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EXHIBIT 99.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT made this 22nd day of January, 2001, by and between
GUEST SUPPLY, INC., a New Jersey corporation (the "Company"), XXXX X. XXXXX, an
individual residing in the State of New Jersey ("Executive"), and, solely in
respect of Sections 5(a), 5(b), 5(c), 6, 7 and 14 through 22 hereof, SYSCO
CORPORATION, a Delaware corporation ("Sysco").
WITNESSETH:
WHEREAS, Sysco proposes to acquire the Company pursuant to that certain
Merger Agreement and Plan of Reorganization ("Merger Agreement") dated January
22, 2001 by and among the Company, Sysco and Sysco Food Services of New Jersey,
Inc., a Delaware corporation; and
WHEREAS, Executive currently serves as Vice President - Finance of the
Company pursuant to an Employment Agreement (the "1997 Employment Agreement")
dated as of August 6, 1997 between the Company and the Executive; and
WHEREAS, the Company and the Executive have agreed, as a condition to
consummation of the transactions contemplated by the Merger Agreement, to
terminate the 1997 Employment Agreement as of the earlier of the consummation of
(i) the Offer (as defined in the Merger Agreement) or (ii) the Merger (as
defined in the Merger Agreement) (hereinafter referred to as the "Effective
Date") and to provide for the employment of Executive by the Company from and
after the Effective Date in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the terms, conditions, and mutual
covenants hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
1. Effectiveness; Employment. The employment of the Executive by the
Company under this Agreement shall commence on the Effective Date. From and
after the Effective Date, the 1997 Employment Agreement shall be void and of no
further force or effect. The Company agrees to employ Executive, and Executive
accepts employment by the Company, from and after the Effective Date, upon the
terms and conditions hereinafter stated.
2. Term. Subject to the provisions for early termination hereinafter
stated, Executive's term of employment hereunder shall continue until ninety
days following the end of the 2006 fiscal year of Sysco or such later date to
which such term of employment may be extended by mutual agreement of the parties
hereto ("Term").
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3. Duties. During the Term, Executive agrees to serve as, and the
Company agrees to employ Executive as, Executive Vice President of the Company.
Executive will report to the Chief Executive Officer of the Company or his
designee (the "Reporting Officer"). Executive agrees to perform such duties,
subject to the direction of the Reporting Officer, as are customarily performed
by the Executive Vice President of other Sysco operating companies, including,
but not limited to, (i) being responsible for Company budget, financial
planning, financial controls and financial reporting; and (ii) assisting the
President and Chief Executive Officer of the Company in management of the
Company including, but not limited to, (a) endeavoring to sustain the Company's
sales and pre-tax earnings growth; (b) selling the Company's products to the
Company's customers and to Sysco and training broadline salesmen to sell the
Company's products; and (c) concentrating on growing the Company; and Executive
shall devote such time, energy and skills to such employment as are necessary in
order to carry out his duties and responsibilities hereunder. Executive shall
not during the Term serve as officer, employee, manager, independent contractor
or consultant for any other person or entity, other than the Company; provided,
however, Executive shall not be prohibited from serving on the boards of
directors of charitable or community organizations.
4. Base Salary. As compensation for services rendered by Executive
pursuant to this Agreement, the Company agrees to pay Executive a minimum base
salary of Two Hundred Ten Thousand and No/100 Dollars ($210,000.00) per year,
payable in accordance with the Company's customary payroll practices and subject
to the normal withholding and payroll deductions and subject to periodic review
by, and increase by the Sysco officer (the "Sysco Officer") to whom the
President and Chief Executive Officer of the Company reports ("Base Salary"); in
particular Executive's Base Salary shall be reviewed on or about July 1, 2002
and may be increased pursuant to such review to reflect any increased
responsibilities of Executive following the Effective Time. The Reporting
Officer shall not increase Executive's Base Salary or other compensation
described in Section 5 below without the prior written consent of the Sysco
Officer.
5. Other Compensation.
(a) In addition to his Base Salary, Executive shall be
eligible to participate (a) in the Sysco Corporation Management Incentive Plan
("MIP") in accordance with its terms, as provided below, and (b) in the Sysco
Supplemental Executive Retirement Plan, the Sysco 2000 Stock Incentive Plan, the
Sysco Pension Plan, the Sysco Executive Deferred Compensation Plan, and Sysco's
life insurance and disability insurance programs, commencing on the Effective
Date; provided that no amounts other than Base Salary shall be taken into
account in the determination of any incentive bonus under the MIP. The Company
shall, promptly following the Effective Date, pay to Executive the bonus earned
by Executive under the Company's incentive bonus plan for fiscal 2001 through
the Effective Date, subject to the approval of the Reporting Officer. The
Company's Board of Directors shall establish an all-cash bonus opportunity for
Executive for the period beginning on the Effective Date and ending on the last
day of Sysco's 2001 fiscal year (i.e., July 1, 2001). Executive will become a
full participant in the MIP beginning with the first day of Sysco's 2002 fiscal
year.
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(b) In addition to his Base Salary, the Company shall provide
to the Executive such other benefits as are customarily provided to other
Executive Vice Presidents of Sysco operating subsidiaries, as reasonably
determined by the Reporting Officer. The Company shall continue to provide
Executive with the automobile currently provided to Executive through November
30, 2002.
(c) As of the Effective Date, Executive shall be granted
pursuant to the Sysco 2000 Stock Incentive Plan an option (the "Option") to
purchase 30,000 shares of Sysco common stock at an exercise price equal to the
fair market value of the Sysco common stock on the date of grant. The Option
shall have the terms and conditions as hereinafter provided: (i) the Option
shall vest in 20% increments following the conclusion of each of the 2002
through 2006 fiscal years of the Company ending concurrently with the
corresponding fiscal years of Sysco (the "Vesting Period"), on the date or dates
of certification by the Chief Financial Officer of Sysco in writing after the
conclusion of each such fiscal year (such certification to be made not later
than 90 days following the end of each such fiscal year) that the pre-tax
earnings of the Company increased at least 5% in the fiscal year just ended over
the Company's pre-tax earnings for the prior fiscal year (and in the case of the
first fiscal year (i.e., the 2002 fiscal year) of the Company ending during the
Vesting Period, such increase shall be measured with respect to the pro forma
fiscal year of the Company beginning July 2, 2000 and ending July 1, 2001); if
the pre-tax earnings of the Company shall increase less than 5% in any fiscal
year over the prior fiscal year, the Option shall vest as to all unvested
increments of such Option relating to prior fiscal years only on such date or
dates as the Chief Financial Officer of Sysco has certified in writing after the
conclusion of any such fiscal year (such certification to be made not later than
90 days following the end of each such fiscal year) that the cumulative pre-tax
earnings of the Company for the fiscal years ending after fiscal year 2001 have
grown at a minimum rate of 5% compounded annually; if none of the vesting
requirements set out above are met within the Vesting Period as to any portion
of the Option, such Option (or portion thereof) will nonetheless vest and become
exercisable six months prior to the expiration thereof (the "Supplemental
Vesting Date") provided that Executive continues in the active employment of the
Company or one of its affiliates on the Supplemental Vesting Date; supplemental
vesting shall not apply if Executive has retired or become disabled (within the
meaning of Sysco's retirement plan) or Executive is otherwise not actively
employed by a Sysco affiliate; and (ii) the Option shall expire ten years from
the date of grant; provided, however, in the event Executive's employment is
terminated prior to the expiration of the Option, the Option shall vest and be
exercisable as provided herein: (1) in the event of termination of Executive's
employment by the Company without Cause (as hereinafter defined) or by Executive
for Good Reason (as hereinafter defined), the portion of the Option which has
theretofore vested shall remain exercisable until the first anniversary of the
date of termination; (2) in the event of Executive's death, the Option shall be
exercisable by his executor, administrator or other personal representative in
accordance with the terms and conditions of the Sysco 2000 Stock Incentive Plan;
(3) in the event of termination of Executive's employment by the Company for
Cause at any time or by Executive without Good Reason within three years of the
date of grant, the Option shall immediately terminate; and (4) the Option shall
be treated as an incentive stock option to the maximum extent permitted by law.
The Company shall cause a Stock Option Agreement
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for the Options to be issued to Executive as promptly as practicable following
the date of grant. The terms and conditions of the Option set forth herein shall
take precedence over the terms and conditions of the Sysco 2000 Stock Incentive
Plan, to the extent not prohibited thereby, and the Stock Option Agreement
issued pursuant to such plan. The shares of Sysco common stock to be issued
pursuant to the Option shall be covered by a Registration Statement on Form S-8.
6. Termination.
(a) The employment of Executive under this Agreement shall
cease in the event of Executive's death or Permanent Disability (defined below).
For purposes hereof, the term "Permanent Disability" shall mean that Executive
shall become incapacitated by reason of sickness, accident or other physical or
mental disability and shall be unable to perform his normal duties hereunder for
a cumulative period of two (2) months in any period of four (4) consecutive
months.
(b) The Company may terminate Executive's employment for Cause
(defined below) upon notice of termination to Executive, which notice shall
specify Cause in reasonable detail. As used herein, "Cause" shall mean (i)
Executive's material and deliberate failure to perform, or material and
deliberate misconduct in the performance of, his duties hereunder, or a material
violation of the Sysco Corporation Business Code of Conduct, in each case
determined in the good faith judgment of a committee consisting of Sysco's Chief
Executive Officer and President, Sysco's Chief Operating Officer and the
Company's President and Chief Executive Officer; (ii) Executive's act(s) or
omission(s) amounting to gross negligence or willful misconduct to the material
detriment of the Company; (iii) Executive's fraud or embezzlement against the
Company; or (iv) Executive's conviction of or pleading guilty to any felony.
(c) Executive may terminate his employment without Good Reason
at any time upon thirty (30) days written notice to the Reporting Officer. The
Executive may terminate his employment hereunder for Good Reason upon notice of
termination to the Company, which notice shall specify Good Reason in reasonable
detail. Prior to terminating his employment pursuant to the immediately
preceding sentence, the Executive will first provide Company with written notice
and a thirty (30) day period after the receipt of such notice to cure the event
that Executive alleges gives rise to termination for "Good Reason" and upon such
timely cure, such Good Reason shall be deemed not to have occurred. As used
herein, "Good Reason" shall mean: (i) the Company's failure to observe or
perform any material covenant, condition or provision of this Agreement; (ii)
the Company's demotion of the Executive to a lesser position than as provided in
Section 3 hereof; (iii) assignment to Executive of duties materially
inconsistent with his position or material reduction of the Executive's duties,
responsibilities or authority, in either case without the Executive's prior
consent; (iv) any reduction in Executive's Base Salary without the Executive's
prior consent; (v) unless agreed to by Executive, relocation of Executive's
principal place of business outside of Central New Jersey; or (vi) a Change in
Control (as hereinafter defined).
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7. Obligations of the Company and Executive Upon Termination. In the
event of any termination of Executive's employment, whether by Executive
(including with Good Reason or without Good Reason), the Company (including with
Cause or without Cause), Executive's death or Executive's Permanent Disability,
the Company shall pay to Executive the Base Salary accrued to the date of such
termination and not theretofore paid to Executive. Rights and benefits of
Executive under the benefit plans and programs of the Company and Sysco,
including without limitation the benefit plans and programs described in
Sections 5(a) and 5(b) of this Agreement, shall be determined in accordance with
the provisions of such plans and programs. Rights and benefits of Executive with
respect to the Option shall be determined in accordance with the provisions of
the Options and Section 5(c) hereof. Upon termination of Executive's employment,
whether by Executive or the Company, neither Executive nor the Company shall
have any further rights or obligations under this Agreement, except as provided
in Sections 8, 9, 10, 11 and 12 of this Agreement.
8. Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(a) "Company Business" shall mean the business of
manufacturing, packaging and/or distributing to the lodging industry, nursing
homes, cruise ships and others personal care Company amenities (which include,
among other items, shampoo, hair conditioners, soap, bath gel, and mouthwash),
housekeeping supplies, room accessories and textiles; AND manufacturing and
packaging personal care products for consumer products and retail companies (THE
"HOSPITALITY INDUSTRY") in the Territory.
(b) "Trade Secrets" means information not generally known
about the Company Business and/or Sysco which is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy or confidentiality
and from which the Company and/or Sysco derives economic value from the fact
that the information is not generally known to other persons who can obtain
economic value from its disclosure or use. Trade Secrets include, but are not
limited to, technical or non-technical data, compilations, programs and methods,
techniques, drawings, processes, financial data, research, pricing, information
as to sales representatives and suppliers, lists of actual customers and
potential customers, customer route books, cards or lists containing the names,
addresses, buying habits and business locations of past, present and prospective
customers, sales reports, service reports, price lists, product formulae and
methods and procedures relating to services.
(c) "Confidential Information" shall mean business information
of the Company and/or Sysco not known to the public and which the Company
desires to keep confidential.
(d) "Competing Business" shall mean any person, concern or
entity which is engaged in or conducts a business similar to the Company
Business, including a business which markets and distributes to the Hospitality
Industry one or more of the products distributed by the Company.
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(e) "Territory" shall mean the United States of America. The
parties hereto agree that the Company serves customers throughout the Territory
and Executive's duties and responsibilities hereunder will similarly extend
throughout the Territory.
(f) "Change in Control" shall mean the occurrence of any of
the following: (i) the sale, lease, transfer conveyance or other disposition, in
one or a series of related transactions, of all or substantially all of the
assets of Sysco or the Company to any "person" or "group" (as such terms are
used in Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934)
other than an affiliate (as defined in Rule 144 of the Securities Act of 1933)
of Sysco, or (ii) any person or group (other than an affiliate of Sysco), is or
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 40% of the total voting power of
the voting stock of Sysco or the Company, including by way of merger,
consolidation or otherwise; or (iii) the dissolution of Sysco or the Company,
provided the assets are not transferred to a Sysco affiliate in connection with
such dissolution.
9. Non-Disclosure.
(a) Executive and the Company agree that operation of the
Company Business encompasses substantially all of the Territory and that the
Company Business enjoys a valuable and extensive trade of its products and
services. The business connections, customers, products, techniques, goodwill
and other aspects of the business are maintained at great expense, are long
standing, are kept and protected as confidential information and are of great
value to the Company and provide it with a substantial competitive advantage. By
virtue of Executive's employment with the Company, Executive has been and will
be entrusted with the knowledge and possession of Trade Secrets and Confidential
Information. The Company and Executive agree that by virtue of Executive's
knowledge of the Company Business, the Company and Sysco would suffer great loss
and irreparable injury if Executive would disclose or use Trade Secrets or
Confidential Information in contravention of Section 9(b) hereof.
(b) Executive will not at any time, both during and after his
employment by the Company, communicate or disclose to any person, firm or
corporation, or use for his benefit or for the benefit of any other person, firm
or corporation other than the Company or Sysco, directly or indirectly, any
Trade Secrets and/or Confidential Information acquired by Executive while
employed by the Company or Sysco; provided, however, that Executive may disclose
such information (i) as has become generally available to the public (other than
by virtue of any disclosure by Executive), (ii) as is necessary to disclose in
the performance of his duties hereunder, (iii) as may be required in any report,
statement or testimony submitted to any municipal, state or federal regulatory
body, (iv) as may be required in response to any summons or subpoena or in
connection with any litigation, or (v) as may be required in order to comply
with any law, order, regulation or ruling applicable to Executive or the
Company.
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10. Agreement Not to Compete. Executive covenants and agrees that
during his employment by the Company and until the later of (i) the first
anniversary of the date on which Executive's employment with the Company
terminates for any reason, hereunder or otherwise, other than a termination by
the Company without Cause, or (ii) the exercise in full or expiration of the
Option or the surrender of the Option by Executive, he will not, without the
prior written consent of the Reporting Officer, directly or indirectly within
the Territory (a) perform services for a Competing Business, either (i) for
himself, (ii) as a consultant, director, manager, supervisor, employee, owner,
partner, joint venturer, investor, lender, or manager of a Competing Business,
or (iii) as an independent contractor for a Competing Business, or (b) own,
engage in, conduct, manage, operate or participate in a Competing Business;
provided, however, that Executive may own not greater than a three percent (3%)
interest in any publicly traded company. An entity's division or subsidiary
which is not engaged in or conducting a business similar to the Company Business
shall not be deemed a Competitive Business and this Agreement shall not be
deemed to prohibit Executive from performing duties as aforesaid for such
division or subsidiary.
11. Agreement Not to Solicit Customers. Executive covenants and agrees
that during his employment by the Company and until the later of (i) the first
anniversary of the date on which Executive's employment with the Company
terminates for any reason, hereunder or otherwise, or (ii) the exercise in full
or expiration of the Option or the surrender of the Option by Executive, he will
not, without the prior written consent of the Reporting Officer, either directly
or indirectly, on his own behalf or in the service or on behalf of others,
solicit or attempt to divert or appropriate to a Competing Business, any
customer of the Company to whom the Company sold or provided any products or
services.
12. Agreement Not to Solicit Employees. Executive covenants and agrees
that during his employment by the Company and until the later of (i) the first
anniversary of the date on which Executive's employment with the Company
terminates for any reason, hereunder or otherwise, or (ii) the exercise in full
or expiration of the Option or the surrender of the Option by Executive, he will
not, either directly or indirectly, solicit, divert or recruit any employee of
the Company or Sysco to leave such employment, whether or not such employment is
pursuant to a written contract with the Company or Sysco or at will.
13. Injunctive Relief. Both Executive and the Company expressly
recognize that the subject matter of this Agreement is unique, and that any
breach of Executive's obligations under this Agreement, particularly the
provisions of Sections 9, 10, 11 and 12 hereof, is likely to result in
irreparable injury to the Company, which cannot be adequately or solely measured
or compensated by the rules of law and legal remedies. Therefore, in the event
of a breach or threatened breach of this Agreement by Executive, the Company
shall be entitled to injunctive relief and such ancillary remedies of an
equitable nature as a court may deem appropriate. Such equitable relief shall be
in addition to, and the availability of such equitable relief shall not serve to
preclude, any legal remedies which might be available to the Company.
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14. Governing Law. This Agreement is governed by and subject to the
laws of the State of New Jersey (without giving effect to its conflict of law
provisions) irrespective of the fact that a party hereto is an individual who
may be a resident of another state or jurisdiction. Each of the parties hereby
irrevocably submits in any suit, action or proceeding arising out of or related
to this Agreement to the exclusive jurisdiction of the courts of the State of
New Jersey and waives any and all objections to jurisdiction that it may have
under the laws of New Jersey or the United States.
15. Non-Waiver. The failure to enforce any right arising under this
Agreement or any other agreement on one or more occasions shall not operate as a
waiver of that right under this Agreement or any other agreement on any other
occasion, or of any other right on that occasion or any other occasion.
16. Severability. If any portion of this Agreement may be held to be
invalid or unenforceable for any reason, it is agreed that said invalidity or
unenforceability shall not affect the other portions of this Agreement and that
the remaining covenants, terms and conditions or portions thereof shall remain
in full force and effect and any court of competent jurisdiction may so modify
or amend the objectionable provision as to make it valid, reasonable and
enforceable. If any court shall finally hold that the time or territory or any
other provision stated in this Agreement constitutes an unreasonable restriction
upon Executive, Executive hereby expressly agrees that the provisions of this
Agreement shall not be rendered void, but shall apply as to time and territory
or to such other extent as such court may judicially determine or indicate
constitutes a reasonable restriction under the circumstances involved.
17. Notices. Any notice to be given hereunder shall be deemed given and
sufficient if in writing and delivered personally or mailed by registered or
certified mail, for next day delivery by a recognized overnight delivery service
(e.g. Federal Express) which guarantees next day delivery ("Overnight Delivery")
or by telefax with confirmation of receipt (with a copy sent by registered or
certified mail, return receipt requested, postage prepaid or Overnight
Delivery),
in the case of Company
or Sysco, to: Sysco Corporation
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxx, Esq.
Arnall Golden & Xxxxxxx
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
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and in the case of Executive to:
Xxxx X. Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
or such address as shall be furnished by such notice to the other parties. The
parties hereto agree that notices that are sent in accordance with this Section
17 by (i) telefax will be deemed received on the date sent, (ii) Overnight
Delivery will be deemed received the day immediately following the date sent,
and (iii) U.S. mail (certified or registered) will be deemed received three (3)
days immediately following the date sent.
18. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by the Company and Sysco, and their
respective successors and assigns, and Executive, his heirs, executors and
personal representatives, but shall not be assignable by Executive. The
Agreement shall be assignable by the Company or Sysco only with Executive's
written consent.
19. Modification. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof (other than with respect to
such matters as are contained in that certain Noncompetition Agreement of even
date herewith entered into by Executive in connection with the concurrent sale
of the Company to Sysco) and may be amended or superseded only by an agreement
in writing signed by the parties hereto. No action or course of conduct shall
constitute a waiver of any of the terms and conditions hereof, unless such
waiver is specified in writing and, in the case of such action by the Company or
Sysco, approved by the Reporting Officer, and then only to the extent so
specified.
20. Time of Essence. The parties agree that time is of the essence with
respect to each provision of this Agreement.
21. Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
22. Survival. Sections 8 through 22 hereof shall survive the
termination of this Agreement.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day, month and year first above written.
THE COMPANY:
GUEST SUPPLY, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
---------------------------------------
Its: President
--------------------------------------
EXECUTIVE:
/s/ XXXX X. XXXXX
------------------------------------------
Xxxx X. Xxxxx
SYSCO:
Sysco Corporation*
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Its: Vice President
--------------------------------------
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*solely in respect of Sections 5(a), 5(b),
5(c), 6, 7 and 14 through 22 hereof
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WAIVER AGREEMENT
THIS WAIVER AGREEMENT (also referred to herein as "Agreement") is made
and entered into as of this 22nd day of January, 2001 by and between Xxxx X.
Xxxxx for himself, his dependents, heirs, executors, administrators, successors
and assigns (hereinafter collectively referred to as "Employee") and GUEST
SUPPLY, INC., and its subsidiaries, affiliates, and related entities, and its
agents, employees, representatives, attorneys, officers, directors, owners,
shareholders, insurers, predecessors, successors, assigns, and employee benefit
plans (hereinafter collectively referred to as "Employer").
WITNESSETH
WHEREAS Employee and Employer entered into an Employment Agreement
dated August 6, 1997 (hereinafter referred to as the "Employment Agreement");
and
WHEREAS Employer, Sysco Corporation, a Delaware corporation ("Sysco"),
and Sysco Food Services of New Jersey, Inc., a Delaware corporation, are
entering into that certain Merger Agreement and Plan of Reorganization under
Section 368(a) of the Internal Revenue Code of 1986, as amended ("Merger
Agreement"), dated the date hereof; and
WHEREAS Employee and Employer desire to enter into this Agreement to
terminate the Employment Agreement and to reflect certain obligations,
representations and promises between them subject to and effective upon the
earlier of the consummation of (i) the Offer (as defined in the Merger
Agreement) or (ii) the Merger (as defined in the Merger Agreement); and
WHEREAS after the Effective Date (as defined below) Employee and
Employer desire to continue their employment relationship on the terms and
conditions contained in that certain
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Employment Agreement dated the date hereof among Employee, Employer and Sysco
("New Employment Agreement"); and
WHEREAS, to induce Sysco to execute and deliver the Merger Agreement
which the Employee acknowledges will impart a substantial benefit to the
Employee, the Employee agrees to execute this Agreement.
NOW THEREFORE, in consideration of the promises, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:
1. Recitals. The recitals set forth above are incorporated herein as
true and accurate.
2. Termination of Employment Agreement.
Subject to and effective as of the date of the earlier of the
consummation of (i) the Offer or (ii) the Merger (such date referred to herein
as the "Effective Date"), the Employment Agreement is hereby terminated. From
and after the Effective Date, Employee shall continue to be employed by Employer
on the terms and conditions contained in the New Employment Agreement.
3. Waiver.
Without in any way limiting Section 2 hereof, Employee hereby
acknowledges and agrees that, although consummation of the transactions
described in the Merger Agreement constitute a "Change in Control" (as such term
is used and defined in the Employment Agreement), Employee hereby waives any
payments that he may be entitled to receive under Sections 6.6 and 6.7 of the
Employment Agreement.
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4. Governing Law/Severability.
This Agreement shall be interpreted, enforced, and governed under
the laws of the State of New Jersey, without regard to conflicts of laws
principles. Its provisions are severable, and if any part of the Agreement is
found to be unenforceable, the remainder of the Agreement will continue to be
valid and effective.
5. Headings and Captions.
The headings and captions used in the Agreement are for
convenience of reference only, and shall in no way define, limit, expand, or
otherwise affect the meaning or construction of any provision of this Agreement.
6. Counterparts.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument, with the same effect as if the signatures thereto
were in the same instrument.
7. Entire Agreement.
This Agreement constitutes the entire agreement and supersedes
any and all other prior agreements and undertakings, both written and oral,
among the parties, or any of them, with respect to the subject matter hereof.
8. Termination.
Upon termination of the Merger Agreement, this Agreement shall
automatically terminate and have no force or effect.
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I HAVE PERSONALLY READ THE FOREGOING AGREEMENT, AND I AM VOLUNTARILY
AND KNOWINGLY ENTERING INTO THE TERMS AND PROVISIONS CONTAINED IN IT, WITH FULL
UNDERSTANDING OF ITS CONSEQUENCES.
WITNESS: EMPLOYEE:
Xxxxxx X. Xxxxxx
------------------------------
Witness' Printed Name Xxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxx /s/ Xxxx X. Xxxxx
------------------------------ ------------------------------------
Witness' Signature Employee's Signature
Date: January 22, 2001 Date: January 22, 2001
EMPLOYER:
GUEST SUPPLY, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
----------------------------------
Title: President and CEO
Date: January 22, 2001
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THIS NONCOMPETITION AGREEMENT ("Agreement"), dated this 22nd day of
January, 2001, is made by and between Guest Supply, Inc., a New Jersey
corporation (the "Company") and Xxxx X. Xxxxx ("Executive"), a significant
stockholder of the Company, immediately prior to the Merger (defined below).
WITNESSETH
WHEREAS, pursuant to that certain Merger Agreement and Plan of
Reorganization ("Merger Agreement"), dated as of January 21, 2001, by and among
the Company, Sysco Corporation, a Delaware corporation ("Sysco"), and Sysco Food
Services of New Jersey, Inc., a Delaware corporation and a wholly-owned
subsidiary of Sysco, Sysco proposes to acquire the Company pursuant to the Offer
(as defined in the Merger Agreement) and the Merger (as defined in the Merger
Agreement); and
WHEREAS, in order to induce Sysco and Merger Sub to enter into, and
consummate, the Merger Agreement, which Executive hereby acknowledges will
benefit him, Executive has agreed to accept certain restrictions as set forth
herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements
of the parties herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Definitions. For the purposes of this Agreement, the following
definitions shall apply:
(a) "Company Business" shall mean the business of manufacturing,
packaging and/or distributing to the lodging industry, nursing homes, cruise
ships and others personal care Company amenities (which include, among other
items, shampoo, hair conditioners, soap, bath gel, and mouthwash), housekeeping
supplies, room accessories and textiles; and manufacturing and packaging
personal care products for consumer products and retail companies (THE
"HOSPITALITY INDUSTRY") in the Territory.
(b) "Trade Secrets" shall mean information not generally known
about the Company Business and/or Sysco which is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy or confidentiality
and from which the Company and/or Sysco derives economic value from the fact
that the information is not generally known to other persons who can obtain
economic value from its disclosure or use. Trade Secrets include, but are not
limited to, technical or non-technical data, compilations, programs and methods,
techniques, drawings, processes, financial data, research, pricing, information
as to sales representatives and suppliers, lists of actual customers and
potential customers, customer route books, cards or lists containing the names,
addresses, buying habits and business locations of past, present and prospective
customers, sales reports, service reports, price lists, product formulae and
methods and procedures relating to services.
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(c) "Confidential Information" shall mean business information of
the Company and/or Sysco not known to the public and which the Company desires
to keep confidential.
(d) "Competing Business" shall mean any person, concern or entity
which is engaged in or conducts a business similar to the Company Business,
including a business which markets and distributes to the Hospitality Industry
one or more of the products distributed by the Company.
(e) "Territory" shall mean the United States of America. The
parties hereto agree that the Company serves customers throughout the Territory
and Executive's duties and responsibilities hereunder will similarly extend
throughout the Territory.
(f) "Change in Control" shall mean the occurrence of any of the
following: (i) the sale, lease, transfer conveyance or other disposition, in one
or a series of related transactions, of all or substantially all of the assets
of Sysco or the Company to any "person" or "group" (as such terms are used in
Section 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) other than
an affiliate (as defined in Rule 144 of the Securities Act of 1933) of Sysco, or
(ii) any person or group (other than an affiliate of Sysco), is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, except that a person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total voting power of the voting
stock of Sysco or the Company, including by way of merger, consolidation or
otherwise; or (iii) the dissolution of Sysco or the Company, provided the assets
are not transferred to a Sysco affiliate in connection with such dissolution.
(g) "Employment Agreement" shall mean the employment agreement
dated January 22, 2001 by and among the Company, Sysco and Executive.
2. Agreement Not to Compete. Executive covenants and agrees that during
his employment by the Company and until the later of (i) the second anniversary
of the date on which Executive's employment with the Company terminates for any
reason, other than a termination by the Company without Cause (as that term is
defined in the Employment Agreement), or (ii) the exercise in full or expiration
of the Option (as that term is defined in the Employment Agreement) or the
surrender of the Option by Executive, he will not, without the prior written
consent of the Reporting Officer (as that term is defined in the Employment
Agreement), directly or indirectly within the Territory (a) perform services for
a Competing Business, either (i) for himself, (ii) as a consultant, director,
manager, supervisor, employee, owner, partner, joint venturer, investor, lender,
or manager of a Competing Business, or (iii) as an independent contractor for a
Competing Business, or (b) own, engage in, conduct, manage, operate or
participate in a Competing Business; provided, however, that Executive may own
not greater than a three percent (3%) interest in any publicly traded company.
An entity's division or subsidiary which is not engaged in or conducting a
business similar to the Company Business shall not be deemed a Competitive
Business and this Agreement shall not be deemed to prohibit Executive from
performing duties as aforesaid for such division or subsidiary.
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3. Agreement Not to Solicit Customers. Executive covenants and agrees
that during his employment by the Company and until the later of (i) the first
anniversary of the date on which Executive's employment with the Company
terminates for any reason, hereunder or otherwise, or (ii) the exercise in full
or expiration of the Option or the surrender of the Option by Executive, he will
not, without the prior written consent of the Reporting Officer, either directly
or indirectly, on his own behalf or in the service or on behalf of others,
solicit or attempt to divert or appropriate to a Competing Business, any
customer of the Company to whom the Company sold or provided any products or
services.
4. Agreement Not to Solicit Employees. Executive covenants and agrees
that during his employment by the Company and until the later of (i) the first
anniversary of the date on which Executive's employment with the Company
terminates for any reason, hereunder or otherwise, or (ii) the exercise in full
or expiration of the Option or the surrender of the Option by Executive, he will
not, either directly or indirectly, solicit, divert or recruit any employee of
the Company or Sysco to leave such employment, whether or not such employment is
pursuant to a written contract with the Company or Sysco or at will.
5. Severability. If any portion of this Agreement may be held to be
invalid or unenforceable for any reason, it is agreed that said invalidity or
unenforceability shall not affect the other portions of this Agreement and that
the remaining covenants, terms and conditions or portions thereof shall remain
in full force and effect and any court of competent jurisdiction may so modify
or amend the objectionable provision as to make it valid, reasonable and
enforceable. If any court shall finally hold that the time or territory or any
other provision stated in this Agreement constitutes an unreasonable restriction
upon Executive, Executive hereby expressly agrees that the provisions of this
Agreement shall not be rendered void, but shall apply as to time and territory
or to such other extent as such court may judicially determine or indicate
constitutes a reasonable restriction under the circumstances involved.
6. Injunctive Relief. Both Executive and the Company expressly
recognize that the subject matter of this Agreement is unique, and that any
breach of Executive's obligations under this Agreement, particularly the
provisions of Sections 2, 3, and 4 hereof, is likely to result in irreparable
injury to the Company, which cannot be adequately or solely measured or
compensated by the rules of law and legal remedies. Therefore, in the event of a
breach or threatened breach of this Agreement by Executive, the Company shall be
entitled to injunctive relief and such ancillary remedies of an equitable nature
as a court may deem appropriate. Such equitable relief shall be in addition to,
and the availability of such equitable relief shall not serve to preclude, any
legal remedies which might be available to the Company.
7. Governing Law. This Agreement is governed by and subject to the laws
of the State of New Jersey (without giving effect to its conflict of law
provisions) irrespective of the fact that a party hereto is an individual who
may be a resident of another state or jurisdiction. Each of the parties hereby
irrevocably submits in any suit, action or proceeding arising out of or related
to this Agreement to the exclusive jurisdiction of the courts of the State of
New Jersey and waives
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any and all objections to jurisdiction that it may have under the laws of New
Jersey or the United States.
8. Modification. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof (other than with respect to
such matters as are contained in the Employment Agreement and may be amended or
superseded only by an agreement in writing signed by the parties hereto. No
action or course of conduct shall constitute a waiver of any of the terms and
conditions hereof, unless such waiver is specified in writing and, in the case
of such action by the Company or Sysco, approved by the Reporting Officer, and
then only to the extent so specified.
9. Benefit. This Agreement shall be binding upon and inure to the
benefit of and shall be enforceable by the Company and Sysco, and their
respective successors and assigns, and Executive, his heirs, executors and
personal representatives, but shall not be assignable by Executive. The
Agreement shall be assignable by the Company or Sysco only with Executive's
written consent.
10. Notices. Any notice to be given hereunder shall be deemed given and
sufficient if in writing and delivered personally or mailed by registered or
certified mail, for next day delivery by a recognized overnight delivery service
(e.g. Federal Express) which guarantees next day delivery ("Overnight Delivery")
or by telefax with confirmation of receipt (with a copy sent by registered or
certified mail, return receipt requested, postage prepaid or Overnight
Delivery),
in the case of Company or Sysco, to:
Sysco Corporation
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
with a copy to: Xxxxxxxx Xxxxxx, Esq.
Arnall Golden & Xxxxxxx
2800 One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
and in the case of Executive to:
Xxxx X. Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000
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with a copy to:
Xxxxxx X. Xxxxxx, Esq.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
or such address as shall be furnished by such notice to the other parties. The
parties hereto agree that notices that are sent in accordance with this Section
10 by (i) telefax will be deemed received on the date sent, (ii) Overnight
Delivery will be deemed received the day immediately following the date sent,
and (iii) U.S. mail (certified or registered) will be deemed received three (3)
days immediately following the date sent.
* * *
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have executed and delivered this Agreement as of the day and year first above
written.
EXECUTIVE:
/s/ Xxxx X. Xxxxx
--------------------------------------------
Xxxx X. Xxxxx
THE COMPANY:
GUEST SUPPLY, INC.
By: /s/ Xxxxxxxx X. Xxxxxxx
-----------------------------------------
Its: President and CEO
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