As filed with the Securities and Exchange Commission on May 1, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
AquaPenn Spring Water Company, Inc.
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(Exact name of registrant as specified in its charter)
Pennsylvania 25-1541772
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One AquaPenn Drive, Milesburg, PA 16853
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(Address of Principal Executive Offices) (Zip Code)
AquaPenn Spring Water Company, Inc. 1989 Stock Option Plan;
1994 Incentive Option Plan and Sales Representatives Option Plan
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(Full title of the plan)
Edward J. Lauth, III
Chairman, President and
Chief Executive Officer
AquaPenn Spring Water Company, Inc.
One AquaPenn Drive, Milesburg, PA 16853
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(Name and address of agent for service)
(814) 355-5556
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(Telephone number, including area code, of agent for service)
copy to:
Brian D. Doerner, Esquire, Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor, Philadelphia, Pennsylvania 19103
(215) 665-8500
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Calculation of Registration Fee
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<TABLE>
<CAPTION>
Proposed maximum Proposed maximum
Title of securities Amount to offering price aggregate Amount of
to be registered be registered(1) per share(2) offering price(2) registration fee
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,220,960 shares(3) $(2) $8,253,328.80 $2434.74
No par value
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this
Registration Statement shall be deemed to cover an indeterminate number
of additional shares of Common Stock issuable in the event the number
of outstanding shares of the Company is increased by stock split,
reclassification, stock dividend and similar transactions.
(2) In accordance with Rules 457(c) and (h), the price shown is based upon
(i) 720,960 shares offered pursuant to options outstanding exercisable
at the following prices: 90,120 shares at $4.99 per share, 90,120
shares at $12.60 per share and 540,720 shares at $1.90 per share; and
(ii) 500,000 shares reserved for issuance upon exercise of options to
be granted in the future, the proposed offering price of which has been
determined based upon the average of the high and low prices reported
for the Common Stock on the New York Stock Exchange on April 24, 1998,
$11.2815.
(3) This Registration Statement on Form S-8 registers shares of Common
Stock of AquaPenn Spring Water Company, Inc., no par value, which may
be issued pursuant to options which have or will be granted as follows
(i) 270,360 shares issuable pursuant to the AquaPenn Spring Water
Company, Inc. 1989 Stock Option Plan, (ii) 680,240 shares issuable
pursuant to the 1994 Incentive Option Plan and (iii) 270,360 shares
issuable pursuant to the Sales Representatives Option Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be included in
Part I of this Registration Statement will be given or sent to all persons who
were or will be granted options to purchase shares of Common Stock of AquaPenn
Spring Water Company, Inc. (the "Company") under (i) the AquaPenn Spring Water
Company, Inc. 1989 Stock Option Plan; (ii) the 1994 Incentive Option Plan; and
(iii) the Sales Representatives Option Plan as required by Rule 428 under the
Securities Act of 1933, as amended (the "Securities Act").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by AquaPenn Spring Water Company, Inc.
(the "Company") with the Securities and Exchange Commission (the "Commission")
are incorporated by reference in this Registration Statement:
(a) The Company's Prospectus dated January 29, 1998 and filed with the
Commission on January 30, 1998, which contains audited financial
statements for the Company's fiscal year ended September 30, 1997.
(b) The Company's quarterly report on Form 10-Q for the quarter ended
December 31, 1997.
(c) The description of the Company's Common Stock, no par value, set
forth in the Company's Registration Statement on Form 8-A, filed
with the Commission on January 20, 1998 and declared effective on
January 29, 1998.
All reports and other documents filed by the Company after the date
hereof pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of filing of such reports and documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers.
The Pennsylvania Business Corporation Law of 1988 authorizes the
Company to indemnify its directors and officers in terms sufficiently broad to
permit indemnification of such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933.
The Company's By-Laws provide as follows:
"Section 7.01. Indemnification of Directors and Officers. The
Corporation shall indemnify any director or officer or employee or
agent of the Corporation or any of its subsidiaries who was or is an
"authorized representative" of the Corporation (which shall mean, for
the purposes of this Article, a director or officer of the Corporation,
or a person serving at the request of the Corporation as a director,
officer, partner, fiduciary or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise) and who was or is a "party" (which shall include for
purpose of this Article the giving of testimony or similar involvement)
or is threatened to be made a party to any "proceeding" (which shall
mean for purposes of this Article any threatened, pending or completed
action, suit, appeal or other proceeding of any nature, whether civil,
criminal, administrative or investigative, whether formal or informal,
and whether brought by or in the right of the Corporation, its
shareholders or otherwise) by reason of the fact that such person was
or is an authorized representative of the Corporation to the fullest
extent permitted by law including, without limitation, indemnification
against expenses (which shall include for purposes of this Article,
attorneys' fees and disbursements), damages, punitive damages,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with such proceeding
unless the act or failure to act giving rise to the claim is finally
determined by a court to have constituted willful misconduct or
recklessness. If an authorized representative is not entitled to
indemnification with respect to a portion of any liabilities to which
such person may be subject, the Corporation shall nonetheless indemnify
such person to the maximum extent for the remaining portion of the
liabilities."
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
Exhibit Number
4.1 Form of Certificate evidencing Common Stock of the Company,
incorporated herein by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-1 (File No. 333-38771), as
amended.
4.2 The AquaPenn Spring Water Company, Inc. 1989 Stock Option Plan.
4.3 Option Agreement dated May 1, 1990 between the Company and Geoffrey
F. Feidelberg.
II-2
<PAGE>
4.4 Employment Agreement dated September 16, 1994 between Edward J.
Lauth, III and the Company (this is a form of agreement which sets
forth the terms for all recipients under the 1994 Incentive Option
Plan), incorporated herein by reference to Exhibit 10.4 of the
Company's Registration Statement on Form S-1 (File No. 333-38771),
as amended.
4.5 Sales Representative Agreement dated February 1, 1992 between the
Company and Matthew J. Suhey.
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
15 Letter re: unaudited interim financial information.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Matson and Isom Accountancy Corporation.
23.3 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in its
opinion filed as Exhibit 5).
24 Power of Attorney (included on signature pages to this Registration
Statement).
Item 9. Undertakings.
A. Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not
apply if the registration statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the
II-3
<PAGE>
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. Filings Incorporating Subsequent Exchange Act Documents by Reference
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Request for Acceleration of Effective Date or Filing of Registration
Statement on Form S-8
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to its Restated Articles of Incorporation, as
amended, its By-Laws or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milesburg, Commonwealth of Pennsylvania on May 1,
1998.
AQUAPENN SPRING WATER COMPANY, INC.
By: /s/ Geoffrey F. Feidelberg
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Name: Geoffrey F. Feidelberg
Title: Executive Vice President, Chief Financial Officer and
Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Each person whose signature appears below in so signing also makes,
constitutes and appoints Edward J. Lauth, III and Geoffrey F. Feidelberg and
each of them, his or her true and lawful attorney-in-fact, with full power of
substitution, for him or her in any and all capacities, to execute all
amendments and post-effective amendments to this Registration Statement, with
exhibits thereto and other documents in connection therewith and hereby ratifies
and confirms all that said attorney-in-fact or his substitute or substitutes may
do or cause to be done by virtue hereof.
/s/ Edward J. Lauth, III President, Chief Executive May 1, 1998
- -------------------------- Officer and Director
Edward J. Lauth, III (principal executive officer)
/s/ Geoffrey F. Feidelberg Executive Vice President, May 1, 1998
- -------------------------- Chief Financial Officer, Chief
Geoffrey F. Feidelberg Operating Officer and
Director (principal financial
and accounting officer)
/s/ Nancy Jean Davis Director May 1, 1998
- --------------------------
Nancy Jean Davis
/s/ Richard F. DeFluri Director May 1, 1998
- --------------------------
Richard F. DeFluri
/s/ John H. Gutfreund Director May 1, 1998
- --------------------------
John H. Gutfreund
/s/ James D. Hammond Director May 1, 1998
- --------------------------
James D. Hammond
/s/ Robert E. Poole, Jr. Director May 1, 1998
- --------------------------
Robert E. Poole, Jr.
<PAGE>
/s/ Henry S. Shatkin Director May 1, 1998
- --------------------------
Henry S. Shatkin
/s/ Matthew J. Suhey Director May 1, 1998
- --------------------------
Matthew J. Suhey
/s/ Calvin J. Wagner, Jr. Director May 1, 1998
- --------------------------
Calvin J. Wagner, Jr.
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
4.1 Form of Certificate evidencing Common Stock of the Company, incorporated
herein by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-1 (File No. 333-38771), as amended.
4.2 The AquaPenn Spring Water Company, Inc. 1989 Stock Option Plan.
4.3 Option Agreement dated May 1, 1990 between the Company and Geoffrey F.
Feidelberg.
4.4 Employment Agreement dated September 16, 1994 between Edward J. Lauth,
III and the Company, (this is a form of agreement which sets forth the
terms for all recipients under the 1994 Incentive Option Plan)
incorporated herein by reference to Exhibit 10.4 of the Company's
Registration Statement on Form S-1 (File No. 333-38771), as amended.
4.5 Sales Representative Agreement dated February 1, 1992 between the Company
and Matthew J. Suhey.
5 Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
15 Letter re: unaudited interim financial information.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Matson and Isom Accountancy Corporation.
23.3 Consent of Ballard Spahr Andrews & Ingersoll, LLP (included in its
opinion filed as Exhibit 5).
24 Power of Attorney (included on signature pages to this Registration
Statement).
Exhibit 4.2
AQUAPENN SPRING WATER COMPANY, INC.
1989 STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Incentive Plan (the "Plan") is
to advance the development, growth and financial condition of AquaPenn Spring
Water Company, Inc. (the "Corporation") by providing incentives through
participation in the appreciation of capital stock of the Corporation so as to
secure, retain and motivate personnel who may be responsible for or involved in
the management and operation of the affairs of the Corporation.
2. Term. The Plan shall become effective as of the date it is adopted
by the Corporation's Board of Directors (the "Board"), so long as the
Corporation's stockholders duly approve the Plan within twelve (12) months
either before or after the date of the Board's adoption of the Plan. Any and all
options and rights awarded under the Plan ("Awards") before it is so approved by
the Corporation's stockholders shall be conditional upon and may not be
exercised before timely obtainment of such approval, and shall lapse upon the
failure thereof. If the Plan is so approved, it shall continue in effect until
all Awards either have lapsed or been exercised or cancelled according to their
terms under the Plan.
3. Stock. The shares of stock that may be issued under the Plan shall
not exceed in the aggregate 500,000 shares of the Corporation's no par value
common stock (the "Stock"), as may be adjusted pursuant to paragraph 17 hereof.
Such shares of Stock may be either authorized and unissued shares of Stock, or
authorized
<PAGE>
shares of Stock issued by the Corporation and subsequently reacquired by it as
treasury stock. Under no circumstances shall any fractional shares of Stock be
issued or sold under the Plan or any Award. Except as may be otherwise provided
in the Plan, any Stock subject to an Award that for any reason lapses or
terminates prior to its exercise as to such Stock shall become and again be
available under the Plan. The Corporation shall reserve and keep available, and
shall duly apply for any requisite governmental authority to issue or sell the
number of shares of Stock needed to satisfy the requirements of the Plan while
in effect. The Corporation's failure to obtain any such governmental authority
deemed necessary by the Corporation's legal counsel for the lawful issuance and
sale of Stock under the Plan shall relieve the Corporation of any duty, or
liability for the failure to issue or sell such Stock as to which such authority
has not been obtained,
4. Administration. The Plan shall be administered by a committee (the
"Committee") consisting of not fewer than three (3) persons serving for such
terms as determined, selected and appointed by the Board. The Board shall fill
all vacancies occurring in the Committee's membership, and at any time and for
any reason may add additional members to the Committee or may remove members
from the Committee and appoint their successors. The members of the Committee
may, but need not be members of the Board, but no person shall be a member of
the Committee unless he or she is ineligible while serving on the Committee and
has been ineligible for at least one (1) year prior to his or her appointment to
the Committee to receive any Awards, allocations or other options or rights of
or
2
<PAGE>
with respect to Stock or any other capital stock of the Corporation or its
affiliates under the Plan or any other plan of the Corporation or its
affiliates. A majority of the Committee's membership shall constitute a quorum
for the transaction of all business of the Committee, and all decisions and
actions taken by the Committee shall he determined by a majority of the members
of the Committee attending a meeting at which a quorum of the Committee is
present.
The Committee shall be responsible for the management and operation
of the Plan and, subject to its provisions, shall have full, absolute and final
power and authority, exercisable in its sole discretion: to interpret and
construe the provisions of the Plan, adopt, revise and rescind rules and
regulations relating to the Plan and its administration, and decide all
questions of fact arising in the application thereof; except as may be required
pursuant to any employment agreement of the Corporation, to determine what, to
whom, when and under what facts and circumstances Awards shall be made, and the
form, number, terms, conditions and duration thereof, including but not limited
to when exercisable, the number of shares of Stock subject thereto, and Stock
option purchase prices; to adopt, revise and rescind procedural rules for the
transaction of the Committee's business, subject to any directives of the Board
not inconsistent with the provisions or intent of the Plan or applicable
provisions of law; and to make all other determinations and decisions, take all
actions and do all things necessary or appropriate in and for the administration
of the Plan. The Committee's determinations, decisions and actions under the
3
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Plan, including but not limited to those described above, need not be uniform or
consistent, but may be different and selectively made and applied, even in
similar circumstances and among similarly situated persons. Unless contrary to
the provisions of the Plan, all decisions, determinations and actions made or
taken by the Committee shall be final and binding upon the Corporation and all
interested persons, and their heirs, personal and legal representatives,
successors, assigns and beneficiaries. No member of the Committee or of the
Board shall be liable for any decision, determination or action made or taken in
good faith by such person under or with respect to the Plan or its
administration.
5. Awards. Awards may be made under the Plan in the form of (a)
"Qualified Options" to purchase Stock that are intended to qualify for certain
tax treatment as incentive stock options under Sections 421 and 422A of the
Internal Revenue Code of 1986, as amended (the "Code"), or (b) "Non-Qualified
Options" to purchase Stock that do not qualify under Sections 421-424 of the
Code. All Awards and the terms and conditions thereof shall be set forth in
written agreements, in such form and content as approved by the Committee from
time to time, and shall be subject to the provisions of the Plan whether or not
contained in such agreements. Every Award made to a person (a "Recipient") shall
be exercisable during his or her lifetime only by the Recipient, and shall not
be salable, transferable or assignable by the Recipient except by his or her
Will or pursuant to applicable laws of descent and distribution.
6. Eligibility. Persons eligible to receive Awards shall be those key
officers and other employees of the Corporation as
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determined by the Committee. In no case, however, shall any current member of
the Committee be eligible to receive any Awards. A person's eligibility to
receive Awards shall not confer upon him or her any right to receive any Awards;
rather, the Committee shall have the sole authority, exercisable in its
discretion consistent with the provisions of the Plan, to select when, to whom
and under what facts and circumstances Awards will be made. Except as otherwise
provided, a person's eligibility to receive, or actual receipt of Awards under
the Plan shall not limit or affect his or her benefits under or eligibility to
participate in any other incentive or benefit plan or program of the Corporation
or its affiliates.
7. Grant of Award. On the first business day immediately following
the adoption of the Plan by the Corporation's Board of Directors, an Award for
450,000 shares of the Stock shall be granted under the Plan to Geoffrey F.
Feidelberg, the Vice President and Chief Financial Officer of the Corporation,
as set forth in the Stock Option Agreement that is attached hereto as Exhibit
"A".
8. Qualified Options. In addition to other applicable provisions of
the Plan, all Qualified Options and Awards thereof shall be under and subject to
the following terms and conditions:
(a) No Qualified Option shall be awarded more than ten (10)
years after the date the Plan is adopted by the Board or the date the
Plan is approved by the Corporation's stockholders, whichever date is
earlier;
5
<PAGE>
(b) The time period during which any Qualified Option is
exercisable, as determined by the Committee, shall not commence
before the expiration of six (6) months or continue beyond the
expiration of ten (10) years after the date such Option is awarded;
and
(c) The purchase price of a share of Stock subject to
any Qualified Option, as determined by the Committee, shall
not be less than the Stock's fair market value at the time
such Option is awarded.
9. Non-Qualified Options. In addition to other applicable provisions
of the Plan, all Non-Qualified Options and Awards thereof shall be under and
subject to the following terms and conditions:
(a) The time period during which any Non-Qualified Option is
exercisable, as determined by the Committee, shall not commence
before the expiration of six (6) months or continue beyond the
expiration of ten (10) years after the date such Option is awarded;
(b) If a Recipient of a Non-Qualified Option, before its
lapse or full exercise, ceases to be eligible under the Plan, the
Committee may permit the Recipient thereafter to exercise such Option
during its remaining term, to the extent that the Option was then and
remains exercisable, for such time period and under such terms and
conditions as may be prescribed by the Committee; and
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<PAGE>
(c) The purchase price of a share of Stock subject to
any Non-Qualified Option shall be determined by the Committee.
10. Exercise. Except as otherwise provided in the Plan or specified
in an individual award, Awards may be exercised in whole or in part by giving
written notice thereof to the Secretary of the Corporation, or his or her
designee, identifying the Award being exercised, the number of shares of Stock
with respect thereto, and other information pertinent to exercise of the Award.
The purchase price of the shares of Stock with respect to which an Award is
exercised shall be fully payable with the written notice of exercise, either in
cash or in Stock at its then current fair market value, or in any combination
thereof, as the Committee shall determine. Funds received by the Corporation
from the exercise of any Award shall be used for its general corporate purposes.
The number of shares of Stock subject to an Award shall be reduced by the number
of shares of Stock with respect to which the Recipient has exercised rights
under the Award.
The Committee may permit an acceleration of previously established
exercise terms of any Awards as, when, under such facts and circumstances, and
subject to such other or further requirements and conditions as the Committee
may deem necessary or appropriate. In addition: (a) if the Corporation or its
stockholders execute an agreement to dispose of all or substantially all of the
Corporation's assets or capital stock by means of sale, merger, consolidation,
reorganization, liquidation
7
<PAGE>
or otherwise, as a result of which the Corporation's stockholders as of
immediately before such transaction will not own more than forty-nine percent
(49%) of the total combined voting power of all classes of voting capital stock
of the surviving entity (be it the Corporation or otherwise) immediately after
the consummation of such transaction, thereupon any and all Awards immediately
shall become and remain exercisable with respect to the total number of shares
of Stock still subject thereto for the remainder of their respective terms until
the consummation of such transaction, or if not consummated, until the agreement
therefor expires or is terminated, in which case thereafter all Awards shall be
treated as if said agreement never had been executed; or (b) if there is a
change in the ownership of fifty-one percent (51%) or more of all classes of
voting capital stock of the Corporation through the acquisition of, or an offer
to acquire such percentage of the Corporation's voting capital stock by any
person or entity, or persons or entities acting in concert or as a group, and
such acquisition or offer has not been duly approved by the Board, thereupon any
and all Awards immediately shall become and remain exercisable with respect to
the total number of shares of Stock still subject thereto for the remainder of
their respective terms.
11. Withholding. Whenever the Corporation is about to issue Stock
pursuant to any Award, the Corporation may require the Recipient to remit to the
Corporation an amount sufficient to satisfy fully any federal, state and other
jurisdictions' income and other tax withholding requirements prior to the
delivery of any
8
<PAGE>
certificates for such shares of Stock. Whenever payments are to be made in cash
to any Recipient pursuant to his or her exercise of an Award, such payments
shall be made net after deduction of all amounts sufficient to satisfy fully any
federal, state and other jurisdictions' income and other tax withholding
requirements.
12. Value. Where used in the Plan, the "fair market value" of Stock
or any options or rights with respect thereto, including Awards, shall mean and
be determined by (a) the average of the highest and lowest reported sales prices
thereof on the principal established domestic securities exchange on which
listed, and if not listed, then (b) the average of the dealer "bid" and "ask"
prices thereof on the New York over-the-counter market as reported by the
National Association of Securities Dealers, Inc., in either case as of the
specified or otherwise required or relevant time, or if not traded as of such
specified, required or relevant time, then based upon such reported sales or
"bid" and "ask" prices before and/or after such time in accordance with
pertinent provisions of and principles under the Code and the regulations
promulgated thereunder.
13. Amendment. The Committee may amend or terminate the Plan at any
time, but may not without the approval of the Corporation's stockholders: (a)
increase the maximum number of shares of Stock that may be issued under the Plan
(other than adjustments pursuant to paragraph 17 hereof), (b) extend the time
period during which any Award is exercisable, (c) extend the term of the Plan,
or (d) change the minimum Stock purchase price under any Qualified Option.
9
<PAGE>
In no event shall any such termination or amendment limit or affect any
outstanding Award, or the rights of a Recipient thereunder, without such
Recipient's consent.
In addition, the Committee may prescribe other or additional terms,
conditions and provisions with respect to the grant or exercise of any or all
Awards as the Committee may determine necessary or appropriate for such Awards
and the Stock subject thereto to qualify under and comply with all applicable
laws, rules and regulations, and changes therein, including but not limited to
the provisions of Sections 421 and 422A of the Code, Section 16 of the
Securities Exchange Act of 1934, as amended, and Rule 16b-3 promulgated by the
Securities and Exchange Commission. Without limiting the generality of the
preceding sentence, each Qualified Option, shall be subject to such other and
additional terms, conditions and provisions as the Committee may deem necessary
or appropriate in order to qualify such Option, or connected Option, as an
incentive stock option under Section 422A of the Code, including but not limited
to the following provisions:
(i) the aggregate fair market value, at the time such Option is
awarded, of the Stock subject thereto and of any Stock or other
capital stock with respect to which incentive stock options
qualifying under Sections 421 and 422A of the Code are exercisable
for the first time by the Recipient during any calendar year under
the Plan and any other plans of the Corporation or its affiliates,
shall not exceed $100,000.00;
10
<PAGE>
(ii) No Qualified Option shall be awarded to any person if at the
time of such Award, such person owns Stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
capital stock of the Corporation or its affiliates, unless at the
time such Option is awarded the Stock purchase price under such
Option is at least one hundred and ten percent (110%) of the fair
market value of the Stock subject to such Option and the Option by
its terms is not exercisable after the expiration of five (5) years
from the date it is awarded; and
(iii) If the Recipient of a Qualified Option ceases to be employed
by the Corporation or any Subsidiary for any reason other than his or
her death, the Committee may permit the Recipient thereafter to
exercise such Option during its remaining term for a period of not
more than three (3) months after such cessation of employment to the
extent that the Option was then and remains exercisable, unless such
employment cessation was due to the Recipient's disability as defined
in Section 22(e)(3) of the Code, in which case such three (3) month
period shall be twelve (12) months; if the Recipient dies while
employed by the Corporation, the Committee may permit the Recipient's
qualified personal representatives, or any persons who acquire the
Qualified Option pursuant to his or her Will or laws of descent and
distribution, thereafter to exercise such Option during its remaining
term for a period of not more than one (1) year
11
<PAGE>
after the Recipient's death to the extent that the Option was then
and remains exercisable; the Committee may impose terms and
conditions upon and for said exercise of such Qualified Option after
such cessation of the Recipient's employment or his or her death.
From time to time, the Committee may rescind, revise and add to any of such
terms, conditions and provisions as may be necessary or appropriate to have any
Awards be or remain qualified and in compliance with all applicable laws, rules
and regulations, and may delete, omit or waive any of such terms, conditions or
provisions that are no longer required by reason of changes in applicable laws,
rules or regulations.
14. Continued Employment. Nothing in the Plan or any Award shall
confer upon any Recipient or other persons any right to continue in the
employment of, or maintain any particular relationship with the Corporation or
its affiliates, or limit or affect any rights, powers or privileges that the
Corporation or its affiliates may have to supervise, discipline and terminate
such Recipient or other persons, and the employment and other relationships
thereof. However, the Committee may require as a condition of making and/or
exercising any Award that its Recipient agree to, and in fact provide services,
either as an employee or in another capacity, to or for the Corporation for such
time period following the date the Award is made and/or exercised as the
Committee may prescribe. The immediately preceding sentence shall not apply to
any Qualified Option to the extent such application
12
<PAGE>
would result in disqualification of said Option as an incentive stock option
under Sections 421 and 422A of the Code.
15. General Restrictions. Each Award shall be subject to the
requirement and provision that if at any time the Committee determines it
necessary or desirable as a condition of or in consideration of making such
Award, or the purchase or issuance or Stock thereunder, (a) the listing,
registration or qualification of the Stock subject to the Award, or the Award
itself, upon any securities exchange or under any federal or state securities or
other laws, (b) the approval of any governmental authority, or (c) an agreement
by the Recipient with respect to disposition of any Stock (including without
limitation that at the time of the Recipient's exercise of the Award, any Stock
thereby acquired is being and will be acquired solely for investment purposes
and without any intention to sell or distribute such Stock), then such Award
shall not be consummated in whole or in part unless such listing, registration,
qualification, approval or agreement shall have been appropriately effected or
obtained to the satisfaction of the Committee and legal counsel for the
Corporation.
16. Rights. Except as otherwise provided in the Plan, the Recipient
of any Award shall have no rights as a holder of the Stock subject thereto
unless and until one or more certificates for the shares of such Stock are
issued and delivered to the Recipient. No adjustments shall be made for
dividends, either ordinary or extraordinary, or any other distributions with
respect to Stock, whether made in cash, securities or other property, or any
rights
13
<PAGE>
with respect thereto, for which the record date is prior to the date that any
certificates for Stock subject to an Award are issued to the Recipient pursuant
to his or her exercise thereof. No Award, or the grant thereof, shall limit or
affect the right or power of the Corporation or its affiliates to adjust,
reclassify, recapitalize, reorganize or otherwise change its or their capital or
business structure, or to merge, consolidate, dissolve, liquidate or sell any or
all of its or their business, property or assets.
17. Adjustments. Except as otherwise provided in the Plan, no
Recipient of any Award shall have any rights, powers or privileges or be
entitled to any adjustments of or with respect to his or her Award by reason of
any stock split, dividend, distribution or division, recapitalization, merger,
consolidation, reorganization, liquidation, dissolution, issuance, sale or
exchange of shares of Stock or any other capital stock or any rights thereto,
increase or decrease in the authorized number of shares of Stock or any other
capital stock, sale, transfer or other disposition of any assets of any kind, or
any other similar action or transaction by, of or with respect to the
Corporation or its affiliates.
In the event of a change in the Stock as presently constituted, which change
is limited to a change of all of the authorized shares thereof into the same
number of shares with a different par value, the shares resulting from such
change shall be deemed to be Stock
14
<PAGE>
within the meaning and for purposes of the Plan without further action.
The aggregate number of shares of Stock available for Awards under
the Plan, and the shares of Stock subject to any and all outstanding Awards and
the option purchase price for each share of Stock thereunder all shall be
adjusted proportionately for and on account of any increase or decrease in the
number of issued shares of Stock after the effective date of the Plan resulting
from (a) a split, division or consolidation of, or any other capital change or
adjustment with respect to shares of Stock, (b) the payment of any Stock
dividend with respect to shares of Stock, or (c) any other increase or decrease
in the number of issued shares of Stock effected without the receipt of
consideration by the Corporation.
In the event the Corporation is the surviving corporation of any
merger, consolidation or other reorganization, any and all outstanding Awards
shall apply and relate to the securities to which a holder of Stock is entitled
after such merger, consolidation or other reorganization. Upon any liquidation
or dissolution of the Corporation, or any merger, consolidation or other
reorganization of which the Corporation is not the surviving corporation, any
and all outstanding Awards shall terminate upon consummation of such merger,
consolidation or other reorganization, but prior to such consummation shall be
exercisable to the extent that the same otherwise are exercisable under the
Plan.
18. Forfeiture. Notwithstanding anything to the contrary in this
Plan, if the Committee finds after full consideration of the
15
<PAGE>
facts presented on behalf of the Corporation and the involved Recipient, that he
or she has been engaged in fraud, embezzlement, theft, commission of a felony,
or dishonesty in the course of his or her employment by the Corporation that has
damaged it, or that the Recipient has disclosed trade secrets of the Corporation
or its affiliates, the Recipient shall forfeit all rights under and to
unexercised Awards, and all exercised Awards under which the Corporation yet has
not delivered the certificates for shares of Stock, all of which Awards and
rights shall be automatically cancelled. The decision of the Committee as to the
cause of the Recipient's discharge from employment with the Corporation and the
damage thereby suffered shall be final for purposes of the Plan, but shall not
affect the finality of the Recipient's discharge by the Corporation for any
other purposes. The preceding provisions of this paragraph shall not apply to
any Qualified Option to the extent such application would result in
disqualification of said Option as an incentive stock option under Sections 421
and 422A of the Code.
16
<PAGE>
19. Indemnification. In and with respect to the administration of the
Plan, the Corporation shall indemnify each present and future member of the
Committee and/or of the Board, who shall be entitled without further action on
his or her part to indemnity from the Corporation for all damages, losses,
judgments, settlement amounts, punitive damages, excise taxes, fines, penalties,
costs and expenses (including without limitation attorneys' fees and
disbursements) incurred by such member in connection with any threatened,
pending or completed action, suit or other proceedings of any nature, whether
civil, administrative, investigative or criminal, whether formal or informal,
and whether by or in the right or name of the Corporation, any class of its
security holders, or otherwise, in which such member may be or have been
involved, as a party or otherwise, by reason of his or her being or having been
a member of the Committee and/or of the Board, whether or not he or she
continues to be such a member. The provisions, protection and benefits of this
paragraph shall apply and exist to the fullest extent permitted by applicable
law to and for the benefit of all present and future members of the Committee
and/or of the Board, and their respective heirs, personal and legal
representatives, successors and assigns, in addition to all other rights that
they may have as a matter of law, by contract, or otherwise, except (a) as may
not be allowed by applicable law, (b) to the extent there is entitlement to
insurance proceeds under insurance coverage provided by the Corporation on
account of the same matter or proceeding for which indemnification hereunder is
17
<PAGE>
claimed, or (c) to the extent there is entitlement to indemnification from the
Corporation, other than under this paragraph, on account of the same matter or
proceeding for which indemnification hereunder is claimed.
20. Miscellaneous. Any reference contained in this Plan to a
particular section or provision of law, rule or regulation, including but not
limited to the Internal Revenue Code of 1986 and the Securities Exchange Act of
1934, both as amended, shall include any subsequently enacted or promulgated
section or provision of law, rule or regulation, as the case may be, of similar
import. Where used in this Plan: the plural shall include the singular, and
unless the context otherwise clearly requires, the singular shall include the
plural, and, the term "affiliates" shall mean each and every subsidiary (as
defined in Section 425 of the Code) and any parent of the Corporation. The
captions of the numbered paragraphs contained in this Plan are for convenience
only, and shall not limit or affect the meaning, interpretation or construction
of any of the provisions of the Plan.
18
Exhibit 4.3
AQUAPENN SPRING WATER COMPANY, INC.
1989 STOCK OPTION PLAN
STOCK OPTION AGREEMENT
Pursuant to the AquaPenn Spring Water Company, Inc. 1989 Stock Option
Plan (the "Plan"), an option and right to purchase not more than a total of four
hundred and fifty thousand (450,000) shares of no par value common stock (the
"Stock") of AquaPenn Spring Water Company, Inc., a Pennsylvania business
corporation ("AquaPenn"), is hereby granted to Geoffrey F. Feidelberg (the
"Optionee") under and subject to the following terms and conditions:
1. During the first twelve (12) months after September 25, 1989 (the
"Effective Date"), the Optionee may purchase up to sixty thousand (60,000)
shares of Stock; however, the Optionee may not exercise such purchase right
before the expiration of six (6) months after the date of this Agreement. In
addition, on each of the succeeding six (6) anniversaries of the Effective Date,
an additional sixty thousand (60,000) shares of Stock shall become available for
the Optionee's purchase hereunder, and upon the seventh (7th) anniversary of the
Effective Date, an additional thirty thousand (30,000) shares of Stock shall
become available for the Optionee's purchase hereunder. The Optionee's right to
purchase up to four hundred fifty thousand (450,000) shares of Stock as
<PAGE>
above provided in this paragraph shall be cumulative; for example, if the
Optionee purchases 50,000 shares of the 180,000 shares of Stock available for
purchase as of the third anniversary of the Effective Date, the Optionee would
be entitled to purchase up to 190,000 shares of Stock until the fourth
anniversary of the Effective Date, and upon the fourth anniversary, the Optionee
would be entitled to purchase 250,000 shares of Stock.
2. This Agreement and the option and right to purchase Stock
hereunder shall terminate at 11:59 o'clock p.m. on September 24, 1999, or at
such earlier time as may be provided in this Agreement, or if earlier, when the
option to purchase Stock hereunder has lapsed or been exercised or cancelled
under the provisions of this Agreement or the provisions of the Plan; upon
termination of this Agreement, any unexercised option or right to purchase Stock
hereunder shall expire and the Optionee shall have no further rights under this
Agreement. Provided however, that a termination of this Agreement or lapse or
cancellation of the option hereunder shall not terminate, limit or affect
AquaPenn's right of repurchase under paragraph 4(b) of this Agreement, which
right of repurchase shall survive as provided in said paragraph 4(b).
3. If at any time while this Agreement is in effect, the Optionee's
employment with AquaPenn is terminated by AquaPenn without cause under the
provisions of paragraph 10(b) of the Employment Agreement, the Optionee (or the
duly qualified personal representative of his estate, to the extent permitted by
applicable
2
<PAGE>
law) then may purchase up to four hundred and fifty thousand (450,000) shares of
Stock, minus the number of shares of Stock previously purchased by the optionee
under this Agreement. Such option to purchase shall expire on the third (3rd)
anniversary of the effective date of such termination of the Optionee's
employment and if not exercised by that time, such option and this Agreement
shall lapse and terminate.
4. (a) If at any time while this Agreement is in effect, the
Optionee's employment with AquaPenn terminates for any reason other than by
AquaPenn without cause (including without limitation a termination of employment
due to the Optionee's death), the Optionee (or the duly qualified personal
representative of his estate, to the extent permitted by applicable law) then
may purchase under this Agreement up to that number of shares of Stock that is
equal to thirty thousand (30,000) shares of Stock multiplied by the number of
twelve (12) month time periods (including any part of a twelve-month period)
beginning with the Effective Date and ending with the effective date of such
termination of the Optionee's employment, but in no event more than three
hundred thousand (300,000) shares of Stock, minus the number of shares of Stock
previously purchased by the Optionee under this Agreement. Such option to
purchase shall expire on the sixtieth (60th) day after the effective date of
such termination of the Optionee's employment and if not exercised by that time,
such option and this Agreement shall lapse and terminate. For example, if the
optionee terminates his employment nine weeks after the
3
<PAGE>
third anniversary of the Effective Date, the Optionee then would be entitled to
purchase within the next 60 days 120,000 shares of Stock less what he already
had purchased under this Agreement.
(b) If prior to such a termination of the Optionee's employment with
AquaPenn for any reason other than by AquaPenn without cause (including without
limitation a termination of employment due to the Optionee's death), the
Optionee has purchased more shares of Stock than he would be entitled to
purchase under paragraph 4(a) above, AquaPenn shall have the right to purchase
from the Optionee (and his purchasers, transferees, assignees and any other
persons to whom the Optionee may have disposed of his shares of Stock in any
manner, and the Optionee's personal and legal representatives, estate, heirs and
testamentary beneficiaries) any or all of the shares of Stock purchased by the
Optionee under this Agreement in excess of the number of shares of Stock that
the Optionee is entitled to purchase under paragraph 4(a) above. Such right to
repurchase by AquaPenn shall be at the same per share purchase price as was paid
by the Optionee for each such excess share of Stock, and shall expire on the
sixtieth (60th) day after the effective date of such termination of the
Optionee's employment (and if not exercised by that time, shall be of no further
force or effect).
5. Notwithstanding the preceding provisions hereof, if while this
Agreement is in effect: (a) AquaPenn or its stockholders execute an agreement to
dispose of all or substantially all of AquaPenn's assets or capital stock by
means of sale, merger,
4
<PAGE>
consolidation, reorganization, liquidation or otherwise, as a result of which
AquaPenn's stockholders as of immediately before such transaction will not own
more than forty-nine percent (49%) of the total combined voting power of all
classes of voting capital stock of the surviving entity (be it AquaPenn or
otherwise) immediately after the confirmation of such transaction, or (b) there
is a change in the ownership of fifty-one percent (51%) or more of all classes
of voting capital stock of AquaPenn through the acquisition of, or an offer to
acquire such percentage of AquaPenn's voting capital stock by any person or
entity, or persons or entities acting in concert or as a group, and such
acquisition or offer has not been duly approved by the Board, or (c) there is a
public offering of the common stock of AquaPenn, and in any such case (a, b or c
above) the employment of the Optionee with AquaPenn continues and then is in
effect under that certain Employment Agreement between AquaPenn and the Optionee
dated September 21, 1989 (the "Employment Agreement"), the Optionee's right to
purchase Stock under paragraph 1 above shall be accelerated (without further
action) so that the Optionee may purchase immediately under this Agreement up to
four hundred fifty thousand (450,000) shares of Stock, minus the number of
shares of Stock previously purchased by the Optionee under this Agreement.
Provided, that if while this Agreement is in effect, the Optionee's employment
with AquaPenn for any reason terminates at any time subsequent to any of the
events described in (a, b or c) in the immediately preceding sentence, the
5
<PAGE>
Optionee's option to purchase Stock under this paragraph 5 shall remain in
effect only until:
a) the third (3rd) anniversary of the effective date of such
termination of the Optionee's employment, if such termination of
employment is by AquaPenn without cause under the provisions of
paragraph 10(b) of the Employment Agreement, and if not exercised by
that time, such option and this Agreement shall lapse and terminate;
or
b) the sixtieth (60th) day after the effective date of such
termination of the optionee's employment, if such termination of
employment occurs for any reason other than by AquaPenn without cause
(including without limitation a termination of employment due to the
Optionee's death), and if not exercised by that time, such option and
this Agreement shall lapse and terminate.
Any shares of Stock actually purchased by the Optionee pursuant to his exercise
of the accelerated rights above provided in this paragraph 5 shall not be
subject to AquaPenn's right of repurchase under paragraph 4(b) of this
Agreement.
6. All share certificates for Stock issued pursuant to the exercise
of the option to purchase under paragraph 1 above shall be conspicuously
endorsed with a legend providing notice of AquaPenn's right of repurchase under
paragraph 4(b) above.
7. The option price for each share of Stock purchased under this
Agreement, regardless of when purchased, shall be $1.50 per share, the fair
market value of the Stock as of the date of this
6
<PAGE>
Agreement. Any exercise of the option to purchase Stock under this Agreement and
payment of such option price for the Stock being purchased shall be made in the
manner provided in paragraph 10 of the Plan.
8. The option and right granted to the Optionee under this Agreement
shall be exercisable during the Optionee's lifetime only by the Optionee, and
shall not be salable, transferable or assignable in any manner by the Optionee
except by his or her Will or pursuant to applicable laws of descent and
distribution.
9. It is intended that the Optionee's option and right to purchase
Stock under this Agreement shall be an incentive stock option qualified under
Sections 421 and 422A of the Internal Revenue Code of 1986, as amended, to the
fullest extent permitted by said Sections and the rules and regulations
promulgated thereunder.
10. Except as otherwise hereinbefore provided, this Agreement and the
option to purchase Stock hereunder are subject to all of the terms, conditions
and provisions of the Plan, a copy of which has been furnished to and received
by the Optionee. The provisions of this Agreement shall be construed under and
enforced in accordance with the laws of the Commonwealth of Pennsylvania. Where
used in this Agreement, the words "hereunder", "herein" and other similar
compounds of the word "here" shall mean and refer to this entire Agreement and
not to any particular paragraph or provision of this Agreement.
7
<PAGE>
IN WITNESS WHEREOF, pursuant to the Plan, AquaPenn Spring Water
Company, Inc. and Geoffrey F. Feidelberg, each intending to be legally bound
hereby, have duly executed this Agreement as of the 1st day of May, 1990.
ATTEST: AQUAPENN SPRING WATER COMPANY, INC.
/s/ Pamela M. Law By: /s/ Edward J. Lauth
- ------------------------- ----------------------------------
Pamela M. Law Edward J. Lauth, III
Assistant Secretary President
WITNESS: OPTIONEE:
/s/ Paula Boone /s/ Geoffrey F. Feidelberg
- ------------------------- ----------------------------------
Geoffrey F. Feidelberg
8
Exhibit 4.5
SALES REPRESENTATIVE AGREEMENT
THIS AGREEMENT made as of the 1st day of February, 1992, by and between
AQUAPENN SPRING WATER COMPANY, INC., a Pennsylvania corporation, having its
principal office at 3035 Research Drive, State College, Pennsylvania (the
"Company") and MATTHEW J. SUHEY, an individual, having a principal office at
1942 Dale Avenue, Highland Park, Illinois, (the "Broker").
RECITALS:
A. The Company is engaged in the wholesale production and sale of a
family of high-quality spring water products.
B. The Company and the Broker desire to enter into a relationship
whereby the Broker will act as a sales representative of the Company on the
terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual promises herein set
forth, the parties hereto, with the intent to be legally bound hereby, agree as
follows:
1. Sales Representative. The Company hereby grants to the Broker, and
the Broker hereby accepts, during the term of this agreement, the right to act
as the Company's sales representative with the exclusive right to sell,
distribute and handle all products sold or distributed directly or indirectly by
the Company from time to time (the "products") to persons and entities located
in the Territory as defined in Section 3 below.
Notwithstanding the above, the Broker will not have the exclusive right
to sell Products on behalf of the Company to a person or entity (i) located in
the Territory if the Broker refuses or fails to service such account
("Unserviced Account"); or (ii) which is an account with its purchasing
headquarters located outside the Territory (an "Outside Account") and the sale
within the Territory is due solely to an order or approval at such headquarters.
The Broker is not entitled to commission for Unserviced Accounts or Outside
Accounts. The Broker may elect to not service accounts without being in breach
hereof.
2. Term. The term of this Agreement shall commence effective as of the
date hereof and continue until January 31, 1999, unless otherwise terminated
pursuant to the terms hereof.
3. Territory. The initial territory shall be the States of Illinois,
Indiana, Wisconsin, Missouri and Iowa. The Broker may, at any time upon notice
to the Company, elect to have the
<PAGE>
State of Texas included in the Territory; provided, however, that if the Company
indicates that it intends to assign Texas to another sales representative, the
Broker will have a fifteen (15) day period in which to elect to include such
State in the Territory hereunder, but if the Broker does not so exercise to
include Texas in the Territory, the Broker shall cease to have any right to
subsequently elect to include Texas in the Territory.
4. Compensation.
4.1 Commission. Unless otherwise agreed in writing by both parties
hereto, the Company will pay to Broker on or before the last day of each month,
as commission, an amount equal to five percent (5%) of the previous months
receipts of Gross Sales Price for sales of Products, to (i) any person or entity
located in the Territory other than an Outside Account or Unserviced Account,
and (ii) any account, wherever located, where the purchasing headquarters of the
account is located in the Territory and the account has approved the purchase of
Products due to the Broker's efforts. "Gross Sales Price" shall mean the net
purchase price paid by a purchaser as shown on invoices rendered, less all
deductions for any (i) sales, use or excise taxes; (ii) freight and other
transportation-related charges; (iii) adjustments, refunds, returns, settlement
of claims, collection costs and other allowances made for price-offs related to
sales of Products for which a commission has been paid or is payable to the
Broker.
4.2 Stock Options. As additional compensation, the Broker shall have
the option to purchase and the Company shall sell to the Broker common stock of
the Company with the number of shares subject to the Broker's option hereunder
based on the aggregate gross sales for which the Broker is entitled to a
commission hereunder in accordance with the following scale:
(i) Four percent (4%) of the first two
million dollars ($2,000,000) of
gross sales for which the Broker is
entitled to a commission hereunder
("Gross Sales"), or 80,000 shares;
(ii) Three percent (3%) of the next two
million dollars ($2,000,000) of
Gross Sales, or 60,000 shares; and
(iii) Two percent (2%) of the next sixteen
million dollars ($16,000,000) of
Gross Sales, or 320,000 shares.
2
<PAGE>
Except as otherwise provided below, the maximum number of shares which
may be purchased by the Broker hereunder is 460,000 shares and the purchase
price is $1.50 per share. The Broker shall be entitled to exercise his option to
purchase some or all of the shares to which he is entitled hereunder for a sixty
(60) day period following February 1 of each year (the "Anniversary Date")
provided that the Broker shall be entitled to purchase shares to which he is
entitled hereunder any time during a six (6) month period following termination
or expiration of this Agreement. If the Broker becomes entitled to purchase
shares following the termination or expiration of this Agreement, the Broker
shall have a sixty (60) day period from being notified by the Company of his
right to purchase shares hereunder to exercise his option. The Company shall
inform the Broker each month of the number of shares which are subject to the
options set forth hereunder. Notwithstanding anything to the contrary herein,
the Broker shall not be entitled to exercise his option hereunder until the
Gross Sales is equal to or exceeds $500,000. The failure by the Broker to
exercise his option at any Anniversary Date shall not affect the Broker's right
to subsequently exercise his options. In the event of a stock split or a reverse
stock split, the Broker will be eligible to an equitable adjustment in the class
and number of shares and the purchase price to take into consideration such
additional issuance. In addition, if the Company is a party to a merger and is
not the survivor, the Company shall provide that the Broker shall be eligible to
purchase such number and types of shares as may be equitable under the
circumstances.
5. Trade Secrets. Broker, during the term of this Agreement, will have
access to and become acquainted with various trade secrets, consisting of
formulas, patterns, devices, secret inventions, processes, compilations of
information, records, specifications, and customer lists which are owned by
Company and which are regularly used in the operation of the business of the
Company. The Broker shall not disclose any of the aforesaid trade secrets,
directly or indirectly, or use them in any way, either during the term of this
Agreement or at any time thereafter, except (i) as required in the course of his
services under this Agreement, (ii) disclosure is in connection with a judicial
or arbitration proceeding, (iii) such information is or becomes of general
knowledge in the industry other than due to the wrongful acts of the Broker,
(iv) the Company discloses such information to a third party without restriction
in disclosure or use or (v) disclosure or use is in connection with the Broker's
subsequent employment or business endeavors in good faith and without the
specific intent or unreasonably depriving the Company of the value and benefit
of such information and a period of two (2) years has expired following the
termination or expiration of this agreement. All original files, records,
documents, drawings, specifications, equipment, and other items relating to
3
<PAGE>
the business of the Company, whether prepared by Broker or otherwise coming into
his possession, shall remain the exclusive property of the Company and shall be
delivered to the Company upon termination or expiration of this Agreement;
provided that the Broker may retain copies of such information subject to the
confidentiality provision contained herein.
6. Noncompetition. During the term of this Agreement, the Broker shall
not, directly or indirectly, either as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director, or in any other
individual or representative capacity, own, operate, control, assist, or
participate in any business that is in competition in any manner whatsoever with
the business of the Company. The foregoing prohibitions shall not apply to
ownership by Broker of less than five percent (5%) of the issued or outstanding
stock of any company whose shares are listed for trading over any public
exchange or the over-the-counter market provided that Broker does not control
any such company.
7. Duties.
7.1 Brokers Duties. During the term of this Agreement the Broker
will: (i) use reasonable efforts to promote the Products in the Territory it
being understood that this is not the Broker's sole business activity; (ii)
maintain a perpetual customer list which states Products being sold and agreed
upon compensation; and (iii) perform his duties hereunder in strict compliance
with all applicable laws, rules and regulations of duly constituted governmental
authorities and shall obtain all licenses, registrations or other approvals
required by law in connection with the services to be rendered hereunder.
7.2 Company's Duties. During the term of this Agreement, the Company
will: (i) provide the Broker with the then current price lists for the Products;
(ii) provide the Broker with the then current promotional materials and samples
of the Products; (iii) provide the Broker with information of all promotional
programs, if any, available from time to time during the terms of this Agreement
in connection with the Products; (iv) provide copies of any invoices for which
commissions are payable hereunder upon the Broker's request; (v) use reasonable
efforts to promptly ship Products regarding orders accepted by the Company and
promptly invoice and collect all amounts due as a result thereof; (vi) perform
its duties hereunder in direct compliance with all applicable laws, rules and
regulations.
8. Independent Contractor. The Broker's relationship to the Company
will, for all purposes, be that of an independent contractor. The Broker will
not be responsible for shipment or delivery of the Products or any credit
decisions. All expenses
4
<PAGE>
and disbursements, including, but not limited to, those for travel and
entertainment, office, clerical, and general selling expenses, that may be
incurred by the Broker in connection with the services which he renders pursuant
to this Agreement shall be borne wholly and completely by the Broker, and the
Company shall not be in any way responsible or liable therefore unless otherwise
agreed in writing by the Company. The Broker does not have, nor shall he hold
himself out as having, any right, power or authority to create any contract or
obligation, either express or implied on behalf, in the name of, or binding upon
the Company, or to pledge the Company's credit, or to extend credit in the
Company's name unless otherwise agreed in writing by the Company. The Broker
shall not have the right to appoint or otherwise designate suitable and
desirable salesmen, employees, agents, and representatives (hereinafter
collectively referred to as "Broker's Representatives") without approval of
Company. If approval is granted the Broker shall be solely responsible for the
Broker's Representatives and their acts. The Broker's Representatives shall be
at the Broker's own risk, expense, and supervision, and the Broker's
Representatives shall not have any claim against the Company for salaries,
commissions, items of cost, or other form of compensation or reimbursement; and
the Broker represents, warrants, and covenants that the Broker's Representatives
shall be subordinate to the Broker and subject to each and all of the terms,
provisions, and conditions applying to the Broker hereunder.
9. Assignment By/Sale Of Company. The company, without being released
thereby, shall have the right to assign this Agreement and all of its rights and
privileges and obligations to any other person or entity which purchases the
operations of the Company or, to the extent applicable, any label or line of the
Company. However if the Company is liquidated or if the sale of the operations
of the Company or any label or line of the Company is contingent upon the
termination of this agreement to the extent it would otherwise apply to such
sale, then Broker shall accept a reasonable buyout price for the remaining term
of this Contract for such liquidation or as it applies to that portion of the
Company's operations being sold. Also, in the event of any such sale or
liquidation, Broker may then exercise any unexercised stock options granted
under Section 4.2, whether or not the Gross Sales requirements of that section
have then been met.
10. Assignment By Broker. This Agreement is a personal one, being
entered into in reliance upon and in consideration of the singular personal
skill, qualifications, and representations of said trust and confidence in
Broker. Therefore, neither Broker's interest in this Agreement nor any of his
rights or privileges shall be assigned, transferred, shared or divided,
voluntarily or involuntarily, by operation of law or otherwise,
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<PAGE>
in any manner. The Broker may assign his interest hereunder to a corporation in
which the Broker owns or controls at least a majority of issued and outstanding
stock. Any such assignment shall not release the Broker from any of his
obligations hereunder, and the Company is obligated only to the Broker.
11. Termination.
11.1 Termination by the Company. The Company may terminate
this Agreement, prior to its expiration, upon occurrence of any of the
following:
(i) For a ninety (90) day period following
each Anniversary Date (the "Current
Anniversary Date") commencing on the
second Anniversary Date, the Company may
elect to terminate this Agreement if (a)
the Gross Sales during the prior twelve
(12) month period (the "Current Period")
do not exceed the Gross Sales during the
twelve (12) month period ending on the
immediately preceding Anniversary Date
by ten percent (10%) and (b) the Gross
Sales during the Current Period do not
exceed by ten percent (10%) the average
annual Gross Sales during each twelve
(12) month period ending on the prior
two Anniversary Dated prior to the
Current Anniversary Date. If the
Company does not deliver a termination
notice within such ninety (90) day
period, this Agreement shall remain in
full force and effect; and
(ii) The material failure of the Broker to
materially comply with any of his
obligations hereunder for a period of
thirty (30) days after written notice of
such failure shall be given by the
Company to the Broker; provided,
however, that if the nature of such
failure shall be such that it cannot be
cured within said thirty (30) day period
and the Broker shall immediately
commence to cure such failure.
11.2 Termination by the Broker. The broker may terminate this
Agreement, prior to its expiration, upon the occurrence of any of the following:
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(i) Upon non-payment of any amounts owing to
the Broker hereunder;
(ii) The material failure of the Company to
materially comply with any of its
obligations hereunder for a period of
thirty (30) days after written notice of
such failure shall be given by the
Broker to the Company; provided,
however, that if the nature of such
failure shall be such that it cannot be
cured within said thirty (30) day period
and the Company shall immediately
commence to cure such failure, the
Company shall have such additional
reasonable period of time as may be
necessary to cure such failure; or
(iii) If any proceeding in bankruptcy,
insolvency or other law for the relief
of debtors, including the appointment of
any receiver or trustee or assignment of
any receiver or trustee or assignment
for the benefit of creditors, shall be
instituted by or against the Company.
12. Effect of Termination or Expiration. The following shall apply upon
termination or expiration of this Agreement:
12.1 Orders. The Broker will be entitled to commissions in
accordance with and subject to the terms of this Agreement for any order for
which the Broker ordinarily would be entitled a commission hereunder and which
the Company received prior to the expiration or the effective date of the
termination of this Agreement.
12.2 Survival. Upon the termination or expiration of this
Agreement, the parties shall be relieved of their respective obligations
hereunder, except as expressly provided in this Agreement and except that:
(i) All amounts owed by one party to
another shall be paid as they become
due, including, without limitation,
amounts due under Sections 4 and 9
herein;
(ii) All claims for breach of contract
with respect to actions occurring
prior to termination or expiration
shall remain applicable and survive
such termination or expiration;
7
<PAGE>
(iii) All representations and warranties
shall remain applicable and shall
survive such termination or
expiration;
(iv) The respective rights and
obligations of the parties pursuant
to Sections 5, 9, 13 and 14 herein
remain applicable and survive such
termination or expiration; and
(v) The general subsections of Section
15 shall remain applicable and
survive such termination.
13. Indemnification. The Company agrees to indemnify, defend and hold
the Broker and his permitted employees and agents and their respective
successors and assigns harmless from and against any and all fines, losses,
damages, claims, costs and expenses (collectively, "Losses") which the Broker or
any such person or entity may incur or be subject to as a result of or on
account of, with regard to the Products, any Losses relating to product
liability.
14. Insurance. During the term of this Agreement and for a period of
three (3) years thereafter, the Company shall add Broker and his permitted
employees and agents as additional named insureds and their respective
successors and assigns on any and all product liability and similar insurance
policies it maintains such insurance coverages (both in type and amount). The
Company shall deliver to the Broker, upon request, insurance certificates
verifying compliance with this section.
15. Miscellaneous.
15.1 Governing Laws. This Agreement shall be deemed to have
been made in the State of Pennsylvania and shall be construed according to the
laws of that state.
15.2 Entire Agreement. This Agreement contains all of the
terms and conditions agreed upon by the parties hereto with reference to the
subject matter hereof. No other agreements, oral or otherwise, shall be deemed
to exist or to bind any of the parties hereto, and all prior agreements and
understandings are superseded hereby. No officer or employee or agent of the
Company has any authority to make any representation or promise not contained in
this Agreement, and Broker agrees that he has executed this Agreement without
reliance upon any such representation or promise. This Agreement cannot be
modified or changed except by written instrument signed by all of the parties
hereto.
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15.3 Severability. In the event any one or more of the
provisions contained in this Agreement shall for any reason be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision thereof and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
15.4 Waiver. A waiver of one of the provisions of this
Agreement shall not affect any of the other provisions of this Agreement, such
that the remaining provisions will remain in full force and effect. The failure
of either party to enforce any of the provisions of this Agreement shall not be
deemed a waiver thereof. A waiver in writing at any time of any of the terms and
conditions of this Agreement shall not be considered a modification,
cancellation or waiver of such terms or conditions as to subsequent events
unless otherwise expressly provided.
15.5 Notices. Each notice, consent, request or other
communication required or permitted by this Agreement shall be in writing and
shall be deemed "given" to a party (i) when delivered by hand to such party, or
(ii) on the third day after deposit in the U.S. mail, postage prepaid and
certified (return receipt requested), addressed to the party to which it is to
be given at the address set forth below, or (iii) on the date sent, if sent by
facsimile transmission to the number indicated below or (iv) on the first
service day after proper and timely deposit, freight prepaid, with a nationally
recognized next-day delivery service providing next-day service to the location
of the recipient, to such party at the address set forth below:
If to Broker: Mr. Matthew S. Suhey
1942 Dale Avenue
Highland Park, IL 60035
Fax No. 708-939-3389
If to the Company: AquaPenn Spring Water Company, Inc.
3035 Research Drive
State College, PA 16801
Fax No. 814-237-6318
Any party at any time may change the address or the facsimile telephone number
at which it or he is to be given notice by giving notice to its or his new
address or new facsimile telephone number to the other party in the foregoing
manner.
15.6 Enforcement. Should any legal proceedings be commenced to
secure or enforce any right under this Agreement, the prevailing party, if
litigation, or the party designated by the arbitrators, if arbitration, shall be
entitled to recover from the other party its reasonable attorneys, fees and
costs, in
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addition to all other relief to which said party may be entitled. The term
"prevailing party" shall mean that party whose position is substantially upheld
in a final judgment rendered in such litigation or, if the final judgment is
appealed, that party whose position is substantially upheld by the decision of
the final appellate body to consider the appeal.
15.7 Arbitration. Any dispute between the parties regarding
any matter or issue arising under this Agreement shall, upon the written demand
of any affected party, be submitted to arbitration in State College,
Pennsylvania in accordance with the commercial arbitration rules of the American
Arbitration Association. The award of the arbitrators in any such arbitration
proceeding shall be final and binding upon the parties, and judgment thereon may
be entered in any court. Notwithstanding this section, either party may seek
injunctive or other relief from any court of competent jurisdiction to prevent a
breach or further breach of this Agreement pending the outcome of arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement with the intent to be legally bound thereby on the day and year first
above-written.
ATTEST: AQUAPENN SPRING WATER
COMPANY, INC.
By:/s/ C.J. Wagner, Jr. By:/s/ Edward J. Lauth (seal)
------------------------- ---------------------------
Secretary President
I HAVE READ THE FOREGOING AGREEMENT AND I HEREBY ACCEPT AND AGREE TO
EACH AND ALL OF THE PROVISIONS, COVENANTS AND CONDITIONS THEREOF. I HEREBY
ACKNOWLEDGE RECEIPT OF A COPY OF THIS AGREEMENT.
/s/ Matthew J. Suhey
-----------------------------
Matthew J. Suhey
10
Exhibit 5
May 1, 1998
AquaPenn Spring Water Company, Inc.
One AquaPenn Drive
Milesburg, PA 16853
Re: Registration Statement on Form S-8
----------------------------------
Gentlemen:
We have acted as special counsel to AquaPenn Spring Water
Company, Inc. (the "Company") in connection with the registration under the
Securities Act of 1933, as amended, of 1,220,960 shares of common stock of the
Company, no par value (the "Shares"), issuable under the Company's 1989 Stock
Option Plan, 1994 Incentive Option Plan and Sales Representatives Option Plan
(each, as amended and collectively, the "Plans").
In rendering our opinion, we have reviewed the Plans and such
certificates, documents, corporate records and other instruments as in our
judgment are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of all
instruments presented to us as originals, the conformity with the originals of
all instruments presented to us as copies and the genuineness of all signatures.
Based on the foregoing, we are of the opinion that the Shares,
when issued and paid for in accordance with the terms of the Plans, will be
legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5
to the Registration Statement on Form S-8 being filed with respect to the
offering of the Shares.
This opinion is limited to the matters expressly stated
herein. No implied opinion may be inferred to extend this opinion beyond the
matters expressly stated herein. We do not undertake to advise you or anyone
else of any changes in the opinions expressed herein resulting from changes in
law, changes
<PAGE>
in facts or any other matters that hereafter might occur or be
brought to our attention.
Very truly yours,
/s/ Ballard Spahr Andrews &
Ingersoll,LLP
2
EXHIBIT 15
AquaPenn Spring Water Company, Inc. and Subsidiaries
Copy of Letter from Independent Accountants'
Regarding Unaudited Interim Financial Information
To the Board of Directors
AquaPenn Spring Water Company, Inc.
We acknowledge our awareness of the incorporation by reference in this
Registration Statement on Form S-8 of our report dated March 5, 1998 related to
our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such report is not
considered a part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of Section 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
State College, PA
May 1, 1998
Exhibit 23.1
Accountant's Consent
To the Board of Directors
AquaPenn Spring Water Company, Inc.
We consent to the incorporation by reference in this Registration Statement of
AquaPenn Spring Water Company, Inc. (the "Company") on Form S-8 of our report
dated October 21, 1997 (except for note 15 which is as of October 24, 1997),
appearing in the Company's Prospectus dated January 29, 1998 and filed with the
Securities and Exchange Commission on January 30, 1998 (the "Prospectus") and to
the reference to our firm under the headings "Experts" and "Selected
Consolidated Financial Data" in the Prospectus.
/s/ KPMG Peat Marwick LLP
-------------------------
KPMG Peat Marwick LLP
State College, Pennsylvania
May 1, 1998
Exhibit 23.2
ACCOUNTANTS' CONSENT
To the Board of Directors
AquaPenn Spring Water Company, Inc.
We consent to the incorporation by reference in this Registration Statement of
AquaPenn Spring Water Company, Inc. (the "Company") on Form S-8 of our report
dated October 31, 1997, appearing in the Company's Prospectus dated January 29,
1998, and filed with the Securities and Exchange Commission on January 30, 1998,
(the "Prospectus") and to the reference to our firm under the heading "Experts"
in the Prospectus
/s/ Matson and Isom
Accountancy Corporation
Redding, California
May 1, 1998
