GREAT BRANDS OF EUROPE, INC.
November 2, 1998
Xxxxxx X. Xxxxx, III
President
Aqua Penn Spring Water Company, Inc.
Xxx Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
EMPLOYMENT AGREEMENT
Dear Xx. Xxxxx:
This is to confirm our desire to engage in a continuing employment
relationship with you following the closing of the pending acquisition (the
"TRANSACTION") of AquaPenn Spring Water Company, Inc., a Pennsylvania
corporation ("AQUAPENN"), by Groupe Danone, a company incorporated under the law
of the Republic of France, the parent company of Great Brands of Europe, Inc.
(the "COMPANY"). The following sets forth the agreement between the Company and
you regarding the terms of your employment as an employee of AquaPenn and the
Company (the "AGREEMENT"). Capitalized terms not otherwise defined in the text
of this Agreement are defined in Section 6 hereof.
1. TERM OF EMPLOYMENT. The term of your employment with the
Company pursuant to this Agreement shall commence on the "Closing Date" of the
Transaction (as such term is defined in the Agreement and Plan of Merger dated
November 2, 1998 (the "EFFECTIVE DATE"), and shall continue for a period of up
to one year thereafter (the "TERM").
2. POSITION, REPORTING AND RESPONSIBILITIES. During the Term,
you shall be employed as the President of AquaPenn and you will be based in
Milesburg, Pennsylvania. You will report directly to the Chief Executive
Officer of the Company. Your duties and responsibilities shall at all times be
commensurate with your position and reporting responsibilities. During the
Term, you shall devote all of your business time, attention, skills and efforts
exclusively to the business and affairs of the Company, other than DE MINIMIS
amounts of time devoted by you to the management of your personal finances or to
engaging in charitable or community services. You understand and agree that you
will be required to travel from time to time for business purposes.
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3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. During the Term as compensation to you for all
services rendered to the Company, the Company will pay you a base salary (the
"SALARY") at the rate of $200,000 per annum, which will be reviewed annually by
the Company and may be increased but not decreased on the basis of such review.
Your Salary will be paid to you in accordance with the Company's payroll
practices as established from time to time, but no less frequently than monthly.
(b) BONUS. In addition to the Salary, beginning in calendar year
1999 you will participate in the Company's executive bonus program, which is
offered by the Company to similarly situated executives of the Company, pursuant
to which you may be awarded up to thirty-five percent of the Salary for each
annual bonus period (the "ANNUAL BONUS"). The amount of your Annual Bonus will
be determined based upon the achievement by you of personal objectives and the
business results for the Company's North American operations during each bonus
period and will be paid to you in a lump sum amount as soon as practicable after
the business results for the bonus period have been determined. In the event
that your employment hereunder terminates prior to the end of the 1999 bonus
period, you will receive a pro rated portion of the Annual Bonus for such
period; PROVIDED, HOWEVER, that in the event that prior to the end of the 1999
bonus period, your employment hereunder is terminated by the Company for Cause
or you resign without Good Reason, you will forfeit any and all rights to the
Annual Bonus.
(c) BENEFITS. During the Term, you and your dependants shall be
eligible to participate in such retirement, medical and other welfare benefit
plans, programs and arrangements that are offered by the Company to similarly
situated employees from time to time which benefits will be at least as
favorable to you as those you enjoyed prior to the Effective Date.
(d) BUSINESS EXPENSES. The Company shall pay or reimburse you for
the reasonable expenses incurred by you in connection with the performance of
your employment obligations to the Company, subject to your delivery to the
Company of appropriate documentation of such expenses.
(e) AUTOMOBILE. During the Term, the Company will provide you
with an automobile pursuant to a program that is at least as favorable to you as
the automobile program in which you participated immediately prior to the
Effective Date.
(g) EQUITY COMPENSATION. Subject to approval by the Board of
Directors of Groupe Danone at its next meeting which is scheduled to take place
in December 1998, as soon as practicable after the Effective Date, Groupe Danone
shall grant you stock options
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which will be exercisable for 750 ordinary shares of Groupe Danone, nominal
value FF10 per share (the "STOCK OPTIONS"). Subject to the terms of Section
4(a) and 4(b) below, the Stock Options will become 100% vested on the second
anniversary of the date of grant.
4. TERMINATION OF EMPLOYMENT. Subject to the provisions of this
Agreement, the Company shall have the right to terminate your employment, and
you shall have the right to resign from your employment with the Company, for
any reason or for no stated reason.
(a) TERMINATION OR RESIGNATION OF EMPLOYMENT - ALL CIRCUMSTANCES.
In the event of your termination or resignation of employment for any reason
during the Term, the Company shall pay you (or in the event of your death, your
Beneficiary) (i) the full amount of the accrued but unpaid Salary you have
earned through the Date of Termination (as defined in Section 4(g) below), (ii)
a cash amount for any accrued but unused vacation (based on the highest rate of
Salary in effect during the twelve months prior to the Date of Termination), and
(iii) any earned but unpaid Annual Bonus for any bonus period ended prior to the
Date of Termination (together, the "ACCRUED AMOUNTS"). The Accrued Amounts
shall be paid to you in a lump sum cash payment as soon as practicable following
the Date of Termination (but in no event later than thirty days following such
date). All unvested Stock Options shall immediately lapse and become void
either (i) on the Date of Termination other than in the event of an Involuntary
Termination or (iii) the last day of the Term.
(b) INVOLUNTARY TERMINATION. (i) In addition to the Accrued
Amounts, in the event of your Involuntary Termination during the Term, the
Company will provide you the payments and benefits set forth in this Section
4(b). The Company shall continue to pay to you an amount equal to the monthly
portion of your Salary, as in effect on the Date of Termination (the "SEVERANCE
PAYMENT"), for a period of one year after the Date of Termination (the
"SEVERANCE PERIOD") and a pro rated portion of the Annual Bonus. In addition to
the Severance Payment, you will receive in equal monthly payments during the
Severance Period, an amount equal to AquaPenn's matching contribution to the
AquaPenn Salary Savings Plan for a one-year period based on your contribution
rate to the on the Date of Termination, subject to applicable limitation set
forth in the Internal Revenue Code of 1986, as amended.
(ii) As soon as practicable after the Date of Termination, the
Company shall pay you a lump sum cash amount equal to the fair market value of
the unvested Stock Options less the exercise price of such Stock Options (the
"CASH-OUT AMOUNT"). Immediately upon payment to you of the Cash-Out Amount, the
Stock Options shall lapse and become void.
(iii) You and your dependents shall continue to be eligible to
participate during the Benefit Continuation Period in the medical, dental and
health insurance plans (but not the disability plans) applicable to you
immediately prior to your Involuntary Termination
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on the same terms and conditions in effect for you and your dependents
immediately prior to such Involuntary Termination.
(c) TERMINATION DUE TO DEATH OR DISABILITY. In addition to the
Accrued Amounts, in the event that the Company terminates your employment during
the Term as a result of your Disability or in the event of your death, the
Company will provide you, of your Beneficiary, as the case may be, the payments
and benefits set forth in this Section 4(c). The Company shall pay to you, or
your Beneficiary, the Severance Payment during the Severance Period and a pro
rated portion of the Annual Bonus; PROVIDED, HOWEVER, that the Severance Payment
shall be reduced by any amounts you receive from other disability benefits
including disability pension benefits, death benefits or life insurance
proceeds. In addition, you and your dependents shall continue to be eligible to
participate during the Benefit Continuation Period in the medical, dental and
health insurance plans (but not the disability plans) applicable to you
immediately prior to your termination on the same terms and conditions in effect
for you and your dependents immediately prior to such termination, subject to
payment of your share of all applicable premiums.
(d) YOUR VOLUNTARY RESIGNATION. In the event that you resign from
your employment hereunder during the Term for reasons that do not constitute
Good Reason, you must provide the Company with at least thirty days notice of
such resignation. The Company may, in its sole discretion, continue to pay your
Salary for the thirty day period and request that you refrain from coming to the
Company offices, which request you hereby agree to honor. On the Date of
Termination, other than payment of the Accrued Amounts in accordance with
Section 4(a) and as required by law, all obligations of the Company to you,
other than as required by law, shall cease.
(e) TERMINATION BY THE COMPANY FOR CAUSE. In the event that
during the Term, your employment hereunder is terminated by the Company for
Cause, the Company will pay you the Accrued Amount in accordance with the terms
of Section 4(a) and, except for the payment by the Company to you of the Accrued
Amount, on the Date of Termination all obligations of the Company to you, other
than as required by law, shall cease.
(f) NO OTHER PAYMENTS OR BENEFITS. On the Date of Termination,
other than the payments and benefits expressly provided for in this Section 4,
all obligations of the Company to you, other than as required by law, shall
cease.
(g) DATE AND NOTICE OF TERMINATION. Any termination of your
employment by the Company or by you shall be communicated by a notice of
termination to the other parties hereto (the "NOTICE OF TERMINATION"). The
Notice of Termination shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your
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employment under the provision so indicated. The date of your termination of
employment with the Company (the "DATE OF TERMINATION") shall be determined as
follows: (i) if your employment is terminated for Disability, thirty days after
a Notice of Termination is given (PROVIDED that you shall not have returned to
the full-time performance of your duties during such thirty-day period), (ii) if
your employment is terminated by the Company in an Involuntary Termination, the
date specified in the Notice of Termination (or if no date is specified in the
Notice of Termination, the date the Notice of Termination is delivered to you)
and (iii) if your employment is terminated by the Company for Cause, the later
of the date specified in the Notice of Termination or ten days following the
date such notice is received by you. If the basis for your termination is your
resignation for Good Reason, the Date of Termination shall be, subject to the
applicable cure provisions, ten days after the date your Notice of Termination
is received by the Company. The Date of Termination for a resignation of
employment other than for Good Reason shall be the date set forth in the Notice
of Termination, which shall be no earlier than thirty days after the date such
notice is received by the Company. The Date of Termination in the event of your
death shall be the date of your death.
(i) NO MITIGATION. You shall have no obligation or duty to
mitigate any severance or other amounts payable to you under this Agreement and
the amount of such payments shall not be subject to any right of setoff or
offset by the Company.
5. PROTECTIVE AND RESTRICTIVE COVENANTS.
(a) RESTRICTIONS ON COMPETITIVE ENGAGEMENTS. During the
Restricted Period, you will not, directly or indirectly, as a sole proprietor,
member of a partnership, stockholder or investor (other than a stockholder or
investor owning not more than a 5% interest of a publicly traded company),
officer or director of a corporation, or as an employee, associate, consultant
or agent of any person, partnership, corporation or other business organization
or entity, other than the Company or any parent or subsidiary of the Company
(both individually and together, the "COMPANY GROUP"), render any service to or
in any way be affiliated with a competitor (or any person or entity that is
reasonably anticipated to become a competitor) of the Company Group.
(b) NON-SOLICITATION. During the Restricted Period, you shall
not, directly or indirectly, without the prior written consent of the Company:
(i) solicit business from, entice away from, accept orders
involving or otherwise interfere with the relationships of the Company
Group with any client or prospective client (including any person or entity
who, during the most recent twelve months, was a client of any member of
the Company Group); or
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(ii) solicit the services of any individual who is employed by any
member of the Company Group (or who was employed by any member of the
Company Group during the then most recent twelve-month period) or who is
retained by any member of the Company Group as an independent contractor
or consultant (or who was retained by any member of the Company Group in
such capacity in the most recent twelve-month period), or take any action
that results, or might reasonably result, in any employee, independent
contractor or consultant ceasing to perform services for any member of the
Company Group.
(c) NON-DISCLOSURE. You shall not at any time during the Term or
thereafter in perpetuity, directly or indirectly, other than in the performance
of your duties on behalf of the Company or with the prior written consent of the
Company:
(i) disclose any confidential or other proprietary information
pertaining to the client accounts of the Company Group, including, but not
limited to, contracts, client lists, systems, procedures, manuals,
confidential reports and financial information concerning the Company
Group's services, products or businesses;
(ii) use any confidential or other proprietary information
pertaining to the clients of any member of the Company Group (including,
but not limited to, client lists, client contacts, client profiles and
statistical or demographic analysis of any member of the Company Group's
clients) in order to contact, solicit, accept or refer business from, or
otherwise do business or deal with, any client of any member of the Company
Group (including any person or entity who, during the most recent twelve
months, was a client of any member of the Company Group) in connection with
the provision of any product or service similar to any provided by the
Company Group; or
(iii) disclose the terms of this Agreement, other than to your
legal, financial or tax advisors or as necessary to enforce the terms of
this Agreement or as otherwise required by law.
(d) RETURN OF COMPANY PROPERTY. Upon any termination or
resignation of your employment hereunder, you shall immediately return to the
Company all property and material in your possession that belongs or relates to
the Company (the "COMPANY PROPERTY") unless the Company expressly agrees in
writing that you may retain possession of any such property or material. Company
Property shall include all originals and copies of files, writings, reports,
memoranda, diaries, notebooks, nots of meetings or presentations, data, computer
tapes or diskettes, drawings charts, photographs, slides, patents, or an other
form of record which contains information created or produced for or at the
direction of any member of the Company Group, or any employee or agent thereof.
All Company Property shall be returned undamaged and intact.
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(e) APPLICATION OF COVENANTS. The activities described in this
Section 5 shall be prohibited regardless of whether undertaken by you in an
individual or representative capacity, and regardless of whether performed for
your own account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company).
(f) INJUNCTIVE RELIEF. Without limiting the remedies available to
the Company, you acknowledge that a breach of any of the covenants contained in
this Section 5 may result in material irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order or a preliminary or permanent injunction restraining you from
engaging in activities prohibited by this Section 5 or such other relief as may
be required to specifically enforce any of the covenants in this Section 5.
(g) VIOLATION AND REMEDY. If the Company reasonably determines
that you have breached any of the provisions of this Section 5, in addition to
any other remedies available to the Company in law or equity, the Company shall
be entitled to immediately suspend as of the date of such breach the provision
to you of any payments or benefits under this Agreement.
(h) THIRD-PARTY BENEFICIARY. The parties hereto acknowledge and
agree that the subsidiary and parent companies of the Company are third-party
beneficiaries to the terms of this Section 5 and may enforce the terms of this
Agreement as they pertain to Section 5 to the full extent permitted by law and
equity.
6. DEFINITIONS. For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below:
"BENEFICIARY" shall mean the person or persons designated by you in
writing to receive any benefits payable to you hereunder in the event of
your death or, if no such persons are so designated, your estate. No
Beneficiary designation shall be effective unless it is in writing and
received by the Company prior to the date of your death.
"BENEFIT CONTINUATION PERIOD" shall mean the period beginning on the
Date of Termination and ending on the earlier to occur of (i) the end of
the Severance Period and (ii) the date you are eligible and elect to be
covered under the comparable benefit plans of a subsequent employer.
"CAUSE" shall mean a termination of your employment which is a result
of any of the following: (i) your felony conviction or your plea of "no
contest" to a felony;
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(ii) any fraud by you in connection with the performance of your duties as
an employee of the Company; (iii) any act of intentional gross misconduct
by you in the performance of your duties as an employee of the Company; or
(iv) your continued and repeated neglect of your duties as an officer or
employee of the Company (other than any such neglect resulting from your
incapacity due to physical or mental illness); PROVIDED, HOWEVER, that an
event described in clauses (ii), (iii) and (iv) shall not constitute Cause
unless it is communicated to you by the Company in writing within thirty
days of the date the Company knows or has reason to know of such event and
is not corrected by you in a manner which is reasonably satisfactory to the
Company within thirty days of your receipt of such written notice from the
Company. No act or omission shall constitute Cause unless such act or
omission was undertaken by you without the good faith belief that it was in
furtherance of Company business or interests of the Company.
"DISABILITY" shall mean (i) your incapacity due to physical or mental
illness which causes you to be absent from the full-time performance of
your duties with the Company for three consecutive months and (ii) your
failure to return to full-time performance of your duties with the Company
within thirty days after written Notice of Termination due to Disability is
given to you. Any question as to the existence of your Disability upon
which you and the Company cannot agree shall be determined by a qualified
independent physician selected by the Company and approved by you (or, if
you are unable to provide such approval, such approval shall be provided by
any adult member of your immediate family), which approval shall not be
unreasonably withheld. The determination of such physician made in writing
to the Company and to you shall be final and conclusive for all purposes of
this Agreement.
"GOOD REASON" shall mean a resignation of your employment as a result
of any of the following: (i) the failure of the Company to renew the Term,
(ii) the failure of the Company to pay you any material amount of
compensation or to provide you with any material benefit when due, (iii) a
significant and adverse change in your position or duties, (iv) any
decrease in your Salary or (v) notice by the Company to you of the
relocation of your principal place of business to a location more than
fifty miles from Milesburg, Pennsylvania unless you consent to such
relocation; PROVIDED, HOWEVER, that an event described in clauses (ii),
(iii), (iv) or (v) of this sentence shall not constitute Good Reason unless
it is communicated by you to the Company in writing within thirty days of
the date you know or have reason to know of such event and is not corrected
by the Company in a manner which is reasonably satisfactory to you
(including full retroactive correction with respect to any monetary matter)
within thirty days of the Company's receipt of such written notice from
you.
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"INVOLUNTARY TERMINATION" shall mean (i) your termination of
employment by the Company other than for Cause or Disability or (ii) your
resignation for Good Reason.
"RESTRICTED PERIOD" shall mean the period beginning on the Effective
Date and ending on the later of (i) the second anniversary of the Date of
Termination or (ii) the last day of the Severance Period; PROVIDED,
HOWEVER, that in the event that your employment continues until the last
day of the Term, the Restricted Period shall mean the period beginning on
the Effective Date and ending on the second anniversary of the last day of
the Term.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, if to the Company,
to its offices at Groupe Danone, 0, xxx xx Xxxxxxx, 00000 Xxxxx Xxxxx 00 Xxxxxx,
and if to you at your last address of record, or to such other address as any
party may have furnished to the other parties hereto in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
8. BINDING ARBITRATION. Except for the relief provided for in
Section 5(f), any controversy or claim arising out of or relating to this
Agreement (including any claims relating to employment or the termination of
employment, whether arising under federal, state, or local law and whether in
contract or in tort and including any discrimination or common law claims, but
excluding workers' compensation and unemployment insurance) shall be settled by
arbitration under the auspices of the American Arbitration Association ("AAA")
in New York, New York, in accordance with the National Rules for the Resolution
of Employment Disputes of the AAA. The dispute shall be submitted to a single
arbitrator to be mutually agreed upon by the parties. If the parties cannot
agree on a single arbitrator, each party shall appoint one arbitrator who shall
then jointly appoint a single arbitrator. The arbitrator shall give effect to
applicable statutes of limitations. Any controversy concerning whether an issue
is arbitrable shall be determined by the arbitrator. Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
prevailing party in any arbitration proceeding, as determined by the arbitrator,
or in any proceeding with respect thereto as determined by the person presiding,
shall be entitled to receive from the non-prevailing party reasonable attorneys'
fees and costs incurred by such prevailing party in connection therewith. In
the event that there is no prevailing party, reasonable attorneys' fees and
costs incurred by the parties shall be allocated between them by the arbitrator.
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9. MISCELLANEOUS.
(a) AMENDMENTS, WAIVERS, ETC. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing. No waiver by any party hereto at any time of any
breach by the other party hereto of, or of compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
any party which are not expressly set forth in this Agreement and this Agreement
shall supersede all prior agreements, negotiations, correspondence, undertakings
and communications of the parties, oral or written, with respect to the subject
matter hereof and, unless otherwise expressly provided and incorporated into
this Agreement, shall supercede all prior agreements, negotiations,
correspondence, undertakings and communications, oral or written, with respect
to your employment with AquaPenn prior to the Effective Date, including, without
limitation, the Change in Control Agreement dated September 16, 1994, the
Employment Agreement dated September 16, 1994, as amended by Amendment No. 1 to
the Employment Agreement dated October 27, 1997, and all other prior agreements
between you and AquaPenn; PROVIDED, HOWEVER, that the parties hereto acknowledge
and agree that you will not forfeit any rights or benefits pursuant to the
Non-Qualified Deferred Compensation Agreement between you and AquaPenn dated
October 1, 1994 that had accrued to you prior to the Effective Date.
(b) VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. The
parties intend that any offending provision shall be enforced to the fullest
extent to which it is enforceable, that any unenforceable portion thereof be
severed from this Agreement, and that this Agreement, as modified to sever any
such unenforceable portion, will be enforced to the fullest extent permitted by
law.
(c) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(d) WITHHOLDING. Amounts paid to you hereunder shall be subject
to all applicable federal, state and local tax withholdings.
(e) HEADINGS. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect the rights of
the parties to this Agreement.
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(f) GOVERNING LAW. The validity, interpretation, construction,
and performance of this Agreement shall be governed by the laws of the State of
New York applicable to contracts entered into and performed in such State
without regard to the choice of law provisions thereof.
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If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
will then constitute our agreement on this subject.
Sincerely,
GREAT BRANDS OF EUROPE, INC.
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
UNDERSTOOD, ACCEPTED
AND AGREED:
/s/ Xxxxxx X. Xxxxx, III
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Xxxxxx X. Xxxxx, III
