Employment Agreement - Merisant Co. and Arnold W. Donald
AGREEMENT
AGREEMENT dated as of June 1, 2003 between Merisant Company, a
Delaware corporation (the "Company"), and Arnold W. Donald ("Donald").
WHEREAS, the Company is engaged in the business of developing,
manufacturing, marketing, distributing and selling tabletop sweetener products
to consumer end-users and establishments serving or selling such products to
consumer end-users;
WHEREAS, the Company desires to retain Donald to provide services to
the Company as its Chairman, upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereby agree as follows:
1. TERM
The Company hereby retains Donald and Donald hereby agrees to provide
services to the Company upon the terms and subject to the conditions contained
in this Agreement. The term of this Agreement shall commence on June 1, 2003
and, unless earlier terminated pursuant to Section 4, shall end at the close of
business on June 1, 2005 (such period referred to herein as the "Term.")
2. POSITION, SERVICES AND STATUS
(a) POSITION. Donald shall provide services to the Company during the
Term as its Chairman.
(b) SERVICES. During the Term, Donald shall perform such services for
the Company and its subsidiaries as may from time to time be directed by the
Board of Directors of the Company (the "Board").
(c) STATUS. Donald shall provide services to the Company hereunder as
an independent contractor.
3. COMPENSATION
(a) BASE COMPENSATION. During the Term, the Company shall pay to
Donald base compensation at the rate of $150,000 per annum ("Base
Compensation"), payable monthly. Such Base Compensation shall be reviewed
annually, and shall be subject to such annual increases, if any, as determined
by the Board.
(b) OFFICE. During the Term, provided that the Company maintains the
lease on such office, the Company shall provide Donald's existing office for his
use. If the Company does not maintain the lease on Donald's existing office for
the full Term, it shall provide for Donald's use during the remainder of the
Term, another office in the St Louis, Missouri
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metropolitan area acceptable to Donald and determined to be reasonable in the
sole discretion of the board of directors of the Company.
(c) ADMINISTRATIVE ASSISTANT. During the Term, the Company shall
provide for Donald's use the services of the administrative assistant who
provided services to Donald on May 31, 2003, or if the services of such
individual are not available, the services of another administrative assistant
acceptable to Donald.
(e) EXPENSE REIMBURSEMENT. During the Term, the Company shall
reimburse Donald for all reasonable and proper expenses incurred by him in the
performance of services as active Chairman of the Company and for the membership
dues and expenses associated with one country club and one luncheon club.
4. TERMINATION
(a) DEATH. Upon the death of Donald, this Agreement shall
automatically terminate and Donald's estate or his beneficiaries, as the case
may be, shall be entitled to:
(1) accrued Base Compensation through and including Donald's
date of death; and
(2) the compensation, if any, that is or becomes payable in
accordance with the terms and conditions of any stock
option agreements, restricted stock awards and long-term
performance awards.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may, at its
option, terminate this Agreement prior to the end of the Term without Cause
(defined below) upon written notice to Donald. Upon such termination, Donald
shall be entitled to:
(1) the Base Compensation, office, administrative assistant and
expense reimbursements provided in Section 3(a), (b), (c)
and (d) through and including the end of the Term; and
(2) the compensation, if any, that is or becomes payable in
accordance with the terms and conditions of any stock
option agreements, restricted stock awards and long-term
performance awards.
(c) TERMINATION BY THE COMPANY FOR CAUSE.
(1) The Company may, at its option, terminate Donald's services
under this Agreement for Cause (defined below). A
termination for Cause shall not take effect until and
unless the Company complies with this Section 4(c)(1).
Donald shall be given written notice by the Board of the
intention to terminate his services hereunder for
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Cause (the "Cause Notice"). The Cause Notice shall state
the particular action(s) or inaction(s) giving rise to
termination for Cause. Donald shall have 10 days after the
Cause Notice is given to cure the particular action(s) or
inaction(s), to the extent a cure is possible. If Donald so
effects a cure, the Cause Notice shall be deemed rescinded
and of no force or effect.
(2) As used in this Agreement, the term "Cause" shall mean any
one or more of the following:
(i) Donald's refusal to perform his duties under this
Agreement or to perform specific directives of the
Board which are consistent with the scope and nature
of the Donald's duties and responsibilities as set
forth herein;
(ii) Donald's commission of a felony or of any crime
involving moral turpitude, fraud, embezzlement,
theft or misrepresentation;
(iii) any gross negligence or willful misconduct of Donald
resulting in substantial loss to the Company or
substantial damage to the Company's reputation;
(iv) any breach by Donald of any one or more of the
covenants contained in Sections 6 hereof; or
(v) any significant violation of any statutory or common
law duty of loyalty to the Company or any of its
subsidiaries.
(3) The exercise of the right of the Company to terminate
Donald's services pursuant to this Section 4(c) shall not
abrogate the rights or remedies of the Company in respect
of the breach giving rise to such termination.
(4) If the Company terminates Donald's services for Cause, he
shall be entitled to:
(i) accrued Base Compensation through and including the
effective date of Donald's termination of services;
and
(ii) the compensation, if any, that is or becomes payable
in accordance with the terms and conditions of any
stock option agreements, restricted stock awards and
long-term performance awards.
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(c) TERMINATION BY DONALD. Upon 60 days prior written notice to the
Company (or such shorter period as may be permitted by the Board), Donald may
voluntarily terminate his services under this Agreement prior to the end of the
Term for any reason. If Donald voluntarily terminates his services pursuant to
this subsection (c), he shall be entitled to:
(1) accrued Base Compensation through and including the
effective date of Donald's termination of services; and
(2) the compensation, if any, that is or becomes payable in
accordance with the terms and conditions of any stock
option agreements, restricted stock awards and long-term
performance awards.
(d) TAX ON EXCESS PARACHUTE PAYMENTS. If any payment or benefit (the
"Payments") which Donald is entitled to receive from the Company would be
subject to the tax imposed by Code Section 4999 and reduction of the Payments to
the amount necessary to avoid the application of such tax would result in Donald
retaining an amount that is greater than the amount he would retain if the
Payments were made without such reduction but after the application of such tax,
the Payments shall be reduced to the extent required to avoid application of
such tax. Donald shall be entitled to select the Payments to be reduced in
accordance with the preceding sentence. Determination of whether the Payments
would result in the application of the tax under Code Section 4999, and the
amount of the reduction that is necessary so that no such tax is applied, shall
be made by the mutual agreement of the Company and Donald or, in the absence of
such agreement, by a mutually selected independent certified public accounting
firm, retained at the Company's expense.
5. NONCOMPETITION; NONSOLICITATION
(a) Donald acknowledges that in the course of providing services to
the Company pursuant to this Agreement he will become familiar with trade
secrets and customer lists of, and other confidential information concerning,
the Company and its subsidiaries, affiliates and clients and that his services
have been and will be of special, unique and extraordinary value to the Company.
(b) Donald agrees that during the Term and for a period of two years
thereafter (the "Noncompetition Period") he shall not in any manner, directly or
indirectly, through any person, firm, corporation or enterprise, alone or as a
member of a partnership or as an officer, director, stockholder, investor or
employee of or advisor or consultant to any person, firm, corporation or
enterprise or otherwise, engage or be engaged, or assist any other person, firm,
corporation or enterprise in engaging or being engaged, in any business being
conducted by the Company or any of its subsidiaries or affiliates as of the
effective date of Donald's termination of employment in any geographic area in
which the Company or any of its subsidiaries or affiliates is then conducting
such business.
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(c) Donald further agrees that during the Noncompetition Period he
shall not (i) in any manner, directly or indirectly, induce or attempt to induce
any employee of or advisor or consultant to the Company or any of its
subsidiaries or affiliates to terminate or abandon his or her or its employment
or relationship for any purpose whatsoever, or (ii) in connection with any
business to which Section 5(b) applies, call on, service, solicit or otherwise
do business with any customer of the Company or any of its subsidiaries or
affiliates; provided, however, that the restriction contained in clause (i) of
this Section 5(c) shall not apply to, or interfere with, the proper performance
by Donald of services pursuant to Section 2 of this Agreement.
(d) Nothing in this Section 5 shall prohibit Donald from being (i) a
stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than two percent of the outstanding common stock,
capital stock and equity of any firm, corporation or enterprise that engages in
any business being conducted by the Company or any of its subsidiaries or
affiliates as of the effective date of Donald's termination of employment in any
geographic area in which the Company or any of its subsidiaries or affiliates is
then conducting such business so long as Donald has no active participation in
the business of such firm, corporation or enterprise.
(e) If, at any time of enforcement of this Section 5, a court or an
arbitrator holds that the restrictions stated herein are unreasonable under
circumstances then existing, the parties hereto agree that the maximum period,
scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum period,
scope and area permitted by law.
6. ENFORCEMENT
The parties hereto agree that the Company and its subsidiaries or
affiliates would be damaged irreparably in the event that any provision of
Section 5 of this Agreement were not performed in accordance with its terms or
were otherwise breached and that money damages would be an inadequate remedy for
any such nonperformance or breach. Accordingly, the Company and its successors
or assigns shall be entitled, in addition to other rights and remedies existing
in their favor, to an injunction or injunctions to prevent any breach or
threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security). Each of the parties
agrees that he or it will submit himself or itself to the personal jurisdiction
of the courts of the State of Illinois in any action by the other party to
enforce an arbitration award against him or it or to obtain interim injunctive
or other relief pending an arbitration decision.
7. DONALD'S REPRESENTATIONS
Donald represents and warrants to the Company that (a) the execution,
delivery and performance of this Agreement by Donald does not and will not
breach, violate or cause a default under any contract, agreement, instrument,
order, judgment or decree to which Donald is
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a party or by which he is bound, (b) Donald is not a party to or bound by any
employment agreement, noncompetition agreement or confidentiality agreement with
any other person or entity that could prevent him from performing his duties
hereunder, and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of Donald,
enforceable in accordance with its terms, except to the extent enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and by the effect of general
principles of equity (regardless of whether enforceability is considered in a
proceeding in equity or at law).
8. SURVIVAL
Sections 5, 6, 7, 8 and 9 of this Agreement shall survive and continue
in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Term.
9. ALTERNATIVE DISPUTE RESOLUTION
Any dispute or controversy between the Company and Donald, whether
arising out of or relating to this Agreement, the breach of this Agreement, or
otherwise, shall be settled by arbitration administered by the American
Arbitration Association ("AAA") in accordance with its Commercial Rules then in
effect and judgment on the award rendered by the arbitrator may be entered in
any court having jurisdiction thereof. Any arbitration shall be held before a
single arbitrator who shall be selected by the mutual agreement of the Company
and Donald, unless the parties are unable to agree to an arbitrator, in which
case, the arbitrator will be selected under the procedures of the AAA. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of the
Company and Donald. The Company and Donald acknowledge that this Agreement
evidences a transaction involving interstate commerce. Notwithstanding any
choice of law provision included in this Agreement, the United States Federal
Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision. The arbitration proceeding shall be conducted in Chicago,
Illinois or such other location to which the parties may agree.
10. NOTICES
All notices and other communications required or permitted hereunder
shall be in writing and shall be deemed given when (a) delivered personally or
by overnight courier to the following addresses of the other party hereto (or
such other address for such party as shall be
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specified by notice given pursuant to this Section) or (b) sent by facsimile to
the facsimile numbers of the other party hereto specified by notice given
pursuant to this Section, with a confirmatory copy delivered by overnight
courier to the addresses of such party pursuant to this Section:
If to the Company, to:
Luke Kissam
Merisant Company
One North Brentwood Boulevard, Suite 510
Clayton, MO 63105
With a copy to:
David S. Uri
Pegasus Capital Advisors, L.P.
99 River Road
Cos Cob, CT 06807
If to Donald, at his most recent home address and/or facsimile number
on file with the Company.
11. SEVERABILITY
Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of any other provision of this Agreement or the
validity, legality or enforceability of such provision in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
12. ENTIRE AGREEMENT
This Agreement, and the agreements referenced herein, constitute the
entire agreement and understanding between the parties with respect to the
subject matter hereof and supersede and preempt any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related in any manner to the subject matter hereof.
13. SUCCESSORS AND ASSIGNS
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This Agreement shall be enforceable by Donald and his heirs,
executors, administrators and legal representatives, and by the Company and its
successors and assigns. Any successor of the Company shall assume the
liabilities of the Company hereunder.
14. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to
principles of conflict of laws.
15. AMENDMENT AND WAIVER
The provisions of this Agreement may be amended or waived only by the
written agreement of the Company and Donald, and no course of conduct or failure
or delay in enforcing the provisions of this Agreement shall affect the
validity, binding effect or enforceability of this Agreement.
16. BENEFICIARIES/REFERENCES
Donald shall be entitled, to the fullest extent permitted by law, to
select and to change a beneficiary or beneficiaries to receive any compensation
or benefit hereunder following Donald's death, by giving written notice to the
Company. In the event of Donald's death or a judicial determination of his
incompetence, references in this Agreement to Donald shall be deemed, where
appropriate, to refer to his beneficiary, estate or other legal representative.
17. HEADINGS
The headings of the Sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
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18. COUNTERPARTS
This Agreement may be executed in two counterparts, each of which
shall be deemed to be an original and both of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
MERISANT COMPANY
By: /s/ Luther C. Kissam IV
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Name: Luther C. Kissam IV
Title: VP, Secretary & General Counsel
/s/ Arnold W. Donald
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Arnold W. Donald
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