Exhibit 10.1
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EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the
__________day of____, 199_, by and between JP Foodservice, Inc., a Delaware
corporation (the "Company"), and Xxxx Xxx Xxxxxxxxxxxx (the "Executive").
WHEREAS, immediately prior to the date hereof, the Executive was the
President, Chief Executive Officer and Chairman of the Board of Xxxxxx-Xxxxxx
Inc., a Delaware corporation ("RSI");
WHEREAS, immediately prior to the date hereof, the Executive was a
party to an Amended and Restated Employment Agreement with RSI, dated as of
February 2, 1996, as amended by a letter agreement dated June 9, 1997 (the
"Prior Agreement");
WHEREAS, pursuant to an Agreement and Plan of Merger dated June 30,
1997 (the "Merger Agreement") by and among the Company, RSI, and Xxxxxx
Acquisition Corp. ("Merger Sub"), a Delaware corporation and a wholly-owned
subsidiary of the Company, as of the date hereof, RSI will be merged with and
into Merger Sub, with Merger Sub as the surviving entity (the "Merger");
WHEREAS, it is a condition precedent to effectuating the Merger that
the Executive enter into an employment agreement with the Company in the form
hereof, which agreement supersedes any previous employment agreement the
Executive may have had with RSI, including, but not limited to, the Prior
Agreement.
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, it is agreed as follows:
1. Employment. The Company hereby agrees to employ the Executive and
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the Executive hereby agrees to be in the employ of the Company upon the terms
and conditions herein set forth.
2. Term. Employment shall be for a term commencing on the closing
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date of the Merger (the "Effective Date") and, subject to termination under
Section 8, expiring on the third anniversary of the Effective Date.
3. Duties of the Executive. The Executive shall serve as the Vice
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Chairman and President of the Company. The Executive shall report solely to the
Chief Executive Officer and shall have those duties that are assigned to him by
the Chief Executive Officer. The Executive shall devote substantially all of
his normal
working time and his best efforts, full attention and energies to the duties
assigned to him by the Chief Executive Officer. The Company shall use its best
efforts to cause the Executive to be elected as a member of its Board of
Directors (the "Board") and as Vice Chairman of the Board throughout the term of
this Agreement and shall include him in the management slate for election as a
director at every stockholders' meeting at which his term as a director would
otherwise expire. To the extent that it does not interfere with the Executive's
employment hereunder, the Executive may (a) serve as an officer or director of,
or otherwise participate in any non-competing entity and any education, welfare,
social, religious or civic organizations or (b) manage personal and family
investments. Nothing in this Section 3 shall be deemed to prohibit the Executive
from acquiring, directly or indirectly, solely as an investment, not more than
two percent (2%) of any class of securities of any entity that is registered
under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended,
including the regulations issued thereunder.
4. Compensation.
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(a) During the term of this Agreement, the Company shall pay to
the Executive a base salary of not less than $500,000 per annum, which base
salary may be increased (but not decreased) from time to time by the Board in
its sole discretion, payable at the times and in the manner consistent with the
Company's general policies regarding compensation of executive employees. The
Board may from time to time authorize such additional compensation to the
Executive, in cash or in property, as the Board may determine in its sole
discretion to be appropriate.
(b) In addition to base salary, the Executive shall be provided,
for each fiscal year ending during the term of this Agreement, an annual bonus
opportunity in cash and stock-based incentives at least equal to 100% of the
Executive's annual base salary. Each such annual bonus shall be paid no later
than the end of the third month of the fiscal year next following the fiscal
year for which the annual bonus is awarded, unless the Executive shall elect to
defer the receipt of such annual bonus.
5. Executive Benefits.
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(a) During the term of this Agreement, the Executive shall be
entitled to participate in all savings and retirement plans, practices, policies
and programs applicable generally to other peer executives of the Company and
its subsidiaries.
(b) During the term of this Agreement, the Executive and/or the
Executive's family, as the case may be, shall be eligible for participation in
and shall receive all benefits under welfare benefit plans, practice, policies
and
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programs provided by the Company and its subsidiaries (including, without
limitation, medical, prescription, dental, disability, employee life, group
life, accidental death and travel accident insurance plans and programs) to the
extent applicable generally to other peer executives of the Company and its
subsidiaries.
(c) During the term of this Agreement, the Executive shall be
entitled to fringe benefits, including, without limitation, tax and financial
planning services, payment of club dues, use of an automobile and payment of
related expenses, as generally provided to other peer executives of the Company.
Without limiting the generality of the foregoing, and notwithstanding anything
herein to the contrary, the Company shall, during the term of this Agreement,
pay all of the Executive's dues and membership assessments of two country clubs,
one of which shall be the Riviera Country Club in Los Angeles, California, and
such other club memberships as are determined by the Executive and the Board to
be useful in connection with the Executive's duties on behalf of the Company.
The Company shall also reimburse the Executive for all reasonable expenses
incurred at such club(s) on behalf of the Company. In addition, without limiting
the generality of the foregoing, and notwithstanding anything herein to the
contrary, the Executive shall be entitled, during the term of this Agreement, at
the Company's expense, to the full use of a new car (including adequate
insurance for the Executive, automobile and occupants and full maintenance and
operating costs necessary and appropriate to maintain such car in prime and safe
operating condition). In the event the Executive terminates his employment for
any reason other than for Cause (as defined in Section 9(e)), the Executive
shall furthermore be offered the option to acquire the car at the lesser of the
book value of the car at the time of the Executive's termination of employment
or the lease purchase price provided for in any car lease between the Company
and any third party lessor at the time of the Executive's termination of
employment. The option to purchase after termination as provided for herein
shall be exercised by the Executive no later than 90 days after termination of
employment.
(d) During the term of this Agreement, the Executive shall be
entitled to at least four weeks of paid vacation per calendar year. The
Executive shall have the right to accrue and carry forward unused vacation.
(e) The Company shall provide reimbursement for relocation
expenses to the Columbia, Maryland area in accordance with RSI's past policies,
practices and procedures for senior executives; provided, however, that the
Company shall have the right to participate in all decisions relating to the
sale of the Executive's residence. Thereafter, reimbursement for relocation
expenses shall be in accordance with the Company's practice and procedures for
senior executives.
(f) The Executive's benefits under this Section 5 shall be
reduced to the extent that the Executive is or becomes entitled to receive
comparable benefits under the terms of the Prior Agreement or the Third Amended
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and Restated Change in Control Agreement between RSI and the Executive, dated
June 9, 1997 (the "Change in Control Agreement").
6. Expenses. During the term of this Agreement, the Executive shall
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be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the policies, practices and procedures of
the Company.
7. Place of Performance. In connection with his employment by the
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Company, unless otherwise agreed by the Executive, the Executive shall be based
at the offices of the Company located in Columbia, Maryland, except for travel
reasonably required for Company business.
8. Termination.
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(a) Involuntary Termination. The Executive's employment hereunder
may be terminated by the Company for any reason by written notice as provided in
Section 14(f). The Executive's Disability (as defined herein) during the term of
the Agreement shall constitute an involuntary termination of employment
hereunder, unless the Board expressly extends such employment for a specified
time thereafter. The Executive will be treated for purposes of this Agreement as
having been involuntarily terminated by the Company if the Executive terminates
his employment with the Company under the following circumstances: (i) the
assignment to the Executive of any duties inconsistent in any respect with the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
3 of this Agreement; (ii) any failure by the Company to comply with any of the
provisions of Section 4 of this Agreement, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive; (iii)
the Company's requiring the Executive to be based at any office or location
outside of Columbia, Maryland or more than 35 miles from the location provided
in Section 7 hereof or the Company's requiring the Executive to travel on
Company business to a substantially greater extent than required immediately
prior to the Effective Date; (iv) any purported termination by the Company of
the Executive's employment otherwise than as expressly permitted by this
Agreement; or (v) during the 30-day period immediately following the first date,
after the Effective Date, on which a Change in Control (as defined below)
occurs, for any reason or without reason. For purposes of this Section 8(a), any
good faith determination by the Executive after the Effective Date as to whether
a termination by the Executive should be treated as an involuntary termination
by the Company shall be conclusive. Notwithstanding the foregoing, a termination
by the Company or by the Executive that is effective on or after the first
anniversary of the Effective Date shall not be considered an involuntary
termination, provided that the party terminating the Executive's employment
provides
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written notice of such termination to the other party at least 30 days. prior to
the effective date of such termination.
(b) Voluntary Termination. (i) By the Executive. The Executive
may voluntarily terminate the Agreement (including without limitation by
retirement) at any time by notice to the Company as provided in Section 14(f).
The Executive's death during the term of the Agreement shall constitute a
voluntary termination of employment for purposes of eligibility for Termination
Payments and Benefits as provided in Section 9.
(ii) By the Company. Notwithstanding the provisions of Section
8(a) above, the Company shall have the absolute right to terminate the
employment of the Executive effective on or after the first anniversary of the
Effective Date, and such termination shall not be considered an involuntary
termination, provided that the Company gives written notice of such termination
to the executive at least 30 days prior to the effective date of such
termination.
(c) Subject to Section 9 and any benefit continuation
requirements of applicable laws, in the event the Executive's employment
hereunder is voluntarily or involuntarily terminated for any reason whatsoever,
the compensation and benefits obligations of the Company under Sections 4 and 5
shall cease as of the effective date of such termination, except for any
compensation and benefits earned or accrued but unpaid through such date.
9. Termination Payments and Benefits. If the Executive's employment
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hereunder is involuntarily terminated by the Company other than for Cause (as
defined herein) prior to the end of the term of this Agreement, then the Company
shall be obligated to pay to the Executive certain termination payments and make
available certain benefits during the termination payment period, as follows:
(a) Termination Payment Period. The Termination Payment Period
shall be the fraction of a year, if any, remaining from the date of
termination to the first anniversary of the Effective Date.
(b) Calculation of Termination Payment. The termination payment
shall equal the product of the Termination Payment Period as set forth
above in subsection (a) multiplied by the sum of (i) the Executive's
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highest annual base salary during the three-year period prior to the
Executive's termination plus (ii) the Executive's average annual cash
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incentive compensation award during the three-year period prior to the
Executive's termination. For purposes of this subsection, (b) the
applicable three-year period shall include employment with RSI.
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(c) Method of Payment. The termination payment shall be paid to
the Executive in a lump sum payment in cash or by check or wire
transfer within five (5) days of the termination of the Executive's
employment.
(d) Benefits.
(i) Notwithstanding any provision to the contrary in
any option agreement or other agreement or in any plan, (x)
all of the Executive's outstanding stock options shall
immediately become exercisable and (y) all restrictions on
any other equity awards shall lapse and such awards shall
vest.
(ii) During the Termination Payment Period as set
forth above in subsection (a), the Company shall use its best
efforts to maintain in full force and effect for the
continued benefit of the Executive all employee welfare
benefit plans and perquisite programs in which the Executive
was entitled to participate immediately prior to the
Executive's termination or shall arrange to make available to
the Executive benefits substantially similar to those which
the Executive would otherwise have been entitled to receive
if his employment had not been terminated. Such welfare
benefits shall be provided to the Executive on the same terms
and conditions (including employee contributions toward the
premium payments) under which the Executive was entitled to
participate immediately prior to his termination. The Company
does not guarantee a favorable tax consequence to the
Executive for continued coverage and benefits under the
Company-sponsored plans nor will it indemnify the Executive
for such results except with respect to the life insurance
plan made available under Section 5.
(iii) Notwithstanding the foregoing, with respect to
the Executive's continued coverage under the Company's
medical and dental plan, or a successor plan, pursuant to
this provision, the Executive's "qualifying event" for
purposes of the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") shall be his date of termination from
the Company.
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(iv) Any termination payments hereunder shall not be
taken into account for purposes of any retirement plan or
other benefit plan sponsored by the Company, except as
otherwise expressly required by such plans or applicable law.
(v) The Company shall provide to the Executive
reimbursement for relocation expenses on a basis consistent
with the Company's practices for senior executive.
(e) Termination for Cause. For purposes of this Agreement,
"Cause" shall mean
(i) the willful and continued failure of the
Executive to perform substantially the Executive's duties
with the Company or one of its subsidiaries (other than any
such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial
performance is delivered to the Executive by the Chief
Executive Officer which specifically identifies the manner in
which the Chief Executive Officer believes that the Executive
has not substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct which is materially and
demonstrably injurious to the Company, its successors or
assigns.
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Executive Officer or based upon the
advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly
adopted by the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and
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the Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of
the Board, the Executive has engaged in the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof
in detail.
(f) Change in Control. A "Change in Control" of the Company
shall mean any of the following events that occurs after the Effective
Date:
(i) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by
a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual
or threatened election contest with respect to the election
or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person (as defined in Section 9(f)(ii)) other than the
Board; or
(ii) Any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") is or becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
50% or more of the Company's stock generally entitled to
vote for the election of directors ("Voting Stock") or the
consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company or other transaction (a "Business
Transaction"), in each case, unless, following such Business
Transaction, (i) no Person (excluding any employee benefit
plan (or related trust) of the Company or such corporation
resulting from such Business Transaction) beneficially owns,
directly or indirectly, 50% or more of, respectively, the
then outstanding shares of Voting Stock of the Company or
the
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corporation resulting from such Business Transaction and
(ii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Transaction were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Transaction; or
(iii) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(iv) Notwithstanding the foregoing provisions of
subsection (f), the Merger shall not constitute a Change in
Control.
(g) Disability Defined. "Disability" shall mean the absence of
the Executive from the Executive's duties with the Company on a full-
time basis for 180 consecutive business days as a result of incapacity
due to mental or physical illness which is determined to be total and
permanent by a physician selected by the Company, its successors or
assigns or its insurers and acceptable to the Executive or the
Executive's legal representative.
(h) No Obligation to Mitigate. The Executive is under no
obligation to mitigate damages or the amount of any payment provided
for hereunder by seeking other employment or otherwise; provided,
however, that the Executive's coverage under the Company's welfare
benefit plans will terminate when the Executive becomes covered under
any employee benefit plan made available by another employer and
covering the same type of benefits. The Executive shall notify the
Company within thirty (30) days after the commencement of any such
benefits.
(i) Effect of Change of Control Agreement and Prior Agreement.
The Executive's severance benefits under Section 9(d)(ii) of this
Agreement shall be reduced to the extent that the Executive is or
becomes entitled to receive comparable benefits under the terms of the
Prior Agreement or the "Change in Control Agreement".
(j) Certain Additional Payments by the Company.
(i) Anything in this Agreement to the contrary
notwithstanding and except as set forth below, in the
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event it shall be determined that any payment or
distribution by the Company to or for the benefit of the
Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise) (including, without limitation, amounts
attributable to the acceleration of vesting of stock
options), but determined without regard to any additional
payments required under this Section 9(k)) (a "Payment")
would be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax,
together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Executive of all taxes (including
any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and
Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. Notwithstanding the
foregoing provisions of this Section 9(k)(i), if it shall be
determined that the Executive is entitled to a Gross-Up
Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to
the Executive such that the receipt of Payments would not
give rise to any Excise Tax, then no Gross-Up Payment shall
be made to the Executive and the Payments, in the aggregate,
shall be reduced to the Reduced Amount.
(ii) Subject to the provisions of Section 9(k)(iii),
all determinations. required to be made under this Section
9(k), including whether and when a Gross-Up Payment is
required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such
determination, shall be made by KPMG Peat Marwick or such
other certified public accounting firm as may be designated
by the Executive (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice
from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event
that
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the Accounting Firm is serving as accountant or auditor
for the individual, entity or group effecting the Change of
Control, the Executive shall appoint another nationally
recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the
Company. Any Gross-Up Payment, as determined pursuant to
this Section 9(k), shall be paid by the Company to the
Executive within five days of the receipt of the Accounting
Firm's determination. Any determination by the Accounting
Firm shall be the binding upon the Company and the
Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it
is possible that Cross-Up Payments which will not have been
made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its
remedies pursuant to Section 9(k)(iii) and the Executive
thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment
shall be promptly paid by the Company to or for the benefit
of the Executive.
(iii) The Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that,
if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten business days
after the Executive is informed in writing of such claim and
shall apprise the Company of the nature of such claim and
the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which it gives
such notice to the Company (or such shorter period ending on
the date than any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it
desires to contest such claim, the Executive shall:
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(A) give the Company any information reasonably
requested by the Company relating to such claim,
(B) take such action in connection with
contesting such claim as the Company shall reasonably
request in writing from time to time, including,
without limitation, accepting legal representation with
respect to such claim by an attorney reasonably
selected by the Company,
(C) cooperate with the Company in good faith in
order effectively to contest such claim, and
(D) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Executive harmless,
on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses. Without limitation on the foregoing
provisions of this Section 9(k)(iii), the Company shall
control all proceedings taken in connection with such
contest and, at its sole option, may pursue or forgo any and
all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such
claim and may, at its sole option, either direct the
Executive to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if
the Company directs the Executive to pay such claim and xxx
for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and
shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any
imputed income with
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respect to such advance; and further provided that any
extension of the statute of limitations relating to payment
of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(iv) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section
9(k)(iii), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall
(subject to the Company's complying with the requirements of
Section 9(k)(iii)) promptly pay to the Company the amount of
such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the
Company pursuant to Section 9(k)(iii), a determination is
made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify
the Executive in writing of its intent to contest such
denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
10. Additional Covenants of the Executive.
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(a) The Executive acknowledges that (i) the principal
business of the Company and its subsidiaries is the broadline
foodservice distribution business (the "Present Business"); (ii) the
Company and its subsidiaries constitute one of a limited number of
persons who have developed the Present Business; (iii) the Executive's
work for the Company and its subsidiaries has given and will continue
to give him access to the confidential affairs and proprietary
information of the Company and its subsidiaries not readily available
to the public; and (iv) the agreements and covenants of the Executive
contained in this Section 10 are essential to the business and
goodwill
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of the Company. Accordingly, the Executive covenants and agrees that:
(b) While employed by the Company and for a period of one
year following the termination of this Agreement, he will not, (I) in
any state (other than any Excluded State, as defined below) where
the Company or its subsidiaries is then conducting business, directly
or indirectly; (1) engage in the Present Business and any other
principal line of business developed by the Company or its
subsidiaries during the term of this Agreement which, in each case, is
then being conducted by the Company or its subsidiaries (hereinafter
collectively referred to as the "Company Business") for the
Executive's own account; (2) render any services in any capacity to
any person (other than the Company or its affiliates) engaged in such
activities; or (3) become interested in any person (other than the
Company or its affiliates) engaged in such activities as a partner,
shareholder, principal, agent, trustee, consultant or in any other
relationship or capacity; provided, however, that the Executive may
own, directly or indirectly, solely as an investment, securities of
any person which are traded on any national securities exchange or
NASDAQ if the Executive (A) is not a controlling person of, or a
member of a group which controls, such person and (B) does not,
directly or indirectly, own one percent (1%) or more of any class of
securities of such person, or (II) become an employee of, consultant
to, or otherwise render services to any of SYSCO Corporation, Alliant
Foodservice (formerly Kraft) or any of their respective affiliates or
successors. For purposes of this Section 10(a), "Excluded State"
shall mean any state in which annual sales of the Company Business in
the most recently completed fiscal year were less than $1 million.
(c) During the Employment Period and thereafter, the
Executive shall keep secret and retain in strictest confidence, and
shall not use for his benefit or the benefit of others, except in
connection with the business and affairs of the Company and its
affiliates, all confidential matters relating to the Company Business
and to the Company and its affiliates learned by the Executive
heretofore or hereafter, directly or indirectly, from the Company and
its affiliates, including any information concerning the business,
affairs, customers, clients, sources of supply and customer lists of
the Company and its affiliates (the "Confidential Company
Information") and shall not disclose them to anyone except with the
Company's express written consent and except for Confidential Company
Information which (1) is at the time of receipt or thereafter becomes
publicly known, through no breach of this Agreement by the Executive
or (2) is received from a third party not under an obligation to keep
such information confidential and without breach of this Agreement by
the Executive.
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These rights of the Company are in addition to and without limitation
to those rights and remedies available under common law for protection
of the types of such confidential information which constitute "trade
secrets" as construed under controlling law.
(d) For a period of one year following the termination of
this Agreement, the Executive shall not, without the Company's prior
written consent, directly or indirectly, knowingly solicit or
encourage to leave the employment of the Company and its subsidiaries,
any employee of the Company or any of its subsidiaries or hire any
employee who has left the employment of the Company or any of its
subsidiaries within one year of the termination of such employee's
employment with the Company or any of its subsidiaries.
(e) Any Confidential Company Information (including any
memoranda, notes, lists, records and other documents and all copies
thereof) made or compiled by the Executive or made available to the
Executive concerning the Company's Business or the Company or any of
its affiliates shall be the Company's property, shall be kept
confidential in accordance with the provisions of this Section 10 and
shall be delivered to the Company at any time on request.
(f) If the Executive breaches, or threatens to commit a
breach of, any of the provisions of Section 10 (the "Restrictive
Covenants"), the Company shall have the right and remedy, in addition
to, and not in lieu of, any other rights and remedies available to the
Company under law or in equity, to have the Restrictive Covenants
specifically enforced by any court having equity jurisdiction,
including, without limitation, the right to an entry against the
Executive of restraining orders and injunctions (preliminary,
mandatory, temporary and permanent) against violations, threatened or
actual, and whether or not then continuing, of such covenants, it
being acknowledged and agreed that any such breach or threatened
breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company.
11. Arbitration. In the event of any dispute, controversy or
-----------
claim arising out of any provision of this Agreement (excluding, however, any
dispute, controversy or claim arising out of Section 10), the parties agree to
submit such dispute, controversy or claim to arbitration and that the
determination in such arbitration shall be final and binding. Arbitration shall
be effected in the State of Maryland by a panel of three arbitrators in
accordance with the commercial arbitration rules then in force of the American
Arbitration Association, which shall administer the arbitration and act as
appointing authority. In the event of any
15
conflict between the rules and the provisions of this Section 11, the provisions
of this Section 11 shall govern. The arbitrators shall interpret this Agreement
in accordance with the substantive laws of the State of Maryland. Any judgment
upon the award of the arbitrators may be entered in any court having
jurisdiction thereof, with costs of the arbitration to be borne equally by the
parties, except that each party shall pay the fees and expenses of its own
counsel in the arbitration.
12. Legal Fees and Expenses. In the event of litigation between the
-----------------------
parties regarding interpretation or enforcement of this Agreement, the parties
agree that the prevailing party shall be entitled to recover reasonable
attorneys' and related fees and expenses incurred in connection with the
litigation.
13. Certain Agreements with RSI. From and after the Effective Date,
---------------------------
the Change in Control Agreement, the Prior Agreement and the Supplemental
Retirement Plan for the Executive, originally effective as of July 20, 1994, and
as amended effective June 19, 1995, between RSI and the Executive (the
"Supplemental Retirement Plan") shall remain in full force and effect. The
Company will, and will cause Merger Sub to, honor and perform the Change in
Control Agreement, the Prior Agreement and the Supplemental Retirement Plan in
accordance with their respective terms, as modified by this Section 15. The
commencement of the Executive's employment with the Company on the Effective
Date under the terms of this Agreement shall be treated as follows:
(a) For purposes of the Change in Control Agreement, the
employment of the Executive with RSI shall be treated as having been
terminated by RSI after the occurrence of a Change in Control other
than by reason of The Executive's death. The Date of Termination
shall be deemed to be the day immediately prior to the Effective Date;
provided, however, for purposes of Section 3(C) of the Change in
Control Agreement, the Date of Termination shall be deemed to be the
date of termination of the Executive's employment with the Company.
Except as modified by the preceding sentence, as used in this Section
13(a), the terms "Change in Control" and "Date of Termination" shall
have the meanings assigned to such terms in the Change in Control
Agreement. The applicable benefit plans and perquisite programs shall
be determined based upon those in effect at RSI immediately prior to
the Effective Date.
(b) For purposes of the Prior Agreement, the employment of
the Executive with RSI shall be treated as having been involuntarily
terminated by RSI other than for Cause. Such termination shall be
deemed to have been implemented with prior written notice and to be
effective on the day prior to the Effective Date; provided, however,
that (i) for purposes of the third paragraph of Section 9(d) of the
Prior Agreement, the Executive's "qualifying event"
16
shall be deemed to be the date of termination with the Company, and
(ii) for purposes of Section 9(b) of the Prior Agreement, coverage by
the Company or any Affiliate shall not be taken into account. For
purposes of the second paragraph of Section 9(d) of the Prior
Agreement, the applicable benefit plans and perquisite programs shall
be determined based upon those in effect at RSI immediately prior to
the Effective Date.
(c) For purposes of the Supplemental Retirement Plan, the
employment of the Executive with RSI and all Affiliates shall be
treated as having been terminated other than by reason of his death or
an approved leave of absence. The Executive's Termination of
employment shall be deemed to occur on the date immediately prior to
the Effective Date; provided, however, that (i) for purposes of
Section 4.6 of the Supplemental Retirement Plan, the employment by the
Company or any affiliate on or after the Effective Date shall not be
treated as reemployment by the Employer or an Affiliate for purposes
of the Supplemental Retirement Plan, and (ii) the Executive's accrued
benefit under the Qualified Pension Plan for purposes of Section
4.1(a)(ii) of the Supplemental Retirement Plan shall be based on his
accrued benefit under the Qualified Pension Plan determined as of the
day immediately prior to the Effective Date. Except as provided in
this Section 13(c), the terms "Affiliate", "Termination of
Employment", "Qualified Pension Plan" and "Employer" shall have the
meanings assigned to such terms in the Supplemental Retirement Plan.
14. Miscellaneous.
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(a) Affiliate Definition. "Affiliate" shall mean any person,
firm or corporation which directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with, the
persons specified.
(b) Company, Successor and Assigns Definitions.
(i) The Company, its successors or assigns shall mean the Company and/or its
past, present and future affiliates, divisions, subsidiaries, facilities,
parents, successors, predecessors and assigns, and their respective past,
present and future officers, directors, managers, shareholders, agents,
representatives, attorneys and employees.
(ii) RSI, its successors or assigns shall mean RSI and/or its
past, present and future affiliates, divisions, subsidiaries,
facilities, parents, successors, predecessors and assigns, and their
respective
17
past, present and future officers, directors, managers, shareholders,
agents, representatives, attorneys and employees.
(c) Amendments. This Agreement may be amended only by a
writing executed by each of the parties hereto.
(d) Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter
hereof, and supersedes all prior contracts, agreements, arrangements,
communications, discussions, representations and warranties, whether
oral or written, between the parties; provided, however, that the
Prior Agreement, the Change in Control Agreement and the Supplemental
Retirement Plan shall be subject to Section 13.
(e) Law and Interpretation. This Agreement shall be
governed by, construed and interpreted in accordance with the laws of
the State of Maryland. With respect to each and every term and
condition in this Agreement, the parties understand and agree that the
same have or has been mutually negotiated, prepared and drafted, and
that if at any time the parties hereto desire or are required to
interpret or construe any such term or condition or any agreement or
instrument subject hereto, no consideration shall be given to the
issue of which party hereto actually prepared, drafted or requested
any term or condition of this Agreement or any agreement or instrument
subject hereto.
(f) Notices. Any notice, request or other communication
required or permitted hereunder shall be in writing and shall be
deemed to have been duly given (a) when received if personally
delivered, (b) within 12 hours after being sent by telecopy, with
telecopy confirmation, and (c) when received (as established by
written receipt) if sent by established overnight courier to the
parties (and to the persons to whom copies shall be sent) at:
To the Company: JP Foodservice, Inc.
0000 Xxxxxxxx Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
With a copy to: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy No.: (000) 000-0000
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Attention: Xxxxxx X. Xxxxxxx, Esq.
To the Executive: Xx. Xxxx Xxx Xxxxxxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000
Telecopy No.:
With a copy to:
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Any party by notice given to the other party in accordance with this Section
14(f) may change the address or the persons to whom notices or copies thereof
shall be directed.
(g) Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of which together shall constitute one and the same instrument.
(h) Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
assigns and heirs, as set forth herein, but no rights, obligations or
liabilities hereunder shall be assignable by the Executive without the prior
written consent of the Company, its successors or assigns.
(i) Waivers and Amendments. This Agreement may be
amended, superseded, canceled, renewed or extended, and the terms hereof may be
waived, only by a written instrument signed by the parties or, in the case of a
waiver, by the party waiving compliance. No delay on the part of either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of either party of such right, power
or privilege nor any single or partial exercise of any such right, power or
privilege, preclude any other further exercise thereof or the exercise of any
other such right, power or privilege.
(j) Headings. The headings in this Agreement are solely
for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
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IN WITNESS WHEREOF, the Executive has executed, and the Company has
caused its duly authorized representative to execute, this Agreement as of the
date first above written.
JP FOODSERVICE, INC.
By
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Xxxx Xxx Xxxxxxxxxxxx
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