Agreement Relating To Employment and Post-Employment Competition - ARAMARK Corp. and Charles E. Kiernan
ARAMARK CORPORATION
AGREEMENT RELATING TO EMPLOYMENT AND
POST-EMPLOYMENT COMPETITION
This Agreement is between the undersigned individual ("Employee") and ARAMARK
CORPORATION ("ARAMARK").
RECITALS
A. ARAMARK is the leading provider of managed services to business and
industry, private and public institutions, and the general public, in the
following business segments: food, leisure and support services; health and
education services; magazine and book services; and uniform services.
B. ARAMARK has a proprietary interest in its business and financial plans and
systems, methods of operation and other secret and confidential
information, knowledge and data ("Proprietary Information") which includes,
but is not limited to, annual and strategic business plans; financial
plans, reports and systems including, profit and loss statements and other
information regarding costs, profits, sales and the financial condition of
ARAMARK and its business units; management development reviews, including
information regarding the capabilities and experience of ARAMARK employees;
information regarding ARAMARK's relationships with its clients, customers,
and suppliers and prospective clients, customers and suppliers; and
technical data and know-how, including policy and procedure manuals,
computer programs, recipes, accounting forms and procedures and human
resource policies and procedures, all of which information is not publicly
disclosed and is considered by ARAMARK to be confidential trade secrets,
C. Employee shall be employed in a senior management position and shall have
access to ARAMARK's Proprietary Information, directly in the course of
Employee's employment, and indirectly through interaction with and
presentations by other senior ' managers at the Executive Leadership
Institute, Executive Leadership Council meetings, President's Council
meetings, Chairman's Council meetings and the like, and ARAMARK will
encourage Employee to develop personal relationships with ARAMARK's
clients, prospective clients and suppliers.
D. ARAMARK will be vulnerable to unfair post-employment competition by
Employee since Employee will have access to and knowledge of ARAMARK's
Proprietary Information and will have a personal relationship with
ARAMARK's clients, prospective clients and suppliers.
E. In consideration of continued employment, the severance and other
post-employment benefits provided for herein, Employee is willing to enter
into this Agreement with ARAMARK as a condition of employment pursuant to
which Employee will limit Employee's right to compete against ARAMARK
following termination of employment on the terms set forth in this
Agreement.
NOW, THEREFORE, intending to be legally bound, the parties agree as follows:
ARTICLE 1. NON-DISCLOSURE AGREEMENT: ARAMARK shall, in the course of employment,
provide and confide to Employee ARAMARK's Proprietary Information developed at
great expense by ARAMARK and which Employee recognizes to be unique assets of
ARAMARK's business. Employee shall not, during or after the term of employment,
directly or indirectly, in any manner utilize or disclose to any person, firm,
corporation, association or other entity, except
<PAGE>
where required by law, any such Proprietary Information which is not generally
known to the public or recognized as standard practice in the industries in
which ARAMARK is engaged.
ARTICLE 2. NON-COMPETITION AGREEMENT:
A. Subject to Article 2. B. below, Employee, for a period of two years
following the voluntary or involuntary termination of employment, shall
not, without ARAMARK's written permission, directly or indirectly, become
employed by (as an employee, consultant or otherwise), or acquire or
maintain any ownership interest in any Business which is similar to or
competitive with that conducted by or developed for later implementation by
ARAMARK at any time during the term of Employee's employment, provided,
however, if Employee's employment is involuntarily terminated by ARAMARK
for any reason other than good and sufficient cause, the term of the
non-competition provision set forth herein, will be modified to the longer
of (i) one year, (ii) the number of months Employee receives severance
payments or (iii) the number of months Employee is entitled to receive
severance payments pursuant to Article 5a below. For purposes of this
Agreement, "Business" shall be defined as a person, corporation, firm,
partnership, joint venture or other entity.
B. The provision set forth in Article 2. A. above, shall apply to (i) all
fifty states, and (11) each foreign country, possession or territory in
which ARAMARK may be engaged in business as of the effective date of
termination or at any time during the twelve month period prior thereto.
Further, notwithstanding anything in this Agreement to the contrary,
Article 2, A. above shall not limit Employee's right to engage in any
business or activity if such business or activity is unrelated to the type
of business or activity conducted by the business segment or segments for
which Employee directly or indirectly provided services during the
twenty-four month period preceding Employee's effective date of termination
unless Employee otherwise directly or indirectly acquired knowledge of
Proprietary information for such business segment or segments at any time
during the twenty-four month period preceding Employee's effective date of
termination. By way of example, but not limitation, if Employee provided
services to one of the business units of ARAMARK Food and Support Services
Group, Employee would be precluded during the applicable time period from
being employed by any Business providing food, leisure and support services
(irrespective of the particular ARAMARK business unit that employed
Employee) but Employee would not be precluded from working for a competitor
in the magazine and book distribution business or uniform rental business,
unless Employee had acquired knowledge of Proprietary Information for
ARAMARK's Magazine and Book Distribution business or Uniform Rental
businesses within twenty-four months prior to termination, as a result of
task force assignments, special projects, attendance at the Executive
Leadership Institute, Executive Leadership Council meetings, Presidents'
Council meetings, Chairman's Council meetings, and the like.
C. Employee acknowledges that enforcement of the provisions set forth in this
Article 2 will not unduly impair Employee's ability to obtain other
employment following the termination (voluntary or involuntary) of
Employee's employment with ARAMARK. Further, Employee acknowledges that the
provisions set forth in this Article 2 shall apply if Employee is
involuntarily terminated for good and sufficient cause; as a result of the
elimination of employee's position; for performance related issues; or for
any other reason or no reason at all.
ARTICLE 3. NON-SOLICITATION OF EMPLOYEES. Employee shall not for a period of two
years following the voluntary or involuntary termination of employment, directly
or indirectly, at any time, in any manner, induce or attempt to influence any
employees of ARAMARK to terminate their employment with ARAMARK.
<PAGE>
ARTICLE 4. REMEDIES: Employee acknowledges that in the event of any violation by
Employee of the provisions set forth in Articles 1, 2 or 3 above, ARAMARK will
sustain serious, irreparable and substantial harm to its business, the extent of
which will be difficult to determine and impossible to fully remedy by an action
at law for money damages. Accordingly, Employee agrees that, in the event of
such violation or threatened violation by Employee, ARAMARK shall be entitled to
an injunction before trial before any court of competent jurisdiction as a
matter of course upon the posting of not more than a nominal bond, in addition
to all such other legal and equitable remedies as may be available to ARAMARK.
If ARAMARK is required to enforce the provisions set forth in Articles 2 and 3
above by seeking an injunction, Employee agrees that the relevant time periods
set forth in Articles 2 and 3 shall commence with the entry of the injunction.
Employee further agrees that, in the event any of the provisions of this
Agreement are determined by a court of competent jurisdiction to be contrary to
any applicable statute, law or rule, or for any reason unenforceable as written,
such court may modify any such provisions so as to permit enforcement thereof as
modified.
ARTICLE 5. POST-EMPLOYMENT BENEFITS:
A. If Employee is terminated by ARAMARK for any reason other than good and
sufficient cause, Employee shall be entitled to the following
post-employment benefits:
I. Severance Pay: Employee shall receive severance payments equivalent to
Employee's monthly base salary as of the effective date of termination for
a period of one (1) year until Executive Leadership Council Agreement
payout schedule exceeds one year, then the employee shall receive the
number of months set forth on the following schedule:
Years of ARAMARK Continuous Service
Completed From Last Hire Date
----------------------------------------------
7 8 9 10 or more
----------------------------------------------
13 14 16 18
----------------------------------------------
Employee shall receive severance payments equivalent Severance payments shall
commence with the Employee's effective date of termination and shall be made in
accordance with ARAMARK's normal payroll cycle. The period during which employee
receives severance payments shall be referred to as the "Severance Pay Period."
2. Other Post-Employment Benefits
a. Basic Group medical and life insurance coverages shall continue under then
prevailing terms during the Severance Pay Period. Employee's share of the
premiums will be deducted from Employee's severance payments, Basic Group
medical coverage provided during such period shall be applied against
ARAMARK's obligation to continue group medical coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"). Upon
termination of basic group medical and life coverages, Employee may convert
such coverages to individual policies to the extent allowable under plan
provisions.
b. Employee's leased vehicle shall be made available to Employee through the
Severance Pay Period at which time Employee has the option to either
purchase the vehicle in accordance with the Executive Leadership Council
plan then in effect or return it to ARAMARK.
c. Employee's eligibility to receive or participate in all other benefit and
compensation plans, including, but not limited to the Management Incentive
Bonus, Long Term Disability, Stock Unit Retirement and any stock option or
ownership plans, shall terminate as of the effective date of Employee's
termination unless provided otherwise under the terms of a
<PAGE>
particular plan, provided, however, participation in plans and programs
made available solely to Executive Leadership Council members, including,
but not limited to the Executive Leadership Council Medical Plan, shall
cease as of the effective date of termination or the date Employee's
Executive Leadership Council membership ceases, whichever occurs first.
Employee, however, shall have certain rights to continue the Executive
Leadership Council Medical Plan under COBRA.
B. Termination for "Good and sufficient cause" shall be defined as termination
for such things as fraud or dishonesty, willful failure to perform assigned
duties, willful violation of ARAMARK's Business Conduct Policy, or
intentionally working against the best interest of ARAMARK.
C. If Employee is terminated by ARAMARK for reasons other than good and
sufficient cause, Employee will receive the severance payments and other
post-employment benefits during the Severance Pay Period even if Employee
commences other employment during such period provided such employment does
not violate the terms of Article 2.
D. ARAMARK reserves the right to terminate all severance payments and other
post-employment benefits if Employee violates the covenants set forth in
Articles 1, 2 and 3 above.
E. ARAMARK expressly reserves the rights to revoke or amend, in whole or in
part, the severance provisions set forth in this agreement at any time, for
any reason, provided, however, in the event Employee is terminated for
reasons other than good and sufficient cause subsequent to such revocation
or amendment, Employee shall be entitled to no less than the monthly
severance payments which Employee would have received under this Agreement
had he been terminated by ARAMARK on the date ARAMARK elected to revoke or
amend the severance provisions.
ARTICLE 6. TERM OF EMPLOYMENT: Employee acknowledges that ARAMARK has the right
to terminate Employee's employment at any time for any reason whatsoever,
provided, however, that any termination by ARAMARK for reasons other than good
and sufficient cause shall result in the severance and the post-employment
benefits described in Article 5 above, to become due in accordance with the
terms of this Agreement subject to the conditions set forth in this Agreement.
Employee further acknowledges that the severance payments made and other
benefits provided by ARAMARK are in full satisfaction of any obligations ARAMARK
may have resulting from ARAMARK's exercise of its right to terminate Employee's
employment, except for those obligations which are intended to survive
termination such as the payments to be made pursuant to retirement plans and
conversion of insurance.
ARTICLE 7. MISCELLANEOUS:
A. As used throughout this Agreement, ARAMARK includes ARAMARK CORPORATION and
its subsidiaries and affiliates or any corporation, joint venture, or other
entity in which ARAMARK CORPORATION or its subsidiaries or affiliates has
an equity interest in excess of ten percent (10%).
B. This Agreement shall supersede and substitute for any previous
postemployment or severance agreement between Employee and ARAMARK, and is
entered into in consideration of the mutual undertakings of the parties and
the cancellation of all previous agreements, The terms of this Agreement
shall be governed by the laws of the Commonwealth of Pennsylvania.
C. Employee and ARAMARK acknowledge that for purposes of Article 5, Employee's
last hire date with ARAMARK is October 19, 1998.
<PAGE>
IN WITNESS WHEREOF, and intending to be legally bound, hereto
have caused this Agreement to be signed.
Date: December 14, 1998 ARAMARK CORPORATION
By:/s/ Brian G. Mulvaney
----------------------------
Brian G. Mulvaney
By:/s/ Charles E. Kiernan
----------------------------
Charles E. Kiernan