Document:

Exhibit 10.1

 

DISTRIBUTION
AGREEMENT

 

dated
as of

 

February 14,
2006

 

between

 

MERISANT
US, INC.

 

and

 

ACH
FOOD COMPANIES, INC.

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE I – DEFINITIONS AND CONSTRUCTION

  	
  1

  
	
  1.1

  	
  Defined Terms

  	
  1

  
	
  1.2

  	
  Construction

  	
  4

  
	
  1.3

  	
  Schedules

  	
  4

  
	
  1.4

  	
  Effectiveness

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE II – DISTRIBUTION SERVICES

  	
  4

  
	
  2.1

  	
  Exclusive Distributor

  	
  4

  
	
  2.2

  	
  Distribution Services

  	
  5

  
	
  2.3

  	
  Marketing and Trade Fund Management.

  	
  5

  
	
  2.4

  	
  Inventory.

  	
  7

  
	
  2.5

  	
  Reporting; Other Information.

  	
  8

  
	
  2.6

  	
  Designated Personnel; Offices.

  	
  8

  
	
  2.7

  	
  No Other Warranties; Products Complaints

  	
  9

  
	
  2.8

  	
  Recall.

  	
  9

  
	
  2.9

  	
  Returned Goods Policy

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE III – PRICING AND TERMS

  	
  10

  
	
  3.1

  	
  Prices

  	
  10

  
	
  3.2

  	
  Invoices

  	
  10

  
	
  3.3

  	
  Commissions.

  	
  11

  
	
  3.4

  	
  Freight And Distribution Costs

  	
  11

  
	
  3.5

  	
  Tax

  	
  11

  
	
  3.6

  	
  Title; Risk Of Loss

  	
  12

  
	
  3.7

  	
  Credit Risk

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV - WARRANTIES

  	
  12

  
	
  4.1

  	
  Warranties.

  	
  12

  
	
  4.2

  	
  Consequential Damages Waiver

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE V - TRADEMARKS AND TRADE NAMES

  	
  13

  
	
  5.1

  	
  Trademarks

  	
  13

  
	
  5.2

  	
  Use

  	
  13

  
	
  5.3

  	
  Notification

  	
  13

  
	
  5.4

  	
  Actions

  	
  14

  
	
  5.5

  	
  Similar Marks

  	
  14

  
	
  5.6

  	
  Literature

  	
  14

  
	
  5.7

  	
  Effect of Termination

  	
  14

  
	
  5.8

  	
  Packaging

  	
  14

  
	
  5.9

  	
  Right of First Refusal on Certain Branded Products

  	
  14

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI - COMPLIANCE WITH APPLICABLE LAW

  	
  15

  

 

i

 

	
  ARTICLE VII - INDEMNIFICATION

  	
  15

  
	
  7.1

  	
  ACH

  	
  15

  
	
  7.2

  	
  Merisant

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII – DISPUTE RESOLUTION

  	
  15

  
	
  8.1

  	
  Negotiation

  	
  15

  
	
  8.2

  	
  Mediation

  	
  16

  
	
  8.3

  	
  Arbitration

  	
  16

  
	
  8.4

  	
  Final and Binding Arbitration Before American Arbitration Association

  	
  16

  
	
  8.5

  	
  Number of Arbitrators

  	
  16

  
	
  8.6

  	
  Selection and Qualifications of Arbitrators

  	
  16

  
	
  8.7

  	
  Consolidation

  	
  17

  
	
  8.8

  	
  Interim Measures

  	
  17

  
	
  8.9

  	
  Place of Arbitration

  	
  17

  
	
  8.10

  	
  Confidentiality

  	
  17

  
	
  8.11

  	
  Discovery

  	
  17

  
	
  8.12

  	
  Entry of Judgment

  	
  18

  
	
  8.13

  	
  Cost and Attorney’ Fees

  	
  18

  
	
  8.14

  	
  Punitive Damages

  	
  18

  
	
  8.15

  	
  No Appeal

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX – DURATION AND TERMINATION

  	
  18

  
	
  9.1

  	
  Term

  	
  18

  
	
  9.2

  	
  Termination Without Cause

  	
  18

  
	
  9.3

  	
  Termination With Cause

  	
  19

  
	
  9.4

  	
  Continuing Rights

  	
  19

  
	
  9.5

  	
  Repurchase Of Inventory

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE X - CONFIDENTIALITY

  	
  19

  
	
  10.1

  	
  Confidentiality

  	
  19

  
	
  10.2

  	
  Disclosure Required by Law

  	
  20

  
	
  10.3

  	
  Return of Confidential Information

  	
  20

  
	
  10.4

  	
  Remedies

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI - MISCELLANEOUS

  	
  20

  
	
  11.1

  	
  Relationship of the Parties

  	
  20

  
	
  11.2

  	
  Governing Law

  	
  21

  
	
  11.3

  	
  Notices

  	
  21

  
	
  11.4

  	
  Assignment; Binding Effect; Third Party Beneficiaries

  	
  22

  
	
  11.5

  	
  Force Majeure

  	
  22

  
	
  11.6

  	
  Entire Agreement

  	
  22

  
	
  11.7

  	
  Extensions; Waivers.

  	
  22

  
	
  11.8

  	
  Severability

  	
  23

  
	
  11.9

  	
  Headings

  	
  23

  
	
  11.10

  	
  Counterparts

  	
  23

  

 

ii

 

SCHEDULES

 

SCHEDULE 2.3.1
- 2006 TRADE PROMOTION PROGRAM

SCHEDULE 2.3.2
- EXECUTIVE COUNCIL

SCHEDULE 2.9
- RETURN GOODS POLICY

SCHEDULE 3.1 - SELLING PRICES

SCHEDULE 3.3.1 - RETAIL COMMISSIONS

SCHEDULE 3.3.2 - FOODSERVICE COMMISSIONS

SCHEDULE 3.4 - FREIGHT AND DISTIRBUTION
COSTS

 

iii

 

DISTRIBUTION
AGREEMENT

 

This
DISTRIBUTION AGREEMENT (this “Agreement”)
is made and entered into as of this 14th day of February, 2006, by
and between Merisant US, Inc., a Delaware corporation, having offices at
10 South Riverside Plaza, Suite 850, Chicago, Illinois 60606 (“Merisant”), and ACH Food Companies, Inc.,
a Delaware corporation, having its offices at 7171 Goodlett Farms Parkway,
Memphis, Tennessee 38016 (“ACH”).

 

WHEREAS, Merisant and its affiliates
manufacture and market Equal® and
other branded low calorie sweeteners in the United States; and

 

WHEREAS, ACH is a leading distributor of
edible consumer products through retail grocery and foodservice channels in
North America; and

 

WHEREAS, Merisant desires to engage ACH, and
ACH desires to act, as the exclusive distributor of products used primarily to
sweeten beverages that are marketed and sold by Merisant in the United States,
as more fully set forth in this Agreement.

 

NOW, THEREFORE, for and in consideration of
the mutual promises set forth herein and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereby
agree as follows:

 

ARTICLE I

DEFINITIONS
AND CONSTRUCTION

 

1.1                                 Defined
Terms.  The following capitalized terms
shall have the meanings ascribed to them below:

 

“Commissions”
has the meaning set forth in Section 3.3(b).

 

“Confidential
Information” means all oral and written information concerning
Disclosing Party’s business and data of any type whatsoever, in any tangible or
intangible form, which is hereafter or has been prior to the date hereof
provided to Recipient or any of its Representatives by Disclosing Party,
Disclosing Party’s Representatives, or a third party at the direction of
Disclosing Party or which is or has been developed, compiled or prepared by
Recipient based on such information; provided, however, that the term “Confidential
Information” will not include: (i) information that the Recipient can
establish, by documentary evidence, is now, or subsequently becomes, publicly
available, other than as the result of an unauthorized disclosure by Recipient
or any of its Representatives; (ii) information that the Recipient can
establish, by documentary evidence, was known to Recipient and was in Recipient’s
possession, without any obligation to keep such information confidential, prior
to disclosure by Disclosing Party; (iii) information that Recipient
receives from a third party having legitimate possession of such information
and who is not under any obligation to keep such information confidential; and (iv) information
that the Recipient can establish, by documentary

 

 

evidence, is developed by the Recipient independently of the disclosure
made by the Disclosing Party.  Any
information disclosed by one party to the other party or its Representatives
pursuant to the Confidentiality Agreement, dated April 21, 2005, by and
between Merisant Company and ACH shall be deemed Confidential Information under
this Agreement, except as provided in clauses (i) through (iv) above.

 

“Disclosing
Party” means a party to this Agreement or Representative of such
party that discloses Confidential Information.

 

“Distribution
Channels” means the Retail Channel and the Foodservice Channel.

 

“Effective
Date” means, except as the parties may otherwise agree, the later of
the date on which the Heinz Agreements terminate in accordance with their terms
or that date which is 60 days after the date on which Merisant has provided to
ACH all the information necessary for ACH to prepare to render the distribution
services hereunder.  The Effective Date
shall be confirmed in writing by the parties.

 

“Executive
Council” has the meaning set forth in Section 2.3(b).

 

“Foodservice
Channel” means (i) all restaurants, bakeries and other businesses
at which prepared food or beverages are sold for consumption on or off such
premises; (ii) food service departments of, or third-party contractors
that provide food services to, hospitals, prisons, military installations,
schools, colleges, and other group feeding facilities; and (iii) businesses
that use the Products as ingredients in the preparation of food products.  For avoidance of doubt, Foodservice Channel
shall not include office coffee service and vending machine providers.

 

“Foodservice
Commissions” has the meaning set forth in Section 3.3(b).

 

“Freight
and Distribution Costs” has the meaning set forth in Section 3.4.

 

“Heinz
Agreements” means the Amended and Restated Retail Distribution
Agreement, dated May 17, 2001, by and between the Company and Heinz North
America, a division of H.J. Heinz Company, as such agreement has been amended
or supplemented from time to time, and the Amended and Restated Foodservice
Distribution Agreement, dated May 17, 2001, by and between the Company and
Heinz North America, a division of H.J. Heinz Company, as such agreement has
been amended or supplemented from time to time.

 

“Heinz Inventory” has the meaning set forth
in Section 2.4(b).

 

“Invoice Price” has the meaning set forth in Section 3.1.

 

“Minimum Fill Rate” has the meaning set
forth in Section 2.4(a).

 

“Minimum Foodservice Commission” has the
meaning set forth in Section 3.3(b).

 

2

 

“Minimum Retail Commission” has the meaning
set forth in Section 3.3(a)

 

“Net Price” means the Selling Price of a
Product minus any discounts, trade marketing spending, returns, allowances and
credits offered by ACH or its brokers or other agents to customers that
purchase such Product.

 

“Products”
means all products used primarily to sweeten beverages marketed and sold by
Merisant in the Territory during the term of this Agreement through the
Distribution Channels and any sweetened product that the parties agree will
become a “Product” for purposes of this Agreement.  The term “Products” shall not include (i) Canderel® branded chocolates, (ii) co-branded
sweetener products used primarily to sweeten beverages that bear both a
Trademark and a trademark designated in writing by Merisant on the date hereof
that is packaged in a sugar stick format, (iii) ”private label” products
that are manufactured by Merisant for third parties, and (iv) products
that are manufactured and distributed by or for third parties and that bear any
trademark other than a Trademark.

 

“Recipient”
means a party to this Agreement or Representative of such party that receives
Confidential Information from the Disclosing Party.

 

“Representatives”
means the employees, agents, and consultants of a Disclosing Party or a
Recipient, including its legal and accounting representatives.

 

“Retail
Channel” means all retail grocery stores (including limited
selection stores, military post exchanges, and alternative retail grocery
stores commonly known as health or natural food stores) and drugstores.   For avoidance of doubt, the Retail Channel
does not include distribution to any club, mass merchandisers, dollar stores or
convenience store class of outlet, including without limitation Sam’s Club, BJ
Wholesale Club and Costco.

 

“Retail
Commissions” has the meaning set forth in Section 3.3(a).

 

“Selling
Price” has the meaning set forth in Section 3.1.

 

“SKU” means
a stock keeping unit, or a separate, individual inventory item differentiated
by style, color, size or other characteristic.

 

“Territory” means the States of the United
States of America, the District of Columbia, and any territory that becomes a
State of the United States of America, subject in the latter case only to any
agreement with Merisant or any company controlled by or under direct or
indirect common control with Merisant that is in effect prior to such territory
becoming a State.

 

“Trademark” has the meaning set forth in Section 5.1.

 

3

 

1.2                                 Construction.  The parties have participated jointly in the
negotiation and drafting of this Agreement. 
If any ambiguity or question of intent or intent arises, this Agreement
will be construed as if drafted jointly by the parties and no presumption or
burden of proof will arise favoring or disfavoring any party because of the
authorship of any provision of this Agreement.  
Any reference to any federal, state or local law will be deemed also to
refer to law as amended and rules and regulations promulgated thereunder,
unless the context requires otherwise. 
Unless the context requires otherwise, references to the plural include
the singular; references to the singular include the plural; the words “include,”
“includes,” and “including” will be deemed to be followed by the phrase “without
limitation” and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or”.   Each reference to “this Agreement”, “hereof”,
“hereunder”, “herein” and “hereby” and each other similar reference contained
in this Agreement shall refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited.  The parties intend that each representation,
warranty and covenant contained herein will have independent significance.  If any party has breached any representation,
warranty or covenant contained herein in any respect, the fact that there
exists another representation, warranty or covenant relating to the same
subject matter (regardless of the relative levels of specificity) which the
party has not breached will not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant.

 

1.3                                 Schedules.  The Schedules and other attachments
identified in this Agreement are incorporated herein by reference and are made
a part hereof.

 

1.4                                 Effectiveness.  This Agreement shall be legally binding upon
the parties hereto upon its execution and delivery by both parties, but this
Agreement shall not be deemed effective and operative until the Effective Date.

 

ARTICLE II

DISTRIBUTION
SERVICES

 

2.1                                 Exclusive
Distributor.

 

(a)                                  As of the Effective
Date and subject to the terms and conditions contained herein, Merisant
appoints ACH, and ACH accepts its appointment, as the exclusive distributor of
the Products through the Distribution Channels in the Territory.  Nothing contained in this Agreement shall be
construed to limit or restrict Merisant’s right, in its sole discretion, to
discontinue the manufacture, sale or distribution of any Product at any time,
subject, however, to Merisant’s obligation to repurchase from ACH its entire
inventory of such Product then on hand at the Invoice Price therefor as
provided herein.

 

(b)                                 During
the term of this Agreement, ACH shall not directly or indirectly manufacture,
distribute or sell, or assist any other entity to manufacture, distribute or
sell, in the Territory, including without limitation through any
sub-distributor, sales agent or broker, any products that directly compete with
the Products other than the Products or products that ACH acquired or distributed
prior to the date hereof; provided that ACH

 

4

 

shall not be
precluded from acquiring any business that has existing products (other than
branded sweeteners used primarily to sweeten beverages) that are identified as
being sweetened with any branded sweetener that competes directly with any
Product nor shall ACH be precluded from participating in joint promotional
activities with third party brands as long as the products involved are not
high intensity sweetener products or low-calorie, all natural sweetener
products.

 

(c)                                  Merisant will not be
liable to ACH for any third-party sales of the Products or other activities
within the Territory which have not been authorized by Merisant; provided,
however, that Merisant will not sell the Products to any entity it
knows, or has reason to know, intends, directly or indirectly, to distribute or
sell the Products in the Territory or to anyone else intending to do the same;
and provided further that if any such sales of Products are made in the
Territory, Merisant shall take commercially reasonable efforts to halt such
sales.

 

2.2                                 Distribution
Services.  ACH shall provide the
following services under this Agreement:

 

 (a)                               ACH
shall use commercially reasonable efforts to (i) distribute and sell the
Products in the Territory, (ii) extend the distribution and sale of the
Products in the Territory so as to maximize such distribution, and (iii) meet
or exceed the volume sales targets agreed to by the parties.

 

(b)                                 ACH shall be
responsible for invoicing and receivables collection for all Products sold to
customers by ACH under this Agreement.

 

(c)                                  ACH shall maintain a
sales management team and trained personnel adequate for the needs of the
Territory, maintaining such office, warehouse and distribution facilities
(either directly or through third parties) as shall be reasonably necessary for
such purposes.  ACH shall provide or
direct all sales activities in the Retail Channel, including headquarter calls
and regional sales execution through ACH’s broker network.  In addition, ACH shall provide or direct all
sales activities for the Foodservice Channel through its distribution and
national account sales team, including through ACH’s broker network.

 

(d)                                 In the event that a
customer for the Products requests a service that is outside the scope of this
Agreement, the parties agree to use their commercially reasonable efforts to
reach a mutually acceptable solution that is in the mutual best interests of
the parties.

 

2.3                                 Marketing
and Trade Fund Management.

 

(a)                                  Schedule 2.3.1
sets forth the trade promotion program for the calendar year ended December 31,
2006.  Merisant agrees that it shall establish
and provide to ACH its recommended trade promotion plan for the next calendar
year based on a schedule provided by ACH to Merisant.  Merisant understands that it is ACH’s intent
to

 

5

 

have in place all key parameters of
the next-year’s plan at least six months in advance, unless certain customer
requirements dictate that those parameters must be in place earlier.  In such case, ACH shall provide reasonable
notice to Merisant of the date on which such information will be required, and
Merisant shall use its commercially reasonable efforts to provide such
information as ACH requests on the time schedule established by ACH.  Each such trade promotion program shall
establish a budget for trade marketing and promotional allowances to be funded
by Merisant and provided to customers of the Products in the Retail Channel and
Foodservice Channel.  If the parties are
unable to agree upon a trade promotion program with respect to the Retail
Channel or Foodservice Channel for a year during the term of the Agreement, the
parties shall continue to implement the trade promotion program then in effect
for such Distribution Channel to the extent applicable until the parties agree
upon a new trade promotion program.  ACH
shall negotiate specific trade programs with customers; provided that such
trade programs are consistent with the overall trade promotion program then in
effect.

 

(b)                                 The
parties agree to establish an executive council, composed of two
representatives each, the initial members of which are listed on Schedule 2.3.2
(the “Executive Council”).  Such Executive Council and other appropriate
personnel shall meet in person or by teleconference at least once per calendar
quarter to guide marketing planning and execution and to review trade plans and
execution.

 

(c)                                  ACH
shall provide Merisant with the reasonable opportunity upon advance request by
Merisant to participate in the following ACH meetings: (i) ACH national
sales meetings, (ii) annual sales planning meetings with customers of the
Products, and (iii) quarterly business review meetings with customers of
the Products. Merisant’s field
representatives shall be afforded a reasonable opportunity to participate in
scheduled sales calls to customers of the Products as reasonably requested from
time to time by Merisant.  Merisant shall
be permitted to participate in primary customer planning and execution against
the plan for business development with respect to the distribution of Products
to the top 15 customers in each Distribution Channel.

 

(d)                                 Within forty-five (45)
days after the date of this Agreement, the parties shall use their good faith
efforts to agree upon the methodology by which ACH shall track and
Merisant shall fund trade spending pursuant to this Agreement.  All trade marketing and promotional expenses
and allowances less the rate for applicable Commissions that are incurred by
ACH shall be invoiced to Merisant in the ACH accounting period immediately
following such activity accompanied by complete supporting documentation as
mutually agreed by the parties.

 

(e)                                  Merisant
shall make available to ACH for use by its sales team reasonable quantities of
promotional materials at no cost to ACH.

 

(f)                                    ACH
shall work with Merisant in a collaborative manner to develop and execute
specific marketing and advertising programs for each Distribution Channel.  The cost of all programs will be the
responsibility of Merisant. Merisant may provide, in its 

 

6

 

sole
discretion and with the prior written approval of ACH, incentives to ACH’s
sales organization, including sub-distributors, sales agents and brokers.

 

(g)                                 For
avoidance of doubt, Merisant shall be responsible for all business activities
except for those expressly assumed by ACH pursuant to this Agreement or as
otherwise agreed by the parties, including, but not limited to, new product
development, product manufacturing, consumer affairs, and consumer direct
marketing.

 

2.4                                 Inventory.

 

(a)                                  During the term of
this Agreement, ACH shall submit to Merisant binding purchase orders for
Product on a regular basis as necessary for ACH to maintain at all times during
the term of this Agreement at least thirty (30) days’ inventory for each
SKU.  ACH shall manage its inventory of
each SKU of the Product such that it maintains a 98% case fill rate for ship-to-trade orders (the “Minimum Fill Rate”) and shall forward to
Merisant within ten (10) business days after the end of each accounting
period adequate documentation (as mutually agreed by the parties) of the
percentage fill rate for such past accounting period.  ACH shall not be deemed to be in breach of
its obligation to maintain the Minimum Fill Rate if ACH’s failure to meet such
Minimum Fill Rate is a direct result of Merisant’s failure to perform its
obligations under this Agreement.  If ACH
fails to maintain the Minimum Fill Rate for a period of two (2) consecutive
ACH accounting periods, the parties shall promptly meet to discuss any problems
that may be causing such failure and adopt plans to remediate any such
problems.  Notwithstanding the foregoing,
ACH shall not be required to maintain inventory of any SKU of the Product in
excess of the amount reasonably forecasted by ACH and Merisant as necessary to
fill orders over the next succeeding thirty (30) days.

 

(b)                                 On or about the
Effective Date, Merisant shall acquire from H. J. Heinz Company all Products
then owned and in the possession of H. J. Heinz Company pursuant to the terms
of the Heinz Agreements (the “Heinz
Inventory”).  Merisant shall
cause all such Heinz Inventory to be delivered to ACH at such locations as may
be designated by ACH, and ACH shall accept delivery of all such Heinz Inventory
at such designated locations.  ACH shall
take title to and pay Merisant pursuant to the terms of this Agreement for the
Heinz Inventory up to the amount of inventory reasonably forecasted by ACH and
Merisant as necessary to fill orders over the next succeeding thirty (30) days,
based on movement data for each SKU over the six months preceding the Effective
Date.  ACH will acquire the remaining
Heinz Inventory (which shall remain the property and risk of Merisant until
acquired by ACH) as needed to fulfill its obligations under paragraph (a) of
this Section 2.4.  ACH shall only be
required to take title to Heinz Inventory that (i) meets the applicable
and current specifications for the Product, (ii) is not, in ACH’s
reasonable determination, damaged or distressed and (iii) has an
expiration date that is at least six (6) months after the Effective Date.

 

(c)                                  ACH shall arrange and
manage movement of the Products through ACH’s distribution centers and
third-party warehouses and will be responsible for delivery to customers.  ACH shall regularly monitor and handle the
Products at ACH’s distribution

 

7

 

centers and third-party warehouses to ensure their proper storage,
handling and continued conformance to an “excellent” rating pursuant to the
then most current standards of the American Institute of Baking.

 

(d)                                 ACH shall manage
inventory rotation of the Products on a “code out” (FIFO) basis. Any
obsolescence of the Products which was the result of improperly managed
inventory rotation, as mutually agreed by the parties, will be for the sole
account of ACH, and ACH shall bear all costs related to disposition of such
Products. All costs of obsolete Products due to reasons other than agreed
improper rotation on the part of ACH will be borne by Merisant.  Costs reimbursable hereunder to ACH for such
obsolete Products will include the Invoice Price of the obsolete Products to
ACH and all costs related to disposition of such Products.

 

2.5                                 Reporting; Other Information.

 

(a)                                  Within
forty-five (45) days after the date hereof, the parties shall develop a
protocol for the reporting of historical operating data with respect to the
sales and distribution of Products pursuant to this Agreement.  Such protocol shall prescribe the types of
information to be reported by ACH and its brokers to Merisant and the timing of
such reports.  The protocol may also
establish the procedures by which ACH may make available to Merisant electronic
records of operating data relating to the sale and distribution of the
Products.   ACH shall provide to Merisant
forecasts of purchases of Product and ship-to-trade for the current ACH
accounting period and for a rolling period consistent with periods used by ACH
for similar products distributed by ACH which at a minimum shall be the
remaining accounting periods in ACH’s then-current fiscal year.  Such forecasts shall be stated in the
aggregate and broken down by SKU.

 

(b)                                 Subject
to the conditions of any agreements ACH has with its third-party providers,
Merisant employees shall be provided access during normal business hours to
inspect those portions of the offices where the distribution services provided
pursuant this Agreement are managed and warehouses and other facilities of ACH
where Products are stored or distributed, provided (i) reasonable advance
written notice of least forty-eight (48) hours is provided to ACH, and (ii) Merisant
does not visit any such site for this purpose more than once per calendar
month.  ACH shall use commercially
reasonable efforts to provide, or cause to be provided, to Merisant access to
the executive management of any broker used to sell Products during normal
business hours upon reasonable advance notice. 
Merisant may request that ACH use commercially reasonable efforts to
obtain information from its brokers with respect to order processing, sales
reporting and retail execution appraisals or “score cards” generated by such
brokers, provided that ACH shall not be required to incur any costs in doing
so.

 

2.6                                 Designated Personnel; Offices.

 

(a)                                  At
all times during the term of this Agreement, each of the parties shall
designate at least one manager for each of the Retail Channel and the Foodservice

 

8

 

Channel who
will have direct responsibility for such Distribution Channel.  The initial managers shall be Monte Fenstra
and Greg DuPey for ACH and Julie Forbes and Michael Falvo for Merisant.  All communications (other than invoicing and
similar communications) and information requests shall be made through such
designated managers.

 

 (b)                              ACH shall provide
reasonable access to office cubicles for up to two employees of Merisant from
time to time at ACH’s office located in the Chicago metropolitan area at no
additional cost to Merisant.  Merisant
employees shall have access to such offices during ACH’s normal hours of
operation for such location, and Merisant shall cause its employees to observe
any security policies of ACH that apply to such location.  Each such Merisant employee shall execute a
nondisclosure agreement with ACH which shall be effective for as long as such
employee has access to ACH’s premises.

 

2.7                                 No Other Warranties; Product Complaints.  ACH shall
not make any verbal or written warranties, representations or claims concerning
the Products other than those contained in written materials previously
supplied by Merisant to ACH.  Product
related complaints received by ACH will be promptly forwarded to Merisant and
handled by Merisant in accordance with Merisant’s applicable procedures.  ACH will assist Merisant to the extent
reasonably necessary in the resolution of any such complaints.

 

2.8                                 Recall.

 

(a)                                  Only Merisant may
initiate the recall or withdrawal of the Products.  To the extent that any Product is determined
to be adulterated or materially misbranded or otherwise is determined not to be
legally salable in any jurisdiction, Merisant shall initiate a recall or
withdrawal with regard to such Product. 
A Product shall be deemed to be “materially misbranded” for purposes of
the preceding sentence if the nature of the misbranding creates a risk of
sickness, injury, gross consumer deception or economic fraud.  In the event of such recall or withdrawal,
Merisant will provide notice to ACH, and the recall or withdrawal shall be
conducted by ACH in accordance with its procedures and policies then in
effect.   In addition, ACH agrees to
provide any additional reasonable services requested by Merisant in connection
with such recall or withdrawal.  ACH’s
direct expenses related to the recall or withdrawal services or incurred by it
in connection with any seizure of Product, including customer charges and
out-of-pocket and allocated manpower expenses, will be billed to and payable by
Merisant, provided that Merisant shall bear no expense to the extent that the
recall or withdrawal is caused by ACH’s negligence or willful misconduct.  Merisant shall reacquire from ACH any
Products that are recalled or withdrawn and any Products returned to ACH due to
or in connection with such recall or withdrawal, whether technically the
subject of such recall or withdrawal or not, and shall promptly pay ACH the Net
Price for any such Products.  Merisant
shall also reimburse ACH the Net Price for any Products seized by or through
the order of a court or governmental agency or authority as a result of the
failure of Merisant to initiate a recall or withdrawal in a timely
fashion.  Amounts due to ACH from
Merisant pursuant to this paragraph shall be paid

 

9

 

within thirty (30) days from the receipt by Merisant of an invoice from
ACH setting forth the amounts due; provided that any such amount shall accrue
at a rate of interest per year equal to the prime interest rate reported by ACH’s
principal commercial bank plus 1% per annum during the period commencing on the
date that is five (5) business days after receipt of such invoice and
ending on the date of payment of such amount.

 

(b)                                 ACH shall provide
prompt notice to Merisant if it learns of any condition that reasonably could
give rise to a recall or withdrawal of Products.

 

2.9                                 Returned Goods Policy.  Merisant
shall accept the return by ACH of Products in accordance with ACH’s Returned
Goods Policy, a copy of which is attached hereto as Schedule 2.9.
Merisant agrees to reimburse ACH for reasonable charges, including freight and
handling, it incurs for the services provided by third parties employed by ACH
to process unsalable Products and damaged Products claims at the point of
delivery to ACH.

 

ARTICLE III

PRICES AND
TERMS

 

3.1                                 Prices.  Merisant shall sell Products to ACH at a
price (the “Invoice Price”) equal
to (x) the gross list prices for each SKU of such Products published by
Merisant from time to time during the term of this Agreement (the “Selling Prices”), minus  (y) applicable Commissions earned thereon,
and minus (z) any cash discounts that ACH will provide its customer for such
Product with respect to such Product.  The Selling
Prices for individual Product SKUs shall not vary by Distribution Channel.  The initial Selling Prices are set forth in Schedule 3.1
to this Agreement.  Merisant may revise
the Selling Prices from time to time upon ninety (90) days’ prior written
notice to ACH.   In the event that
Merisant decreases the Selling Prices during the term of this Agreement, all
Products then owned by ACH or its customers will be price protected (i.e.,
Merisant shall provide to ACH a credit equal to the amount of the decrease for
each SKU affected, times the total number of units of that SKU in inventory for
ACH and its customers on the date that the price decrease becomes
effective).  In the event that Merisant
increases the Selling Prices during the term of this Agreement, it shall meet
with ACH to discuss in good faith possible adjustments in the trade promotion
program then in effect to assist in the implementation of such increase.

 

3.2                                 Invoices.

 

(a)                                  Merisant shall invoice ACH at the time of transfer
of title of the Products purchased pursuant to orders issued by ACH in an
amount equal to the Invoice Price for the Products. Invoices shall be due
thirty (30) days from the date of invoice, subject to a two percent (2%)
discount for payment of the invoice in full by the due date.

 

(b)                                 ACH shall invoice
Merisant for returns and spoilage allowances less the rate of any Commissions
paid on returned or damaged Product and shall, upon request,

 

10

 

provide Merisant reasonable documentation evidencing such returns and
spoilage allowances.

 

(c)                                  During and after the
term of this Agreement, if either party incurs an expense, via chargeback,
deduction or otherwise that is not attributable to the party incurring such
expense, the other party agrees to reimburse the affected party for such costs
within thirty (30) days of invoice.

 

3.3                                 Commissions.

 

(a)                                  Merisant shall pay
ACH commissions based on the Net Price of Products to be sold in the Retail
Channel by ACH or agents of ACH pursuant to this Agreement as set determined in
accordance with Schedule 3.3.1 (the “Retail Commissions”); provided that Merisant shall pay ACH
minimum Retail Commissions each year as set forth in Schedule 3.3.1,
which amount shall be pro rated for any partial year during the term of this
Agreement (the “Minimum Retail Commission”).

 

(b)                                 Merisant shall pay ACH
commissions based on Net Price of Products to be sold in the Foodservice
Channel made by ACH or agents of ACH pursuant to this Agreement as set
determined in accordance with Schedule 3.3.2 (the “Foodservice  Commissions” and, together with Retail Commissions, “Commissions”); provided that Merisant
shall pay to ACH minimum Foodservice Commissions each year as set forth in Schedule 3.3.2,
which amount shall be pro rated for any partial year during the term of this
Agreement (the “Minimum Foodservice
Commission”).

 

3.4                                 Freight And Distribution Costs.  Schedule 3.4
provides a
description of the methodology to be used by ACH to determine costs associated
with the services provided by ACH under this Agreement for inbound freight,
outbound freight and distribution and warehousing (collectively, the “Freight and Distribution Costs”).  At any time during the Agreement, ACH may
adjust the costs then in effect in order to pass through any change in fuel
surcharges from ACH’s providers.  ACH
shall provide notice to Merisant of any such increase in fuel surcharges and,
upon the request of Merisant, documents reasonably documenting such
increase.  ACH will invoice Merisant for
Freight and Distribution Costs at the end of each ACH accounting period, and
Merisant shall pay ACH within thirty (30) days of the date of the relevant
invoice.  The Freight and Distribution
Costs shall be subject to the co-shipment adjustment set forth in Schedule 3.4.  In order to assist Merisant in its annual
planning process, ACH shall from time to time provide to Merisant an estimate
of the potential per-case costs ACH expects to incur for Freight and
Distribution Costs to be paid by Merisant based on the methodology provided in Schedule 3.4.

 

3.5                                 Tax.  ACH agrees to pay any sales, use, gross
receipts or other similar sales or use taxes with respect to any shipment of
the Products. If ACH asserts a tax exemption, ACH will furnish Merisant a valid
exemption certificate for each jurisdiction in which it is claiming an
exemption.

 

11

 

3.6                                 Title; Risk of Loss.  Title to
the Products and risk of loss shall pass to ACH at the point of delivery to
ACH.

 

3.7                                 Credit Risk.
The credit risk is assumed solely by ACH. 
ACH, therefore, reserves the right to make independent credit decisions
regarding credit line extensions plus monitoring each customer’s open account
exposure.

 

ARTICLE IV

WARRANTIES

 

4.1                   Warranties.

 

(a)                    Merisant warrants that all Products
will be in conformity with Merisant’s then current specifications for such
Products at the time of delivery to ACH. 
Merisant further warrants that any Products delivered by Merisant or any
affiliate of Merisant to ACH shall not be adulterated or misbranded within the
meaning of the federal Food Drug & Cosmetic Act, and shall not be an article which
may not, under the provisions of Section 404 and 505, be introduced into
interstate commerce.  All Products shall
conform to all applicable Consumer Product Safety Standards, bans and rules issued
under the federal Consumer Product Safety Act and the federal Hazardous
Substances Act and shall not be an article which is a banned hazardous
product under the Consumer Product Safety Act or a banned hazardous substance
under the federal Hazardous Substances Act at the date of delivery to ACH.  Merisant further warrants that any Product
delivered to ACH shall comply at the date of such delivery with all other
applicable federal laws, rules and regulations of all political
subdivisions of the United States of America and with the applicable laws, rules and
regulations of the respective states of the United States of America and their
respective political subdivisions whether now or hereafter enacted.  All warranties made under this Section 4.1(a) are
subject to the fact that Merisant does not warrant and hereby disclaims any
liability for any Products becoming adulterated or misbranded within the
meaning of the Consumer Product Safety Act by reason of causes beyond its
control, including, but not limited to, any act or omission of ACH, and
Merisant further disclaims any liability for sales of any Products in any state
of the United States of America if any state or political subdivision
thereof  bans any ingredient contained in
any Product or requires labeling with respect to any such ingredient and
Merisant has delivered notice to ACH of any such ban or requirement.

 

(b)                   Merisant further represents that it
has the relevant corporate power and authority necessary to execute and deliver
this Agreement and perform its obligations contained herein, and that the
execution and delivery of this Agreement and the performance of its obligations
hereunder after the Effective Date will not breach any other agreement to which
Merisant is a party or be in any way violating the rights of any other party to
any such other agreement.

 

(c)                    ACH represents that it has the
relevant corporate power and authority necessary to execute and deliver this
Agreement and perform its obligations contained herein, and that the execution
and delivery of this Agreement and the performance of its

 

12

 

obligations hereunder will not breach any other agreement to which
Merisant is a party or be in any way violating the rights of any other party to
any such other agreement.

 

4.2                                 Consequential Damages Waiver.  IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL OR CONSEQUENTIAL
LOSSES OR DAMAGES (INCLUDING, BUT NOT LIMITED TO ECONOMIC LOSS OR LOSS OF
PROFITS) SUFFERED OR INCURRED AS A RESULT OF OR IN CONNECTION WITH ANY BREACH
OF THIS AGREEMENT OR ANY TORT (INCLUDING, BUT NOT LIMITED TO, STRICT LIABILITY
OR NEGLIGENCE) COMMITTED BY A PARTY IN CONNECTION WITH THIS AGREEMENT.

 

ARTICLE V

TRADEMARKS AND TRADE NAMES

 

5.1                                 Trademarks.  All trademarks, trade names, logos,
copyrights and other designations used or adopted by Merisant in connection
with the Products, including without limitation Equal® (the “Trademarks”),
will at all times be and remain the property of Merisant, its affiliated
companies or third parties with whom Merisant or its affiliated companies have
a license. ACH shall not in any way dispute or impugn the validity of the
Trademarks, Merisant’s, its affiliated companies’ or such third parties’ sole
ownership of the Trademarks, or such parties’ right to use and control the use
of the Trademarks during the term of this Agreement and thereafter; nor will
ACH do or knowingly permit to be done any action or thing which will in any way
impair the rights of Merisant or such third parties in and to the Trademarks.
ACH acknowledges that its use of the Trademarks will not create in it any
right, title or interest in the Trademarks and agrees that all use of the Trademarks
will be for the benefit of Merisant or such third parties.

 

5.2                                 Use.  ACH may use the Trademarks only in connection
with the services to be provided hereunder and only in the manner and style
approved by Merisant in writing.  Such
approval shall not be unreasonably withheld or delayed by Merisant provided
that Merisant shall be reasonable in withholding such approval if Merisant
determines that such use shall dilute, tarnish or otherwise diminish the value
of such Trademark.  ACH will not use the
Trademarks as part of its company name or in connection with any product other
than the Products.  ACH agrees not to
alter, deface, remove, cover up, or mutilate any of the Trademarks or any
serial number, lot code number or other designation that may be attached or
affixed to the Products or any packaging materials.

 

5.3                                 Notification.  ACH will: (i) notify
Merisant in writing of any infringing uses, applications for registration, or
registrations of the Trademarks or marks similar thereto of which it has actual
knowledge; (ii) execute any documentation reasonably requested by Merisant
relating to the Trademarks; and (iii) comply with all reasonable
instructions of Merisant with regard to the use and display of the Trademarks.

 

13

 

5.4                                 Actions.  ACH acknowledges that only Merisant will have
authority to institute actions or proceedings to prevent any infringement,
imitation, unauthorized use, or misuse of any of the Trademarks and agrees to
provide Merisant with reasonable assistance in such proceedings at Merisant’s
request, provided that Merisant shall reimburse ACH for any costs incurred by
ACH in so doing.

 

5.5                                 Similar Marks. ACH agrees not to adopt any trademark, trade name, mark, logo or
symbol which is similar to or likely to be confused with any of the Trademarks.
ACH will not use any other trademark, word, symbol, letter or design in
combination with any of the Trademarks.

 

5.6                                 Literature.  Merisant will have the right to approve all
sales literature, advertising and promotional materials, manuals and related
materials prepared or used by ACH in connection with the Products.  Such approval shall not be unreasonably
withheld or delayed by Merisant.  ACH
agrees to provide to Merisant copies or workpapers describing such literature
and materials prior to such use.  If
Merisant does not object to such material within ten (10) business days of
receipt, Merisant shall be deemed to have approved ACH’s use of such materials.

 

5.7                                 Effect of
Termination.  Upon termination of
this Agreement for any reason, ACH shall promptly cease all use of the
Trademarks, provided that ACH may continue to use the Trademarks in its
promotion and sale of the Products held in inventory and not repurchased by
Merisant pursuant to the provisions of Section 9.5 hereof.

 

5.8                                 Packaging.  The Products shall be resold only in their
original packages. ACH shall not, either directly or indirectly, re-label,
repackage, mark, or assist any other entity to re-label, repackage, or mark the
Products except for such repackaging as may be necessary to refurbish damaged
Products with the prior approval of Merisant.

 

5.9                                 Right of First
Refusal on Certain Branded Products. 
If during the term of this Agreement, Merisant receives a bona fide
offer from an unrelated third party to license any Trademark for use with
branded creamers or fortified nutritional drink mixes to be sold by or for such
third party in the Territory, Merisant shall deliver notice to ACH, which
notice shall disclose all material economic terms of any such offer to
ACH.  Within thirty (30) days of receipt
of such offer, ACH shall be permitted to match such offer to Merisant to
license such Trademark for the purposes described in the notice.  If, within thirty (30) days after its receipt
of the notice from Merisant, ACH shall not have delivered a notice to Merisant
agreeing to match the offer made, Merisant shall be permitted to enter into an
agreement with such third party on terms not less favorable than those set
forth in Merisant’s notice to ACH.  If
ACH delivers a notice within that 30-day period agreeing to match the offer
made, the parties shall meet in good faith and negotiate a license on the terms
provided in the original notice, with such adjustments as they may mutually
agree.

 

14

 

ARTICLE VI

COMPLIANCE WITH APPLICABLE LAW

 

Each party
warrants to the other that it shall comply with all applicable laws and
regulations and governmental orders and decrees applicable to the sale of the
Products by Merisant to ACH and the purchase, promotion and sale by ACH of the
Products, including without limitation applicable Food and Drug Administration
regulations.

 

ARTICLE VII

INDEMNIFICATION

 

7.1                                 ACH.  ACH shall indemnify, defend and hold Merisant
harmless against all costs, claims, suits, demands, judgments, expenses
(including reasonable attorneys’ fees) or damages resulting from or arising out
of the following: (i) any breach by ACH of any of its warranties, duties
or obligations under this Agreement; and (ii) the negligence or willful
misconduct of ACH, its employees or agents, except to the extent any such
damage resulted from or was contributed to by Merisant, its employees or
agents.

 

7.2                                 Merisant.  Merisant shall indemnify, defend and hold ACH
harmless against all costs, claims, suits, demands, judgments, expenses
(including reasonable attorneys’ fees) or damages resulting from or arising out
of the following: (i) any breach by Merisant of any of its warranties,
duties or obligations under this Agreement; (ii) the negligence or willful
misconduct of Merisant, its employees or agents; (iii) any alleged death
or injury relating to or caused by the Products; and (iv) any claim of
infringement or award of royalties of profits from the use of the intellectual
property of others with respect to the Products, except in each case to the
extent any such damage resulted from or was contributed to by ACH, its
employees or agents.

 

ARTICLE VIII

DISPUTE
RESOLUTION

 

8.1                               Negotiation.  In the event that any dispute may arise
relating to the Agreement, the parties shall first seek to resolve such dispute
by negotiations between senior executives who have authority to settle the
controversy and have direct operational responsibility for the matters
contemplated by this Agreement.  When a
party believes there is a dispute relating to the Agreement, the party will
give the other party written notice of the dispute. The senior executives shall
meet at a mutually acceptable time and place within thirty (30) days after the
date of the notice to exchange relevant information and to attempt to resolve
the dispute.  If a senior executive
intends to be accompanied at a meeting by an attorney, the other party’s senior
executive shall be given at least three (3) business days’ notice of such
intention and may also be accompanied by an attorney.  All negotiations are confidential and shall
be treated as compromise and settlement negotiations under the United States
Federal Rules of Evidence.

 

15

 

8.2                               Mediation.
If the dispute has not been resolved within thirty (30) days after the date of
the notice of a dispute, or if the party receiving such notice fails or refuses
to meet within such time period, either party may require mediation of the
dispute by sending the other party a written notice that the dispute be
mediated. The party receiving such a written notice will promptly respond to
the requesting party so that all parties can jointly select a neutral and
impartial mediator and schedule the mediation session.  The parties shall mediate the dispute before
a neutral, third-party mediator within thirty (30) days after the date of the
written request for mediation.

 

8.3                               Arbitration.
If a dispute has not been resolved within sixty (60) days after the original
notice of a dispute or within two (2) business days after the date
mediation has been completed, whichever is later, then either party may
initiate arbitration proceedings. Notwithstanding the above provisions, if
either party deems that time is of the essence in resolving the dispute, it may
initiate arbitration and seek interim measures, if appropriate, and then comply
with the requirements for negotiations and mediation as long as they are fully
completed before the commencement of the final hearing on the merits in the
arbitration proceeding.

 

8.4                               Final
and Binding Arbitration Before American Arbitration Association.  Any dispute, controversy or claim, of any and
every kind or type, whether based on contract, tort, statute, regulations, or
otherwise, arising out of, connected with, or relating in any way to this
Agreement, the relationship of the parties, the obligations of the parties or
the operations carried out under this Agreement, including without limitation,
any dispute as to the existence, validity, construction, interpretation,
negotiation, performance, non-performance, breach, termination, or
enforceability of this Agreement, shall be settled through final and binding
arbitration, it being the intention of the parties that this is a broad form
arbitration agreement designed to encompass all possible disputes among the
parties relating to the project that is the subject of the parties’
agreement.  The arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, as supplemented to the extent necessary to
determine any procedural appeal questions by the Federal Arbitration Act (Title
9 of the United States Code).  If there
is any inconsistency between this Article VIII and the Commercial
Arbitration Rules or the Federal Arbitration Act, the terms of this Article VIII
will control the rights and obligations of the parties.

 

8.5                               Number
of Arbitrators.  If the amount in
dispute involves less than $1,000,000, exclusive of interest and costs, then
the arbitration shall be conducted and finally settled by a sole
arbitrator.  If the amount in
controversy, exclusive of interest and costs, is $1,000,000 or more, if the
amount in dispute is unknown, or if relief other than damages is sought, then
the arbitration shall be conducted and finally settled by three (3) arbitrators.

 

8.6                               Selection
and Qualifications of Arbitrators. 
If the arbitration is to be conducted by a sole arbitrator, then the
arbitrator will be jointly selected by the parties.  If the parties fail to agree on the
arbitrator within ten (10) business days after the initiation of the
arbitration, then Chicago, Illinois Chapter of the AAA shall appoint the
arbitrator.

 

16

 

If the
arbitration is to be conducted by three arbitrators, then each party or group
shall appoint one arbitrator within thirty (30) days of receipt of notice of
the commencement of the arbitration, and the two arbitrators so appointed shall
select the presiding arbitrator within thirty (30) days after the later of the
two arbitrators is appointed by the parties. 
All arbitrators shall be and remain at all times wholly impartial and
shall provide the parties with a statement that they can and shall decide the
case impartially. No arbitrator shall have any financial interest (directly or
indirectly) in the dispute or any financial dependence (directly or indirectly)
upon any of the parties.  All arbitrators
shall be knowledgeable of the consumer products business or the law applicable
to such business.

 

8.7                               Consolidation.  If the parties to this Agreement initiate
multiple arbitration proceedings, the subject matters of which are related by
common questions of law or fact and which could result in conflicting awards or
obligations, then the parties hereby agree that all such proceedings may be
consolidated into a single arbitral proceeding if the consolidated proceeding
can be conducted in a manner consistent with the terms of this Agreement. The
parties do not intend or agree by this provision to authorize a class action or
a mass action.

 

8.8                                 Interim Measures.  Notwithstanding the foregoing,
in the event interim judicial relief is necessary prior to the conclusion of
discussions, mediation or arbitration contemplated by this Article VIII in
order to avoid irreparable injury to either party, then such party may seek
interim measures of protection, including without limitation orders of
injunction, specific performance or other equitable relief, from any court of
competent jurisdiction. The provisions of this Section 8.8 shall not be
deemed to preclude the arbitrators from awarding similar or other interim
relief or entering interim arbitration awards.

 

8.9                                 Place of Arbitration.  Unless
otherwise agreed by all parties to the arbitration, the situs of the
arbitration under this Agreement shall be Chicago, Illinois.

 

8.10                         Confidentiality.  Except to the extent necessary to enforce the
arbitration agreement or award, to enforce other rights of the party, or as required
by law, the parties, their employees, officers, directors, counsel,
consultants, and expert witnesses, shall maintain as confidential the fact of
the arbitration proceeding, the arbitral award, contemporaneous or historical
documents exchanged or produced during the arbitration proceeding, and
memorials, briefs or other documents prepared for the arbitration.

 

8.11                         Discovery.  All discovery shall be conducted in
accordance with the Federal Rules of Evidence and, to the extent permitted
thereunder, the parties shall produce documents, which may include contracts,
books, records, internal documents, notes, and memoranda, of any and all kinds
or types. It shall not be objectionable that documents are requested by general
category. The parties also agree to provide oral depositions of their
employees, officers and directors, and to fully, accurately and timely answer
written interrogatories submitted to them. The arbitral tribunal shall have the
power, upon the application of any party, to make all appropriate orders for
the discovery described above, to which power the parties specifically consent.
If a party fails to

 

17

 

provide
documents pursuant to an order of the tribunal, the arbitrators may take that failure
into account in deciding the issues. Applicable legal privileges against the
disclosure of information shall be recognized.

 

8.12                         Entry
of Judgment.  Judgment on the award
of the arbitral tribunal may be entered by any court of competent jurisdiction.

 

8.13                         Costs
and Attorneys’ Fees.  The arbitral
tribunal is authorized to award costs and attorney’s fees or allocate them
between the parties, and the costs of the arbitration proceedings, including
attorneys’ fees, shall be borne in the manner determined by the arbitral
tribunal.

 

8.14                         Punitive
Damages.  Penal, punitive, treble,
multiple, consequential, incidental or similar damages may not be recovered or
awarded.

 

8.15                           No Appeal.  Any arbitral award shall be final and binding
on the parties as to the questions submitted to arbitration except that errors
of law or findings of fact not supported by substantial evidence shall be
subject to appeal.

 

ARTICLE IX

DURATION AND
TERMINATION

 

9.1                                 Term.  The term of this Agreement will commence on
the Effective Date and will thereafter remain in effect until the date that is
three years after the Effective Date, unless earlier terminated as provided
herein. This Agreement may be renewed for two additional three-year terms upon
written notice of such extension delivered by either party at least one hundred
eighty (180) days prior to the then scheduled expiration of this Agreement.
Both parties shall continue to perform timely their respective obligations
under this Agreement during the period from the 
delivery of any such expiration notice through the date of termination.

 

9.2                                 Termination Without Cause.  Either
party may terminate this Agreement without cause in whole or with respect to a
Distribution Channel by giving the other party at least one hundred and eighty
(180) days prior written notice of its intention to do so; provided, however,
that no such notice may be given until after the first anniversary of the
Effective Date. If Merisant terminates this Agreement pursuant to this Section 9.2,
Merisant shall pay to ACH $1,000,000 on the date that this Agreement terminates
and the rate of Commissions shall increase by 1.5% for all Commissions earned
by ACH on Products sold during the period commencing on the date of the
termination notice and ending on the date this Agreement terminates.  Both parties shall continue to perform timely
their respective obligations under this Agreement during the period from the
delivery of any such termination notice through the effective date of
termination, including the payment by Merisant of any Commissions earned by ACH
during such period.

 

18

 

9.3                                 Termination With
Cause.  In the event of a material
breach of this Agreement by a party, the other party may terminate this
Agreement upon not less than ninety (90) days’ prior written notice, provided
that the breach has not been cured within thirty (30) days of receipt of notice
of such breach and provided further that the party terminating this Agreement
is not then in material breach of this Agreement.  Either party may terminate this Agreement
upon written notice to the other if there has occurred any event of force
majeure preventing performance by the other party and such event has continued
for a period of three (3) consecutive months or longer.

 

9.4                                 Continuing Rights.  Upon expiration or termination
of this Agreement for any reason, the parties will have no further rights,
liabilities, duties or obligations under this Agreement, except for any rights,
liabilities, duties or obligations under Sections 9.2, 9.4 and 11.2 and
Articles VII, VIII and X of this Agreement, and any rights, liabilities, duties
or obligations which arise prior to such expiration or termination.

 

9.5                                 Repurchase Of Inventory.  Upon the
date of expiration or termination of this Agreement for any reason, Merisant
shall purchase at the Net Price the remaining inventory of Products that are
good and salable. Promptly following expiration or termination, pursuant to
Merisant’s request and direction and at Merisant’s cost, ACH will return all
price lists, catalogs, samples, advertising, promotional or other materials for
the Products in ACH’s possession, except for such materials used in the sale of
remaining inventories of the Products not purchased by Merisant.

 

ARTICLE X

CONFIDENTIALITY

 

10.1                           Confidentiality.  During the term of this
Agreement and for a period of two years after the termination or expiration of
this Agreement, Recipient agrees that (i) it will, and will cause its
Representatives to, maintain in confidence all Confidential Information and
will not disclose any Confidential Information to any person, except as
expressly provided herein, and will provide the same care to avoid disclosure
or unauthorized use of the Confidential Information as it provides to protect
its own similar proprietary information; and (ii) it will not, and will
not permit its Representatives to, use the Confidential Information for any
commercial or competitive purpose whatsoever. 
Furthermore, each party acknowledges and agrees that the Confidential
Information will be used only for the purposes of this Agreement and not in any
way directly or indirectly detrimental to the Recipient.  Recipient may, however, disclose the
Confidential Information to its Representatives, but only if such
Representatives reasonably need to know the Confidential Information for the
purposes of this Agreement.  Recipient
agrees to (i) inform each of its Representatives receiving Confidential
Information of the confidential nature of the Confidential Information and of
the existence and the terms of this Agreement; (ii) direct its
Representatives to treat the Confidential Information confidentially and not to
use it other than in connection with the Discussions; and (iii) be
responsible for any improper use of the Confidential Information by any of its

 

19

 

Representatives
(including, without limitation, those Representatives who, subsequent to the
first date of disclosure of Confidential Information hereunder, cease to be
Representatives).

 

10.2                           Disclosure Required by Law.  In the
event Recipient, or any of its Representatives, is requested or becomes legally
compelled (by deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information, then the party so requested or compelled will provide Disclosing
Party with prompt written notice of such request or requirement so that
Disclosing Party may seek a protective order or other appropriate remedy or
waive compliance with the terms of this Agreement.  In the event that such protective order or
other remedy is not obtained, or that Disclosing Party waives compliance with
the provisions hereof, the Person so requested or compelled will furnish only
that portion of the Confidential Information that it is advised by outside
legal counsel is legally required to be disclosed and to exercise reasonable
efforts to obtain assurance that confidential treatment will be accorded the
Confidential Information.  ACH
acknowledges and agrees that a copy of this Agreement will be filed by Merisant
Worldwide, Inc. and Merisant Company with the Securities and Exchange
Commission.

 

10.3                           Return of Confidential Information.  All
Confidential Information, unless otherwise specified in writing, remains the
property of the Disclosing Party. Upon the request of Disclosing Party
following termination of this Agreement, Recipient agrees to promptly return to
Disclosing Party all documents, reports, exhibits and other materials provided
by or on behalf of Disclosing Party containing Confidential Information.  In addition, Recipient agrees to destroy all
working papers containing any Confidential Information or extracts therefrom, and
all copies of any notes, analyses, compilations, studies or other documents
that it or its Representatives prepared containing or reflecting any
Confidential Information and, if requested by Disclosing Party, to deliver a
certificate executed by an appropriate officer of Recipient certifying that all
such materials have been destroyed. 
Notwithstanding the foregoing, Recipient shall be entitled to retain in
its legal department, for record and audit purposes only, in its legal
department one copy of any such materials referred to above in this Section 10.3

 

10.4                           Remedies.  Recipient acknowledges and agrees that
remedies at law for any actual or threatened breach by it of the covenants
contained in this Article would be inadequate and that Disclosing Party
will be entitled to equitable relief, including injunction and specific
performance, in the event of any breach of the provisions of this Article, in
addition to all other remedies available to Disclosing Party at law or in
equity.

 

ARTICLE XI

MISCELLANEOUS

 

11.1                           Relationship of the Parties.  The
relationship of Merisant and ACH under this Agreement is that of seller and
purchaser, and nothing contained in this Agreement and no action taken by
either party to this Agreement will be deemed to: (i) constitute

 

20

 

either party or any
of such party’s employees, agents or representatives to be an employee, agent
or representative of the other party, or (ii) create any partnership,
joint venture, association or syndicate among or between the parties, or (iii) confer
on either party any express or implied right, power or authority to enter into
any agreement or commitment, express or implied, or to incur any obligation or
liability on behalf of the other party.

 

11.2                           Governing Law.  This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of
Illinois, excluding the conflict of laws provisions thereof.

 

11.3                           Notices.  Any notice under this Agreement will be valid
and effective only if given by written instrument that is personally delivered
or sent by facsimile, or registered or certified mail, postage prepaid,
addressed as follows (or to such other address as any party may give in a
notice given in accordance with the provisions hereof):

 

If to ACH:

ACH Food Companies, Inc.

7171 Goodlett Farms Parkway

Memphis, Tennessee 38016

Facsimile: (901) 381-2906

Attention:  Vice President, Strategy and
Development

 

With a copy to:             General Counsel (same
address and facsimile)

 

If to
Merisant:                    Merisant
US, Inc.

10 South Riverside Plaza, Suite 850

Chicago, Illinois 60606

Facsimile: (312) 840-5108

Attention: Senior Vice President, North American Sales

 

With a copy to:             General Counsel (same
address and facsimile)

 

All notices, requests or other communications will be effective and
deemed given only as follows:  (i) if
given by personal delivery, upon such personal delivery, (ii) if sent by
certified or registered mail, on the fifth business day after being deposited
in the United States mail, (iii) if sent for next day delivery by
overnight delivery service, on the date of delivery as confirmed by written
confirmation of delivery, (iv) if sent by facsimile, upon the transmitter’s
confirmation of receipt of such facsimile transmission, except that if such
confirmation is received after 5:00 p.m. (in the recipient’s time zone) on
a business day, or is received on a day that is not a business day, then such
notice, request or communication will not be deemed effective or given until
the next succeeding business day. 
Notices, requests and other communications sent in any other manner,
including by electronic mail, will not be effective.

 

21

 

11.4                           Assignment; Binding Effect; Third Party
Beneficiaries.  No party may assign either this Agreement or
any of its rights, interests or obligations hereunder, whether by operation of
law or otherwise, without the prior written approval of the other party, and
any such assignment by a party without prior written approval of the other
party will be deemed invalid and not binding on such other party; provided
that Merisant may assign this Agreement in whole or in part upon notice to ACH
to an affiliate of Merisant, or as part of a sale of all or substantially all
of the stock of Merisant or Merisant Worldwide, Inc. or assets of business
of Merisant that manufactures or markets the Products; and provided, further
that ACH may assign this Agreement in whole or in part to any wholly owned
subsidiary or affiliate of ACH or to any purchaser of all or substantially all
of the assets of ACH other than to any purchaser that owns or distributes any
sweetener or sweetened product that competes directly with any of the Products
or that is controlled by or under common control with any person that owns or
distributes any such sweetener or sweetened product.  Merisant acknowledges that ACH may utilize
the services of brokers in the performance of its duties and obligations
hereunder, and that such use will not be a breach of this Section 11.4.   All of the terms, agreements, covenants,
representations, warranties and conditions of this Agreement are binding upon,
and inure to the benefit of and are enforceable by, the parties and their
respective successors and permitted assigns. 
There are no third party beneficiaries having rights under or with
respect to this Agreement.

 

11.5                           Force Majeure.  Neither party will be liable
to the other for any loss or injury incurred or damages sustained by the other
party due to a failure on the part of the party to perform under this Agreement
(except for either party’s obligation to make a payment under any provision of
this Agreement), if such failure to perform is a result of war, act of
terrorism, riot, labor strike or lock-out, shortages, fire, flood, wind, storm
or other Act of God, governmental control or regulation or other similar
condition beyond the party’s reasonable control.

 

11.6                           Entire Agreement.  This Agreement sets forth the
entire and final agreement and understanding of the parties with respect to the
subject matter of this Agreement. Any and all prior agreements or
understandings, whether written or oral, with respect to the subject matter of
this Agreement, are hereby terminated. 
This Agreement may not be modified or amended except by an instrument in
writing executed by the parties to this Agreement. Any terms or conditions that
may be different from, or in addition to those agreed to and set forth in this
Agreement, are expressly objected to and will not be binding upon either party
unless mutually agreed to in writing.

 

11.7                           Extensions; Waivers.  Any party
may, for itself only, (i) extend the time for the performance of any of
the obligations of any other party under this Agreement, (ii) waive any
inaccuracies in the representations and warranties of any other party contained
herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions for the benefit of such
party contained herein.  Any such
extension or waiver will be valid only if set forth in a writing signed by the
party to be bound thereby.  No waiver by any
party of any default, misrepresentation or breach of warranty or covenant
hereunder, whether intentional or not, may be deemed to extend to

 

22

 

any prior or
subsequent default, misrepresentation or breach of warranty or covenant
hereunder or affect in any way any rights arising because of any prior or
subsequent such occurrence.  Neither the failure nor any delay on the part of any
party to exercise any right or remedy under this Agreement will operate as a
waiver thereof, nor will any single or partial exercise of any right or remedy
preclude any other or further exercise of the same or of any other right or
remedy.

 

11.8                           Severability.  The provisions of this
Agreement will be deemed severable and the invalidity or unenforceability of
any provision will not affect the validity or enforceability of the other
provisions hereof; provided that if any provision of this Agreement, as applied
to any party or to any circumstance, is judicially determined not to be
enforceable in accordance with its terms, the parties agree that the court
judicially making such determination may modify the provision in a manner
consistent with its objectives such that it is enforceable, and/or to delete
specific words or phrases, and in its modified form, such provision will then
be enforceable and will be enforced.

 

11.9                           Headings.  The article and section headings
contained in this Agreement are inserted for convenience only and will not
affect in any way the meaning or interpretation of this Agreement.

 

11.10                     Counterparts.  This Agreement may be executed
in two or more counterparts, each of which will be deemed an original but all
of which together will constitute one and the same instrument.

 

23

 

IN WITNESS WHEREOF, Merisant and ACH, by
their respective duly authorized officers or representatives, have executed and
delivered this Agreement on the date first above written.

 

 

	
   

  	
  MERISANT US, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jonathan W. Cole

  	
   

  
	
   

  	
   

  	
  Name: Jonathan W. Cole

  
	
   

  	
   

  	
  Title: Vice President, General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ACH FOOD COMPANIES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Jeffrey A. Atkins

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey A. Atkins

  
	
   

  	
   

  	
  Title:

  	
   Executive Vice President

  Chief Executive Officer

  
					

 

 

Signature Page to Distribution
AgreementExhibit 10.1

 

THE NEW
YORK TIMES COMPANY

1991 EXECUTIVE STOCK INCENTIVE PLAN

AS AMENDED THROUGH FEBRUARY 16, 2006

 

1.             NAME
AND GENERAL PURPOSE

 

The name of this plan is
The New York Times Company 1991 Executive Stock Incentive Plan (hereinafter
called the “Plan”). The purpose of the Plan is to enable the Company (as
hereinafter defined) to retain and attract executives who enhance its tradition
and contribute to its success by their ability, ingenuity and industry, and to
enable them to participate in the long-term success and growth of the Company.

 

2.             DEFINITIONS

 

(a)           “Awards”
has the meaning specified in Section 12 hereof.

 

(b)           “Board”
means the Board of Directors of the Company.

 

(c)           “Cash
Plan” means the Company’s 1991 Executive Cash Bonus Plan.

 

(d)           “Code”
means the Internal Revenue Code of 1986, as amended.

 

(e)           “Committee”
means the Committee referred to in Section 3 of the Plan. If at any time no
Committee shall be in office, then the functions of the Committee specified in
the Plan shall be exercised by those members of the Board who are Non-Employee
Directors.

 

(f)            “Common
Stock” means shares of the Class A Common Stock of the Company.

 

(g)           “Company”
means The New York Times Company, a corporation organized under the laws of the
State of New York (or any successor corporation), and, unless the context
otherwise requires, its subsidiaries (as hereinafter defined) and other
non-corporate entities in which it owns directly or indirectly 20% or more of
the equity interests. A “subsidiary” means any corporation in which the Company
possesses directly or indirectly 50% or more of the combined voting power of
all classes of stock.

 

(h)           “Consolidated
Statement of Income” means the consolidated statement of income (or any
comparable statement, however designated) of the Company, audited by the
independent certified public accountants of the Company and contained in the
Company’s annual report to stockholders or proxy statement.

 

(i)            “Disability”
means total disability as defined under the Company’s long-term disability
plan, whether or not the Participant is covered by such plan, as determined by
the Committee.

 

(j)            “Fair
Market Value” means the arithmetic mean of the highest and lowest sales prices
of the Common Stock as reported by The New York Stock Exchange (the “NYSE”) (or
such other national securities exchange on which the Common

 

 

Stock may be listed at
the time of determination, and if the Common Stock is listed on more than one
exchange, then on the one located in New York or if the Common Stock is listed
only on the National Association of Securities Dealers Automated Quotations
System (“NASDAQ”), then on such system) on the date of the grant or other date
on which the Common Stock is to be valued hereunder. If no sale shall have been
made on the NYSE, such other exchange or the NASDAQ on such date or if the
Common Stock is not then listed on any exchange or on the NASDAQ, Fair Market
Value shall be determined by the Committee in accordance with Treasury
Regulations applicable to incentive stock options.

 

(k)           “Income
Before Income Taxes” means the amount designated as Income Before Income Taxes
for the applicable year and shown separately on the Consolidated Statement of
Income for such year.

 

(l)            “Non-Employee
Director” means any Director of the Company who at the time of acting is a “Non-Employee
Director” under Rule 16b-3 or any successor rule (“Rule 16b-3”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(m)          “Participant”
means a key employee of the Company who is selected by the Committee to
participate in any one or more parts of the Plan from among persons who in the
judgment of the Committee are key employees of the Company. In general, key
employees are those employees who have principal responsibility for, or who contribute
substantially to, the management efficiency, editorial achievement or financial
success of the Company. Only employees of The New York Times Company, its
subsidiaries and other non-corporate entities in which it owns directly or
indirectly 40% or more of the equity interests are eligible to participate in
the Plan.

 

(n)           “Retirement”
means retirement as defined by the terms of “The New York Times Companies
Pension Plan” which became effective December 31, 1988, or any successor
retirement plan, whether or not the Participant is a member of such retirement
plan, and, in the case of employees of Affiliated Publications, Inc., or any
subsidiary thereof, who retire under the terms of the Globe Newspaper Company
Retirement Plan, which became effective January 1, 1994 (the “Globe Pension
Plan”) or any successor retirement plan, “Retirement” shall also mean
retirement as defined by the terms of the Globe Pension Plan or any successor
plan.

 

3.             ADMINISTRATION
OF THE PLAN

 

The Plan shall be
administered by the Board or the Committee appointed by it and composed of two
or more directors all of whom shall be Non-Employee Directors. The membership
of the Committee shall be constituted so as to comply at all times with the
applicable requirements of Rule 16b-3, and with the administration requirements
of Section 162(m)(4)(C) of the Code. The Committee shall serve at the
pleasure of the Board and shall have such powers as the Board may from time to
time confer upon it.

 

2

 

4.             OPTIONS
AND AWARDS UNDER THE PLAN

 

Options, which include “Non-Qualified
Options” and “Incentive Stock Options” or combinations thereof, are rights to
purchase Common Stock. Non-Qualified Options and Incentive Stock Options are
subject to the terms, conditions and restrictions provided in Part I of the
Plan.

 

Awards under the Plan may
include one or more of the following types, either alone or in any combination
thereof: (i) “Stock Awards,” (ii) “Restricted Stock Awards,” (iii) “Retirement
Unit Awards,” (iv) “Annual Performance Awards,” (v) “Performance Awards” or “Other
Awards” and (vi) “Long-Term Performance Awards.”

 

Stock Awards are granted
under Part IIA of the Plan. Restricted Stock Awards are granted under Part IIB
of the Plan. Retirement Unit Awards are granted under Part IIC of the Plan. Annual
Performance Awards are granted under Part IID of the Plan. Performance Awards
or Other Awards are granted under Part IIE of the Plan. Awards are subject to
the terms, conditions and restrictions provided in the respective subparts of
Part II of the Plan. Annual Performance Awards will be based exclusively on the
criteria set forth in Section 27A. Long-Term Performance Awards are granted
under Part IIF of the Plan. Long-Term Performance Awards will be based
exclusively on the criteria set forth in Section 28A.

 

PART
I  STOCK OPTIONS

 

5.             PURPOSE

 

The purpose of the Stock
Option portion of the Plan is to provide an added incentive for effective
service and high levels of performance to Participants by affording them an
opportunity, under the terms of the Plan, to acquire Common Stock and thereby
to increase their proprietary interest in the continued progress and success of
the Company.

 

6.             DETERMINATION
OF OPTIONEES; SHARES SUBJECT TO OPTIONS

 

(a)           The
Committee may grant options to purchase Common Stock (“Options”) to
Participants in such amounts as the Committee may determine, subject to the
conditions and limitations set forth in the Plan. Options may be granted in
combination with Awards made under the Plan, and Options may be granted to any
Participant whether or not he or she was eligible for, or received, an Award.

 

(b)           The
number of shares of Common Stock with respect to which Options may be granted
to any key employee during any calendar year shall not exceed 400,000 (subject
to adjustment as provided in Sections 28 and 29 hereof).

 

(c)           There
may be issued under the Plan pursuant to the exercise of Options, an aggregate
of not more than 60,000,000 shares of Common Stock, subject to adjustment as
provided in Sections 28 and 29 hereof. Shares of Common Stock issued pursuant
to Options may be either authorized but unissued shares, treasury shares,
reacquired shares, or any combination thereof. Any shares subject to an Option
which expires without being exercised shall be available for issuance under new
Options.

 

3

 

7.             OPTION
PRICE

 

The exercise price of
Common Stock subject to Options granted pursuant to the Plan shall be the Fair
Market Value thereof at the time the Option is granted. If a Participant owns
or is deemed to be the owner of, by reason of the attribution rules under
Section 425(d) of the Code, more than 10% of the combined voting power of all
classes of the stock of the Company or any subsidiary of the Company and an
Option granted to such Participant is intended to qualify as an Incentive Stock
Option within the meaning of Section 422 of the Code, the option price shall be
no less than 110% of the Fair Market Value of the Common Stock on the date the
Option is granted.

 

8.             PAYMENT
OF OPTION PRICE

 

The
purchase price is to be paid in full when the Option is exercised and Common
Stock will be delivered only against such payment. Payment of the option price
may be made (i) in cash, (ii) by delivering a properly executed exercise notice
to the Company together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price (or by otherwise arranging, in a manner satisfactory to the
Company, for a broker to promptly pay the purchase price to the Company),
(iii) by delivering to the Company shares of Common Stock previously
owned, or (iv) by any combination of the foregoing forms, all subject to
the approval of the Committee and to such rules as the Committee may adopt. In
determining the number of shares of Common Stock necessary to be delivered to
the Company, such Common Stock shall be valued at Fair Market Value.

 

9.             TYPES
OF STOCK OPTIONS

 

(a)           Options
granted under the Plan may be two types, an incentive stock option (“Incentive
Stock Option”) and a non-qualified stock option (“Non-Qualified Option”). It is
intended that Incentive Stock Options granted hereunder shall constitute
incentive stock options within the meaning of Section 422 of the Code. Anything
in the Plan to the contrary notwithstanding, (i) no provision of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised,
so as to disqualify either the Plan or any Incentive Stock Option granted under
such provisions of the Code, and (ii) no Option designated by the Committee as
a Non-Qualified Option shall constitute an Incentive Stock Option. In
furtherance of the foregoing and not by way of limitation, no Incentive Stock
Option shall be granted to a Participant who is not an employee of The New York
Times Company or one of its subsidiaries.

 

(b)           If
the aggregate Fair Market Value of the Common Stock (determined as of the date
of grant) for which any optionee may for the first time exercise Incentive
Stock Options in any calendar year under the Plan and any other stock option
plan of the Company, considered in the aggregate, exceeds $100,000, such excess
Incentive Stock Options will be treated as Non-Qualified Options.

 

4

 

10.          TERMS
OF STOCK OPTIONS

 

(a)           Each
Option will be for a term of not more than ten years from the date of grant,
except that if a Participant owns or is deemed to be the owner of, by reason of
the attribution rules of Section 425(d) of the Code, more than 10% of the
combined voting power of all classes of stock of the Company or any subsidiary
of the Company and an Incentive Stock Option is granted to such Participant,
the term of such Option shall be no more than five years from the date of
grant.

 

(b)           An
Option may not be exercised within one year after the date of grant except in
the case of the death of the optionee or upon termination of active employment
with the Company by reason of the Disability or Retirement of the optionee
during such period; provided, however, that the Committee shall have the
discretion to provide for the immediate exercisability of the Options in such
additional circumstances as the Committee in its discretion shall determine. Thereafter,
an Option shall be exercisable in such installments, if any, as the Committee
may specify, and shall be exercisable during the optionee’s lifetime only by
the optionee (or, if the optionee is disabled, by any guardian or other legal
representative appointed to represent him or her) and, except as provided in
subsections (c) and (d) below, shall not be exercisable by the optionee unless
at the time of exercise such optionee is an employee of the Company.

 

(c)           Upon
termination of active employment with the Company by reason of Disability or
Retirement, an optionee (or, if the optionee is disabled, any guardian or legal
representative appointed to represent him or her) may exercise all Options
otherwise exercisable by him or her at the time of such termination of
employment (subject to the provisions of subsection (e) below) until the
expiration thereof. In the event an optionee dies while employed by the Company
or after termination of employment by reason of Disability or Retirement, the
person who acquired the right to exercise his or her Options by reason of the
death of the optionee, as provided in Section 30 hereof, may exercise such
Options otherwise exercisable at the time of death (subject to the provisions
of subsection (e) below) at any time until the expiration thereof.

 

(d)           Upon
termination of employment with the Company for any reason other than death,
Retirement or Disability, the optionee may exercise all Options otherwise exercisable
by him or her at the time of such termination of employment for an additional
one year after such termination of employment. Upon termination of employment
with the Company as a result of the sale or other disposition of a subsidiary
or division of the Company, management shall have the discretion to extend the
period the optionee may exercise all Options, otherwise exercisable by him or
her for an additional one year after such termination of employment as
described above, up to an additional two years (for a maximum period of three
years) after such termination of employment. In the event of a termination as
described in the preceding sentence, the one-year period referred to in the
following sentences in this Section 10(d) shall be extended accordingly. In the
event such optionee dies within such one-year period, the person who acquired
the right to exercise his or her Options by reason of the death of the
optionee, as

 

5

 

provided in Section 30 hereof,
may exercise such Options at any time within the period of the greater of (i)
the remainder of the one-year period described in the foregoing sentence, or
(ii) three months from the date of the optionee’s death. For purposes of this
Section 10(d), in the event that any optionee is rehired by the Company within
one year of such optionee’s termination of employment with the Company, such
optionee shall be deemed not to have terminated employment for purposes of
determining the expiration date of all unexpired non-qualified stock options
held by such individual on the date of rehire, with the effect that such
options shall continue to be exercisable at any time until the expiration
thereof (subject to the terms thereof and the provisions of this Section 10).

 

(e)           Notwithstanding
any of the foregoing, no Option shall be exercisable in whole or in part after
the expiration date provided in the Option. In the event of the death of the
optionee while employed by the Company, or the Disability or Retirement of the
optionee, the Committee shall have the discretion to provide for the
acceleration of the exercisability of Options exercisable over a period of
time, or alternatively, to provide for all or any part of such Options to
continue to become exercisable in such installments as originally specified by
the Committee, or such revised installments as specified by the Committee at
the time of termination of employment (but in no event beyond the original
expiration date), in either case subject to such conditions as determined by
the Committee in its discretion.

 

(f)            No
Option shall be transferable otherwise than by will or by the laws of descent
and distribution. Notwithstanding the foregoing sentence, the Committee may
determine that Options granted to a Participant or a specified group of
Participants may be transferred by the Participant to one or more members of
the Participant’s immediate family, to a partnership or limited liability
company whose only partners or members are members of the Participant’s immediate
family, or to a trust established by the Participant for the benefit of one or
more members of the Participant’s immediate family; provided, however, that no
Incentive Stock Options may become transferable if inconsistent with Section
422 of the Code, unless the Participant consents. For this purpose, “immediate
family” means the Participant’s spouse, parents, children (including adopted
and step-children), grandchildren and the spouses of such parents, children
(including adopted and step-children) and grandchildren. A transferee described
in this subsection may not further transfer an Option. An Option transferred
pursuant to this subsection shall remain subject to the provisions of the Plan
and shall be subject to such other rules as the Committee shall determine.

 

11.          OPTION
AGREEMENTS

 

In consideration of any
Options granted to a Participant under the Plan, if requested by the Committee,
such Participant shall enter into an Option Agreement with the Company
providing such other terms as the Committee may deem advisable.

 

6

 

PART
II  AWARDS

 

12.          FORM
OF AWARDS

 

The Award portion of the
Plan is designed to provide incentives for Participants by the making of awards
of supplemental compensation (“Awards”). The Committee, subject to the terms
and conditions hereof, may make Awards to a Participant in any one, or in any
combination, of the following forms:

 

(a)           Common
Stock as provided in Part IIA of the Plan (“Stock Awards”);

 

(b)           Restricted
Stock as provided in Part IIB of the Plan (“Restricted Stock Awards”);

 

(c)           Retirement
Units as provided in Part IIC of the Plan (“Retirement Unit Awards”);

 

(d)           Annual
Performance Awards as provided in Part IID of the Plan (“Annual Performance
Awards”);

 

(e)           Performance
Awards (“Performance Awards”) or other forms of Awards (“Other Awards”), as
provided in Part IIE of the Plan; and

 

(f)            Long-Term
Performance Awards as provided in Part IIF of the Plan (“Long-Term Performance
Awards”).

 

Awards may be made to a
Participant whether or not he or she is receiving an Option grant under Part I
of the Plan for the year and whether or not he or she receives an award under
the Cash Plan. Awards will be based on a Participant’s performance in those
areas for which the Participant is directly responsible. Performance for this
purpose may be measured by the achievement of specific management goals such
as, but not limited to, an increase in earnings or the operating cash flow of
the Company, outstanding initiative or achievement in any department of the
Company, or any other standards specified by the Committee. Annual Performance
Awards will be based exclusively on the criteria set forth in Section 27A. Long-Term
Performance Awards will be based exclusively on the criteria set forth in Section
28A.

 

13.          MAXIMUM
AMOUNT AVAILABLE FOR THE ACCRUAL OF AWARDS UNDER PART II OF THE PLAN FOR ANY
YEAR

 

(a)           No
accrual for Awards shall be made hereunder (or under the Cash Plan) for any
year unless cash dividends of not less than five cents ($.05) per share
(subject to adjustment as provided in Sections 28 and 29 hereof) have been
declared on the outstanding Class A and Class B Common Stock of the Company
during such year.

 

(b)           In
the event that the above condition is met for any year during the continuance
of this Plan, the maximum aggregate amount that may be accrued for Awards under
the Plan and the Cash Plan for such year shall be 4% of Income Before Income
Taxes. The Committee, in its sole discretion, may make adjustments in Income
Before Income Taxes to take account of extraordinary, unusual or infrequently
occurring events and transactions, changes in accounting principles that

 

7

 

substantially affect the
foregoing, or such other circumstances as the Committee may determine warrant
such adjustment.

 

(c)           As
soon as feasible after the close of each year, the independent certified public
accountants of the Company shall report the maximum amount that may be accrued
for Awards for such year under the formula described in Section 13(b), subject
to the second sentence of such Section.

 

(d)           If
amounts are accrued in any year under the formula described in this Section 13
and are not awarded in full in such year under the Plan and the Cash Plan, such
unawarded amounts may, in the discretion of the Committee, be carried forward
and be available for Awards under the Plan and under the Cash Plan in any
future year without regard to the provisions of Sections 13(a) or (b) of the
Plan applicable to Awards made in such year.

 

(e)           Awards
under the Plan for any year may not exceed the sum of (i) the amount accrued
for such year under Section 13(b) above, plus (ii) unawarded accrued amounts
carried forward from previous years under Section 13(d) above, plus
(iii) amounts that may become available for Awards pursuant to the last
sentence of Sections 15(c) and 27A hereof, minus (x) the amount of interest or
dividend equivalents set aside during such year pursuant to Sections 15(c) and
27A hereof and the amount of dividend equivalents allocated to Retirement Unit
Accounts during such year pursuant to Section 24 hereof, and minus (y) the
amount of awards made for such year under the Cash Plan (and any interest
equivalents allocated during such year pursuant to Section 10(b), 11(f) and
12(b) thereof). For this purpose, the amount of Awards of Common Stock under
the Plan shall be based on the Fair Market Value of the Common Stock subject to
Awards as of the date of grant of such Awards.

 

(f)            Subject
to Sections 28 and 29 hereof, the aggregate number of shares of Common Stock
for which Stock, Restricted Stock, Retirement Units, Annual Performance Awards,
and Performance and Other Awards may be made under the Plan shall not exceed
2,000,000 shares, which shall be treasury shares reserved for issuance of
Awards under the Plan. Shares of Common Stock subject to, but not issued under,
any deferred Award which has been discontinued by the Committee pursuant to the
provisions hereof or any Restricted Stock which is forfeited by any Participant
shall again be available for Awards under the Plan.

 

8

 

14.          DETERMINATION
OF AWARDS AND PARTICIPANTS

 

(a)           As
promptly as practicable after the end of each year, the Committee may make
Awards (other than Annual Performance Awards and Long-Term Performance Awards,
which are to be made exclusively as set forth in Sections 27A and 28A,
respectively) for such year and determine the amounts to be carried forward for
Awards in future years. The Committee may also, in its discretion, make Awards
(other than Annual Performance Awards and Long-Term Performance Awards, which
are to be made exclusively as set forth in Sections 27A and 28A, respectively)
prior to the end of the year based on the amounts available under clauses (ii)
and (iii) of Section 13(e) and reasonable estimates of the accrual for the year
in question.

 

(b)           The
Committee shall have absolute discretion to determine the key employees who are
to receive Awards (other than Annual Performance Awards, which are to be made
exclusively as set forth in Sections 27A and 28A, respectively) under the Plan
for any year and to determine the amount of such Awards based on such criteria
and factors as the Committee in its sole discretion may determine, such as the
Company’s operating cash flow and overall financial performance. Recommendations
as to the key employees who are to receive Awards (including Annual Performance
Awards and Long-Term Performance Awards) under the Plan for any year and as to
the amount and form of such Awards shall, however, be made to the Committee by
the chief executive officer of the Company. The fact that an employee is
selected as eligible for an Award shall not mean, however, that such employee
will necessarily receive an Award.

 

(c)           A
person whose employment terminates during the year or who is granted a leave of
absence during the year may, in the discretion of the Committee and under such
rules as the Committee may from time to time prescribe, be given an Award with
respect to the period of such person’s service during such year.

 

15.          METHOD
AND TIME OF PAYMENT OF AWARDS

 

(a)           Awards
shall be paid in full as soon as practicable after the Award is made; provided,
however, that the payment of Annual Performance Awards and Long-Term Performance
Awards shall be subject to the provisions of Sections 27A and 28A,
respectively, and provided further, that the payment of any or all Awards may
be deferred, divided into annual installments, or made subject to such other
conditions as the Committee in its sole discretion may authorize under such
rules and regulations as may be adopted from time to time by the Committee.

 

(b)           The
Committee’s rules and regulations may include procedures by which a Participant
expresses a preference to the Committee as to the form of Award or method of
payment of an Award, but the final determination as to the form and the terms
and conditions of any Award shall rest solely with the Committee.

 

9

 

(c)           Awards
deferred under the Plan shall become payable to the Participant or, in the
event of the Participant’s death, as specified in Section 30 hereof, in such
manner, at such time or times (which may be either before or after Retirement
or other termination of service), and subject to such conditions as the
Committee in its sole discretion shall determine. In any year the Committee
shall have the discretion to set aside, for payment in such year or any future
year, interest on any deferred Award payable partly in cash, and amounts
equivalent to dividends on any deferred Award payable wholly or partly in
stock; provided, however, that the total amount of such interest and dividend
equivalents shall be deducted from the maximum amount available for Awards
under Section 13(e) of the Plan. Any forfeited deferred Awards (including any
forfeited stock at its Award value) shall be carried forward and be available
for Awards in any future year without regard to the provisions of Sections
13(a) or (b) of the Plan.

 

16.          INDIVIDUAL
AGREEMENTS

 

(a)           The
Committee may in its discretion require that each Participant receiving an
Award enter into an agreement with the Company which shall contain such terms
and conditions as the Committee in its discretion may require.

 

(b)           The
Committee may cancel any unexpired, unpaid or deferred Award at any time if the
Participant is not in compliance with all applicable provisions of the
agreement referred to above, if any, and the Plan.

 

17.          STATUS
OF PARTICIPANTS

 

No Participant in this
Plan shall be deemed to be a stockholder of the Company, or to have any
interest in any stock or any specific assets of the Company by reason of the
fact that deferred Stock Awards, Retirement Unit Awards, Annual Performance
Awards, Long-Term Performance Awards, Performance Awards, Other Awards or
dollar credits are to be recorded as being held for such Participant’s account
to be paid in installments in the future. The interest of all Participants
shall derive from and be determined solely by the terms and provisions of the Plan
set forth herein.

 

18.          [INTENTIONALLY
LEFT BLANK]

 

PART IIA              STOCK AWARDS

 

19.          DETERMINATION
OF STOCK AWARDS

 

(a)           Each
year the Committee shall designate those Participants who shall receive Stock
Awards under this part of the Plan. Stock Awards may be granted under this part
of the Plan only in lieu of cash salary or bonuses. Stock Awards are made in
the form of grants of Common Stock, which may be delivered immediately, in
installments or on a deferred date, as the Committee, in its discretion, may
provide.

 

10

 

(b)           If
the Committee determines that some portion of a Stock Award to a Participant
shall be treated as a deferred Stock Award and payable in annual or other
periodic installments, then the Participant will be notified in writing when
such deferred Stock Awards shall be paid and over what period of time. As soon
as feasible after the granting of such a Stock Award, there shall be reserved
out of the treasury shares of the Company, a number (which may include a
fraction) of shares of Common Stock equal to the number of shares of Common
Stock so awarded. In each year at the discretion of the Committee there may
also be allocated or credited to each Participant a dollar amount equal to the
cash dividends declared and paid by the Company on its Common Stock which the
Participant would have received had such Participant been the owner of the
number of shares of any Common Stock deferred for future payment. Any amounts
provided for pursuant to the preceding sentence shall become payable in such
manner, at such time or times, and subject to such conditions (which may
include provision for an amount equivalent to interest on such dividend
equivalents at rates fixed by the Committee) as the Committee in its sole
discretion shall determine; provided, however, that the total value of such
dividend equivalents (and any interest thereon) shall be deducted from the
amount available for Awards under the provisions of Section 13(e) of the Plan. The
Committee in its discretion may make appropriate equitable adjustments to such
deferred Stock Award to account for any dividends of property (other than cash)
declared and paid by the Company on its Common Stock, or to account for any
other event described in Sections 28 and 29 hereof.

 

PART
IIB  RESTRICTED STOCK AWARDS

 

20.          DETERMINATION
OF RESTRICTED STOCK AWARDS

 

Each year the Committee
shall designate the Participants who shall receive Restricted Stock Awards. Shares
awarded under this part of the Plan, while subject to the restrictions
hereinafter set forth, are referred to as “Restricted Stock.”

 

21.          TERMS
OF RESTRICTED STOCK AWARDS

 

Any Award of Restricted
Stock shall be subject to the following terms and conditions and to any other
terms and conditions not inconsistent with the Plan as shall be prescribed by
the Committee in its sole discretion and which may be contained in the
agreement, if any, referred to in Section 16 above (or in any amendment
thereto):

 

(a)           DELIVERY
OF RESTRICTED STOCK. Unless otherwise determined by the Committee, the Company
shall transfer treasury shares to each Participant to whom an Award of
Restricted Stock has been made equal to the number of shares of Restricted
Stock specified in the Award, and may either (i) hold the certificates representing
such shares of Restricted Stock for the Participant or (ii) take other steps to
restrict the Participant’s ability to transfer such shares, in either case, for
the period of time during which such shares shall remain subject to the
restrictions set forth in the Award (the “Restricted Period”). Shares of
Restricted Stock may not be sold, assigned, transferred, pledged, hypothecated
or otherwise

 

11

 

encumbered by a
Participant during the Restricted Period, except as hereinafter provided. Except
for the restrictions set forth herein and unless otherwise determined by the
Committee, a Participant shall have all the rights of a stockholder with
respect to the shares of Restricted Stock comprising his or her Award,
including, but not limited to, the right to vote and the right to receive
dividends (which if in shares of Common Stock shall be Restricted Stock under
the same terms and conditions).

 

(b)           RESTRICTED
PERIOD. The Restricted Period shall commence upon the date of the Award (which
unless otherwise specified by the Committee shall be the date the Restricted
Stock is transferred to the Participant) and, unless sooner terminated as
otherwise provided herein, shall continue for such period of time as specified
by the Committee in the Award. The Restricted Period for Restricted Stock shall
be at least (i) one year in the case of Restricted Stock having restrictions
based on performance-based criteria and (ii) three years in the case of
Restricted Stock having restrictions based solely on the passage of time. The
terms of any Award of Restricted Stock, or the Committee at any time, may
provide for the earlier termination of the Restricted Stock Period in the case
of, and only in the case of, the death, Disability or Retirement of the
Participant.

 

(c)           LEGEND.
If certificates are issued in respect of shares of Restricted Stock transferred
or issued to a Participant under an Award registered in the name of the
Participant, such certificate shall bear the following (or a similar) legend:

 

“THIS CERTIFICATE
AND THE SHARES OF STOCK REPRESENTED HEREBY ARE SUBJECT TO THE TERMS AND
CONDITIONS CONTAINED IN THE NEW YORK TIMES COMPANY 1991 EXECUTIVE STOCK
INCENTIVE PLAN (THE “PLAN”) APPLICABLE TO RESTRICTED STOCK AND TO THE RESTRICTED
STOCK AGREEMENT DATED (THE “AGREEMENT”), AND MAY NOT BE SOLD, PLEDGED,
TRANSFERRED, ASSIGNED, HYPOTHECATED, OR OTHERWISE DISPOSED OF OR ENCUMBERED IN
ANY MANNER DURING THE RESTRICTED PERIOD SPECIFIED IN SUCH AGREEMENT. COPIES OF
SUCH PLAN AND AGREEMENT ARE ON FILE WITH THE SECRETARY OF THE COMPANY.”

 

(d)           DEATH
OR DISABILITY. Unless the Committee shall otherwise determine in the Award, if
a Participant ceases to be employed by the Company by reason of death or
Disability, the Restricted Period covering all shares of Restricted Stock
transferred or issued to such Participant under the Plan shall immediately
lapse.

 

(e)           RETIREMENT.
Unless the Committee shall otherwise determine in the Award, the Restricted
Period covering all shares of Restricted Stock transferred to a Participant
under the Plan shall immediately lapse upon such Participant’s Retirement,
whether early or not.

 

(f)            TERMINATION
OF EMPLOYMENT. Unless the Committee shall otherwise determine in the Award or
otherwise determine at or after the date of grant, if a

 

12

 

Participant ceases to be
employed by the Company other than due to a condition described in Sections
21(d) or (e) above, all shares of Restricted Stock owned by such Participant
for which the Restricted Period has not lapsed shall revert back to the Company
upon such termination. Authorized leave of absence or absence in military
service shall constitute employment for the purposes of this Section 21(f).
Whether absence in government service may constitute employment for the
purposes of the Plan shall be conclusively determined by the Committee.

 

(g)           WAIVER
OF FORFEITURE PROVISIONS. The Committee, in its sole and absolute discretion,
may waive the forfeiture provisions in respect of all or some of the Restricted
Stock awarded to a Participant.

 

(h)           LAPSE
OF RESTRICTED PERIOD. Upon the lapse of the Restricted Period with respect to
any shares of Restricted Stock, such shares shall no longer be subject to the
restrictions imposed in the Award and shall no longer be considered Restricted
Stock for the purposes of the Award and the Plan, and the Company shall take
all appropriate steps to effect the foregoing.

 

PART IIC  RETIREMENT UNIT AWARDS

 

22.          DETERMINATION
OF RETIREMENT UNIT AWARDS

 

Each year the
Committee shall designate those Participants who shall receive Retirement Unit
Awards under the Plan. The Company shall create and maintain appropriate
records of account for each Participant which shall be designated as the
Participant’s Retirement Unit Account.

 

23.          CREDITS
TO RETIREMENT UNIT ACCOUNTS

 

The Committee
shall allocate to each Participant selected to receive a Retirement Unit Award
for that year such dollar amount as the Committee shall determine, taking into
account the value of the Participant’s services to the Company. Such dollar
amount shall thereupon be converted into Retirement Units or fractions of Units
and credited to each such Participant’s Retirement Unit Account in a number
equal to the quotient obtained by dividing such allocated dollar amount by the
Fair Market Value of one share of Common Stock as of the date the allocation is
made.

 

24.          DIVIDEND
CREDITS

 

At the discretion of the
Committee there may also be allocated in each year to each Participant a dollar
amount equal to the cash dividends declared and paid by the Company on the
Common Stock which the Participant would have received had such Participant
been the owner of the number of shares of Common Stock equal to the number of
the whole Retirement Units (but not fractional Units) credited to the
Participant’s Retirement Unit Account; provided, however, that the total value
of such dividend equivalents shall be deducted from the amount available for
Awards under Section 13 of the Plan. The dollar amounts allocated shall be
converted into and credited to the Participant’s Retirement Unit Account as
Retirement Units or fractions thereof as set forth in Section 23 above as of
the date on which such dividends were paid by the Company. No interest shall be
paid on the dollar amount so allocated to the

 

13

 

Retirement Unit Account
of any Participant. The Committee in its discretion may make appropriate
equitable adjustments to such Retirement Unit Accounts to account for any
dividends of property (other than cash) declared and paid by the Company on its
Common Stock, or to account for any other event described in Sections 28 and 29
hereof.

 

25.          RESERVATION
OF STOCK AND ACCOUNTING RECORDS

 

The Company shall keep
records of the Participant’s Retirement Unit Account. At the time of any
allocation to a Participant’s account under Sections 23 or 24 hereof, there
shall be reserved out of treasury shares of the Company a number (which may
include a fraction) of shares of Common Stock equal to the number of Units or
fraction thereof so allocated.

 

26.          MATURITY
AND PAYMENT AFTER MATURITY

 

(a)           The
Retirement Unit Account of each Participant shall mature upon such Participant’s
death, Retirement or other separation from service.

 

(b)           Except
as set determined by the Committee, after maturity, the Company shall deliver
to the Participant (or in the event of the death of the Participant, as
specified in Section 30 hereof) in ten approximately equal annual installments,
shares of Common Stock equal in the aggregate to the number of Retirement Units
credited to the Participant’s Retirement Unit Account. Any fraction of a Unit
credited to the Participant’s account at maturity shall be paid in cash with
the first installment, the fractional Unit being converted into cash at the
Fair Market Value of the Common Stock on such first payment date. The first
such installment shall be paid within 90 days after maturity. To the extent
necessary to comply with Code Section 409A, no amount shall be delivered to a
Participant who is a “specified employee” within the meaning of Code Section
409A(a)(2)(B)(i) before the date which is 6 months after the date of the
Participant’s separation from service. “Code Section 409A” shall mean Section
409A of the Code (or any successor provision).

 

(c)           So
long as Retirement Units remain credited to the Retirement Unit Account of a
Participant subsequent to maturity, such account shall be credited with the
dollar amount allocated to the account as dividends as provided for in Section
24 hereof. Any dollar amount so credited may be paid in cash with the next
succeeding annual installment made under Section 26(b) above, or in such
manner, at such time or times, and subject to such conditions as the Committee
in its sole discretion shall determine; provided, however, that in the case of
any dollar amount credited to an account after maturity in respect of a
dividend declared prior to maturity, such dollar amounts shall be converted to
Retirement Units as of the date of payment and the remaining installments of
Common Stock shall be increased accordingly.

 

14

 

PART
IID  ANNUAL PERFORMANCE AWARDS

 

27A.       DETERMINATION OF ANNUAL PERFORMANCE AWARDS

 

(a)           GENERAL. Each year the Committee may make
Annual Performance Awards under this part of the Plan; provided that no
Participant may be eligible to receive an Annual Performance Award hereunder
and under the Cash Plan in the same year.

 

(b)           CERTAIN DEFINITIONS. For the purposes of
this Section 27A, the following terms shall have the meanings specified:

 

“Affected Officers” shall mean those executive officers of the Company
whose compensation is required to be disclosed in the Company’s annual proxy
statement relating to the election of directors.

 

“Code Section 162(m)” shall mean Section 162(m) of the Code
(or any successor provision), and “Regulations” shall mean the regulations
promulgated thereunder, as from time to time in effect.

 

“Eligible Participants” shall have the meaning set forth in subsection
(c) below.

 

“Performance Adjustment” means, for any year, a factor ranging
from 0% to 200%, based upon the achievement of Performance Goal Targets
established by the Committee, that, when multiplied by an Eligible Participant’s
Target Award, determines the amount of such Eligible Participant’s Annual
Performance Award for such year.

 

“Performance Goal” means, for any year, the business criteria selected
by the Committee to measure the performance during such year of the Company (or
of a division, subsidiary or group thereof) from one or more of the following:

 

(i)            earnings
per share of the Company for the year;

 

(ii)           net
income of the Company for the year;

 

(iii)          return
on assets of the Company for the year (net income of the Company for the year
divided by average total assets during such year);

 

(iv)          return
on stockholder’s equity of the Company for the year (net income of the Company
for the year divided by average stockholder’s equity during such year);

 

(v)           operating
profit or operating margins of the Company or of a division, subsidiary or
group thereof for the year;

 

(vi)          cash
flow of the Company or of a division, subsidiary or group thereof for the year;

 

(vii)         increase
in shareholder value as determined at the end of each year;

 

15

 

(viii)        revenue
growth of the Company or of a division, subsidiary or group thereof for the
year; and

 

(ix)           improved
use of capital and/or assets of the Company or of a division, subsidiary or
group thereof for the year.

 

“Performance Goal Target” means, for any Performance Goal, the
levels of performance during a year under such Performance Goal established by
the Committee to determine the Performance Adjustment to an Eligible
Participant’s Target Award for such year.

 

“Target Award” means, for any year, with respect to an Eligible
Participant, the dollar amount set by the Committee that, when multiplied by
the applicable Performance Adjustment, determines the dollar amount of such
Eligible Participant’s Annual Performance Award.

 

(c)           ELIGIBILITY.
Annual Performance Awards are available each year only to Plan Participants who
are designated by the Committee, prior to March 31 of such year (or prior to
such later date as permitted by Code Section 162(m) and the Regulations), as
likely to be Affected Officers for such year, whose annual salary and bonus for
such year are expected to exceed $1,000,000 and who are not designated by the
Committee as eligible for an annual performance award under the Cash Plan for
such year (“Eligible Participants”).

 

(d)           DETERMINATION
OF ANNUAL PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to such
later date as permitted by Code Section 162(m) and the Regulations), the
Committee will determine the Eligible Participants for such year, will
designate those Eligible Participants who will be entitled to earn an Annual
Performance Award for such year under this Plan, and will establish for each
such Eligible Participant for such year: (i) a Target Award, (ii) one or more
Performance Goals, and (iii) for each such Performance Goal, a Performance Goal
Target, the method by which achievement thereof will be measured and a schedule
of Performance Adjustment factors corresponding to varying levels of
Performance Goal Target achievement. In the event more than one Performance
Goal is established for any Eligible Participant, the Committee shall at the
same time establish the weighting of each such Performance Goal in determining
such Eligible Participant’s Annual Performance Award. Notwithstanding anything
in this Section 27A to the contrary, the Annual Performance Award payable to
any Eligible Participant in any year may not exceed $3.0 million.

 

(e)           PAYMENT
OF ANNUAL PERFORMANCE AWARDS. Subject to subsection (f) below, provided the
Committee certifies the extent to which the Performance Goal Target or Targets
under the Performance Goal or Goals have been met or exceeded, Annual
Performance Awards will be paid by March 15 after the end of the year to which
they relate, unless administratively impracticable to do so. In the discretion
of the Committee, an Annual Performance Award may be paid in cash, shares of
Common Stock, shares of Restricted Stock (subject to the

 

16

 

provisions of Section 21
hereof), Retirement Units (subject to the provisions of Sections 23-26 hereof)
or any combination thereof. For this purpose, shares of Common Stock shall be
valued at Fair Market Value, and Restricted Stock and Retirement Units shall be
deemed to have a value equal to the Fair Market Value of the underlying Common
Stock, in each case as of the date of the Committee’s determination to pay such
Annual Performance Award in such form or forms. If permitted by the Regulations
and Code Section 162(m), the Committee may determine to pay a portion of an
Annual Performance Award in December of the year to which it relates. The
Committee may not increase the amount of an Annual Performance Award that would
otherwise be payable upon achievement of the Performance Target or Targets, but
it may reduce any Eligible Participant’s Annual Performance Award in its
discretion. Subject to Section 14(c) above, no Annual Performance Award will be
payable to any Eligible Participant who is not an employee of the Company on
the last day of the year to which such Annual Performance Award relates.

 

(f)            DEFERRAL
OF ANNUAL PERFORMANCE AWARDS. If the Committee determines that some portion of
an Annual Performance Award to an Eligible Participant shall be treated as a
deferred Annual Performance Award and be payable in annual or other periodic
installments, the Eligible Participant will be notified in writing when such
deferred Annual Performance Award shall be paid and over what period of time. A
deferred Award in the form of shares of Common Stock shall be subject to the
provisions of Section 19(b) hereof. In the case of a deferred Award in the form
of cash, in each year the Committee shall have the discretion to provide for
the payment of an amount equivalent to interest, at such rate or rates fixed by
the Committee, on such deferred cash Annual Performance Award. Any amounts
provided for pursuant to the preceding sentence shall become payable in such a
manner, at such time or times, and subject to such conditions as the Committee
shall in its sole discretion determine; provided, however, that the total
amount of such interest shall be deducted from the maximum amount available for
Awards under the formula described in Section 13 of the Plan.

 

(g)           CODE
SECTION 162(m). It is the intent of the Company that Annual Performance Awards
satisfy, and this Section 27A be interpreted in a manner that satisfies, the
applicable requirements of Code Section 162(m) and the Regulations so that the
Company’s tax deduction for Annual Performance Awards to Affected Officers is
not disallowed in whole or in part by operation of Code Section 162(m). If any
provision of this Plan or of any Annual Performance Award would otherwise
frustrate or conflict with such intent, that provision shall be interpreted and
deemed amended so as to avoid such conflict. To the extent of any
irreconcilable conflict with such intent, such provision shall be deemed void
as applicable to Eligible Participants.

 

17

 

PART
IIE  PERFORMANCE OR OTHER AWARDS

 

27.          DETERMINATION
OF PERFORMANCE AND OTHER AWARDS

 

(a)           Each
year the Committee in its sole discretion may authorize other forms of Awards
such as, but not limited to, Performance Awards, if the Committee deems it
appropriate to do so in order to further the purposes of the Plan.

 

(b)           A “Performance
Award” shall mean an Award which entitles the Participant to receive Common
Stock, Restricted Stock, Retirement Units, Options under Part I of the Plan or
other compensation (which may include cash), or any combination thereof, in an
amount which depends upon the financial performance of the Company during a
stated period of more than one year. Performance for this purpose may be
measured by the growth in book value of the Common Stock, an increase in per
share earnings of the Company, an increase in operating cash flow, or any other
indicators specified by the Committee. The Committee shall also fix the period
during which such performance is to be measured, the value of a Performance
Award for purposes of providing for the accrual pursuant to Section 13 of the
Plan and the form of payment to be made in respect of the Performance Award.

 

PART
IIF  LONG-TERM PERFORMANCE AWARDS

 

28A.       DETERMINATION
OF LONG-TERM PERFORMANCE AWARDS

 

(a)           GENERAL.
Each year the Committee shall designate those Participants who shall be
eligible to receive Long-Term Performance Awards under this part of the Plan.

 

(b)           CERTAIN
DEFINITIONS. For purposes of this Section 28A, the following terms shall have
the meanings specified:

 

“Code Section 162(m)” shall mean Section 162(m) of the
Internal Revenue Code of 1986, as amended (or any successor provision), and “Regulations”
shall mean the regulations promulgated thereunder, as from time to time in
effect.

 

“Eligible Participants” shall mean certain key business leaders
and senior management of the Company as determined in the discretion of the
Committee.

 

“Long-Term Performance Goal” means, for any Performance Period, the
business criteria selected by the Committee to measure the performance during
such Performance Period of the Company (or of a division, subsidiary or group
thereof) from one or more of the following:

 

(i)            earnings
per share of the Company for the Performance Period;

 

(ii)           net
income of the Company for the Performance Period;

 

18

 

(iii)          return
on assets of the Company for the Performance Period (net income of the Company
for the Performance Period divided by average total assets for such Performance
Period);

 

(iv)          return
on stockholder’s equity of the Company for the Performance Period (net income
of the Company for the Performance Period divided by average stockholder’s
equity for such Performance Period);

 

(v)           operating
profit or operating margins of the Company or of a division, subsidiary or
group thereof for the Performance Period;

 

(vi)          cash
flow of the Company or of a division, subsidiary or group thereof for the
Performance Period;

 

(vii)         increase
in shareholder value as determined at the end of the Performance Period;

 

(viii)        revenue
growth of the Company or of a division, subsidiary or group thereof for the
Performance Period; and

 

(ix)           improved
use of capital and/or assets of the Company or of a division, subsidiary or
group thereof for the Performance Period.

 

“Long-Term Performance Goal Target” means, for any Long-Term Performance
Goal, the levels of performance during a Performance Period under such
Long-Term Performance Goal established by the Committee to determine an
Eligible Participant’s maximum Long-Term Performance Award.

 

“Performance Period” means the period in excess of one year
commencing on January 1 of the year in which the Committee makes the Long-Term
Performance Award to an Eligible Participant.

 

(c)           ELIGIBILITY.
Long-Term Performance Awards are available each year to Eligible Participants
who are designated by the Committee, prior to March 31 of such year (or prior
to such later date as permitted by Code Section 162(m) and the Regulations).

 

(d)           DETERMINATION
OF LONG-TERM PERFORMANCE AWARDS. Prior to March 31 of each year (or prior to
such later date as permitted by Code Section 162(m) and the Regulations), the
Committee will designate the Eligible Participants who will be entitled to earn
a Long-Term Performance Award for such Performance Period under this Plan, and
will establish for each such Eligible Participant for such Performance Period
(i) one or more Long-Term Performance Goals, and (ii) for each such Long-Term
Performance Goal, a Long-Term Performance Goal Target and the method by which achievement
thereof will be measured. In the event that more than one Long-Term Performance
Goal is established for any Eligible Participant, the Committee shall at the
same time establish the weighting of each such Long-Term Performance Goal in
determining such Eligible Participant’s Long-Term Performance Award. Notwithstanding
anything in this Section 28A to the contrary, the Long-Term Performance Award
payable to any Eligible Participant in any Performance Period may not exceed
$3.0 million.

 

19

 

(e)           PAYMENT
OF LONG TERM PERFORMANCE AWARDS. Subject to subsection (g) below, provided the
Committee certifies the extent to which the Long-Term Performance Goal Target
or Targets under the Long-Term Performance Goal or Goals have been met or
exceeded, Long-Term Performance Awards will be paid in cash by March 15 after
the end of the year in which the Performance Period ends, unless
administratively impracticable to do so. If permitted by the Regulations and
Code Section 162(m), the Committee may determine to pay a portion of a
Long-Term Performance Award in December of the last year of the Performance
Period to which it relates. The Committee may not increase the amount of a
Long-Term Performance Award that would otherwise be payable upon the
achievement of the Long-Term Performance Goal Target or Targets, but it may
reduce any Eligible Participant’s Long-Term Performance Award in its discretion.
Subject to Sections 14(c) and 28A(g), no Long-Term Performance Award will be
payable to any Eligible Participant who is not an employee of the Company on
the last day of the Performance Period to which such Long-Term Performance
Award relates.

 

(f)            TERMINATION
OF EMPLOYMENT BECAUSE OF DEATH, DISABILITY OR RETIREMENT. In the event that an
Eligible Participant terminates employment because of death, Disability or
Retirement, such Eligible Participant, or in the event of death such person as
determined in accordance with Section 30, shall be paid a pro rata portion of
such Eligible Participant’s Long-Term Performance Award that would otherwise be
payable upon the achievement of the Long-Term Performance Goal Target or
Targets had the Participant continued employment until the end of the
Performance Period. Such pro rata Long-Term Performance Award shall not be paid
until the end of the Performance Period to which such Long-Term Award relates.

 

(g)           DEFERRAL
AND ALTERNATIVE FORM OF PAYMENT OF LONG-TERM PERFORMANCE AWARDS. If the
Committee determines that some portion of a Long-Term Performance Award to an
Eligible Participant shall be treated as a deferred Long-Term Performance Award
and payable in annual or other periodic installments, the Eligible Participant
will be notified in writing when such deferred Long-Term Performance Award shall
be paid and over what period of time. In each year the Committee shall have the
discretion to provide for the payment of an amount equivalent to interest, at
such rate or rates fixed by the Committee, on any deferred Long-Term
Performance Award. Any amounts provided for pursuant to the preceding sentence
shall become payable in such manner, at such time or times, and subject to such
conditions as the Committee shall in its sole discretion determine; provided,
however, that the total amount of such interest shall be deducted from the
maximum amount available for Awards under the formula described in Section 5 of
the Plan. Furthermore, the Committee may, in its sole discretion, determine
that such Long-Term Performance Award shall be paid in shares of Common Stock
or in the form of Retirement Units (subject to the provisions of Sections 23-26
hereof). For this purpose, shares of Common Stock shall be valued at Fair
Market Value, and Retirement Units shall be deemed to have a value equal to the
Fair Market Value of the underlying Common Stock, in each case as of the date
of the Committee’s determination to pay such Long-Term Performance Award in
such form.

 

20

 

(h)           CODE
SECTION 162(m). It is the intent of the Company that Long-Term Performance
Awards satisfy, and this Section 28A be interpreted in a manner that satisfies,
the applicable requirement of Code Section 162(m) and the Regulations so that
the Company’s tax deduction for Long-Term Performance Awards to Eligible
Participants is not disallowed in whole or in part by operation of Code Section
162(m). If any provision of this Plan or of any Long-Term Performance Award
would otherwise frustrate or conflict with such intent, that provision shall be
interpreted and deemed amended so as to avoid such conflict. To the extent of
any irreconcilable conflict with such intent, such provision shall be deemed
void as applicable to any Participant whose compensation is subject to Code
Section 162(m).

 

PART III  GENERAL PROVISIONS

 

28.          STOCK
DIVIDEND OR STOCK SPLIT

 

If at any time the
Company shall take any action whether by stock dividend, stock split,
combination of shares, or otherwise, which results in a proportionate increase
or decrease in the number of shares of Common Stock theretofore issued and
outstanding, (i) the number of shares of Common Stock then subject to deferred
Awards, credited to Retirement Unit Accounts (matured or unmatured) or set
aside for Performance or Other Awards, (ii) the number of outstanding Options,
the number of shares of Common Stock for which such Options are exercisable and
the exercise price thereof, (iii) the number of shares of Common Stock reserved
for Awards, (iv) the number of shares of Common Stock reserved for Options, and
(v) the maximum number of shares with respect to which Options may be granted
to any key employee in any calendar year under Section 6(b), shall be increased
or decreased in the same proportion. The Committee shall make an appropriate
equitable adjustment to the provisions of Section 13(a) to take account of such
increase or decrease in issued and outstanding shares. The Committee in its
discretion may make appropriate equitable adjustments respecting deferred Stock
Awards, Retirement Units, Annual Performance Awards, Long-Term Performance
Awards, Performance or Other Awards and outstanding Options to take account of
a dividend by the Company of property other than cash. All such adjustments
shall be made by the Committee whose determination shall be conclusive and binding
upon all Participants and any person claiming under or through any Participant.

 

29.          RECLASSIFICATION
OR MERGER

 

If at any time the
Company reclassifies or otherwise changes its issued and outstanding Common
Stock (other than in par value) or the Company and one or more corporations
merge and the Company is the surviving corporation of such merger, then each
Stock Award, Retirement Unit (matured or unmatured), Annual Performance Award,
Performance or Other Award which at the time of such reclassification or merger
is credited as a Stock Award, Retirement Unit, Annual Performance Award,
Long-Term Performance Award, Performance or Other Award shall thereafter be
deemed to be the equivalent of (and all Units thereafter credited to a
Retirement Unit Account shall be computed with reference to), and outstanding
Options shall be exercisable for, the shares of stock or other securities of
the Company which pursuant to the terms of such reclassification or merger are
issued with respect to each share of Common Stock. The Committee shall also
make an appropriate equitable adjustment to the provisions of Sections 6(b) and
13(a) to take account of such event. All such adjustments shall be made by the

 

21

 

Committee whose
determination shall be conclusive and binding upon all Participants and any
person claiming under or through any Participant.

 

30.          NON-ALIENATION
OF BENEFITS

 

Except as herein
specifically provided, no right or unpaid benefit under this Plan shall be
subject to alienation, assignment, pledge or charge and any attempt to
alienate, assign, pledge or charge the same shall be void. If any Participant
or person entitled to the benefits hereunder should attempt to alienate,
assign, pledge or charge any benefit hereunder, then such benefit shall, in the
discretion of the Committee, cease. Notwithstanding the foregoing, rights and
benefits hereunder shall pass by will or the laws of descent and distribution
in the following order: (i) to beneficiaries so designated by the Participant;
if none, then (ii) to a legal representative of the Participant; if none, then
(iii) to the persons entitled thereto as determined by a court of competent
jurisdiction. Awards so passing shall be made at such times and in such manner
as if the Participant were living.

 

31.          WITHHOLDING
OR DEDUCTION FOR TAXES

 

If at any time specified
herein for the making of any payment or delivery of any Common Stock to any
Participant or beneficiary, any law or regulation of any governmental authority
having jurisdiction in the premises shall require the Company to withhold, or
to make any deduction for, any taxes or take any other action in connection
with the payment or delivery then to be made, such payment or delivery shall be
deferred until such withholding or deduction shall have been provided for by
the Participant or beneficiary, or other appropriate action shall have been
taken. The amount of any such tax shall be computed by the Company in a manner
consistent with applicable law. The Participant or beneficiary may satisfy the
obligation for such withholding or deduction in whole or in part by electing to
deliver shares of Common Stock already owned and having a value (as determined
by Committee rule consistent with applicable law) equal to the amount to be
withheld or deducted.

 

32.          ADMINISTRATION
EXPENSES

 

The entire expense of
administering this Plan shall be borne by the Company.

 

33.          GENERAL
CONDITIONS

 

(a)           The
Board in its discretion may from time to time amend, suspend or terminate any
or all of the provisions of this Plan, provided that no change may be made
which would prevent Incentive Stock Options granted under the Plan from being
Incentive Stock Options as described therein without the consent of the
optionees concerned, and further provided that the Board may not make any
amendment which (1) changes the class of persons eligible for Incentive Stock
Options, or (2) increases the total number of shares for which Options may
be granted under Section 6(c), or (3) materially affects the provisions of
Sections 13(a) or (b) of the Plan, or (4) materially increases the benefits
accruing to Participants under the Plan (provided that changes in the vesting
and exercise periods for Options for Participants who leave the Company may be
effected by the Board or the Committee without stockholder approval), or (5)
increases the total number of

 

22

 

shares authorized under
Section 13(f) for which Awards may be granted, without the consent and approval
of the holders of a majority of the outstanding shares of Class A and Class B
Common Stock of the Company entitled to vote thereon, voting together as one
class. The foregoing provisions shall not be construed to prevent the Committee
from exercising its discretion, or to limit such discretion, to increase the
total number of shares for which Options may be granted under Section 6(b) or
the total number of shares authorized under Section 13(f) for which Awards may
be granted, as expressly permitted by Sections 28 and 29 hereof, or to adjust
the provisions of Sections 13(a) and (b) hereof as expressly permitted by
Sections 13(b), 28 and 29 hereof, or otherwise to exercise any discretion to
the extent expressly authorized hereunder.

 

(b)           Nothing
contained in the Plan shall prohibit the Company from establishing incentive
compensation arrangements in addition to this Plan and the Cash Plan. Payments
made under any such separate arrangements shall not be included in or
considered a part of the maximum dollar amount available for Awards under the
Plan and Cash Plan, or number of shares available for Awards or Options under
the Plan, and shall not be charged against the dollar or share amounts
available for Awards under the Plan and Cash Plan or Options under the Plan. In
the discretion of the Committee, employees shall be eligible to participate in
such other arrangements, as well as the Plan and Cash Plan, in the same year.

 

(c)           Nothing
in this Plan shall be deemed to limit in any way the right of the Company to terminate
a Participant’s employment with the Company at any time.

 

(d)           The
Committee may promulgate rules and regulations relating to the administration
and interpretation of, and procedures under, the Plan. Any decision or action
taken by the Company, the Board or the Committee arising out of or in
connection with the construction, administration, interpretation and effect of
the Plan shall be conclusive and binding upon all Participants and any person
claiming under or through any Participant.

 

(e)           No
member of the Board or of the Committee shall be liable for any act or action,
whether of commission or omission, taken by any other member or by any officer,
agent or employee, nor for anything done or omitted to be done by such Director
except in circumstances involving actual bad faith.

 

(f)            Notwithstanding
any other provision of this Plan, the Company shall not be obligated to make
any Award, issue any shares of Common Stock, or grant any Option with respect
thereto, unless it is advised by counsel of its selection that it may do so
without violation of the applicable Federal and State laws pertaining to the
issuance of securities, and may require any stock so issued to bear a legend,
may give its transfer agent instructions, and may take such other steps, as in
its judgment are reasonably required to prevent any such violation.

 

23

 

(g)           It
is the intent of the Company that transactions involving Options or Awards
granted under the Plan be entitled to the exemption from Section 16 of the
Exchange Act provided by Rule 16b-3, that any ambiguities or inconsistencies in
construction of the Plan be interpreted to give effect to such intention and
that if any provision of the Plan is found not to be in compliance with Rule
16b-3, such provision shall be deemed null and void to the extent required to
permit any such transaction to comply with Rule 16b-3. The Committee may adopt
rules and regulations under, and amend, the Plan in furtherance of the intent
of the foregoing.

 

(h)           CODE
SECTION 409A. It is the intent of the Company that, to the extent the Plan as
to any Award constitutes a nonqualified deferred compensation plan within the
meaning of Code Section 409A, the Plan as to such Award be interpreted in a
manner that satisfies the requirements of Code Section 409A. If any provision
of the Plan or of any Award would otherwise frustrate or conflict with such
intent, that provision shall be interpreted and deemed amended so as to avoid
such conflict. Without limiting the foregoing, to the extent the Plan or Award
provides the Committee with the discretion to determine the time or form of
payment of an Award (including any earnings, interest or dividends credit),
and/or defer or accelerate the time of payment of an Award (including any
earnings, interest or dividends credit), the Committee shall exercise such
discretion only at such time and in such manner as complies with Code Section
409A. “Code Section 409A” shall mean Section 409A of the Code (or any successor
provision).

 

34.          TRANSITION

 

Upon the effectiveness of
this Plan, as provided below, and the Cash Plan, such plans replaced the
Company’s Executive Incentive Compensation Plan (“EICP”), except that the EICP
shall continue to govern options and awards of restricted stock outstanding
under the EICP. No further awards will be made under the EICP, and all amounts
accrued for awards under the EICP and unawarded were carried forward and made
available for Awards under the Plan and awards under the Cash Plan. All
unmatured and matured but undistributed retirement units and all performance
awards respecting current performance cycles awarded under the EICP became
Retirement Units and Performance Awards hereunder and any payments or
distributions in respect thereof shall be made hereunder; provided, however,
that the number of shares of Common Stock available for Awards pursuant to
Section 13(f) hereof shall not be reduced by the number of such retirement
units previously awarded under the EICP and paid subsequently under the Plan.

 

35.          EFFECTIVE
DATE; EXPIRATION

 

The Plan became effective for periods beginning after
January 1, 1991 upon approval by the holders of a majority of the outstanding
shares of Class A and Class B Common Stock of the Company entitled to vote
thereon at the 1991 Annual Meeting of Stockholders, in person or by proxy,
voting together as a single class. No Options may be granted or Awards made
under the Plan after December 31, 2010, or such earlier expiration date as may
be designated by resolution of the Board.

 

24

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