GREAT BRANDS OF EUROPE, INC.
November 2, 1998
Xxxxxxxx X. Xxxxxxxxxx
Chief Operating Officer and
Chief Financial Officer
AquaPenn Spring Water Company, Inc.
Xxx XxxxXxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
EMPLOYMENT AGREEMENT
Dear Xx. Xxxxxxxxxx:
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 (the "TERM") shall commence on the "Closing
Date" (the "EFFECTIVE DATE") of the Transaction (as such term is defined in the
Agreement and Plan of Merger (the "MERGER AGREEMENT") dated November 2, 1998),
and shall continue until the first anniversary of the Effective Date; PROVIDED
that the Term shall automatically renew for additional one-year periods on each
anniversary of the Effective Date (each, a "RENEWAL DATE") until either (a) your
employment hereunder is terminated in accordance with the terms set forth in
Section 4 below or (b) you or the Company give the other such party written
notice of the intent not to so extend the Term at least ninety days prior to
such Renewal Date.
2. POSITION, REPORTING AND RESPONSIBILITIES. Until you are
relocated to Stamford, Connecticut, you shall be employed as (a) the Chief
Operating Officer and Chief Financial Officer of AquaPenn and (b) the project
manager with respect to the transitional period after the acquisition of
AquaPenn by Groupe Danone. During the period that you are employed in the
positions set forth above, you will be based in Milesburg, Pennsylvania and you
will report directly to the Chief Executive Officer of the Company, which
position was held by Xxxx
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Xxxxxxxxx on the date the Merger Agreement was signed. You and the Company
acknowledge and agree that you will thereafter be transferred to the Company's
offices in Stamford, Connecticut where you will be employed in a position of
Vice President and you will serve on the Executive Committee. 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.
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 $160,000 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; PROVIDED, HOWEVER, that you will forfeit any right to receive the Annual
Bonus or any prorated portion thereof in the event your employment with the
Company terminates prior to December 31 of any bonus period during the Term.
(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. Such
benefits will include your participation in the Company's relocation program,
including any mortgage assistance for which you may qualify under the terms of
the relocation program.
(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.
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(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. After your transfer to Stamford, Connecticut, you shall
participate in the Company's Executive Committee Car Program, which provides a
gross monthly automobile allowance of $1,300.
(f) RELOCATION EXPENSES. The Company shall pay or reimburse you,
in accordance with the Company's relocation policy, for the reasonable expenses
incurred by you in connection with the relocation of you and your family from
Milesburg, Pennsylvania to Stamford, Connecticut.
(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 which will be exercisable for 1,500 ordinary
shares of Groupe Danone, nominal value FF10 per share (the "STOCK OPTIONS").
Subject to Section 4(a) below, the Stock Options will become 100% vested on the
fifth anniversary of the date of grant and shall be exercisable during the two
year period following the date that the Stock Options become vested.
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 bonus for any calendar year 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).
You will not be entitled to receive the Annual Bonus or any prorated portion
thereof for any partial calendar year during the Term during which your
employment terminates. Furthermore, all unvested Stock Options shall immediately
lapse and become void on the Date of Termination or at the time you cease to be
employed by the Company or AquaPenn at the end of the Term.
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(b) INVOLUNTARY TERMINATION. In the event of your Involuntary
Termination during the Term, in addition to the Accrued Amounts the Company will
provide you the payments and benefits set forth in this Section 4(b).
(i) In the event of your Involuntary Termination on or after the
first anniversary of the Effective Date, 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").
(ii) In the event of your Involuntary Termination prior to the
first anniversary of the Effective Date, the Company shall continue to pay
to you the Severance Payment for a period of two years after the Date of
Termination (the "EXTENDED SEVERANCE PERIOD").
(iii) 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.
(iv) 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 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; 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.
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(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 ninety days notice of
such resignation. The Company may, in its sole discretion, continue to pay your
Salary for the ninety 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 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 ninety 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.
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(h) 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 the bottled water business or a bottled water
brand.
(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
(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;
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(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.
(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
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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 earliest to occur of (i) the end of
the Severance Period, (ii) the end of the Extended Severance Period, if
any, and (iii) 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; (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
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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) if, during the Term, Groupe Danone sells or
otherwise disposes of the portion of its U.S. operations that engage in the
bottled water business; PROVIDED, HOWEVER, that an event described in
clauses (ii), (iii) or (iv) 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.
"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 latest of (i) the second anniversary of the Date of
Termination, (ii) the last day of the Severance Period or (iii) the last
day of the Extended 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.
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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.
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,
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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.
(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/ Xxxxxxxx X. Xxxxxxxxxx
------------------------------
Xxxxxxxx X. Xxxxxxxxxx
