Sample Business Contracts

Employment Agreement - Coffee People Inc. and Matt Kimble

Employment Forms

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  • Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
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                              [COFFEE PEOPLE LOGO]

TO:            Matt Kimble

FROM:          Taylor Devine

DATE:          9 January 1997

SUBJECT:       Welcome to Coffee People & Making Record of Some Details



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.


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)

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.


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.


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

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.


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.


15. AGREEMENT: This is between Matt Kimble (hereafter the "Employee") and Coffee
People,  Inc.,  (hereafter the "Company") have reached an agreement as set forth

     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:


          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

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

          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

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.


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
- ---------------------------------                 -----------------------------
Coffee People, Inc.                               Matt Kimble, date
Taylor H. Devine, date


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