employer.
(c) Employer shall provide and pay for the annual cost of
premiums for health, dental and medical insurance coverage for
Employee and Employee's dependents consistent with the coverage
generally made available by Employer to senior executives of Employer
and providing benefits at least as favorable to Employee as the
coverage that is in effect at the date of this Agreement.
(d) In addition to the benefits set forth above, Employee
shall be entitled to participate in any other policies, programs and
benefits which Employer may, in its sole and absolute discretion, make
generally available to its other senior executives from time to time
including, but not limited to, life insurance, disability insurance,
pension and retirement plans, stock plans and other similar programs.
4. Termination of Employment.
(a) Notwithstanding any other provision of this
Agreement, Employee's employment under this Agreement may be
terminated as follows:
(i) Upon the death of Employee, this Agreement
and Employee's employment hereunder shall terminate
immediately and without notice by Employer; or
(ii) In the event of the inability of Employee to
perform his duties or responsibilities hereunder, as a result
of mental or physical ailment or incapacity, for an aggregate
of ninety (90) calendar days during any calendar year (whether
or not consecutive) (a "Disability") during which period of
Disability the Employee shall be entitled to his compensation
pursuant to this Agreement, this Agreement
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and Employee's employment hereunder shall terminate upon
delivery of written notice to Employee or
(iii) By Employer for Cause (as defined below) in
accordance with the provisions of Section 4(b) hereof.
(b) The parties agree that for purposes of this
Agreement, the term "Cause" shall mean the following:
(i) Employee's willful and repeated failure to
satisfactorily perform his job duties under this Agreement;
(ii) Failure by the Employee to comply with all
material applicable laws in performing his job duties or in
directing the conduct of Employer's business; and
(iii) Commission by the Employee of any felony or
intentionally fraudulent or other act against Employer, or its
employees, agents or customers which demonstrates Employee's
untrustworthiness or lack of integrity.
With respect to events described in subparagraph
4(b)(i) and (ii) above, Employer shall give written notice to Employee
of any such event and Employee shall have thirty (30) days beginning
on the date of delivery of such written notice to cure same, or if
such event cannot be cured within said thirty (30) day period,
Employee shall commence his efforts to cure the event within the
thirty (30) day period and diligently work to cure such event within a
reasonable time period. If Employee within said thirty (30) day
period or within a reasonable time period, as applicable, does not
cure the event for which notice has been provided under subparagraphs
4(b)(i) or (ii) above, then Employee's employment under this Agreement
may be terminated by Employer by delivery to Employee of written
notice of termination and such termination will be effective as of the
date of delivery of such written notice. With respect to events
described in subparagraph 4(b)(iii) above, Employee's employment under
this Agreement may be terminated by Employer by delivery to Employee
of written notice of termination and such termination will be
effective as of the date of delivery of such written notice.
5. Relocation; Travel. In connection with the performance of his
employment duties under the terms of this Agreement, Employee shall not be
required to relocate to an office of Employer outside of the Orange County,
California area.
6. Arbitration. Any controversy, dispute or claim arising out
of, in connection with, or in relation to the interpretation, performance or
breach of this Agreement or otherwise arising out of the execution hereof,
including any claim based on contract, tort or statute, shall be resolved, at
the request of any party, by submission to binding arbitration at the Orange
County, California offices of Judicial Arbitration & Mediation Services, Inc.
("JAMS"), and any judgment or award rendered by JAMS shall be final, binding
and unappealable, and judgment may be entered by any state or federal court
having jurisdiction thereof. Any party can initiate
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arbitration by sending written notice of intention to arbitrate (the "Demand")
by registered or certified mail to all parties and to JAMS. The Demand shall
contain a description of the dispute, the amount involved, and the remedy
sought. The arbitrator shall be a retired or former judge agreed to between
the parties from the JAMS' panel. If the parties are unable to agree, JAMS
shall provide a list of three available judges and each party may strike one.
The remaining judge shall serve as the arbitrator. Each party hereto intends
that the provisions to arbitrate set forth herein be valid, enforceable and
irrevocable. In his award, the arbitrator shall allocate, in his discretion,
among the parties to the arbitration all costs of the arbitration, including
the fees of the arbitrator and reasonable attorneys' fees, costs and expert
witness expenses of the parties. The parties hereto agree to comply with any
award made in any such arbitration proceedings that has become final and agree
to the entry of a judgment in any jurisdiction upon any award rendered in such
proceeding becoming final.
7. Notices. All notices, requests, demands and other
communications under this Agreement must be in writing and shall be deemed to
have been duly given on the date of service if served personally on the party
to whom notice is to be given, or on the date indicated on the return receipt
as the date of receipt or refusal if mailed to the party to whom notice is to
be given by first class mail, registered or certified, postage prepaid, return
receipt requested, and properly addressed as follows:
To the Employer: Diedrich Coffee
350 Clinton Street, Suite A
Costa Mesa, California 92626
Attention: President
To the Employee: Martin R. Diedrich
(at the Employer's address)
Any party may change its address for the purpose of this Paragraph 7
by giving the other party written notice of the new address in the manner set
forth above.
8. Enforceability. If any of the covenants contained in this
Agreement, for any reason and to any extent, are construed to be invalid or
unenforceable, the remainder of this Agreement, and the application of the
remaining covenants to other persons or circumstances shall not be affected
hereby, but rather shall be enforced to the greatest extent permitted by law.
9. Assignment; Binding Effect. This Agreement shall inure to the
benefit of, and be enforceable by, the Employer and its successors and assigns;
however, this Agreement is personal to Employee and may not be assigned by
Employee in whole or in part. In the event of the sale of all or substantially
all of the assets of Employer or other transaction in which Employer will not
continue as a surviving corporate entity engaged in a substantially similar
business as it is engaged in prior to such transaction, Employer will use
commercially reasonable efforts to obtain from the acquiring person or entity,
before the succession takes place, an agreement to assume and perform all of
the terms and conditions of this Agreement.
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10. Entire Agreement; Amendment. This Agreement contains the
entire agreement between Employer and Employee with respect to the subject
matters hereof and supersedes all prior or contemporaneous agreements,
arrangements or understandings written or oral, with respect to the subject
matters hereof. This Agreement may not be amended, waived, changed, modified
or discharged except by an instrument in writing executed by or on behalf of
the party or parties against whom any amendment, waiver, change, modification
or discharge is sought to be enforced.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
12. Counterparts. This Agreement may be executed simultaneously
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"EMPLOYER" DIEDRICH COFFEE, a California corporation
By:
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Name:
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Title:
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"EMPLOYEE" /s/ Martin R. Diedrich
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MARTIN R. DIEDRICH
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