Document:

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                                                                   Exhibit 10.16

                                                                  Execution Copy

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this "Agreement") dated as of May 5, 2000, is by
and between VP MERGER PARENT, INC. (to be renamed VERMONT PURE HOLDINGS, LTD.
following the "Effective Date," as defined below), a Delaware corporation (the
"Company"), VERMONT PURE SPRINGS, INC., a Delaware corporation that is a direct
or indirect wholly owned subsidiary of the Company (the "Operating Company"),
and JOHN B. BAKER (the "Executive").

     The Company, the Operating Company and the Executive agree as follows:

1.   EMPLOYMENT.

     1.1 GENERAL. The Company shall employ the Executive (either directly or by
employment with the Operating Company), and the Executive accepts employment, as
Executive Vice President of the Company, upon the terms and conditions described
herein. The Executive's employment hereunder will commence on the effective date
(the "Effective Date") of the merger between a wholly owned subsidiary of the
Company Vermont Pure Holdings, Ltd., a publicly traded Delaware corporation
which will become a wholly owned subsidiary of the Company and be renamed
following the Effective Date, pursuant to the Agreement and Plan of Merger and
Contribution (the "Merger Agreement") by and among the Company, such subsidiary,
Crystal Rock Spring Water Company, a Connecticut corporation ("Crystal Rock"),
and the other parties listed therein, dated as of the date hereof, and will
continue for the Employment Term (as defined in Section 2.1 hereof) unless
terminated sooner as herein provided. During the Employment Term, the Executive
shall devote all of his business time, attention and skills to the business and
affairs of the Company, and will not undertake any commitments that would
interfere with or impair his performance of his duties and responsibilities; it
being understood, however, that the Executive may serve as director of a company
or companies that do not compete with any business of the Company or its
subsidiaries, or as a director or trustee of a charitable organization or
organizations, so long as such service does not interfere with or impair his
performance of his duties and responsibilities to the Company.

     Notwithstanding this Section 1.1 or any other provision of this Agreement,
this Agreement shall not be effective until the Effective Date, and if the
Effective Date does not occur on or before the date set forth in Section 10.1(e)
of the Merger Agreement, this Agreement shall be of no force or effect.

     1.2 DUTIES. The Executive shall at all times render his services at the
direction of the Board of Directors (the "Board of Directors") and the Chief
Executive Officer of the Company, and shall report primarily to the President of
the Company. His duties generally will include those required for the day to day
and long term planning, development and operation of the manufacturing, quality
and operational areas of the

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Home and Office business of the Company. The Company may assign to the Executive
such other executive and administrative duties for the Company or any affiliate
of the Company as may be determined by the Board of Directors, consistent with
the Executive's status as Executive Vice President. The Executive agrees to
diligently use his best efforts to promote and further the reputation and good
name of the Company and perform his services well and faithfully.

     1.3 REDUCTION OF DUTIES AND COMPENSATION. Notwithstanding any other
provision of this Agreement, at any time following the 18-month anniversary of
the Effective Date, the Executive may elect to reduce his duties and
compensation under this Agreement by written notice to the Company. The
Executive's employment after such notice is given is referred to hereinafter as
"Reduced Employment." During the period of Reduced Employment, the Executive
shall remain an employee of the Company, but his principal obligation shall be
to make himself available to consult with and advise the Company on matters
within his areas of expertise for a period of 20hours per calendar month. The
Company and the Executive shall endeavor from time to time to establish a
regular schedule of times and places in Connecticut or in White Plains, New
York, at which the Executive shall make himself available by teleconference,
videoconference or in person for such consultation and advice. In addition, the
Executive shall make himself available at such other times and places as the
Company and the Executive shall from time to time mutually agree.

2.   TERM AND TERMINATION.

     2.1 TERM. The term of employment or Reduced Employment by the Company of
the Executive pursuant to this Agreement shall commence on the Effective Date
and terminate on the fifth anniversary of the Effective Date (the "Employment
Term"), subject to the provisions of Section 2.2.

     2.2 EARLY TERMINATION. Notwithstanding anything to the contrary contained
in this Agreement, the Executive's employment or Reduced Employment may be
terminated prior to the end of the Employment Term only as set forth in this
Section.

          2.2.1 Termination Upon Resignation or Death of Executive. The
Executive's employment or Reduced Employment shall terminate upon the
resignation or death of the Executive. In case of termination pursuant to this
Section 2.2.1, the Company shall pay to the Executive (or, in case of his death,
to his estate or his beneficiary designated in writing), the base salary earned
by the Executive pursuant to Section 3, prorated through the date of resignation
or death.

          2.2.2 Termination Upon Disability of Executive. The Executive's
employment or Reduced Employment shall terminate by reason of the disability of
the Executive. For this purpose, "disability" shall mean the Executive's
inability, by reason of accident, illness or other physical or mental disability
(determined in good faith by the Board of Directors with the advice of a
qualified and independent physician), to perform satisfactorily the duties
required by his employment or Reduced Employment hereunder

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for any consecutive period of 120 calendar days. In case of termination pursuant
to this Section 2.2.2, the Executive shall continue to receive his base salary
prorated through the time of such termination, less any amount the Executive
receives during such period from any Company-sponsored or Company-paid source of
insurance, disability compensation or government program.

          2.2.3 Termination Upon Mutual Consent. The Executive's employment or
Reduced Employment may be terminated by the mutual consent of the Company and
the Executive on such terms as they may agree.

          2.2.4 Termination For Cause. The Executive's employment or Reduced
Employment shall terminate immediately on notice to the Executive upon a good
faith finding of the Board of Directors that the Executive has (i) willfully or
repeatedly failed in any material respect to perform his duties in accordance
with the provisions of this Agreement following 30 days' prior written notice to
the Executive and failure of the Executive to cure such deficiency, (ii)
committed a breach of any provision of Section 4 hereof, (iii) misappropriated
assets or perpetrated fraud against the Company, (iv) been convicted of a crime
which constitutes a felony, or (v) been engaged in the illegal use of controlled
or habit forming substances. The preceding clauses (i)-(v) shall constitute
"Cause" for termination of the Executive hereunder. In the event of termination
for Cause pursuant to this Section 2.2.4, the Company shall pay the Executive
his base salary prorated through the date of termination.

          Notwithstanding any other provision of this Agreement, the Executive
shall not be terminated for Cause unless and until the Executive has had an
opportunity to appear before the Board of Directors to hear and respond to the
allegations of Cause for his termination.

          2.2.5 Termination by Company Without Cause. The Company may terminate
the Executive's employment or Reduced Employment at any time and for any reason,
without Cause, upon written notice to the Executive.

          In the event of termination pursuant to this Section 2.2.5, the
Company shall pay or provide to the Executive the following termination
benefits: (i) an amount equal to the product of (A) the sum of (x) the
Executive's annual base salary as of the termination date plus EITHER (y)
$50,000, if the Executive is not engaged in Reduced Employment at the time of
termination of employment, OR (z) $0, if the Executive is engaged in Reduced
Employment at the time of termination of employment, as the case may be,
multiplied by (B) a fraction, the numerator of which shall be the number of
months remaining in the Employment Term ("Remaining Months"), and the
denominator of which shall be 12, payable over the Remaining Months, in equal
regular monthly installments, less income taxes and other applicable
withholdings, and (ii) the Executive's Fringe Benefits (as defined below) for
the Remaining Months.

          The obligation of the Company to provide "Fringe Benefits" following
any termination that is or is deemed to be without Cause shall mean that the
Executive's

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participation (including dependent coverage) in the life and health insurance
plans of the Company in effect immediately prior to the termination shall be
continued, or substantially equivalent benefits provided, by the Company, at a
cost to the Executive no greater than his cost at the date of such termination,
for the Remaining Months or such shorter period as may be required by this
Agreement; provided, however, that if the Executive is engaged in Reduced
Employment at the time of termination without Cause, then "Fringe Benefits"
shall refer only to group health insurance benefits. Notwithstanding the
foregoing, if the Company shall be unable to provide for the continuation of an
insurance benefit (such as life insurance) because such benefit was provided
pursuant to an insurance policy that does not provide for the extension of such
insurance benefit following termination of the employment of the Executive, then
the Executive may purchase insurance providing such insurance benefit and,
whether or not the Executive so elects to purchase insurance, the Company's only
obligation with respect to such insurance benefit shall be to reimburse the
Executive for his premium costs, up to a maximum aggregate amount for all
policies of insurance purchased by the Executive pursuant to this sentence of
$12,000 per annum, if the Executive is not engaged in Reduced Employment at the
time of termination, or $7,000 per annum, if the Executive is engaged in Reduced
Employment at the time of termination, in each case prorated for partial years.
If the Company is obligated pursuant to the so-called "COBRA" law to offer the
Executive the opportunity for a temporary extension of health coverage
("continuation coverage"), then the Executive shall elect continuation coverage,
and the premium cost of such coverage shall be borne by the Company and the
Executive as provided in the first sentence of this paragraph. Continuation
coverage provided pursuant to COBRA shall terminate in accordance with COBRA. To
the extent that any benefit required to be provided to the Executive by the
Company by reason of an actual or deemed termination for Cause shall be provided
to the Executive by any successor employer, the Company's obligation to provide
that benefit to the Executive shall be correspondingly offset or shall cease, as
the case may be. In no event shall the Company have any obligation to provide
Fringe Benefits after the expiration of the Remaining Months or such shorter
period as may be required by this Agreement. The Executive shall not be entitled
to any expense allowance, automobile allowance or relocation allowance following
the termination of his employment for any reason.

          2.2.6 Termination By Executive for Good Reason. The Executive may
terminate his employment at any time for Good Reason (as defined below) upon
written notice to the Company.

          In the event the Executive terminates his employment hereunder for
Good Reason (defined below), then such termination shall be treated as a
termination by the Company without Cause pursuant to Section 2.2.5.

          For purposes of this Agreement, "Good Reason" shall mean either: (i)
if the Executive is not engaged in Reduced Employment at the time of termination
of employment, any of the following occurring without the specific prior written
consent of the Executive:

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          (x) requiring the Executive to be permanently based more than 50 miles
     from his present office location (excluding business related travel to an
     extent reasonably consistent with past practice);

          (y) assignment to the Executive of duties materially inconsistent with
     his position as Executive Vice President of the Company; or

          (z) any material breach by the Company of its obligations hereunder,
     if such breach is not cured following 30 days' written notice from the
     Executive; or

          (ii) if the Executive is engaged in Reduced Employment at the time of
termination of employment, the following occurring without the specific prior
written consent of the Executive: any material breach by the Company of its
obligations hereunder, if such breach is not cured following 30 days' written
notice from the Executive.

          2.2.7 Termination By Executive without Good Reason. The Executive may
terminate his employment or Reduced Employment at any time without Good Reason
upon 30 days' written notice to the Company.

          In the event the Executive terminates his employment or Reduced
Employment hereunder without Good Reason, then the rights of the Executive to
receive future compensation pursuant to Section 3 hereof, and all other rights
of the Executive hereunder, will cease as of the date of such termination except
as may be required by law.

          2.2.8 Termination in Connection with Change of Control. If the
employment or the Reduced Employment of the Executive terminates for any reason,
including termination by the Executive, within 30 days following the occurrence
of a "Change of Control" (as defined in this Section 2.2.8), then the Company
shall pay or provide to the Executive the following termination benefits: (i) an
amount equal to the product of (A) the sum of (x) the Executive's annual base
salary as of the termination date plus EITHER $50,000, if the Executive is not
engaged in Reduced Employment at the time of termination of employment, OR $0,
if the Executive is engaged in Reduced Employment at the time of termination of
employment, as the case may be, multiplied by (B) a fraction, the numerator of
which shall be the lesser of 24 or the number of Remaining Months, and the
denominator of which shall be 12, payable over the lesser of 24 months or the
number of Remaining Months, in equal regular monthly installments, less income
taxes and other applicable withholdings, and (ii) the Executive's Fringe
Benefits (as defined above) for the lesser of 24 months or the number of
Remaining Months. A "Change of Control" shall mean a change in control of the
Company (and not any person or entity that hereafter becomes a successor to all
or substantially all of the business or assets of the Company by reason of a
Change of Control) and shall be deemed to have taken place if: (i) a third
person, including a "group" as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, becomes the beneficial owner of shares of the capital
stock of the Company having more than 50% of the total number of votes that may
be cast for the election of directors of the Company, (ii) the sale or

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other disposition (excluding mortgage or pledge) of all or substantially all of
the assets of the Company, or (iii) the merger or other business combination of
the Company with or into another corporation or entity pursuant to which the
Company will not survive or will survive only as a subsidiary of another
corporation or entity, in either case with the stockholders of the Company prior
to the merger or other business combination holding less than 50% of the voting
shares of the merged or combined companies or entities after such merger or
other business combination. Notwithstanding the foregoing, the following shall
not be deemed to be a Change of Control for purposes hereof: (i) the
transactions contemplated by the Merger Agreement, (ii) any transaction in which
EITHER (x) the Executive, any "Stockholder" as defined in the Merger Agreement,
or any affiliate of any such Stockholder, is or becomes, either alone or as a
member of a "group" as defined in this Section, OR (y) the Stockholders,
together with their affiliates and considered in the aggregate as a single
entity, are or become, the beneficial owner or owners of shares of the capital
stock of the Company having more than 50% of the total number of votes that may
be cast for the election of directors of the Company, or (iii) any transaction
described in SEC Rule 13e-3(a)(3)(i) in which the Executive participates as an
"affiliate" of the Company within the meaning of that Rule, without regard to
whether the test in Rule 13e-3(a)(3)(ii) would be satisfied in the transaction.
The rights and obligations created by this Agreement with respect to a Change of
Control shall apply only with respect to the first Change of Control after the
date of execution of this Agreement, and not with respect to any subsequent
transaction.

          2.2.9 No Other Termination Benefits. The Executive understands and
agrees that the termination payments and benefits described in Section 2.2
constitute all of the payments and benefits to which he (or his estate or
beneficiary) will be or become entitled to receive in case of termination of his
employment or Reduced Employment, and that such payments and benefits are in
lieu of any and all other payments and benefits of every kind or description to
which he may be entitled, including, without limitation, the right to receive a
bonus payment or any portion thereof. Any accrued but unpaid vacation
compensation shall be payable upon termination of employment.

          2.2.10 No Duty to Mitigate; Termination of Benefits. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 2 hereof, whether by seeking other employment or otherwise,
nor shall any compensation earned by the Executive during the period of
continuance of any payments under Section 2 hereof reduce the amount of
compensation payable under Section 2.

3.   COMPENSATION. During the Employment Term, the Company shall pay, in full
payment for all of the Executive's services rendered hereunder, the following
compensation:

     3.1 BASE SALARY. The Company shall pay the Executive an annual base salary,
less income taxes and other applicable withholdings, of $250,000 in accordance
with the Company's standard payroll installments; provided, however, that if the
Executive is engaged in Reduced Employment, then the annual base salary, less
income taxes and other applicable withholdings, shall be $160,000. The Board of
Directors will review the

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annual base salary amount as soon as practicable after the end of each fiscal
year of Company to consider whether or not it should be increased. Such
determination shall be in the sole discretion of the Board of Directors using
such criteria as they deem relevant, including, but not limited to, the
performance of the Company and the Executive.

     3.2  BONUSES.

          3.2.1 Bonuses for Achievement of Goals. While the Executive is
employed by the Company and not engaged in Reduced Employment, the Executive
will be eligible to receive the bonuses described in this Section 3.2.1. If the
Executive is engaged in Reduced Employment, he shall not be eligible for any
bonus; provided, however, that the Executive shall be eligible to receive a pro
rata portion of any bonus to which he would have been entitled under this
Section 3.2.1 in the year in which he elects Reduced Employment. The incentive
goals set forth in this Section shall be based upon or derived from the
Company's audited consolidated financial statements prepared in accordance with
generally accepted accounting principles as reported on by the Company's
independent accountants. With respect to the Company's fiscal years ended
October 2000, 2001, 2002, 2003, 2004 and 2005, if the Company has actual annual
earnings before interest, taxes, depreciation and amortization ("EBITDA") which,
expressed as a percentage of target annual EBITDA approved in the budget for
that fiscal year by the Board of Directors, are at least 90% of such target
annual EBITDA, then there shall be a bonus as set forth in the following table.
Bonuses in fiscal year 2000 and 2005 shall be pro-rated for the portion of the
fiscal year that includes the Employment Term. Bonuses shall be non-cumulative.

          ACTUAL EBITDA DIVIDED BY TARGET EBITDA              BONUS
          --------------------------------------              -----
          less than 90% of target                        -    $  -0-
          at least 90% but less than 91% of target       -     25,000
          at least 91% but less than 92% of target       -     27,500
          at least 92% but less than 93% of target       -     30,000
          at least 93% but less than 94% of target       -     32,500
          at least 94% but less than 95% of target       -     35,000
          at least 95% but less than 96% of target       -     37,500
          at least 96% but less than 97% of target       -     40,000
          at least 97% but less than 98% of target       -     42,500
          at least 98% but less than 99% of target       -     45,000
          at least 99% but less than 100% of target      -     47,500
          at least 100% but less than 102% of target     -     50,000
          at least 102% but less than 104% of target     -     52,500
          at least 104% but less than 106% of target     -     55,000
          at least 106% but less than 108% of target     -     57,500
          at least 108% but less than 110% of target     -     60,000
          at least 110% but less than 112% of target     -     62,500
          at least 112% but less than 114% of target     -     65,000
          at least 114% but less than 116% of target     -     67,500
          at least 116% but less than 118% of target     -     70,000

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          at least 118% but less than 120% of target     -     72,500
          at least 120% of target or greater             -     75,000

          3.2.2 Guaranteed Bonus. The Executive shall be entitled to a
guaranteed bonus each year during the Employment Term (pro-rated for partial
years) in an amount equal to the excess of $50,000 (if the Executive is not
engaged in Reduced Employment) or $15,000 (if the Executive is engaged in
Reduced Employment), as the case may be, over the actual costs reimbursed to the
Executive by the Company pursuant to Section 3.7.

          3.2.3 Time of Bonus Payments. Each bonus required to be paid to the
Executive under this Section 3.2 shall be paid as soon as practicable after the
filing with the Securities and Exchange Commission of the Company's Annual
Report on Form 10-K or 10-KSB or successor form, as the case may be.

          3.3 STOCK OPTIONS. The Executive shall be eligible to receive stock
options from time to time, as determined by the Compensation Committee of the
Board of the Directors of the Company.

          3.4 VACATION. The Executive shall be entitled to four (4) weeks of
vacation in each 12-month period during the Employment Term, with carryover from
year to year of unused vacation time, so long as the Executive is not engaged in
Reduced Employment. No more than two (2) weeks may be taken consecutively.

          3.5 EXECUTIVE BENEFIT PLANS. The Executive shall be entitled to
participate in all plans or programs sponsored by the Company for employees in
general, including without limitation, participation in any group health,
medical reimbursement, or life insurance plans; provided, however, that if the
Executive has elected Reduced Employment, he shall only be entitled to
participate in group health and medical reimbursement plans.

          3.6 EXPENSE ALLOWANCE. The Company shall reimburse the Executive for
all reasonable and necessary expenses incurred by him from time to time in the
performance of his duties hereunder, against receipts therefor in accordance
with the then effective policies and requirements of the Company.

          3.7 DISABILITY INSURANCE; AUTOMOBILE ALLOWANCE. The Company shall have
no obligation to provide disability insurance to the Executive. The Company
agrees to provide an allowance of up to $50,000 per year (if the Executive is
not engaged in Reduced Employment) or $15,000 per year (if the Executive is
engaged in Reduced Employment), in the aggregate, to reimburse the Executive for
(i) the actual cost of premiums incurred by the Executive for disability
insurance obtained by the Executive and (ii) the actual cost of leasing and
operating an automobile for use by the Executive during the Executive's
employment with the Company. The Executive may determine in his reasonable
judgment how to allocate the allowance between disability insurance premiums and
automobile leasing expense.

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4.   PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETE

     4.1 ACKNOWLEDGEMENTS. The Executive acknowledges that:

     (a) The Executive has obtained and, during his employment by the Company,
will obtain secret and confidential information concerning the business of the
Company and its affiliates, including, without limitation, customer lists and
sources of supply, their needs and requirements, the nature and extent of
contracts with them, and related cost, price and sales information.

     (b) The Company and its affiliates will suffer substantial and irreparable
damage which will be difficult to compute if, during the period of his
employment with the Company or thereafter, the Executive should enter a
competitive business or should divulge secret and confidential information
relating to the business of the Company and its affiliates heretofore or
hereafter acquired by him in the course of his employment with the Company.

     (c) The provisions of this Agreement are reasonable and necessary for the
protection of the business of the Company and its affiliates.

     4.2 CONFIDENTIALITY. The Executive agrees that he will not at any time,
either during the Employment Term or thereafter, divulge to any person, firm or
corporation any information obtained or learned by him during the course of his
employment with the Company, with regard to the operational, financial, business
or other affairs of the Company and its affiliates, and their respective
officers and directors, including, without limitation, trade secrets, customer
lists, sources of supply, pricing policies, operational methods or technical
processes, except (i) in the course of performing his authorized duties
hereunder, (ii) with the Company's express written consent; (iii) to the extent
that any such information is lawfully in the public domain other than as a
result of the Executive's breach of any of his obligations hereunder; or (iv)
where required to be disclosed by court order, subpoena or other government
process. In the event that the Executive shall be required to make any
disclosure pursuant to the provisions of clause (iv) of the preceding sentence,
the Executive promptly, but in no event more than 48 hours after learning of
such subpoena, court order, or other government process, shall notify the
Company, by personal delivery or by fax, confirmed by mail, to the Company and,
if the Company so elects and at the Company's expense, the Executive shall: (a)
take all reasonably necessary steps requested by the Company to defend against
the enforcement of such subpoena, court order or other government process, and
(b) permit the Company to intervene and participate with counsel of its choice
in any proceeding relating to the enforcement thereof.

     4.3 RETURN OF PROPERTY. Upon termination of his employment with the
Company, or at any time the Company may so request, the Executive will promptly
deliver to Company all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the business
of the Company and

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its affiliates and all property associated therewith, which he may then possess
or have under this control.

     4.4 NON-COMPETITION. During the Employment Term and for a period equal to
the time during which Executive receives severance payments for benefits
pursuant to Section 2 of this Agreement or for a period of 12 months in the
event the Executive is terminated without entitlement to severance benefits
herein, the Executive shall not, without the prior written permission of the
Company, in the United States, its territories and possessions, directly or
indirectly, (i) enter into the employ of or render any services to any person,
firm or corporation engaged in any Competitive Business (as defined below); (ii)
engage in any Competitive Business for his own account; (iii) become associated
with or interested in any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent, employee, trustee,
consultant, advisor or in any other relationship or capacity; (iv) employ or
retain, or have or cause any other person or entity to employ or retain, any
person who was employed or retained by the Company or its affiliates while the
Executive was employed by the Company; or (v) solicit, interfere with, or
endeavor to entice away from the Company or its affiliates any of their
customers or sources of supply. However, nothing in this Agreement shall
preclude the Executive from investing his personal assets in the securities of
any Competitive Business if such securities are traded on a national stock
exchange or in the over-the-counter market and if such investment does not
result in his beneficially owning, at any time, more than 4.9% of the
publicly-traded equity securities of such competitor. "Competitive Business"
shall mean any business or enterprise which (a) designs, sells, manufactures,
markets and/or distributes spring or purified water products or still spring or
purified water beverages, or (b) engages in any other business in which Company
or its affiliates is involved at any time during the 12-month period immediately
prior to the termination of the Executive's employment.

     4.5 ENFORCEMENT. If the Executive commits a breach, or threatens to commit
a breach, of any of the provisions of Section 4, the Company shall have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having jurisdiction over the matter, it being acknowledged and
agreed by the Executive that the services being rendered hereunder to the
Company are of a special, unique and extraordinary character and that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or equity.-

     4.6 BLUE PENCILING. If any provision of Section 4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration or area, or all of them, and such provision or provisions shall then be
applicable in such modified form.

5.   REPRESENTATIONS OF EXECUTIVE. The Executive represents and warrants to the
Company that the Executive is not a party to or bound by any agreement,
understanding or restriction that would or may be breached by the Executive's
execution and full

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performance of this Agreement. The Executive expressly undertakes and agrees
that none of his acts or duties hereunder that will violate any obligations he
may have to any prior employer (or will impose on the Company any liability to
any prior employer) and that he has complied with all requirements of notice
applicable to the termination of any prior employment before he commenced his
employment with the Company. The Executive further represents and warrants that
he has delivered to the Company complete copies of all employment agreements,
understanding and restrictions to which he has been subject at any time during
the last five years.

6.   CONSTRUCTION OF THIS AGREEMENT.

     6.1 CHOICE OF LAW. This Agreement is to be construed pursuant to the laws
of the State of Delaware, without regard to the laws affecting choice of law.

     6.2 INVALID AGREEMENT PROVISIONS. Should any provision of this Agreement
become legally unenforceable, no other provision of this Agreement shall be
affected, and this Agreement shall continue as if the Agreement had been
executed absent the unenforceable provision.

     6.3 NO OTHER AGREEMENTS. This Agreement represents the full agreement
between the Company and the Executive with respect to the subject matter hereof
and the Company and the Executive have made no agreements, representations or
warranties relating to the subject matter of this Agreement that are not set
forth herein. This Agreement supersedes any and all other agreements, oral or
written, that may define the employment relationship between the Executive and
the Company. When effective, this Agreement also supersedes any and all
employment agreements between the Executive and Crystal Rock, which is a
signatory to this Agreement solely for the purpose of terminating, as of the
Effective Date, and without liability to any party thereto, any and all such
employment agreements between Crystal Rock and the Executive. Nothing in this
Agreement confers any rights or remedies on any person or entity or than the
parties hereto.

     6.4 NOTICES. All notices provided for in this Agreement shall be in writing
and shall be deemed to be given when delivered personally to the party to
receive the same, when transmitted by electronic means or when mailed first
class, postage prepaid by certified mail, return receipt requested, addressed to
the party to receive the same at the applicable addresses set forth below or
such other address as the party to receive the same shall have specified by
written notice give in the manner provided for in this Section. All notices
shall be deemed to have been given as of the date of personal delivery,
transmittal or mailing thereof.

          If to the Executive: Mr. John B. Baker, c/o Crystal Rock Spring Water
Company, 1050 Buckingham Street, Watertown, Connecticut 06795, with a copy to:
Brian Keeler, Esquire, Bingham Dana LLP, 150 Federal Street, Boston,
Massachusetts 02110.

<PAGE>   12

                                      -12-

          If to the Company: Vermont Pure Holdings, Ltd., Route 66, Catamount
Park, Randolph Center, Vermont 05061, Attention: Chairman of the Board, with a
copy to: Dean Hanley, Esquire, Foley, Hoag & Eliot LLP, One Post Office Square,
Boston, Massachusetts 02109.

     6.5 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Company's successors and assigns.

     6.6 DISPUTES AND CONTROVERSIES. The parties hereto agree that in case of
any dispute, controversy or claim arising out of or relating to this Agreement,
other than pursuant to Sections 4 and 6 hereof, the dispute, controversy or
claim shall be determined by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The place of the
arbitration shall be Boston, Massachusetts. Any arbitration award shall be based
upon and accompanied by a written opinion containing findings of fact and
conclusions of law. The determination of the arbitrator(s) shall be conclusive
and binding on the parties hereto, and any judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction.

     6.7 COUNTERPARTS. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original,
but all of which together will constitute one and the same agreement. In
pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.

     6.8 WAIVERS; AMENDMENTS. No waiver of any breach or default hereunder will
be valid unless in a writing signed by the waiving party. No failure or other
delay by any party exercising any right, power, or privilege hereunder will be
or operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. No amendment or modification of this Agreement will
be valid or binding unless in a writing signed by both the Executive, the
Company and the Operating Company.

<PAGE>   13

                                      -13-

     IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first written above.

COMPANY:                             VP MERGER PARENT, INC.

                                     By: /s/ Timothy G. Fallon
                                        ----------------------------------
                                     Name: Timothy G. Fallon
                                     Title: CEO and President

OPERATING COMPANY:                   VERMONT PURE SPRINGS, INC.

                                     By: /s/ Timothy G. Fallon
                                        ----------------------------------
                                     Name: Timothy G. Fallon
                                     Title: CEO and President

EXECUTIVE:                           /s/ John B. Baker
                                     ---------------------------------------
                                     JOHN B. BAKER

CRYSTAL ROCK:                        CRYSTAL ROCK SPRING WATER COMPANY
                                     (solely for purposes of
                                     Section 6.3 hereof)

                                     By: /s/ Henry E. Baker
                                        ----------------------------------
                                     Name: Henry E. Baker
                                     Title: Chairman<PAGE>   1
                                                                   Exhibit 10.17

                                                                  Execution Copy

                              EMPLOYMENT AGREEMENT

     This EMPLOYMENT AGREEMENT (this "Agreement") dated as of May 5, 2000, is by
and between VP MERGER PARENT, INC. (to be renamed VERMONT PURE HOLDINGS, LTD.
following the "Effective Date," as defined below), a Delaware corporation (the
"Company"), VERMONT PURE SPRINGS, INC., a Delaware corporation that is a direct
or indirect wholly owned subsidiary of the Company (the "Operating Company"),
and HENRY E. BAKER (the "Executive").

     The Company, the Operating Company and the Executive agree as follows:

1.   EMPLOYMENT.

     1.1 GENERAL. The Company shall employ the Executive (either directly or by
employment with the Operating Company), and the Executive accepts employment, as
Chairman Emeritus of the Company, upon the terms and conditions described
herein. The Executive's employment hereunder will commence on the effective date
(the "Effective Date") of the merger between a wholly owned subsidiary of the
Company and Vermont Pure Holdings, Ltd., a publicly traded Delaware corporation
which will become a wholly owned subsidiary of the Company and be renamed
following the Effective Date, pursuant to the Agreement and Plan of Merger and
Contribution (the "Merger Agreement") by and among the Company, such subsidiary,
Crystal Rock Spring Water Company, a Connecticut corporation ("Crystal Rock"),
and the other parties listed therein, dated as of the date hereof, and will
continue for the Employment Term (as defined in Section 2.1 hereof) unless
terminated sooner as herein provided. During the Employment Term, the Executive
shall devote such business time, attention and skills as are reasonably required
to the business and affairs of the Company, and will not undertake any
commitments that would interfere with or impair his performance of his duties
and responsibilities.

     Notwithstanding this Section 1.1 or any other provision of this Agreement,
this Agreement shall not be effective until the Effective Date, and if the
Effective Date does not occur on or before the date set forth in Section 10.1(e)
of the Merger Agreement, this Agreement shall be of no force or effect.

     1.2 DUTIES. The Executive shall at all times render his services at the
direction of the Board of Directors (the "Board of Directors") and the Chief
Executive Officer of the Company, and his principal obligation shall be to make
himself available to consult with and advise the Company on matters within his
areas of expertise for a period of 20 hours per calendar month. The Company may
assign to the Executive such other executive and administrative duties for the
Company or any affiliate of the Company as may be determined by the Board of
Directors, consistent with the Executive's status as Chairman Emeritus. The
Executive agrees to diligently use his best efforts to promote

<PAGE>   2

                                      -2-

and further the reputation and good name of the Company and perform his services
well and faithfully.

2.   TERM AND TERMINATION.

     2.1 TERM. The term of employment by the Company of the Executive pursuant
to this Agreement shall commence on the Effective Date and terminate on the
fifth anniversary of the Effective Date (the "Employment Term"), subject to the
provisions of Section 2.2.

     2.2 EARLY TERMINATION. Notwithstanding anything to the contrary contained
in this Agreement, the Executive's employment may be terminated prior to the end
of the Employment Term only as set forth in this Section.

          2.2.1 Termination Upon Resignation or Death of Executive. The
Executive's employment shall terminate upon the resignation or death of the
Executive. In case of termination pursuant to this Section 2.2.1, the Company
shall pay to the Executive (or, in case of his death, to his estate or his
beneficiary designated in writing), the base salary earned by the Executive
pursuant to Section 3, prorated through the date of resignation or death.

          2.2.2 Termination Upon Disability of Executive. The Executive's
employment shall terminate by reason of the disability of the Executive. For
this purpose, "disability" shall mean the Executive's inability, by reason of
accident, illness or other physical or mental disability (determined in good
faith by the Board of Directors with the advice of a qualified and independent
physician), to perform satisfactorily the duties required by his employment
hereunder for any consecutive period of 120 calendar days. In case of
termination pursuant to this Section 2.2.2, the Executive shall continue to
receive his base salary prorated through the time of such termination, less any
amount the Executive receives during such period from any Company-sponsored or
Company-paid source of insurance, disability compensation or government program.

          2.2.3 Termination Upon Mutual Consent. The Executive's employment may
be terminated by the mutual consent of the Company and the Executive on such
terms as they may agree.

          2.2.4 Termination For Cause. The Executive's employment shall
terminate immediately on notice to the Executive upon a good faith finding of
the Board of Directors that the Executive has (i) willfully or repeatedly failed
in any material respect to perform his duties in accordance with the provisions
of this Agreement following 30 days' prior written notice to the Executive and
failure of the Executive to cure such deficiency, (ii) committed a breach of any
provision of Section 4 hereof, (iii) misappropriated assets or perpetrated fraud
against the Company, (iv) been convicted of a crime which constitutes a felony,
or (v) been engaged in the illegal use of controlled or habit forming
substances. The preceding clauses (i)-(v) shall constitute "Cause" for
termination of the Executive hereunder. In the event of termination for Cause
pursuant to

<PAGE>   3

                                      -3-

this Section 2.2.4, the Company shall pay the Executive his base salary prorated
through the date of termination.

          Notwithstanding any other provision of this Agreement, the Executive
shall not be terminated for Cause unless and until the Executive has had an
opportunity to appear before the Board of Directors to hear and respond to the
allegations of Cause for his termination.

          2.2.5 Termination by Company Without Cause. The Company may terminate
the Executive's employment at any time and for any reason, without Cause, upon
written notice to the Executive.

          In the event of termination pursuant to this Section 2.2.5, the
Company shall pay or provide to the Executive the following termination
benefits: (i) an amount equal to the product of (A) the Executive's annual base
salary as of the termination date, multiplied by (B) a fraction, the numerator
of which shall be the number of months remaining in the Employment Term
("Remaining Months"), and the denominator of which shall be 12, payable over the
Remaining Months, in equal regular monthly installments, less income taxes and
other applicable withholdings, and (ii) the Executive's Fringe Benefits (as
defined below) for the Remaining Months.

          The obligation of the Company to provide "Fringe Benefits" following
any termination that is or is deemed to be without Cause shall mean that the
Executive's participation (including dependent coverage) in the life and health
insurance plans of the Company in effect immediately prior to the termination
shall be continued, or substantially equivalent benefits provided, by the
Company, at a cost to the Executive no greater than his cost at the date of such
termination, for the Remaining Months or such shorter period as may be required
by this Agreement. Notwithstanding the foregoing, if the Company shall be unable
to provide for the continuation of an insurance benefit (such as life insurance)
because such benefit was provided pursuant to an insurance policy that does not
provide for the extension of such insurance benefit following termination of the
employment of the Executive, then the Executive may purchase insurance providing
such insurance benefit and, whether or not the Executive so elects to purchase
insurance, the Company's only obligation with respect to such insurance benefit
shall be to reimburse the Executive for his premium costs, up to a maximum
aggregate amount for all policies of insurance purchased by the Executive
pursuant to this sentence of $12,000 per annum, prorated for partial years. If
the Company is obligated pursuant to the so-called "COBRA" law to offer the
Executive the opportunity for a temporary extension of health coverage
("continuation coverage"), then the Executive shall elect continuation coverage,
and the premium cost of such coverage shall be borne by the Company and the
Executive as provided in the first sentence of this paragraph. Continuation
coverage provided pursuant to COBRA shall terminate in accordance with COBRA. To
the extent that any benefit required to be provided to the Executive by the
Company by reason of an actual or deemed termination for Cause shall be provided
to the Executive by any successor employer, the Company's obligation to provide
that benefit to the Executive shall be correspondingly offset or shall cease, as
the case may be. In no event shall the Company

<PAGE>   4

                                      -4-

have any obligation to provide Fringe Benefits after the expiration of the
Remaining Months or such shorter period as may be required by this Agreement.
The Executive shall not be entitled to any expense allowance, automobile
allowance or relocation allowance following the termination of his employment
for any reason.

          2.2.6 Termination By Executive for Good Reason. The Executive may
terminate his employment at any time for Good Reason (as defined below) upon
written notice to the Company.

          In the event the Executive terminates his employment hereunder for
Good Reason (defined below), then such termination shall be treated as a
termination by the Company without Cause pursuant to Section 2.2.5.

          For purposes of this Agreement, "Good Reason" shall mean any of the
following occurring without the specific prior written consent of the Executive:
(i) requiring the Executive to be permanently based more than 50 miles from his
present office location (excluding business-related travel to an extent
reasonably consistent with past practice); (ii) assignment to the Executive of
duties materially inconsistent with his position as Chairman Emeritus of the
Company; or (iii) any material breach by the Company of its obligations
hereunder, if such breach is not cured following 30 days' written notice from
the Executive.

          2.2.7 Termination By Executive without Good Reason. The Executive may
terminate his employment at any time without Good Reason upon 30 days' written
notice to the Company.

          In the event the Executive terminates his employment hereunder without
Good Reason, then the rights of the Executive to receive future compensation
pursuant to Section 3 hereof, and all other rights of the Executive hereunder,
will cease as of the date of such termination except as may be required by law.

          2.2.8 Termination in Connection with Change of Control. If the
employment of the Executive terminates for any reason, including termination by
the Executive, within 30 days following the occurrence of a "Change of Control"
(as defined in this Section 2.2.8), then the Company shall pay or provide to the
Executive the following termination benefits: (i) an amount equal to the product
of (A) the Executive's annual base salary as of the termination date, multiplied
by (B) a fraction, the numerator of which shall be the lesser of 24 or the
number of Remaining Months, and the denominator of which shall be 12, payable
over the lesser of 24 months or the number of Remaining Months, in equal regular
monthly installments, less income taxes and other applicable withholdings, and
(ii) the Executive's Fringe Benefits (as defined above) for the lesser of 24
months or the number of Remaining Months. A "Change of Control" shall mean a
change in control of the Company (and not any person or entity that hereafter
becomes a successor to all or substantially all of the business or assets of the
Company by reason of a Change of Control) and shall be deemed to have taken
place if: (i) a third person, including a "group" as defined in Section 13(d)(3)
of the Securities

<PAGE>   5

                                      -5-

Exchange Act of 1934, becomes the beneficial owner of shares of the capital
stock of the Company having more than 50% of the total number of votes that may
be cast for the election of directors of the Company, (ii) the sale or other
disposition (excluding mortgage or pledge) of all or substantially all of the
assets of the Company, or (iii) the merger or other business combination of the
Company with or into another corporation or entity pursuant to which the Company
will not survive or will survive only as a subsidiary of another corporation or
entity, in either case with the stockholders of the Company prior to the merger
or other business combination holding less than 50% of the voting shares of the
merged or combined companies or entities after such merger or other business
combination. Notwithstanding the foregoing, the following shall not be deemed to
be a Change of Control for purposes hereof: (i) the transactions contemplated by
the Merger Agreement, (ii) any transaction in which EITHER (x) the Executive,
any "Stockholder" as defined in the Merger Agreement, or any affiliate of any
such Stockholder, is or becomes, either alone or as a member of a "group" as
defined in this Section, OR (y) the Stockholders, together with their affiliates
and considered in the aggregate as a single entity, are or become, the
beneficial owner or owners of shares of the capital stock of the Company having
more than 50% of the total number of votes that may be cast for the election of
directors of the Company, or (iii) any transaction described in SEC Rule
13e-3(a)(3)(i) in which the Executive participates as an "affiliate" of the
Company within the meaning of that Rule, without regard to whether the test in
Rule 13e-3(a)(3)(ii) would be satisfied in the transaction. The rights and
obligations created by this Agreement with respect to a Change of Control shall
apply only with respect to the first Change of Control after the date of
execution of this Agreement, and not with respect to any subsequent transaction.

          2.2.9 No Other Termination Benefits. The Executive understands and
agrees that the termination payments and benefits described in Section 2.2
constitute all of the payments and benefits to which he (or his estate or
beneficiary) will be or become entitled to receive in case of termination of his
employment, and that such payments and benefits are in lieu of any and all other
payments and benefits of every kind or description to which he may be entitled,
including, without limitation, the right to receive a bonus payment or any
portion thereof. Any accrued but unpaid vacation compensation shall be payable
upon termination of employment.

          2.2.10 No Duty to Mitigate; Termination of Benefits. The Executive
shall not be required to mitigate the amount of any compensation payable to him
pursuant to Section 2 hereof, whether by seeking other employment or otherwise,
nor shall any compensation earned by the Executive during the period of
continuance of any payments under Section 2 hereof reduce the amount of
compensation payable under Section 2.

3.   COMPENSATION. During the Employment Term, the Company shall pay, in full
payment for all of the Executive's services rendered hereunder, the following
compensation:

     3.1 BASE SALARY. The Company shall pay the Executive an annual base salary,
less income taxes and other applicable withholdings, of $25,000 in accordance
with the

<PAGE>   6

                                      -6-

Company's standard payroll installments. The Board of Directors will review the
annual base salary amount as soon as practicable after the end of each fiscal
year of Company to consider whether or not it should be increased. Such
determination shall be in the sole discretion of the Board of Directors using
such criteria as they deem relevant, including, but not limited to, the
performance of the Company and the Executive.

     3.2 [Reserved; Intentionally Left Blank.]

     3.3 STOCK OPTIONS. The Executive shall be eligible to receive stock options
from time to time, as determined by the Compensation Committee of the Board of
the Directors of the Company.

     3.4 VACATION. The Executive shall be entitled to four (4) weeks of vacation
in each 12-month period during the Employment Term, with carryover from year to
year of unused vacation time. No more than two (2) weeks may be taken
consecutively.

     3.5 EXECUTIVE BENEFIT PLANS. The Executive shall be entitled to participate
in all plans or programs sponsored by the Company for employees in general,
including without limitation, participation in any group health, medical
reimbursement, or life insurance plans.

     3.6 EXPENSE ALLOWANCE. The Company shall reimburse the Executive for all
reasonable and necessary expenses incurred by him from time to time in the
performance of his duties hereunder, against receipts therefor in accordance
with the then effective policies and requirements of the Company.

     3.7 AUTOMOBILE ALLOWANCE. The Company agrees to provide an allowance of up
to $12,000 per year to reimburse the Executive for the actual cost of leasing
and operating an automobile for use by the Executive during the Executive's
employment with the Company.

     3.8 ELECTION AS A DIRECTOR. Subject only to the fiduciary duties of its
directors, the Company will use its best efforts to nominate and cause the
Executive to be elected as a member of the Board of Directors during the
Employment Term. If the Executive's employment is terminated for any reason,
then such termination shall not in any way affect the Executive's right to be
elected to the Board of Directors as set forth in the preceding sentence so long
as the Executive and the Stockholders (as defined in the Merger Agreement)
and/or their respective affiliates continue to hold in the aggregate at least
40% of the shares of outstanding capital stock of the Company.

4.   PROTECTION OF CONFIDENTIAL INFORMATION; NON-COMPETE

     4.1 ACKNOWLEDGEMENTS. The Executive acknowledges that:

     (a) The Executive has obtained and, during his employment by the Company,
will obtain secret and confidential information concerning the business of the
Company

<PAGE>   7

                                      -7-

and its affiliates, including, without limitation, customer lists and sources of
supply, their needs and requirements, the nature and extent of contracts with
them, and related cost, price and sales information.

     (b) The Company and its affiliates will suffer substantial and irreparable
damage which will be difficult to compute if, during the period of his
employment with the Company or thereafter, the Executive should enter a
competitive business or should divulge secret and confidential information
relating to the business of the Company and its affiliates heretofore or
hereafter acquired by him in the course of his employment with the Company.

     (c) The provisions of this Agreement are reasonable and necessary for the
protection of the business of the Company and its affiliates.

     4.2 CONFIDENTIALITY. The Executive agrees that he will not at any time,
either during the Employment Term or thereafter, divulge to any person, firm or
corporation any information obtained or learned by him during the course of his
employment with the Company, with regard to the operational, financial, business
or other affairs of the Company and its affiliates, and their respective
officers and directors, including, without limitation, trade secrets, customer
lists, sources of supply, pricing policies, operational methods or technical
processes, except (i) in the course of performing his authorized duties
hereunder, (ii) with the Company's express written consent; (iii) to the extent
that any such information is lawfully in the public domain other than as a
result of the Executive's breach of any of his obligations hereunder; or (iv)
where required to be disclosed by court order, subpoena or other government
process. In the event that the Executive shall be required to make any
disclosure pursuant to the provisions of clause (iv) of the preceding sentence,
the Executive promptly, but in no event more than 48 hours after learning of
such subpoena, court order, or other government process, shall notify the
Company, by personal delivery or by fax, confirmed by mail, to the Company and,
if the Company so elects and at the Company's expense, the Executive shall: (a)
take all reasonably necessary steps requested by the Company to defend against
the enforcement of such subpoena, court order or other government process, and
(b) permit the Company to intervene and participate with counsel of its choice
in any proceeding relating to the enforcement thereof.

     4.3 RETURN OF PROPERTY. Upon termination of his employment with the
Company, or at any time the Company may so request, the Executive will promptly
deliver to Company all memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the business
of the Company and its affiliates and all property associated therewith, which
he may then possess or have under this control.

     4.4 NON-COMPETITION. During the Employment Term and for a period equal to
the time during which Executive receives severance payments for benefits
pursuant to Section 2 of this Agreement or for a period of 12 months in the
event the Executive is terminated without entitlement to severance benefits
herein, the Executive shall not,

<PAGE>   8

                                      -8-

without the prior written permission of the Company, in the United States, its
territories and possessions, directly or indirectly, (i) enter into the employ
of or render any services to any person, firm or corporation engaged in any
Competitive Business (as defined below); (ii) engage in any Competitive Business
for his own account; (iii) become associated with or interested in any
Competitive Business as an individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee, consultant, advisor or in any
other relationship or capacity; (iv) employ or retain, or have or cause any
other person or entity to employ or retain, any person who was employed or
retained by the Company or its affiliates while the Executive was employed by
the Company; or (v) solicit, interfere with, or endeavor to entice away from the
Company or its affiliates any of their customers or sources of supply. However,
nothing in this Agreement shall preclude the Executive from investing his
personal assets in the securities of any Competitive Business if such securities
are traded on a national stock exchange or in the over-the-counter market and if
such investment does not result in his beneficially owning, at any time, more
than 4.9% of the publicly-traded equity securities of such competitor.
"Competitive Business" shall mean any business or enterprise which (a) designs,
sells, manufactures, markets and/or distributes spring or purified water
products or still spring or purified water beverages, or (b) engages in any
other business in which Company or its affiliates is involved at any time during
the 12-month period immediately prior to the termination of the Executive's
employment.

     4.5 ENFORCEMENT. If the Executive commits a breach, or threatens to commit
a breach, of any of the provisions of Section 4, the Company shall have the
right and remedy to have the provisions of this Agreement specifically enforced
by any court having jurisdiction over the matter, it being acknowledged and
agreed by the Executive that the services being rendered hereunder to the
Company are of a special, unique and extraordinary character and that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. Such
right and remedy shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or equity.-

     4.6 BLUE PENCILING. If any provision of Section 4 is held to be
unenforceable because of the scope, duration or area of its applicability, the
tribunal making such determination shall have the power to modify such scope,
duration or area, or all of them, and such provision or provisions shall then be
applicable in such modified form.

5.   REPRESENTATIONS OF EXECUTIVE. The Executive represents and warrants to the
Company that the Executive is not a party to or bound by any agreement,
understanding or restriction that would or may be breached by the Executive's
execution and full performance of this Agreement. The Executive expressly
undertakes and agrees that none of his acts or duties hereunder that will
violate any obligations he may have to any prior employer (or will impose on the
Company any liability to any prior employer) and that he has complied with all
requirements of notice applicable to the termination of any prior employment
before he commenced his employment with the Company. The Executive further
represents and warrants that he has delivered to the Company complete

<PAGE>   9

                                      -9-

copies of all employment agreements, understanding and restrictions to which he
has been subject at any time during the last five years.

6.   CONSTRUCTION OF THIS AGREEMENT.

     6.1 CHOICE OF LAW. This Agreement is to be construed pursuant to the laws
of the State of Delaware, without regard to the laws affecting choice of law.

     6.2 INVALID AGREEMENT PROVISIONS. Should any provision of this Agreement
become legally unenforceable, no other provision of this Agreement shall be
affected, and this Agreement shall continue as if the Agreement had been
executed absent the unenforceable provision.

     6.3 NO OTHER AGREEMENTS. This Agreement represents the full agreement
between the Company and the Executive with respect to the subject matter hereof
and the Company and the Executive have made no agreements, representations or
warranties relating to the subject matter of this Agreement that are not set
forth herein. This Agreement supersedes any and all other agreements, oral or
written, that may define the employment relationship between the Executive and
the Company. When effective, this Agreement also supersedes any and all
employment agreements between the Executive and Crystal Rock, which is a
signatory to this Agreement solely for the purpose of terminating, as of the
Effective Date, and without liability to any party thereto, any and all such
employment agreements between Crystal Rock and the Executive. Nothing in this
Agreement confers any rights or remedies on any person or entity or than the
parties hereto.

     6.4 NOTICES. All notices provided for in this Agreement shall be in writing
and shall be deemed to be given when delivered personally to the party to
receive the same, when transmitted by electronic means or when mailed first
class, postage prepaid by certified mail, return receipt requested, addressed to
the party to receive the same at the applicable addresses set forth below or
such other address as the party to receive the same shall have specified by
written notice give in the manner provided for in this Section. All notices
shall be deemed to have been given as of the date of personal delivery,
transmittal or mailing thereof.

     If to the Executive: Mr. Henry E. Baker, c/o Crystal Rock Spring Water
Company, 1050 Buckingham Street, Watertown, Connecticut 06795, with a copy to:
Brian Keeler, Esquire, Bingham Dana LLP, 150 Federal Street, Boston,
Massachusetts 02110.

     If to the Company: Vermont Pure Holdings, Ltd., Route 66, Catamount Park,
Randolph Center, Vermont 05061, Attention: Chairman of the Board, with a copy
to: Dean Hanley, Esquire, Foley, Hoag & Eliot LLP, One Post Office Square,
Boston, Massachusetts 02109.

<PAGE>   10

                                      -10-

     6.5 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the Company's successors and assigns.

     6.6 DISPUTES AND CONTROVERSIES. The parties hereto agree that in case of
any dispute, controversy or claim arising out of or relating to this Agreement,
other than pursuant to Sections 4 and 6 hereof, the dispute, controversy or
claim shall be determined by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. The place of the
arbitration shall be Boston, Massachusetts. Any arbitration award shall be based
upon and accompanied by a written opinion containing findings of fact and
conclusions of law. The determination of the arbitrator(s) shall be conclusive
and binding on the parties hereto, and any judgment upon the award rendered by
the arbitrator(s) may be entered in any court having jurisdiction.

     6.7 COUNTERPARTS. This Agreement may be executed by the parties in separate
counterparts, each of which when so executed and delivered will be an original,
but all of which together will constitute one and the same agreement. In
pleading or proving this Agreement, it will not be necessary to produce or
account for more than one such counterpart.

     6.8 WAIVERS; AMENDMENTS. No waiver of any breach or default hereunder will
be valid unless in a writing signed by the waiving party. No failure or other
delay by any party exercising any right, power, or privilege hereunder will be
or operate as a waiver thereof, nor will any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. No amendment or modification of this Agreement will
be valid or binding unless in a writing signed by both the Executive, the
Company and the Operating Company.

<PAGE>   11

                                      -11-

     IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first written above.

COMPANY:                             VP MERGER PARENT, INC.

                                     By: /s/ Timothy G. Fallon
                                        ------------------------------------
                                     Name: Timothy G. Fallon
                                     Title: CEO and President

OPERATING COMPANY:                   VERMONT PURE SPRINGS, INC.

                                     By: /s/ Timothy G. Fallon
                                        ------------------------------------
                                     Name: Timothy G. Fallon
                                     Title: CEO and President

EXECUTIVE:                           /s/ Henry E. Baker
                                     ------------------------------------
                                     HENRY E. BAKER

CRYSTAL ROCK:                        CRYSTAL ROCK SPRING WATER COMPANY
                                     (solely for purposes of
                                     Section 6.3 hereof)

                                     By: /s/ Peter Baker
                                        ------------------------------------
                                     Name: Peter Baker
                                     Title: Co-President

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