exv10w23






Exhibit 10.23




Employment Agreement




     This Employment Agreement (the “Agreement”) is made as of April 1, 2010 between Primo Water
Corporation, a Delaware corporation (the “Company”), and Mark Castaneda (the “Executive”).




	1.	 	BACKGROUND







	 	1.1	 	The Company is a rapidly growing provider of three- and five-gallon purified
bottled water and water dispensers sold through major retailers nationwide, and intends
to expand into related fields, such as water bottle refill vending machines and the
sale of ice, nationwide. The Company desires to employ the Executive, and the
Executive desires to accept employment, on the terms and conditions set forth in this
Agreement.







	2.	 	DEFINITIONS. For purposes of this Agreement, the following terms have the meanings set forth
below. Other defined terms have the meanings set forth in the provisions of this Agreement in
which they are used.







	 	2.1	 	Board means Board of Directors of the Company.

	 
	 	2.2	 	Cause means (i) the continued willful failure by Executive to substantially
perform his duties with the Company, (ii) the willful engaging by Executive in
misconduct materially and demonstrably injurious to the Company or (iii) Executive’s
material breach of this Agreement; provided, that with respect to any breach that is
curable by Executive, as determined by the Board in good faith, the Company has
provided Executive written notice of the material breach and Executive has not cured
such breach, as determined by the Board in good faith, within fifteen (15) days
following the date the Company provides such notice.

	 
	 	2.3	 	Change of Control is defined in Section 10.2.

	 
	 	2.4	 	COBRA means the Consolidated Omnibus Budget Reconciliation Act, as the same may
be amended from time to time, or any successor statute, together with any applicable
regulations in effect at the time in question.

	 
	 	2.5	 	Code means the Internal Revenue Code of 1986, as amended.

	 
	 	2.6	 	Company Group means Primo Water Corporation and its subsidiaries.

	 
	 	2.7	 	Company Business is intentionally defined broadly in view of the Executive’s
senior position with the Company and access to Confidential Information related to the
Company Group’s business and business preparations; it means (1) any business engaged
in by the Company Group during the Executive’s Employment and (a) in which the
Executive materially participated, or (b) concerning which the Executive had access to
Confidential Information, or (2) any other business as to which the Company Group has
made demonstrable preparation to engage in during such Employment and (i) in which
preparation the Executive materially





 









 






	 	 	 	participated, or (ii) concerning which preparation the Executive had access to
Confidential Information.

	 
	 	2.8	 	Confidential Information means information about the Company Group or its
suppliers, clients, customers or other parties with which it has business relationships
(such as bottlers and distributors) that was learned by Executive in the course of his
employment by the Company, including (without limitation) any proprietary knowledge
(including business processes and methods), trade secrets, data, formulae, information
and supplier, client, customer, bottler and distributor lists and all papers, resumes,
and records (including computer records) of the documents containing such information,
but excludes information which the Executive can show: (i) was in the Executive’s
possession or within the Executive’s knowledge before the Employment; or (ii) is or
becomes generally known to persons who could take economic advantage of it, other than
officers, directors, and employees of the Company Group, without breach of an
obligation to the Company; or (iii) the Executive obtained from a party having the
right to disclose it without violation of an obligation to the Company; or (iv) is
required to be disclosed pursuant to legal process (e.g., a subpoena), provided that
the Executive notifies the Company immediately upon receiving or becoming aware of the
legal process in question.

	 
	 	2.9	 	Effective Date is defined in Section 5.1.

	 
	 	2.10	 	Employment means the Executive’s employment with the Company.

	 
	 	2.11	 	Good Reason means: (a) a material reduction (without Executive’s express
written consent) in Executive’s duties or responsibilities; (b) the requirement that
Executive relocate to an employment location that is more than 50 miles from his
employment location on the Effective Date; or (c) the Company’s material breach
(without Executive’s express written consent) of this Agreement; provided, that
Executive has provided the Company written notice of the material breach and the
Company has not cured such breach within fifteen (15) days following the date Executive
provides such notice.

	 
	 	2.12	 	Position means the area of responsibility so identified on Exhibit A. If the
Company in its sole discretion increases the Executive’s area of responsibility, then
such increased area of responsibility shall be deemed the Position for all purposes
hereunder.

	 
	 	2.13	 	Resign for Good Reason or Resignation for Good Reason means that all of the
following occur:







	 	(a)	 	the Executive notifies the Company in writing, in accordance
with the notice provisions of this Agreement, of the occurrence of one or more
events constituting Good Reason hereunder;





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	 	(b)	 	the Company fails to revoke, rescind, cancel, or cure the event
(or if more than one, all such events) that was the subject of the notification
under subparagraph (a) within thirty (30) days after such notice; and

	 
	 	(c)	 	within ten (10) business days after the end of the thirty-day
period described in subparagraph (b), the Executive delivers to the Company a
notice of resignation in accordance with this Agreement.







	 	2.14	 	Senior Executives means those officers of the Company who are designated
executive officers from time to time.

	 
	 	2.15	 	Termination Date means the effective date of the Executive’s termination of
Employment with the Company. For purposes of this Agreement, whether a termination of
Employment has occurred shall be determined consistent with the requirements of Section
409A of the Code and the Company’s administrative policies.

	 
	 	2.16	 	Tribunal means a court or other body of competent jurisdiction that is deciding
a matter relating to this Agreement.







	3.	 	EMPLOYMENT







	 	3.1	 	Position. Subject to the terms and conditions hereinafter set forth, the
Company hereby agrees to employ the Executive, and the Executive hereby agrees to serve
the Company, at the office and in the Position referred to on Exhibit A.







	 	(a)	 	The Executive will (i) devote his full professional time,
attention, and energies to the business of the Company and will diligently and
to the best of his ability perform all duties incident to his Employment
hereunder; (ii) use his best efforts to promote the interests and goodwill of
the Company; and (iii) perform such other duties commensurate with the Position
as the Board may from time-to-time assign to the Executive.

	 
	 	(b)	 	The Executive shall obtain the written consent of the Board
prior to serving on corporate, civic or charitable boards or committees. This
Section 3.1 shall not be construed as preventing the Executive from serving on
the corporate, civic or charitable boards or committees on which he currently
serves and which have been previously disclosed to the Company in writing;
provided that in no event shall any such service or business activity require
the provision of substantial services by the Executive to the operations or the
affairs of such businesses or enterprises such that the provision thereof would
interfere in any respect with the performance of the Executive’s duties
hereunder.







	 	3.2	 	Office Space, Equipment, etc. The Company shall provide the Executive with
office space, related facilities, equipment, and support personnel that are
commensurate with the Position.





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	 	3.3	 	Expense Reimbursement. The Company will timely reimburse the Executive for
reasonable business expenses incurred by the Executive in connection with the
Employment in accordance with the Company’s then-current policies no later than
seventy-five (75) days following the date on which the Executive incurs such
expense(s).







	4.	 	COMPENSATION AND BENEFITS DURING EMPLOYMENT. During the Employment, the Company shall
provide compensation and benefits to the Executive as follows.







	 	4.1	 	Salary. In consideration of the services to be rendered by Executive pursuant
to this Agreement, the Company shall pay, or cause to be paid, to Employee a base
salary (the “Base Salary”) as established by or pursuant to authority granted by the
Board. Executive’s initial Base Salary shall be the base salary, as of the Effective
Date, as set forth on Exhibit A. The Base Salary shall be reviewed annually by or
pursuant to authority granted by the Board in connection with its annual review of
executive compensation to determine if such Base Salary should be increased (but not
decreased) for the following year in recognition of services to the Company. The Base
Salary shall be payable at such intervals in conformity with the Company’s prevailing
practice as such practice shall be established or modified from time to time.

	 
	 	4.2	 	Bonuses; Additional Compensation. Executive will be eligible to receive
bonuses and awards of equity and non-equity compensation and to participate in annual
and long-term compensation plans of the Company in accordance with any plan or decision
that the Board, or any committee or other person authorized by the Board, may in its
sole discretion determine from time to time.

	 
	 	4.3	 	Other Benefits. During the period of employment under this Agreement,
Executive shall be entitled to participate in all other benefits of employment
generally available to other Senior Executives and those benefits for which such
persons are or shall become eligible, when and as the Executive becomes eligible
therefore.







	5.	 	TERMINATION OF EMPLOYMENT







	 	5.1	 	Term of Agreement. The term of the Employment shall commence on the date
hereof (the “Effective Date”) and continue to the third anniversary of the Effective
Date (the “Original Term”) and renew automatically for successive one-year terms (each,
a “Renewal Term”) unless notice of non-renewal is given by either party to the other
party at least ninety (90) days prior to the end of the Original Term or any Renewal
Term (the “Expiration Date”); provided that the Employment may also be terminated prior
to such Expiration Date (i) by the Executive for any reason (i.e., with or without Good
Reason), (ii) by the Company for any reason (i.e., with or without Cause) or (iii) due
to the Disability or death of the Executive.





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	 	5.2	 	Termination in the Event of Disability. In the event of the incapacity of the
Executive, by reason of mental or physical disability to perform his material duties
hereunder, for a period of 120 consecutive days or 180 non-consecutive days during any
twelve (12) month period, as reasonably determined by the Board or as certified by a
qualified physician selected by the Board (collectively, “Disability”), the Company may
terminate the Executive’s Employment effective upon written notice to the Executive.
Prior to the termination of Executive’s Employment pursuant to this Section 5.2, during
any period that the Executive fails to perform his full-time duties with the Company as
a result of incapacity due to physical or mental illness, he shall continue to receive
his Base Salary, annual bonus and other benefits provided hereunder, less the amount of
any disability benefits received by the Executive during such period under any
disability plan or program sponsored by the Company.

	 
	 	5.3	 	Notice of Resignation; Waiver of Notice Period. If the Executive resigns from
the Company, the Executive will give the Company at least four (4) weeks’ prior notice
of resignation. The Company may in its discretion waive any notice period stated in
the Executive’s notice of resignation, in which case the Termination Date of the
Employment will be the date of such waiver.

	 
	 	5.4	 	No Termination of Agreement Per Se. Termination of the Employment will not
terminate this Agreement per se; to the extent that either party has any right under
applicable law to terminate this Agreement, any such termination of this Agreement
shall be deemed solely to be a termination of the Employment without affecting any
other right or obligation hereunder except as provided herein in connection with
termination of the Employment.

	 
	 	5.5	 	Payments Following Termination.







	 	(a)	 	If the Employment is terminated for any reason, either by the
Company or by the Executive’s resignation, then the Company shall pay the
Executive the following amounts as part of the Company’s next regular payroll
cycle but in no event later than thirty (30) days after the Termination Date,
to the extent that the same have not already been paid;







	 	(i)	 	any and all Base Salary and vacation pay earned
through the Termination Date; and

	 
	 	(ii)	 	any reimbursable expenses properly reported by
the Executive.







	 	(b)	 	Unless the Executive resigns without Good Reason or the
Employment is terminated for Cause, then the Company shall pay (i) any
applicable prorated annual bonus, based on actual performance for the year of
termination as determined by the Board in its discretion when making bonus
determinations for other Senior Executives and payable at such time as annual
bonuses are otherwise determined for other Senior Executives





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	 	 	 	and (ii) any accrued but unpaid annual bonus for the fiscal year immediately
preceding the year of termination.







	6.	 	SEVERANCE BENEFITS UPON CERTAIN TERMINATIONS







	 	6.1	 	Severance Payment. If (1) the Company does not renew the Agreement at the end
of the Original Term or any Renewal Term, (2) the Employment is terminated by the
Company other than for Cause or (3) the Executive resigns for Good Reason, then:







	 	(a)	 	The Company shall pay to the Executive an amount equal to one
(1) times the sum of (A) the highest Base Salary in effect (i) during the 12
months immediately prior to the Termination Date or (ii) during the Employment,
if the Employment has lasted less than 12 months plus (B) the average annual
bonus earned by the Executive for the most recent two (2) fiscal years ending
prior to the Termination Date, such amount to be paid in cash or
immediately-available funds in a lump sum on the 60th day following
the Termination Date.

	 
	 	(b)	 	As a condition to making any such severance payment, the
continuation of insurance and related benefits under Section 6.2 below and the
special equity vesting under Section 6.3 below, the Company will require the
Executive or his legal representative(s) to first execute a release in form and
substance satisfactory to the Company, which contains a full release of all
claims against the Company and certain other provisions, including but not
limited to a reaffirmation of the covenants in Sections 8, 9.1 and 9.2.







	 	6.2	 	Continuation of Insurance and Related Benefits. If (1) the Company does not
renew the Agreement at the end of the Original Term or any Renewal Term, (2) the
Employment is terminated by the Company other than for Cause or (3) the Executive
resigns for Good Reason then:







	 	(a)	 	The Company shall, to the greatest extent permitted by
applicable law and the terms and conditions of the applicable insurance or
benefit plan, maintain the Executive and the Executive’s dependents as
participants in the health, dental, life, accident, disability and similar
benefit plans offered to (and on the same terms as) other Senior Executives
until the 12-month anniversary of the Termination Date.

	 
	 	(b)	 	To the extent that applicable law or the terms and conditions
of the applicable insurance or benefit plan do not permit the Company to comply
with subparagraph (a), the Company shall reimburse the Executive (if living)
and the Executive’s dependents, for all expenses incurred by any of them in
maintaining the same levels of coverage under COBRA, to the extent applicable,
for the period set forth in subparagraph (a) (not to exceed applicable COBRA
continuation coverage period), but solely to the





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	 	 	 	extent that such expenses exceed the deduction or amount that would have
been required to be paid by the Executive for such coverage if the
Employment had not been terminated. If the period set forth in subparagraph
(a) exceeds the applicable COBRA continuation coverage period, then
following such period, if any, the Company shall provide the Executive (if
living) and the Executive’s dependents with substantially similar levels of
coverage under an individual or group policy for the duration of the time
period specified in subparagraph (a).

	 
	 	(c)	 	If the Executive dies before the expiration of the Company’s
obligation under this Section 6.2, then the Company shall, to the greatest
extent permitted by applicable law and the terms and conditions of the
applicable insurance or benefit plan, continue to maintain coverage for the
Executive’s dependents under all insurance plans referred to in this Section
6.2 for which such dependents had coverage as of the date of the Executive’s
death, at the same coverage levels and for the same period of time as would
have been required had the Executive not died.







	 	6.3	 	Equity Vesting. If (1) the Company does not renew the Agreement at the end of
the Original Term or any Renewal Term, (2) the Employment is terminated by the Company
other than for Cause or (3) the Executive resigns for Good Reason, then the Executive
shall vest upon such termination of Employment in any restricted stock, stock option or
other equity compensation awards granted by the Company that were otherwise scheduled
to vest within six (6) months after the Termination Date. The provisions of this
Section 6.3 shall control except to the extent that the provisions of the applicable
restricted stock, stock option or other equity award are more favorable. Any
post-employment exercise period for vested stock options shall continue to be governed
by the terms of the applicable equity compensation plan and award agreement.

	 
	 	6.4	 	D&O Insurance, and Indemnification. Through at least the sixth anniversary of
the Termination Date, the Company shall maintain coverage for the Executive as a named
insured on all directors’ and officers’ insurance maintained by the Company for the
benefit of its directors and officers on at least the same basis as all other covered
individuals and provide the Executive with at least the same corporate indemnification
as it provides to other Senior Executives.

	 
	 	6.5	 	No Other Severance Benefits. Other than as described above in Sections 6.1,
6.2 and 6.3 and as described below in Section 10, the Executive shall not be entitled
to any payment, benefit, damages, award or compensation in connection with termination
of the Employment, by either the Company or the Executive, except as may be
expressly provided in another written agreement, if any, approved by the Board and
executed by the Executive and the Company. Neither the Executive nor the Company is
obligated to enter into any such other written agreement.





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	 	6.6	 	No Waiver of ERISA-Related Rights. Nothing in this Agreement shall be
construed to be a waiver by the Executive of any benefits accrued for or due to the
Executive under any employee benefit plan (as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended) maintained by the Company, if any,
except that the Executive shall not be entitled to any severance benefits pursuant to
any severance plan or program of the Company other than as provided herein.

	 
	 	6.7	 	Mitigation Not Required. The Executive shall not be required to mitigate the
amount of any payment or benefit which is to be paid or provided by the Company
pursuant to this Section 6. Any remuneration received by the Executive from a third
party following termination of the Employment shall not apply to reduce the Company’s
obligations to make payments or provide benefits hereunder.







	7.	 	TAX WITHHOLDING. Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement, or under any other agreement between the
Executive and the Company, all federal, state, local and foreign taxes that are required to be
withheld by applicable laws or regulations.







	8.	 	CONFIDENTIAL INFORMATION







	 	8.1	 	Executive acknowledges that in the course of his employment by the Company, the
Company has provided him and will continue to provide him, prior to any termination
hereof, with certain Confidential Information and knowledge concerning the operations
of the Company Group which the Company desires to protect. This Confidential
Information shall include, but is not limited to:







	 	(a)	 	terms and conditions of and the identity of the parties to the
Company Group’s agreements with its suppliers, clients, customers or other
parties with which it has business relationships (such as bottlers and
distributors), including but not limited to price information;

	 
	 	(b)	 	management systems, policies or procedures, including the
contents of related forms and manuals;

	 
	 	(c)	 	professional advice rendered or taken by the Company Group;

	 
	 	(d)	 	the Company Group’s own financial data, business and management
information, processes, methods, strategies and plans and internal practices
and procedures, including but not limited to internal financial records,
statements and information, cost reports or other financial information;

	 
	 	(e)	 	proprietary software, systems and technology-related
methodologies of the Company Group and their clients;





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	 	(f)	 	salary, bonus and other personnel information relating to the
Company Group’s personnel;

	 
	 	(g)	 	the Company Group’s business and management development plans,
including but not limited to proposed or actual plans regarding acquisitions
(including the identity of any acquisition contacts), divestitures, asset
sales, and mergers;

	 
	 	(h)	 	decisions and deliberations of the Company Group’s committees
or boards; and

	 
	 	(i)	 	litigation, disputes, or investigations to which the Company
Group may be party and legal advice provided to Executive on behalf of the
Company Group in the course of Executive’s employment.







	 	8.2	 	Executive understands that such information is confidential, and he agrees not
to reveal such information to anyone outside the Company so long as the confidential or
secret nature of such information shall continue. Executive further agrees that he
will at no time use such information in competing with all or any portion of the
Company. At such time as Executive shall cease to be employed by the Company, he will
surrender to the Company all papers, documents, writing and other property produced by
him or coming into his possession by or through his employment and relating to the
information referred to in this paragraph, and the Executive agrees that all such
materials will at all times remain the property of the Company.







	9.	 	NONCOMPETITION AND NONSOLICITATION COVENANT







	 	9.1	 	Noncompetition. In return for the consideration stated in this Agreement,
including the receipt of Confidential Information by Executive and the promise of the
Company to provide the Executive with Confidential Information, the Executive agrees
that, during his Employment and for one (1) year after the termination of Employment,
Executive shall not directly or indirectly possess an ownership interest in, manage,
control, participate in, consult with, or render services for any other person, firm,
association or corporation, engaged in the Company Business without the prior written
consent of the Company, in the Territory (defined below), because such activity would
unavoidably and unfairly compromise the Company’s legitimate, protectable business
interests in its Confidential Information, clients, employees, suppliers, and business
relationships.

	 
	 	 	 	“Territory” means all of the following: (1) any state in which any entity in the
Company Group conducts Company Business at the time of enforcement of this
provision; (2) the United States of America; (3) North America; and (4) the world.

	 
	 	9.2	 	Executive agrees that he shall not, either directly or indirectly, during
Executive’s Employment and for one (1) year after termination of Employment, in any
capacity whatsoever (either as an employee, officer, director, stockholder,





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	 	 	 	proprietor, partner joint venturer, consultant or otherwise) (a) solicit, contact,
call upon, communicate with, or attempt to communicate with any of the Company Group
customers or clients or potential customers or clients for the purpose of selling
products or providing services to such customer or client, (b) sell products or
provide any services to any customer or client or potential customer or client of
the Company Group, or (c) cause, or attempt to cause, any of the Company’s
suppliers, distributors, bottlers or other business partners to cease doing business
with the Company or to reduce the amount of business they do with the Company.

	 
	 	9.3	 	Nonsolicitation. Executive agrees that he shall not directly or indirectly
during Executive’s Employment and for one (1) year after termination of Employment,
either alone or through or in conjunction with any other person or entity employ,
solicit, induce, or recruit, any person employed by any member of the Company Group at
any time within the one (1) year period immediately preceding such employment,
solicitation, inducement or recruitment.

	 
	 	9.4	 	For the purposes of this Agreement, “potential customer” or “potential client”
shall be defined as those entities for which Executive has had access to Confidential
Information during his Employment, and “customer” or “client” shall be defined as those
entities with which any member of the Company Group has conducted any business during
the twelve (12) month period prior to termination of the Employment. For the purposes
of this Agreement, “product” shall mean any product sold by any member of the Company
Group at any time within the one (1) year period preceding termination of Executive’s
Employment and “services” shall mean activities performed by any member of the Company
Group at any time within the one (1) year period preceding termination of Executive’s
Employment.

	 
	 	9.5	 	Executive acknowledges and agrees that the restrictive covenants contained
herein are reasonable in time, territory and scope, and in all other respects. If a
Tribunal determines that any of the restrictions set forth in this Section 9 are
unreasonably broad or otherwise unenforceable under applicable law, then (i) such
determination shall be binding only within the geographical jurisdiction of the
Tribunal, and (ii) the restriction will not be terminated or rendered unenforceable,
but instead will be blue penciled or reformed (solely for enforcement within the
geographic jurisdiction of the Tribunal) to the minimum extent required to render it
enforceable.







	10.	 	CHANGE OF CONTROL







	 	10.1	 	Special Severance Benefits.







	 	(a)	 	If, during the specific time periods listed in subparagraph
(b), the Employment is terminated by any of the specific events listed there,
then the Executive will be entitled to the following benefits:





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	 	(i)	 	The Company shall pay to the Executive an
amount equal to one-half (1/2) the sum of (A) the highest Base Salary
in effect (i) during the 12 months immediately prior to the Termination
Date or (ii) during the Employment, if the Employment has lasted less
than 12 months plus (B) the average annual bonus earned by the
Executive for the most recent two (2) fiscal years ending prior to the
Termination Date, such amount to be paid in cash or
immediately-available funds in a lump sum on the 60th day
following the Termination Date.

	 
	 	(ii)	 	The continuation of insurance and other
benefits set forth in Section 6.2 shall be extended by an additional
six months.

	 
	 	(iii)	 	The amount payable under subparagraph (i) is
in addition to any severance payments due to Executive under the
provisions of Section 6.1 as a result of such termination of
Employment, and the continuation of insurance and other benefits under
subparagraph (ii) is in addition to the continuation of benefits under
the provisions of Section 6.2 as a result of such termination of
Employment.







	 	(b)	 	The specific termination events and time periods in which the
Executive will be entitled to the special severance benefits under Section
10.1(a)(i) above are as follows:







	 	(i)	 	the Executive’s Employment is terminated by the
Company, for any reason other than Cause, at any time during the period
beginning on the Change of Control date and ending on the date two (2)
years after the Change of Control date; or

	 
	 	(ii)	 	the Executive Resigns for Good Reason at any
time during the period beginning on the Change of Control date and
ending on the date two (2) years after the Change of Control date.







	 	(c)	 	In addition, all restricted stock, stock option or other equity
compensation awards granted by the Company that were unvested immediately prior
to the Change of Control date shall become fully vested as of the Change of
Control date. The provisions of this Section 10.1(c) shall control except to
the extent that the provisions of the applicable restricted stock, stock option
or other equity award are more favorable.

	 
	 	(d)	 	As a condition to providing the Executive with the special
severance benefits under Sections 10.1(a)(i) and (ii), the Company will require
the Executive to first execute a release consistent with the requirements of
Section 6.1(b).





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	 	10.2	 	A Change of Control shall occur when:







	 	(a)	 	Any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)) (a “Person”) becomes the beneficial owner (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either (A)
the then-outstanding shares of common stock of the Company (the “Outstanding
Company Common Stock”) or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Section, the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company, or (iv)
any acquisition pursuant to a transaction that complies with Sections
10.2(c)(A), (B) and (C).

	 
	 	(b)	 	Individuals who, as of the date hereof, constitute the Board
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though
such individual was a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board;

	 
	 	(c)	 	There is consummation of a reorganization, merger, statutory
share exchange or consolidation or similar transaction involving the Company or
any of its subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company, or the acquisition of assets or stock of
another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (A)
all or substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of the then-outstanding
shares of common stock (or, for a non-corporate entity, equivalent securities)
and the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may be, of the
entity resulting from such Business Combination (including, without limitation,
an entity that, as a result of





12









 






	 	 	 	such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to
such Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no Person
(excluding any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding shares of
common stock of the corporation resulting from such Business Combination or
the combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (C) at least a majority of the members of the
board of directors (or, for a non-corporate entity, equivalent governing
body) of the entity resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial agreement or
of the action of the Board providing for such Business Combination; or

	 
	 	(d)	 	The stockholders of the Company approve a complete liquidation
or dissolution of the Company.







	 	 	 	Notwithstanding the foregoing, if it is determined that a payment hereunder is
subject to the requirements of Section 409A, the Company will not be deemed to have
undergone a Change of Control unless the Company is deemed to have undergone a
“change in control event” pursuant to the definition of such term in Section 409A.







	11.	 	ADJUSTMENTS TO PAYMENTS







	 	11.1	 	Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the Company to Executive or for
Executive’s benefit (whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise) (the “Payments”) would be subject to the
excise tax imposed by Section 4999 (or any successor provisions) of the Code, or any
interest or penalty is incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, is hereinafter collectively
referred to as the “Excise Tax”), then the Payments shall be reduced (but not below
zero) if and to the extent that such reduction would result in Executive retaining a
larger amount, on an after-tax basis (taking into account federal, state and local
income taxes and the imposition of the Excise Tax), than if Executive received all of
the Payments. The Company shall reduce or eliminate the Payments, by first reducing or
eliminating the portion of the Payments which are not payable in cash and then by
reducing or eliminating cash payments, in each case in reverse order beginning with
payments or benefits which are to be paid the farthest in time from the determination.





13









 






	 	11.2	 	All determinations required to be made under this Section, including whether
and when an adjustment to any Payments is required and, if applicable, which Payments
are to be so adjusted, shall be made by an independent accounting firm selected by the
Company from among the four (4) largest accounting firms in the United States or any
nationally recognized financial planning and benefits consulting company (the
“Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and to Executive within fifteen (15) business days of the receipt of notice
from Executive that there has been a Payment, or such earlier time as is requested by
the Company. In the event that the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the Change of Control, Executive shall
appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by
the Company. If the Accounting Firm determines that no Excise Tax is payable by
Executive, it shall furnish Executive with a written opinion that failure to report the
Excise Tax on Executive’s applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. Any determination by the Accounting Firm
shall be binding upon the Company and Executive.







	12.	 	COMPLIANCE WITH SECTION 409A OF THE INTERNAL REVENUE CODE. To the extent applicable, it is
intended that this Agreement comply with the provisions of Section 409A of the Code
(hereinafter referred to as “Section 409A”). This Agreement shall be administered in a manner
consistent with this intent, and any provision that would cause the Agreement to fail to
satisfy Section 409A shall have no force and effect until amended to comply with Section 409A.
Notwithstanding any provision of this Agreement to the contrary, in the event any payment or
benefit hereunder is determined to constitute nonqualified deferred compensation subject to
Section 409A, then to the extent necessary to comply with Section 409A, such payment or
benefit shall not be made, provided or commenced until six months after Executive’s
Termination Date. Lump sum payments will be made, without interest, as soon as
administratively practicable following the six-month delay. Any installments otherwise due
during the six-month delay will be paid in a lump sum, without interest, as soon as
administratively practicable following the six-month delay, and the remaining installments
will be paid in accordance with the original schedule. For purposes of Section 409A, the right
to a series of installment payments shall be treated as a right to a series of separate
payments. Each separate payment in the series of separate payments shall be analyzed
separately for purposes of determining whether such payment is subject to, or exempt from
compliance with, the requirements of Section 409A.







	13.	 	EMPLOYEE HANDBOOKS, ETC. From time to time, the Company may, in its discretion, establish,
maintain and distribute employee manuals or handbooks or personnel policy manuals, and
officers or other representatives of the Company may make written or oral statements relating
to personnel policies and procedures. The Executive will adhere to and follow all rules,
regulations, and policies of the Company set forth in such manuals, handbooks, or statements
as they now exist or may later be





14









 






	 	 	amended or modified. Such manuals, handbooks and statements do not constitute a part of
this Agreement nor a separate contract, and shall not be deemed as amending this Agreement
or as creating any binding obligation on the part of the Company, but are intended only for
general guidance.

	 
	14.	 	OTHER PROVISIONS







	 	14.1	 	This Agreement shall inure to the benefit of and be binding upon (i) the
Company and its successors and assigns and (ii) the Executive and the Executive’s heirs
and legal representatives, except that the Executive’s duties and responsibilities
under this Agreement are of a personal nature and will not be assignable or delegable
in whole or in part without the Company’s prior written consent.

	 
	 	14.2	 	All notices and statements with respect to this Agreement must be in writing
and shall be delivered by certified mail return receipt requested; hand delivery with
written acknowledgment of receipt; or overnight courier with delivery-tracking
capability. Notices to the Company shall be addressed to the Company’s chief executive
officer or chief financial or accounting officer at the Company’s then-current
headquarters offices. Notices to the Executive may be delivered to the Executive in
person or to the Executive’s then-current home address as indicated on the Executive’s
pay stubs or, if no address is so indicated, as set forth in the Company’s payroll
records. A party may change its address for notice by the giving of notice thereof in
the manner hereinabove provided.

	 
	 	14.3	 	If the Executive Resigns for Good Reason because of (i) the Company’s failure
to pay the Executive on a timely basis the amounts to which he is entitled under this
Agreement or (ii) any other breach of this Agreement by the Company, then the Company
shall pay all amounts and damages to which the Executive may be entitled as a result of
such failure or breach, including interest thereon at the maximum non-usurious rate and
all reasonable legal fees and expenses and other costs incurred by the Executive to
enforce the Executive’s rights hereunder and the Executive will be relieved of all
obligations under Section 9 (noncompetition).

	 
	 	14.4	 	This Agreement sets forth the entire present agreement of the parties
concerning the subjects covered herein except for any equity incentive award agreements
between the Company and the Executive. There are no promises, understandings,
representations, or warranties of any kind concerning those subjects except as
expressly set forth herein or therein.

	 
	 	14.5	 	Any modification of this Agreement must be in writing and signed upon the
express consent of all parties. Any attempt to modify this Agreement, orally or in
writing, not executed by all parties will be void.

	 
	 	14.6	 	If any provision of this Agreement, or its application to anyone or under any
circumstances, is adjudicated to be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability will not affect any other provision or application of
this Agreement which can be given effect without the invalid or





15









 






	 	 	 	unenforceable provision or application and will not invalidate or render
unenforceable such provision or application in any other jurisdiction.

	 
	 	14.7	 	This Agreement will be governed and interpreted under the laws of the State of
North Carolina.

	 
	 	14.8	 	No failure on the part of any party to enforce any provisions of this Agreement
will act as a waiver of the right to enforce that provision.

	 
	 	14.9	 	Termination of the Employment, with or without Cause, will not affect the
continued enforceability of this Agreement.

	 
	 	14.10	 	Section headings are for convenience only and shall not define or limit the
provisions of this Agreement.

	 
	 	14.11	 	This Agreement may be executed in several counterparts, each of which is an
original. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts. A copy of
this Agreement manually signed by one party and transmitted to the other party by FAX
or in image form via email shall be deemed to have been executed and delivered by the
signing party as though an original. A photocopy of this Agreement shall be effective
as an original for all purposes.





By signing this Agreement, the Executive acknowledges that the Executive (1) has read and
understood the entire Agreement; (2) has received a copy of it; (3) has had the opportunity to ask
questions and consult counsel or other advisors about its terms; and (4) agrees to be bound by it.



Executed and effective as of the Effective Date.




	 	 	 	 	 
	Primo Water Corporation
	 	Executive
	 

	By:
	 	/s/ Billy D. Prim	 	/s/ Mark Castaneda
	 

	 	 
	 	 
	Name:

	 	Billy D. Prim	 	Mark Castaneda
	Title:
	 	CEO and President	 	 






16









 






Exhibit A







	 	 	 
	Office

	 	Winston Salem, NC
	 
	 	 
	Position

	 	Chief Financial Officer, Secretary and Asst. Treasurer
	 
	 	 
	Base Salary

	 	$250,000