EXHIBIT 10(m)
GENERAL COUNSEL AGREEMENT
AGREEMENT dated the 6th day of August, 1997 by and
between XXXXXX X. XXXXXX ("TMH") and GUEST SUPPLY, INC., a
New Jersey corporation (the "Company").
W I T N E S S E T H :
WHEREAS, TMH is engaged in the practice of law and
has served as counsel to the Company since 1982;
WHEREAS, TMH's knowledge and experience in the
business and legal affairs of the Company as well as his
expertise and judgment are a valuable asset to the Company;
and
WHEREAS, the Company desires to retain TMH as
General Counsel to the Company, and TMH desires to serve as
General Counsel to the Company, on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the premises
and the mutual agreements hereinafter set forth, the parties
hereto hereby agree as follows:
1. Services; Term.
1.1 The Company agrees to retain TMH, and TMH
agrees to serve as General Counsel to the Company, for the
term set forth in Section 1.2, in the position and with the
responsibilities, duties and authority set forth in Section
2 and on the other terms and conditions set forth in this
Agreement.
1.2 The term of this Agreement shall commence as
of August 1, 1997 and shall terminate on July 31, 2000,
unless sooner terminated in accordance with this Agreement.
1.3 As of July 31, 1998 and each subsequent July
31 during the term of this Agreement (each, an "Automatic
Renewal date"), unless either party shall have given a
notice of non-extension not less than two (2) months prior
to such Automatic Renewal Date, the term of this Agreement
shall be extended automatically for a period of one (1) year
to the first anniversary of the expiration date of the then-
current term of this Agreement. Once a notice of non-
extension shall have been given by either party, there shall
be no further automatic extension of this Agreement.
2. Duties; Independent Contractor.
2.1 During the Term, TMH shall serve in the
position of General Counsel of the Company. TMH shall
perform such legal services as shall be required by the
Company. TMH shall provide such services through the law
firm of Xxxxxx & Xxxxxx. TMH shall also retain such other
special or local counsel as shall be necessary or
appropriate from time to time. TMH shall report directly to
the Chief Executive Officer of the Company and to the Board
of Directors of the Company.
2.2 In performing services under this Agreement,
TMH shall be acting at all times as an independent
contractor and not as an employee of the Company. Under no
circumstances shall TMH be considered an employee of the
Company, nor is this Agreement intended to, and shall not,
create any type of joint venture or partnership between TMH
and the Company. TMH shall not be entitled to any of the
benefits, including, but not limited to, fringe benefits and
workers' compensation benefits, afforded by the Company to
its employees. The Company shall not exercise any control
or direction over the exercise of professional judgement
used by TMH in providing services under this Agreement. TMH
shall be exclusively responsible for the payment of all
taxes, withholding payments, penalties, fees, fringe
benefits, professional liability insurance premiums,
contributions to insurance and pension or other deferred
compensation plans, including, but not limited to, workers'
compensation and Social Security obligations, licensing
fees, and the like, and the filing of all necessary
documents, forms, and returns pertinent to the services
performed and fees earned pursuant to this Agreement.
3. Compensation. In consideration of the
services to be performed by TMH hereunder, the Company shall
pay to TMH a General Counsel fee of $7,500.00 per month,
payable on or about the 15th day of each month during the
Term. The General Counsel fee shall be credited on a
current basis against the fees of Xxxxxx & Xxxxxx for
services rendered to the Company and, to the extent that the
General Counsel fee exceeds the fees of Xxxxxx & Xxxxxx on a
current basis, it shall be credited against future fees of
Xxxxxx & Xxxxxx for services rendered to the Company.
4. Termination.
4.1 In the event of termination of TMH's services
as General Counsel under this Agreement by the Company at
any time during the term of this Agreement prior to a Change
in Control (as defined in Section 4.3 of this Agreement),
the Company shall pay to TMH the monthly General Counsel fee
set forth in Section 3 of this Agreement payable for the
month in which such termination occurs and not theretofore
paid. Neither TMH nor the Company shall have any further
rights or obligations under this Agreement, except as set
forth in Sections 5, 6 and 13 of this Agreement.
4.2 In the event of termination of TMH's services
as General Counsel under this Agreement by the Company upon
or subsequent to a Change in Control, other than by reason
of (i) the death or permanent disability of TMH or (ii) Due
Cause (as hereinafter defined), the Company shall pay to
TMH, on the date of such termination, a lump sum amount in
cash equal to $270,000. The parties agree that the amount
set forth in the preceding sentence shall constitute
liquidated damages, it being agreed that TMH's damages in
the event of termination of his services as General Counsel
under this Agreement might be impossible to ascertain and
that the amount set forth in the preceding sentence
constitutes a fair and reasonable amount of damages under
the circumstances and is not a penalty. Neither TMH nor the
Company shall have any further rights or obligations under
this Agreement, except as set forth in Sections 5, 6 and 13
of this Agreement. For purposes hereof, "Due Cause" shall
mean (i) gross neglect or gross misconduct in TMH's
discharge of his duties and responsibilities under this
Agreement, or (ii) TMH's commission of (x) a felony or (y)
any crime or offense involving moral turpitude.
4.3 For purposes of this Agreement, a Change in
Control of the Company shall be deemed to have occurred if:
(A) a "person" (meaning an individual, a
partnership, or other group or association as defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, other than TMH or a group including TMH), acquires
twenty percent (20%) or more of the combined voting power of
the outstanding securities of the Company having a right to
vote in elections of directors; or
(B) Continuing Directors shall for any
reason cease to constitute two-thirds of the Board of
Directors of the Company; or
(C) the business of the Company is disposed
of by the Company to a party or parties other than a
subsidiary or other affiliate of the Company, in which the
Company owns less than a majority of the equity, pursuant to
a partial or complete liquidation of the Company, sale of
assets (including stock of a subsidiary of the Company) or
otherwise.
For purposes of this Agreement, the term
"Continuing Director" shall mean a member of the Board of
Directors of the Company who either was a member of the
Board of Directors on the date hereof or who subsequently
became a Director and whose election, or nomination for
election, was approved by a vote of at least two-thirds of
the Continuing Directors then in office, other than in
connection with an event specified in clauses (A) or (C)
above.
4.4 For a period of five years following
termination of the services of TMH as General Counsel under
this Agreement pursuant to Section 4.1 or 4.2 (the
"Consulting Period"), the Company shall retain TMH to
provide such consulting services, on such projects, at such
compensation and at such times as are mutually agreed to
from time to time by TMH and the Company. During the
Consulting Period, TMH shall be deemed an employee of the
Company for purposes of the stock option plans and incentive
plans of the Company (the "Plans"). Any options to purchase
common stock, no par value (the "Common Stock"), of the
Company (the "Options") heretofore or hereafter granted to
TMH pursuant to the Plans shall become fully exercisable and
shall remain exercisable upon the termination of TMH's
services as General Counsel under this Agreement until the
first to occur of (a) the expiration of the term of such
Options or (b) the expiration of the Consulting Period. In
the event the Company terminates TMH's services as a
consultant hereunder prior to the expiration of the
Consulting Period, TMH shall be entitled to receive payment
from the Company of liquidated damages in an amount equal to
the aggregate Adjusted Option Spread (as hereinafter
defined), it being agreed that TMH's damages might be
impossible to ascertain and that such amount constitutes a
fair and reasonable amount of damages under the
circumstances and is not a penalty. Any damages payable to
TMH hereunder shall be paid by the Company to TMH within
fifteen (15) days following the original expiration date of
the Consulting Period. For purposes hereof, the Adjusted
Option Spread with respect to each Option held by TMH on the
date of termination of TMH's services as a consultant
hereunder shall be equal to the product of (a) the number of
shares of Common Stock which are subject to such Option
multiplied by (b) the excess of (i) the highest Market Price
(as hereinafter defined) of the Common Stock during the
period commencing on the date on which such Option ceases to
be exercisable as a result of the termination of TMH's
services as a consultant hereunder and terminating on the
original expiration date of the Consulting Period over
(ii) the greater of (x) the option exercise price per share
of Common Stock under such Option or (y) the highest Market
Price of the Common Stock during the period commencing on
the date of termination of TMH's services as a consultant
hereunder and terminating on the date on which such Option
ceases to be exercisable as a result of such termination.
For purposes hereof, Market Price on any date shall mean the
closing price per share of Common Stock on the New York
Stock Exchange (or such other national securities exchange
on which the Common Stock may be listed, if not listed on
the New York Stock Exchange, or in the over-the-counter
market, if not listed on a national securities exchange).
5. Confidential Information.
5.1 TMH shall, during the term of this Agreement
and thereafter, treat all confidential material
confidentially and, except in accordance with the terms of
this Agreement and as required in the performance of his
duties hereunder, shall not, without the prior written
consent of a majority of the Board of Directors of the
Company, disclose such material, directly or indirectly, to
any party not at the time of such disclosure either an
employee or agent of the Company or a partner or employee of
Xxxxxx & Xxxxxx. TMH agrees that all confidential material,
together with all notes and records of TMH relating thereto,
and all copies or facsimiles thereof in the possession of
TMH (whether made by the foregoing or other means) are the
exclusive property of the Company. TMH shall not in any
manner use any confidential material, or any other property
of the Company, in any manner not specifically directed by
the Company.
5.2 For the purposes hereof, the term
"confidential material" shall mean all information in any
way concerning the activities, business or affairs of the
Company or the Company's customers and clients, including,
without limitation, information concerning trade secrets and
the preparation of raw material for, manufacture of, and/or
finishing processes utilized in the production of, the
products or projects of the Company and/or any improvements
therein, together with all sales and financial information
concerning the Company and any and all information
concerning projects in research and development or marketing
plans for any such products or projects, and all information
concerning the practices, customers and clients of the
Company, and all information in any way concerning the
activities, business or affairs of any of such customers or
clients, as such, which is furnished to TMH by the Company
or any of its agents, customers or clients, as such, or
otherwise acquired by TMH in the course of his service as
General Counsel to the Company; provided, however, that the
term "confidential material" shall not include information
which (i) becomes generally available to the public other
than as a result of a disclosure by TMH, (ii) was available
to TMH on a non-confidential basis prior to his service as
General Counsel to the Company or (iii) becomes available to
TMH on a non-confidential basis from a source other than the
Company or any of its agents, customers or clients, as such,
provided that such source is not bound by a confidentiality
agreement with the Company or any of such agents, customers
or clients.
5.3 The obligations of TMH under this Section 5
are in addition to and not in any way in limitation of the
professional obligations of TMH relating to the
confidentiality of attorney-client communications.
6. Equitable Relief. In the event of a breach
or threatened breach by TMH of any of the provisions of
Section 5 of this Agreement, TMH hereby consents and agrees
that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent
jurisdiction restraining TMH from committing or continuing
any such breach or threatened breach or granting specific
performance of any act required to be performed by TMH under
any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an
adequate remedy and without the necessity of posting any
bond or other security. Nothing herein shall be construed
as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have.
7. Failure to Make Payments. If the Company
shall fail to pay to TMH the General Counsel fee under
Section 3 of this Agreement or the termination payment under
Section 4 of this Agreement for a period of thirty (30) days
after the same shall become due and payable, such amount
shall bear interest at the rate of eighteen percent (18%)
per annum or, if less, the highest legal rate per annum
permitted under the laws of the State of New Jersey, from
and after the date that such amount shall have become due
and payable to and including the date that such amount shall
have been paid in full.
8. Successors and Assigns.
8.1 This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and
assigns.
8.2 The Company shall require any successors
(whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume and
agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to
perform if no such succession had taken place. As used in
this Section, the "Company" shall mean the Company as
hereinbefore defined and any successor to its business
and/or assets as aforesaid which otherwise becomes bound by
all the terms and provisions of this Agreement by operation
of law and this Agreement shall be binding upon, and inure
to the benefit of, the Company, as so defined.
9. Governing Law. This Agreement shall be
deemed a contract made under, and for all purposes shall be
construed in accordance with, the laws of the State of New
Jersey applicable to contracts to be performed entirely
within such State. In the event that a court of any
jurisdiction shall hold any of the provisions of this
Agreement to be wholly or partially unenforceable for any
reason, such determination shall not bar or in any way
affect each party's right to relief as provided for herein
in the courts of any other jurisdiction. Such provisions,
as they relate to each jurisdiction, are, for this purpose,
severable into diverse and independent covenants. Service
of process on the parties hereto at the addresses set forth
herein shall be deemed adequate service of such process.
10. Entire Agreement. This Agreement contains
all the understandings and representations between the
parties hereto pertaining to the subject matter hereof and
supersedes all undertakings and agreements, whether oral or
in writing, if any there be, previously entered into by them
with respect thereto.
11. Amendment, Modification, Waiver. No
provision of this Agreement may be amended or modified
unless such amendment or modification is agreed to in
writing and signed by TMH and by a duly authorized
representative of the Company. Except as otherwise
specifically provided in this Agreement, no waiver by either
party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of a similar or
dissimilar provision or condition at the same or any prior
or subsequent time, nor shall the failure of or delay by
either party hereto in exercising any right, power or
privilege hereunder operate as a waiver thereof to preclude
any other or further exercise thereof or the exercise of any
other such right, power or privilege.
12. Arbitration. Any controversy or claim
arising out of or relating to this Agreement, or any breach
thereof, shall be settled by binding arbitration in
accordance with the rules of the American Arbitration
Association then in effect and judgment upon such award
rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitration shall be held
in New York, New York.
13. Attorneys' Fees and Costs. All attorneys'
fees, costs and expenses incurred by the prevailing party in
connection with any litigation pursuant to Section 6 or any
arbitration pursuant to Section 12 shall be borne by the
non-prevailing party.
14. Notices. Any notice to be given hereunder
shall be in writing and delivered personally or sent by
certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated
below or at such other address as such party may
subsequently designate by like notice:
If to the Company:
Guest Supply, Inc.
0000 X.X. Xxxxxxx One
X.X. Xxx 000
Xxxxxxxx Xxxxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xx. Xxxxxxxx X. Xxxxxxx
Chairman and
Chief Executive Officer
If to TMH:
Xxxxxx X. Xxxxxx, Esq.
00 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
15. Severability. Should any provision of this
Agreement be held by a court or arbitration panel of
competent jurisdiction to be enforceable only if modified,
such holding shall not affect the validity of the remainder
of this Agreement, the balance of which shall continue to be
binding upon the parties hereto with any such modification
to become a part hereof and treated as though originally set
forth in this Agreement. The parties further agree that any
such court or arbitration panel is expressly authorized to
modify any such unenforceable provision of this Agreement in
lieu of severing such unenforceable provision from this
Agreement in its entirety, whether by rewriting the
offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or
by making such other modifications as it deems warranted to
carry out the intent and agreement of the parties as
embodied herein to the maximum extent permitted by law. The
parties expressly agree that this Agreement as so modified
by the court or arbitration panel shall be binding upon and
enforceable against each of them. In any event, should one
or more of the provisions of this Agreement be held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or
provisions are not modified as provided above, this
Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been set forth herein.
16. Authority. The Company represents and
warrants to TMH that the execution and delivery of this
Agreement by the Company and the performance by the Company
of its covenants and agreements hereunder have been duly
authorized by all necessary corporate action and that this
Agreement has been duly executed and delivered on behalf of
the Company.
17. Survivorship. The respective rights and
obligations of the parties hereunder shall survive any
termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
18. Titles. Titles of the sections of this
Agreement are intended solely for convenience and no
provision of this Agreement is to be construed by reference
to the title of any section.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.
GUEST SUPPLY, INC.
By /s/ Xxxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxxx X. Xxxxxxx
Title: President
/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
