EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of October 10, 1996,
is made and entered into by and between Hawaiian Natural Water Company, Inc., a
Hawaii corporation (the "Company"), and ▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual resident of
the State of Hawaii ("Employee"). This Agreement shall become effective (the
"Effective Date") concurrently with, and conditioned upon, the closing of a
proposed offering of Units by the Company, as more fully described in that
certain Confidential Private Offering Memorandum of the Company, dated September
6, 1996:
WHEREAS, the Company desires to employ Employee as the Company's President
and Chief Executive Officer, and the Employee desires to be employed by the
Company in such capacity, all on the terms set forth herein; and
WHEREAS, Employee has the experience, knowledge and abilities necessary to
enable him to perform his obligations hereunder;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. Duties.
(a) Within the limitations established by the Company's Bylaws and its
Board of Directors ("the Board"), Employee shall have each and all of the duties
and responsibilities of the President and Chief Executive Officer of the Company
as those duties may from time to time be established by the Board. It is also
anticipated that Employee shall be nominated to serve as a director of the
Company throughout the term of this Agreement. Employee shall not be entitled to
receive any additional compensation for such service as a director, except to
the extent otherwise determined by the Board.
(b) Employee shall devote his full time and best efforts to the performance
of his duties hereunder and to the advancement of the interests of the Company
and shall not, without the express prior written consent of the Board, or the
Chairman, render directly or indirectly to any other person, corporation,
partnership, firm, company, joint venture or other entity any services of any
kind for compensation, or engage in
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any other activity that would in any manner whatsoever compete with the Company,
be adverse to any interests of the Company, and/or in any manner whatsoever
interfere with the proper performance of Employee's duties and responsibilities
to the Company hereunder. The foregoing notwithstanding, Employee shall be
entitled to serve as President of ▇▇▇▇▇▇ Consulting, Inc. ("BCI") so long as any
services rendered by Employee on behalf of BCI are not performed during normal
working hours and do not otherwise interfere with Employee's performance of his
duties hereunder and so long as the operations of BCI are not competitive with
those of the Company. In addition, nothing herein shall be deemed to preclude or
prohibit Employee from performing services within the civic community including,
without limitation, serving on boards of civic groups, so long as such services
do not interfere with Employee's performance of his duties hereunder.
2. Term. Unless earlier terminated as provided in Section 8 hereof,
Employee's employment hereunder (the "Employment") shall extend for a term of
five years; provided, however, that the Employment shall automatically be
extended for an additional year (as so extended, the "Term"), and thereafter
from year to year, on the same terms and conditions as are then existing as of
the extension date, unless either party, in its sole discretion, shall have
given written notice of termination to the other party not less than 90 days
prior to the end of the then current term.
3. Salary. During the first three years of the Term, Employee shall be
entitled to receive an annual salary of $150,000, payable in equal installments
on the Company's regular payroll dates. Thereafter, Employee's salary hereunder
shall be adjusted upwards (but not downwards) to reflect any changes in the cost
of living, based upon changes in the Consumer Price Index in Hawaii.
4. Bonus. During each year of the Term, Employee shall be eligible to
receive a bonus of up to $100,000 based upon the achievement by the Company of
certain performance goals to be established by the Board, in its discretion,
during the first quarter of each year of the Term. Any such bonus shall be
payable by the Company in two equal installments not later than April 1 and June
1 following the end of the year in which earned.
5. Option Grant. On the Effective Date, the Company shall grant to Employee
employee stock options to purchase an aggregate of 150,000 shares of common
stock of the Company, all on the terms and conditions (including vesting
provisions) set forth in that certain Option Agreement of even date herewith
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between Employee and the Company, a copy of which is attached hereto as Exhibit
A.
6. Expenses. The Company shall pay or reimburse Employee for all usual,
reasonable and necessary expenses paid or incurred by him in the performance of
his duties hereunder, subject to receipt by the Company of appropriate
documentary proof of such expenditures and to the right of the Company at any
time to place reasonable limitations on expenses thereafter to be incurred or
reimbursed; provided, however, that Employee may not incur any expense or
related group of expenses in excess of $25,000 in the aggregate without the
express prior written consent of the Board.
7. Employee Benefits. Employee shall be entitled to an automobile allowance
of $600 per month plus the actual cost of his automobile insurance. Employee
shall also be entitled to participate in and receive any and all benefits
pursuant to any benefit programs maintained by the Company during the Term that
are generally available to other senior executives of the Company including,
without limitation, participation in any life insurance, hospital, surgical,
medical or other group health and accident benefit plans. In addition, Employee
shall be entitled to participate in all profit sharing, pension, bonus or
retirement plans of the Company as may be in existence during the Term in
accordance with their respective terms and provisions, but, to the extent
participation or the amount of participation is in the discretion of the Board
or any committee thereof, Employee's participation shall likewise be solely in
such discretion. Employee shall be entitled to four weeks' paid vacation during
each year of the Term.
8. Termination.
(a) The Employment may be terminated by the Company prior to the end of its
then current Term upon notice to Employee at any time For Cause (as hereinafter
defined). The Employment shall also terminate automatically upon Employee's
death or permanent disability (as defined pursuant to the Company's long-term
disability insurance policy as then in effect). If the Company terminates the
Employment For Cause, or if the Employment terminates automatically upon
Employee's death or permanent disability, the Company shall have no further
obligation to Employee under this Agreement, except the obligation to pay
Employee all salary and benefits accrued through the effective date of such
termination including, in the case of death or permanent disability, any
benefits to which Employee may be entitled under long-term disability or other
insurance programs maintained by the Company (collectively, "Termination
Benefits").
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(b) For purposes hereof, the term "For Cause" means (i) the conviction of
Employee of (or plea of nolo contendere to) a felony or any crime involving
moral turpitude, (ii) any embezzlement or intentional misappropriation by
Employee of any assets of the Company (which for this purpose shall not include
the incurrence of any business expense by Employee in good faith in the
performance of his duties hereunder), or (iii) gross negligence by Employee in
the performance of his duties hereunder, but does not mean the Company's
disagreement with any lawful action undertaken by Employee in the good faith
exercise of his business judgment, subject to the reasonable directives of the
Board.
(c) Subject to receipt of all Termination Benefits then due, for a period
of thirty (30) days following any termination of Employee's employment
hereunder, Employee shall fully cooperate with the Company in all matters
relating to the winding up of Employee's work on behalf of the Company and the
orderly transfer of all pending work and Employee's duties and responsibilities
to such other person or persons as may be designated by the Company, in its sole
discretion. Upon any termination of Employee's employment hereunder, Employee
shall immediately deliver to the Company any and all of the Company's property
of any kind or nature whatsoever in Employee's possession, custody or control,
including, without limitation, any and all Confidential Information (as defined
in Section 9 hereof).
9. Confidential Information.
(a) Employee recognizes, acknowledges and agrees that as a result of or in
connection with the Employment, he will have access to and obtain certain
Confidential Information (as hereinafter defined), relating to the Company's
business and not generally known to the public or to the Company's competitors.
Employee recognizes, acknowledges and agrees that the Confidential Information
constitutes a valuable, special and unique asset of the Company, access to and
knowledge of which is essential to the performance of Employee's duties.
Employee specifically agrees that, except as directed by the Board, Employee
will not at any time during or for a period of five years after any termination
of the Employment, use or disclose any Confidential Information to any person
whomsoever for any purpose other than for the benefit of the Company.
(b) For purposes hereof, the term "Confidential Information" means any and
all marketing surveys; marketing programs; compensation arrangements; customer
lists; contact lists; agency lists; agency agreements; pricing information;
sources of customers' business plans, projections or prospects;
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actual and/or projected expenses; actual and/or projected revenues; actual
and/or projected profits; research or experimental work; data; lists; files;
notes; books; records; drawings and any and all other documents, work products
and/or materials and other information of the Company or its clients or
customers of a confidential, proprietary or secret nature which is or may be
applicable to or related in any way to the business of the Company or its
clients or customers.
10. Covenant Not to Compete. In partial consideration for his Employment
hereunder, Employee hereby covenants and agrees that he will not, directly or
indirectly, whether for his own account or as a stockholder, investor, director,
officer, employee, consultant or other agent of or to any person or entity,
other than the Company or any affiliate thereof designated by the Board, engage
or participate in any bottled water business in any State or county within the
United States in which the Company is then carrying on its business for a period
of two years following any termination (or nonrenewal) of this Agreement.
11. Injunctive Relief. The parties hereto agree that in the event of the
breach of Section 9 or 10 of this Agreement by Employee, monetary damages alone
would not be an adequate remedy to the Company for the injury that would result
from such breach, and that the Company shall be entitled, at any time after any
such breach, to immediately obtain injunctive relief prohibiting any further
breach of this Agreement. Employee further agrees that any such injunctive
relief obtained by the Company shall be in addition to monetary damages.
12. Waiver of Modification. Any waiver, alteration or modifications of any
of the provisions of this Agreement shall not be valid unless made in writing
and signed by the parties hereto. Waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
13. Successors and Assigns: Entire Agreement. This Agreement may not be
assigned by either party hereto without the prior written consent of the other
party hereto. This Agreement shall inure to the benefit of, and be binding upon
any successor or assign of the parties hereto. This Agreement and the Option
Agreement attached hereto constitutes the entire agreement of the parties with
respect to the subject matter hereof and thereof and supersedes all prior
agreements, amendments, memoranda representations or understandings, whether
written or oral, with respect to the subject matter hereof between the Company
and Employee.
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14. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Hawaii, without regard to the conflicts
of law provisions thereof.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be in writing and delivered in person or sent via facsimile,
with conformation of receipt, by registered, certified or express mail, postage
and fees prepaid, in the case of the Company, to the then-current address of its
then principal office and, in the case of Employee, to the then-current address
of his office of employment hereunder or such other address or to the attention
of such other person as the recipient party will have specified by prior written
notice to the sending party.
16. Descriptive Headings. The descriptive headings for the paragraphs in
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
17. Negotiated Agreement. This Agreement reflects the negotiations of both
parties hereto. The language used herein shall be deemed to be the language
chosen by the parties hereto to express their mutual intent, and no rule of
strict construction shall be applied.
18. Severability. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be construed as an original for all purposes,
but all of which taken together shall constitute one and same Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective the
day and year first above written.
HAWAIIAN NATURAL WATER COMPANY, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
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