GREAT BRANDS OF EUROPE, INC.
November 2, 1998
Xxxxxxx Xxxxx
Aqua Penn Spring Water Company, Inc.
Xxx Xxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
CONSULTING AGREEMENT
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Dear Xx. Xxxxx:
This is to confirm our desire to engage in a continuing consulting
relationship with you following the closing of the pending acquisition (the
"TRANSACTION") of Aqua Penn Spring Water Company, Inc., a Pennsylvania
corporation ("AQUAPENN"), by Groupe Danone, a company incorporated under the law
of the Republic of France, and the parent company of Great Brands of Europe,
Inc. (the "COMPANY"). The following sets forth the agreement between the
Company and you regarding the terms of your consulting arrangement with the
Company (the "AGREEMENT").
1. TERM. The term of your consulting arrangement with the Company
pursuant to this Agreement (the "TERM") shall commence on the Closing Date of
the Transaction (as such term is defined in the Agreement and Plan of Merger
dated November 2, 1998 (the "EFFECTIVE DATE") and shall end on the first
anniversary of the Effective Date; PROVIDED that the Term shall automatically
renew for one additional one-year period on the first anniversary of the
Effective Date unless you or the Company give the other party written notice of
the intent not to so extend the Term for an additional year at least ninety days
prior to the first anniversary of the Effective Date.
2. RESPONSIBILITIES. During the Term, you shall provide such
consulting services as the Company reasonably requests with regard to assisting
in the transitions that the Transaction will precipitate, identifying additional
key accounts and developing strategies for securing such additional key
accounts. You will report to the Director of National Accounts of the Company,
or his designee.
3. CONSULTING FEE AND BONUSES. (a) During the Term as compensation
to you for all services rendered to the Company, the Company will pay you a
consulting fee (the
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"CONSULTING FEE") of $250,000 per annum, payable in equal installments no less
frequently than monthly.
(b) In the event that on or before the end of the sixth month after
the Effective Date (the "BONUS PERIOD"), the volume of your current account base
in the existing format (which includes value, convenience and jug) increases
sufficiently so as to equal the water category growth rate as measured based on
the most current available syndicated data, the Company shall pay you a bonus of
$50,000 in a lump sum cash payment as soon as practicable after the Bonus Period
(but in no event prior to July 31, 1999.
(c) As soon as practicable after the Effective Date, you and the
Company shall, in good faith, approve in writing a categorized list of potential
new key accounts (the "NEW KEY ACCOUNTS"). In addition, you and the Company
shall, in good faith, mutually agree upon a bonus formula or determination
method (the "BONUS FORMULA") which will measure your success in securing New Key
Accounts for the Company during the period prior to the first anniversary of the
Effective Date. The approval of the New Key Accounts and agreement with respect
to the formula or determination method may not be unreasonably withheld by
either party. As soon as practicable after the first anniversary of the
Effective Date, the Company shall pay you an additional bonus of up to $50,000
based on the application of the Bonus Formula to the one-year period following
the Effective Date.
(d) Your entitlement to either of the bonuses set forth in Sections
3(b) and 3(c) above shall be determined in the discretion of the Company based
on a fair evaluation of the factors upon which such bonuses are based. The
decision of the Company shall be final and binding on the parties hereto.
4. EXPENSES. The Company shall pay or reimburse you for the
reasonable expenses incurred by you in connection with the performance of your
consulting obligations to the Company, subject to your delivery to the Company
of appropriate documentation of such expenses.
5. TERMINATION OF CONSULTING ARRANGEMENT. Subject to the provisions
of this Agreement, each of you and the Company shall have the right to terminate
the consulting arrangement, for any reason or for no stated reason.
(a) TERMINATION GENERALLY. In the event of the termination of the
consulting arrangement for any reason during the Term, the Company shall pay you
the full amount of the accrued but unpaid Consulting Fee you have earned and
unreimbursed business expenses you have incurred through the Date of Termination
(the "ACCRUED AMOUNTS"). The Accrued Amounts shall be paid to you in a lump sum
cash payment as soon as practicable following the Date of Termination (but in no
event later than thirty days following such date). "DATE OF TERMINATION"
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shall mean either (i) the date on which the consulting arrangement set forth
hereunder is terminated either by you, by the Company or by mutual agreement of
both parties hereto or (ii) if the consulting arrangement continues until the
end of the Term, the last day of the Term.
(b) TERMINATION BY MUTUAL AGREEMENT; TERMINATION BY THE COMPANY. In
addition to the Accrued Amounts, in the event that the Consulting Arrangement is
terminated either by the Company or by mutual agreement of the parties prior to
the first anniversary of the Effective Date, as liquidated damages, the Company
shall pay you a lump sum amount equal to the portion of the Consulting Fee that
you would have received for the period beginning on the Date of Termination and
ending on the first anniversary of the Effective Date.
(c) NO OTHER PAYMENTS. On the Date of Termination, other than the
payments expressly provided for in this Section 5, all obligations of the
Company to you shall cease.
6. PROTECTIVE AND RESTRICTIVE COVENANTS.
(a) RESTRICTIONS ON COMPETITIVE ENGAGEMENTS. Beginning on the
Effective Date and continuing until the first anniversary of the Date of
Termination, you will not, directly or indirectly, as a sole proprietor, member
of a partnership, stockholder or investor (other than a stockholder or investor
owning not more than a 1% interest of a publicly traded company), officer or
director of a corporation, or as an employee, associate, consultant or agent of
any person, partnership, corporation or other business organization or entity,
other than the Company or any parent or subsidiary of the Company (together, the
"COMPANY GROUP"), render any service to or in any way be affiliated with a
competitor (or any person or entity that is reasonably anticipated to become a
competitor) of the Company Group.
(b) NON-SOLICITATION. Beginning on the Effective Date and continuing
until the second anniversary of the Date of Termination, you shall not, directly
or indirectly, without the prior written consent of the Company:
(i) solicit business from, entice away from, accept orders involving
or otherwise interfere with the relationships of the Company Group with any
client or prospective client (including any person or entity who, during
the most recent twelve months, was a client of any member of the Company
Group); or
(ii) solicit the services of any individual who is employed by any
member of the Company Group (or who was employed by any member of the
Company Group during the then most recent twelve-month period) or who is
retained by any member of the Company Group as an independent contractor
or consultant (or who was retained by any member of the Company Group in
such capacity in the most recent twelve-month period), or take any action
that results, or might reasonably result, in any employee,
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independent contractor or consultant ceasing to perform services for any
member of the Company Group.
(c) NON-DISCLOSURE. You shall not at any time during the Term or
thereafter in perpetuity, directly or indirectly, other than in the performance
of your duties on behalf of the Company or with the prior written consent of the
Company:
(i) disclose any confidential or other proprietary information
pertaining to the client accounts of the Company Group, including, but not
limited to, contracts, client lists, systems, procedures, manuals,
confidential reports and financial information concerning the Company
Group's services, products or businesses;
(ii) use any confidential or other proprietary information
pertaining to the clients of any member of the Company Group (including,
but not limited to, client lists, client contacts, client profiles and
statistical or demographic analysis of any member of the Company Group's
clients) in order to contact, solicit, accept or refer business from, or
otherwise do business or deal with, any client of any member of the Company
Group (including any person or entity who, during the most recent twelve
months, was a client of any member of the Company Group) in connection with
the provision of any product or service similar to any provided by the
Company Group; or
(iii) disclose the terms of this Agreement, other than to your
legal, financial or tax advisors or as necessary to enforce the terms of
this Agreement or as otherwise required by law.
(d) RETURN OF COMPANY PROPERTY. Upon the termination of the
consulting arrangement, you shall immediately return to the Company all property
and material in your possession that belongs or relates to the Company (the
"COMPANY PROPERTY") unless the Company expressly agrees in writing that you may
retain possession of any such property or material. Company Property shall
include all originals and copies of files, writings, reports, memoranda,
diaries, notebooks, notes of meetings or presentations, data, computer tapes or
diskettes, drawings, charts, photographs, slides, patents, or an other form of
record which contains information created or produced for or at the direction of
any member of the Company Group, or any employee or agent thereof. All Company
Property shall be returned undamaged and intact.
(e) APPLICATION OF COVENANTS. The activities described in this
Section 6 shall be prohibited regardless of whether undertaken by you in an
individual or representative capacity, and regardless of whether performed for
your own account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company).
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(f) INJUNCTIVE RELIEF. Without limiting the remedies available to
the Company, you acknowledge that a breach of any of the covenants contained in
this Section 6 may result in material irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach or threat thereof, the Company shall be entitled to obtain a temporary
restraining order or a preliminary or permanent injunction restraining you from
engaging in activities prohibited by this Section 6 or such other relief as may
be required to specifically enforce any of the covenants in this Section 6.
(g) VIOLATION AND REMEDY. If the Company reasonably determines
that you have breached any of the provisions of this Section 6, in addition to
any other remedies available to the Company in law or equity, the Company shall
be entitled to immediately suspend as of the date of such breach the provision
to you of any payments or benefits under this Agreement.
(h) THIRD-PARTY BENEFICIARY. The parties hereto acknowledge and
agree that the subsidiary and parent companies of the Company are third-party
beneficiaries to the terms of this Section 6 and may enforce the terms of this
Agreement as they pertain to Section 6 to the full extent permitted by law and
equity.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, if to the Company,
to its offices at Groupe Danone, 0, xxx xx Xxxxxxx, 00000 Xxxxx Xxxxx 00 Xxxxxx,
and if to you at your last address of record, or to such other address as any
party may have furnished to the other parties hereto in writing in accordance
herewith, except that notice of change of address shall be effective only upon
receipt.
8. BINDING ARBITRATION. Except for the relief provided for in
Section 6(f), any controversy or claim arising out of or relating to this
Agreement, whether arising under federal, state, or local law and whether in
contract or in tort and including any discrimination or common law claims, shall
be settled by arbitration under the auspices of the American Arbitration
Association ("AAA") in New York, New York. The dispute shall be submitted to a
single arbitrator to be mutually agreed upon by the parties. If the parties
cannot agree on a single arbitrator, each party shall appoint one arbitrator who
shall then jointly appoint a single arbitrator. The arbitrator shall give
effect to applicable statutes of limitations. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator. Judgment
upon the arbitration award may be entered in any court having jurisdiction. The
prevailing party in any arbitration proceeding, as determined by the arbitrator,
or in any proceeding with respect thereto as determined by the person presiding,
shall be entitled to receive from the non-prevailing party reasonable attorneys'
fees and costs incurred by such prevailing party in connection
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therewith. In the event that there is no prevailing party, reasonable
attorneys' fees and costs incurred by the parties shall be allocated between
them by the arbitrator.
9. MISCELLANEOUS.
(a) AMENDMENTS, WAIVERS, ETC. No provision of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing by both parties hereto. No waiver by any party hereto
at any time of any breach by the other party hereto of, or of compliance with,
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by any party which are not expressly set forth in this Agreement
and this Agreement shall supersede all prior agreements, negotiations,
correspondence, undertakings and communications of the parties, oral or written,
with respect to the subject matter hereof and shall supercede all prior
agreements, negotiations, correspondence, undertakings and communications, oral
or written, with respect to your employment and/or consulting arrangement with
AquaPenn prior to the Effective Date.
(b) VALIDITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect. The
parties intend that any offending provision shall be enforced to the fullest
extent to which it is enforceable, that any unenforceable portion thereof be
severed from this Agreement, and that this Agreement, as modified to sever any
such unenforceable portion, will be enforced to the fullest extent permitted by
law.
(c) COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(d) INDEPENDENT CONTRACTOR STATUS. The parties hereto acknowledge
and agree that you will be an independent contractor and not an employee of the
Company and that the amounts paid to you hereunder are not subject to federal,
state or local tax withholdings. You will be responsible for all taxes incurred
by you as a result of the consulting arrangement.
(e) HEADINGS. The headings contained in this Agreement are
intended solely for convenience of reference and shall not affect the rights of
the parties to this Agreement.
(f) GOVERNING LAW. The validity, interpretation, construction,
and performance of this Agreement shall be governed by the laws of the State of
New York applicable to contracts entered into and performed in such State
without regard to the choice of law provisions thereof.
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If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter, which
will then constitute our agreement on this subject.
Sincerely,
GREAT BRANDS OF EUROPE, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Chief Executive Officer
UNDERSTOOD, ACCEPTED
AND AGREED:
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
