EXHIBIT 10.6
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT, dated September 16, 1994, by and between:
AQUAPENN SPRING WATER COMPANY, a Pennsylvania Business Corporation
(the "Company"),
-AND-
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III (the "Employee").
Recitals
A. Employee is an executive of the Company with significant
policy-making and operational responsibilities in the conduct of its
business.
B. The Company recognizes that Employee is a valuable
resource for the Company and the Company desires to be assured of the
continued service of Employee.
C. The Company is concerned that upon a possible or
threatened change in control, Employee may have concerns about the
continuation of his employment and/or his status and responsibilities
and may be approached by others with employment opportunities, and
desires to provide Employee some assurance as to the continuation of
his employment status and responsibilities on a basis consistent with
that which he has earned in the event of such possible or threatened
change in control.
D. The Company desires to assure that if a possible change of
control situation should arise and Employee should be involved in
deliberations or negotiations in connection therewith that Employee
will be in a secure position to consider and/or negotiate such
transaction as objectively as possible and without implied threat to
his financial well-being.
E. The Company is concerned about the possible effect on
Employee of the uncertainties created by any proposed change in
control of the Company.
F. Employee is willing to continue to serve the Company but
desires that in the event of such a change in control he will continue
to have the responsibility, status, income, benefits and perquisites
that he received immediately prior to that event.
NOW THEREFORE, the parties hereto, intending to be legally bound,
agree as follows:
1. Change in Control. The provisions of Section 2 and 3 of
this Agreement shall become operative upon a "change in control" of
the Company, as hereinafter defined. For purposes of this Agreement, a
"change in control" shall be deemed to have occurred if and when:
(a) Any person or group of persons acting in
concert shall, subsequent to the date of this Agreement,
have acquired ownership of or the right to
-2-
vote or to direct the voting of shares of capital stock of the
Company representing thirty (30%) percent or more of the total
voting power of the Company, or
(b) The Company shall have merged into or consolidated
with another corporation, or merged another corporation into the
Company, on a basis whereby less than fifty (50%) percent of the
total voting power of the surviving corporation is represented by
shares held by former shareholders of the Company prior to such
merger or consolidation, or
(c) The Company shall have sold more than fifty (50%)
percent of its assets to another corporation or other entity or
person, or
(d) As the result of, or in connection with, any cash
tender or exchange offer, merger or other business combination,
sale of assets or contested election, the persons who were
Directors of the Company before such transaction cease to
constitute a majority of Directors of the Company.
2. Termination Within One (1) Year. In the event that the
employment of Employee with the Company is terminated involuntarily
within one (1) after a change in control occurs:
(a) Employee shall be entitled to receive an amount of
cash equal to the sum of the following amounts:
(i) one (1) times his annual salary at his rate on the date of
termination of employment; and
(ii) one (1) times the Company's annual retirement plan
contribution at the Employee's contribution rate on the
termination of his employment (subject to applicable
limitations of the Internal Revenue Code, which may dictate
that such amount shall not be added to the retirement plan
but shall be paid in cash).
The sum of these amounts shall be paid in equal monthly
installments over a period of twelve (12) months, the first such
installment to be paid within ten (10) days after Employee's
termination of employment.
(b) Employee shall continue for a period of twelve (12)
months from the date of his termination to be covered at the
expense of the Company by the same or equivalent hospital,
medical, accident, and disability insurance coverages as he was
enrolled in immediately prior to termination of his employment;
provided, however, that the Employee may elect to be paid in cash
within thirty (30) days after termination of his employment, an
amount equal to the Company's cost of providing such coverages
during such period.
(c) All outstanding stock options held by Employee, both
exercisable and nonexercisable, shall be immediately exercisable
regardless of the time such option has been held by Employee and
shall remain exercisable until the original expiration date of
such option, subject to applicable requirements of the Internal
Revenue Code.
3. Resignation Within One (1) Year. In the event the Employee
should determine in good faith that his status or responsibilities
with the Company has or have diminished subsequent to a change in
control, and shall for that reason resign from his employment with the
Company within one year after such change in control, Employee shall
be entitled to receive all payments and enjoy all of the benefits
specified in Section 2 hereof.
4. Other Events. If Employee resigns from the Company within
one (1) year of a change of control, Employee shall be entitled to
receive all payments and enjoy all of the benefits specified in
Section 2 hereof should one or more of the following events occur
within one (1) year following a change in control:
(a) If Employee determines that there has been a
significant change in his responsibilities or duties with the
Company and, for that reason, Employee resigns from the Company;
or
(b) If the base salary paid by the Company to Employee
is reduced by more than fifteen (15%) percent from his salary
immediately prior to the change in control.
5. Agreements Not Exclusive. The specific agreements referred
to herein are not intended to exclude Employee's participation in
other benefits available to executive personnel generally or to
preclude other compensation benefits as may be authorized by the Board
of Directors of the Company at any time, and shall be in addition to
the provisions of any other employment or similar agreements.
6. Enforcement Costs. The Company is aware that upon the
occurrence of a change in control, the Board of Directors or a
shareholder of the Company may then cause or attempt to cause the
Company to refuse to comply with its obligations under this Agreement,
or may cause or attempt to cause the Company to institute, or may
institute, litigation seeking to have this Agreement declared
unenforceable, or may take, or attempt to take, other action to deny
Employee the benefits intended under this Agreement. In these
circumstances, the purpose of this Agreement could be frustrated. It
is the intent of the company that Employee not be required to incur
the expenses associated with the enforcement of his rights under this
agreement by litigation or other legal action because the cost and
expense thereof would substantially detract from the benefits extended
to Employee hereunder, nor be bound to negotiate any settlement of his
rights hereunder under threat of incurring such expenses. Accordingly,
if following a change in control, it should appear to Employee that
the Company has failed to comply with any of its obligations under
this Agreement or in the event that the Company or any other person
takes any action to declare this Agreement void or unenforceable, or
institutes any litigation or other legal action designed to deny,
diminish or to recover from Employee the benefits intended to be
provided to Employee hereunder and that Employee has complied with all
of his obligations under this Agreement, the Company irrevocably
authorizes Employee from time to time to retain counsel of his choice
at the expense of the Company as provided in this Section 5, to
represent Employee in connection with the initiation or defense of any
litigation or other legal action, whether by or against the Company or
any director, officer, shareholder or
other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship
between the Company and such counsel, the Company irrevocably consents
to Employee entering into an attorney-client relationship with such
counsel, and in that connection the Company and Employee agree that a
confidential relationship shall exist between Employee and such
counsel. The reasonable fees and expenses of counsel selected from
time to time by Employee as hereinabove provided shall be paid or
reimbursed to Employee by the Company on a regular, periodic basis
upon presentation by Employee of a statement or statements prepared by
such counsel in accordance with its customary practices.
7. No Set-Off. The Company shall not be entitled to set-off
against the amount payable to Employee any amounts earned by Employee
in other employment after termination of his employment with the
Company, or any amounts which might have been earned by Employee in
other employment had he sought other employment. The amounts payable
to Employee under this Agreement shall not be treated as damages but
as severance compensation to which Employee is entitled by reason of
termination of his employment in the circumstances contemplated by
this Agreement. However, a set-off may be taken by the Company against
the amounts payable to Employee for expenses covering the same or
equivalent hospital, medical, accident, and disability insurance
coverages as set forth in Section 2(c) of this Agreement if such
benefit is paid for the Employee by the employer employing such
Employee after termination by the Company or after Employee's
resignation as under the circumstances set forth in Section 3 of this
Agreement.
8. Termination. This Agreement has no specific term, but
shall terminate if, prior to a change in control of the Company, the
employment of Employee with the Company shall terminate.
9. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Company and its successors and
assigns, and shall be binding upon and inure to the benefit of
Employee and his legal representatives, heirs, and assigns.
10. Severability. In the event that any Section, paragraph,
clause or other provision of this Agreement shall be determined to be
invalid or unenforceable in any jurisdiction for any reason, such
Section, paragraph, clause or other provision shall be enforceable in
any other jurisdiction in which it is valid and enforceable and, in
any event, the remaining Sections, paragraphs, clauses and other
provisions of this Agreement shall be unaffected and shall remain in
full force and effect to the fullest extent permitted by law.
11. Governing Law. This Agreement shall be interpreted,
construed and governed by the laws of the Commonwealth of
Pennsylvania.
12. Headings. The headings used in this Agreement are for
ease of reference only and are not intended to affect the meaning or
interpretation of any of the terms hereof.
13. Gender and Number. Whenever the context shall require,
all words in this Agreement in the male gender shall be deemed to
include the female or neuter gender, all singular words shall include
the plural, and all plural words shall include the singular.
IN WITNESS WHEREOF, this Agreement has been executed the date
and year first above written.
ATTEST: AQUAPENN SPRING WATER COMPANY
/s/ ▇.▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Secretary ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
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Witness ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III