EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement, made as of this 16th day of September, 1994,
by and between, AQUAPENN SPRING WATER COMPANY, a Pennsylvania
business corporation, hereinafter called the "Employer", and
XXXXXXXX X. XXXXXXXXXX, an individual, hereinafter called
"Employee".
Intending to be legally bound, and in consideration of
the mutual covenants contained herein, the parties hereto agree
as follows:
1. Employment. The Employer shall employ Employee for a
one (1) year term beginning on January 1, 1994 and ending on
December 31, 1995. Thereafter, unless this Agreement is
terminated in the manner hereinafter provided, it shall
automatically renew for an unlimited number of successive
additional terms of one (1) year duration. This Agreement may be
terminated at the end of a term, upon six (6) months written
notice from one party to the other party.
2. Employee's Duties. During the term of this Agreement,
Employee shall devote all necessary time and his best efforts to
the faithful performance of his duties as Executive Vice
President and Chief Operating Officer of the Employer as directed
by the Board of Directors and appropriate officers of the
Employer. It is understood between the parties that said duties
shall concentrate in the areas of administration, finance,
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manufacturing and strategic planning. Employee shall devote his
entire professional time to the affairs of the Employer.
Notwithstanding anything contained herein, Employee may render
reasonable amounts of services as an independent consultant to
other organizations during the term of this Agreement as long as
the activities of such other organizations are not in competition
with or adverse to the activities of the Employer and as long as
such consulting activities do not materially interfere with
Employee's performance of his duties hereunder.
3. Salary. Employee's base salary shall be ONE HUNDRED
TEN THOUSAND and NO/100 ($110,000.00) DOLLARS per year, payable
in equal bi-weekly installments. On each anniversary date of this
Agreement, Employee's base salary shall be reviewed and may be
increased by an amount determined by the Employer in its sole
discretion.
4. Benefits and Vacation.
a. Benefits. Employee and his dependents (if
applicable) shall be eligible to participate in the
Employer's fringe benefit plans -- both presently existing
plans and those plans that may be adopted in the future in
accordance with the terms and provisions of such plans. The
Employer presently has the following fringe benefit plans in
effect:
i. Dental insurance; and
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ii. Disability insurance.
b. Vacation and Personal Days. Employee shall be
entitled to reasonable amounts of vacation and personal time.
c. Automobile. Employee shall be entitled to an
automobile of reasonable value, of Employee's selection, for
business and/or personal use, furnished at the Employer's
expense. Such automobile shall be replaced every three (3)
years or at the expiration of a lease of appropriate term.
d. Health Insurance. Employee shall be entitled to
an Employer paid policy of health and hospital insurance
including major medical insurance coverage for Employee and
his dependents.
5. Stock Options.
a. The Employer shall grant to Employee options to
purchase the common stock of the Employer under the terms
set forth in this paragraph.
b. Beginning with the fiscal year of the Employer
commencing after the date of this Employment Agreement, the
Employer shall grant Employee an option to purchase fifty
thousand (50,000) shares of the common stock of the Employer
for each fiscal year of the Employer during which the
Employer's after-tax profits exceed One Million and NO/100
($1,000,000.00) Dollars.
c. Options shall be issued, within thirty (30) days
of the end of each fiscal year of the Employer, if the
condition of subparagraph 5(b) is met.
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d. The option price shall be the fair market value
of the Employer's stock on the date of the option grant and
the term during which the option may be exercised shall
commence on the date of the grant and extend for a period of
ten (10) years thereafter.
e. The terms of any option granted to Employee
under this paragraph shall be as set forth in this paragraph
and as set forth in an Option Agreement to be entered into
between the Employer and Employee as soon as is practicable
following the execution of this Agreement.
6. Retirement/Nonqualified Deferred Compensation Plan.
a. The Employer shall create a bookkeeping reserve
account (the "Nonqualified Deferred Compensation Account")
for Employee which shall be credited for each fiscal year of
Employer with an amount equal to fifteen (15%) percent of
the Employee's salary for such fiscal year.
b. The terms of the Nonqualified Deferred
Compensation Account shall be as set forth in a Nonqualified
Deferred Compensation Plan to be entered into between the
Employer and Employee as soon as is practicable following
the execution of this Agreement.
c. Nothing contained in this paragraph 6 and no
action taken pursuant to the provisions of this Agreement
shall create or be construed to create a trust of any kind,
or a fiduciary relationship between the Employer and
Employee.
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Any funds which may be reserved by the Employer to pay for
the retirement payment provided for hereunder shall continue
for all purposes to be a part of the general funds of the
Employer and no person other than the Employer shall by
virtue of this Agreement have any right to any interest in
such funds. Any bookkeeping reserve accounts for such
payment will be maintained by the Employer solely as a
convenience in the administration of this Agreement. To the
extent that any person acquires a right to receive payments
from the Employer under this paragraph, such right shall be
no greater than the rights of any unsecured general creditor
of the Employer. Neither Employee nor his representative
shall have any right to commute, sell, assign, transfer,
encumber or otherwise dispose of the right to receive the
deferred compensation benefit provided for hereunder, which
payments and the right thereto are expressly declared to be
nonassignable and nontransferable and any attempted
assignment or transfer by Employee shall be void and of no
effect. Title to and beneficial ownership of any assets,
whether cash, investments, life insurance policies or other
assets which the Employer may use to fund its obligation
hereunder shall at all times remain in the Employer.
7. Arbitration. Any disputes relating to the
interpretation or application of this Agreement shall be promptly
resolved by an impartial arbitrator pursuant to the rules of the
American Arbitration Association. The parties shall share equally
all costs and expenses of arbitration including the arbitrator's
fees; and excluding only their own attorney's fees,
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unless the arbitrator shall order either party to pay any or all
of the other's attorneys fees. The award of the arbitrator shall
be final and binding, and immediately enforceable by either party
in any court of competent jurisdiction.
8. Law Applicable. This Agreement shall be interpreted
and enforced in all circumstances according to the laws of the
Commonwealth of Pennsylvania.
9. Notices. Notices to the Employer shall be delivered
to:
AquaPenn Spring Water Company
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
Notices to Employee shall be delivered to:
Xxxxxxxx X. Xxxxxxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
In either case the notice address above may be changed by written
notice of the addressee.
10. Entire Agreement. This Agreement fully integrates all
understandings and agreements between the parties and shall constitute
the entire agreement between them and supersede any prior written
employment agreement between the parties or any oral representations
of any kind. This Agreement may only be modified in writing by the
voluntary signed consent of both parties. Provided, however, that if
Employee has stock options pursuant to prior agreements with the
Employer, such stock options shall continue in
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effect in accordance with the terms of such prior agreement and
shall not be affected by this Agreement.
11. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective successors in interest. Neither party hereto may
assign its interest without the prior written consent of the
other party.
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the day and year first written above.
ATTEST: AQUAPENN SPRING WATER COMPANY
(Illegible Signature) By: /s/ Xxxxxx X. Xxxxx, III
-------------------------- -------------------------------
, Secretary Xxxxxx X. Xxxxx, III
President
(SEAL)
WITNESS: EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxxx X. Xxxxxxxxxx (SEAL)
------------------------- --------------------------
Xxxxxxxx X. Xxxxxxxxxx
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