Agreement Relating To Employment and Post-Employment Competition - ARAMARK Corp. and L. Frederick Sutherland
AGREEMENT RELATING TO EMPLOYMENT AND
POST-EMPLOYMENT COMPETITION*
This Agreement is between the undersigned individual ("Employee") and ARA
Services, Inc. ("ARA").
RECITALS:
---------
A. ARA is a service management company which provides a variety of
services to business and industry, private and public institutions, and the
general public primarily in the following markets: food and refreshment
services; health care; child care, periodical distribution, uniform rental and
maintenance.
B. ARA has a proprietary interest in its business methods and systems
("Systems") which include, but are not limited to, policy and procedure manuals,
computer programs, financial forms and information, supplier information,
recipes, accounting forms and procedures, personnel policies and information on
the needs of clients, all of which information is not publicly disclosed and is
considered by ARA to be confidential trade secrets; and
C. ARA intends to employ Employee in a position where Employee will
have access to information relating to ARA's Systems and ARA will encourage
Employee to develop personal relationships with ARA's clients and prospective
clients; and
D. ARA will be vulnerable to unfair post-employment competition by
Employee since Employee will have access to ARA Systems and will have a personal
relationship with ARA's clients and prospective clients; and
E. In consideration of the severance and other employment benefits
provided for herein, Employee was willing to enter into this Agreement with ARA
as a condition of employment, pursuant to which Employee will limit his right to
compete against ARA following termination of employment for any reason to the
limited extent set forth in this Agreement.
* This Agreement covers individuals in Grade N or Higher.
<PAGE>
NOW, THEREFORE, intending to be legally bound, the parties agree as
follows:
Article 1. NON-DISCLOSURE AGREEMENT: ARA may, pursuant to Employee's employment
hereunder provide and confide to Employee ARA's Systems, techniques and methods
of operation developed at great expense by ARA and which Employee recognizes to
be unique assets of ARA'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 where required by
law: (a) any such Systems, techniques and methods of operation; (b) any sales
prospects, customer lists, products, research or data of any kind; or (c) any
information relating to strategic plans, sales costs, profits or the financial
condition of ARA or any of its customers or prospective customers, which is not
generally known to the public or recognized as standard practice in the
industries in which ARA shall be engaged.
Article 2. NONCOMPETITION AGREEMENT:
A. Subject to the provisions of Paragraphs B and E, below, Employee,
for a period of two (2) years following termination of his employment, shall
not, without ARA's written permission, directly or indirectly, on Employee's
behalf or on behalf of any other person, firm, corporation, association or other
entity, engage in, or in any way be concerned with or negotiate for, or acquire
or maintain any ownership interest in any business or activity which is the
same, similar to or competitive with that conducted by, engaged in or developed
for later implementation by ARA at any time during the term of Employee's
employment.
B. The provisions set forth in Paragraph A, above, shall apply to (i)
all fifty states and (ii) each foreign country, possession or territory in which
ARA may be engaged in business at the termination of Employee's employment or at
any time within twelve ( 12) months prior thereto; but only if Employee was
directly or indirectly involved or exposed to plans for such business at any
time within twelve (12) months prior to termination.
C. Employee further agrees that Employee shall not for a period of two
years, directly or indirectly, at any time in any manner, induce or attempt to
influence any employees of ARA to terminate their employment with ARA.
D. Employee acknowledges that in the event of any violation by Employee
of the provisions set forth in Article I above or this Article 2, ARA will
sustain serious, irreparable and substantial harm to its business, the extent of
which will be difficult to determine and impossible to remedy by an action at
law for money damages. Accordingly, Employee agrees that, in the event of such
violation or threatened violation by Employee, ARA shall be entitled to an
injunction before trial from 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 ARA. Employee further
agrees that, in the event any of the provisions of this Agreement are determined
<PAGE>
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 of such provisions so as to permit enforcement therefore as thus modified.
E. Notwithstanding anything to the contrary in this Agreement, if ARA
elects to terminate Employee's employment for any reason other than good and
sufficient cause, then, in such event the term of the non-competition provision
set forth in Paragraph A above shall be reduced to the number of months that
Employee is entitled to severance pursuant to the Following Article 4A, below.
Article 3. EXECUTIVE CORPS PROGRAMS: Employee shall be eligible to participate
in the following Executive Corps programs while a member of the Executive Corps
to the extent ARA continues to make such programs available to Executive Corps
members:
. Executive Corps Health Care Plan
. Executive Corps Long Term Disability Insurance
. Survivor Income Protection Plan
. Executive Corps Automobile Program
Such Executive Corps programs may be amended or revoked at any time,
without notice to Employee, in the sole discretion of ARA.
Article 4. SEVERANCE BENEFITS: If Employee is terminated by ARA for any reason
other than good and sufficient cause, Employee shall be entitled to the
following severance benefits:
A. Severance Pay: Employee shall receive severance payments equivalent
to Employee's base salary rate for the number of months set forth below:
Years of ARA Continuous Service
Completed from Last Hire Date
10 or
2 3 4 5 6 7 8 9 more
- - - - - - - - -----
9 9 10 11 12 13 14 16 18
Severance payments shall be made in installments in accordance with ARA's normal
payroll cycle.
B. Other Severance Benefits:
<PAGE>
(1) Group medical and life insurance coverages shall continue
under then prevailing terms as long as severance payments are being made to
Employee. Deductions for Employee's share of the premiums will be made from
Employee's severance payments. Group medical coverage provided during such
period shall be applied against ARA's obligation to continue group medical
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). Upon termination of group medical and life insurance coverages,
Employee may convert, this cost, to individual policies.
(2) Employee's eligibility to receive or participate in all
other benefit and compensation plans, including, but not limited to Management
lncentive Bonus, Long Term Disability, Retirement Savings, and Stock Option
Plans, shall terminate as of the effective date of Employee's termination unless
provided otherwise under the terms of a particular benefit or compensation plan,
provided, however, participation in programs made available solely to Executive
Corps members shall cease as of the effective date of Employee's termination or
the date Employee's Executive Corps membership ceases, whichever should occur
first.
C. Termination for "good and sufficient cause: shall include
termination for such things as fraud or dishonesty, willful failure to perform
assigned duties, willful violation of ARA's Business Conduct Policy, or
intentionally working against the best interest of ARA.
D. If Employee is terminated by ARA, for reasons other than good and
sufficient cause, Employee will receive severance payments and benefits for the
number of months set forth above in Paragraph A, whether or not Employee
commences other non-competitive employment while he is receiving such payments
and benefits, provided, however, ARA reserves the right to terminate all
severance payments and benefits if Employee violates the covenants set forth in
Article 2, above.
E. ARA expressly reserves the right 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 ARA
on the date ARA elected to revoke or amend the severance provisions.
F. During any period of disability following termination of Employment,
Employee agrees that disability payments received by him pursuant to health and
accident or disability policies, whether on account of total or partial
disability, shall be credited against the severance payments due him hereunder.
Article 5. TERM OF EMPLOYMENT: Employee acknowledges that ARA has the right to
terminate Employee's employment at any time for any reason whatsoever, provided,
<PAGE>
however, that any termination by ARA for reasons other than good and sufficient
cause shall result in the severance benefits described in Article 4, above, to
become due in accordance with the terms of this Agreement. Employee further
acknowledges that the severance payments made and other benefits provided by ARA
are in full satisfaction of any claims that Employee may have against ARA
resulting from ARA's exercise of its right to terminate Employee's employment,
except for those fringe benefits which are intended to survive termination such
as the right to receive payments pursuant to retirement plans and ,similar
rights.
Article 6. MISCELLANEOUS:
A. As used throughout this Agreement, ARA shall include The ARA Group,
Inc., a Delaware corporation, and its subsidiaries and affiliates, or any
corporation, joint venture, or other entity in which The ARA Group Inc. or its
subsidiaries or affiliates has an equity interest in excess of ten percent
(10%).
B. Reference to the masculine gender shall include the feminine gender.
C. This Agreement shall supersede and substitute for any previous
employment agreement between employee and ARA, and is entered into in
consideration of the mutual undertakings of the parties, the cancellation of all
previous agreements, and the release of the parties of their respective rights
and obligations under any previous employment agreement, excepting only such
rights and obligations which by their nature are intended to survive termination
or cancellation of such employment agreement. In the event Employee's previous
employment agreement provided for a longer severance period than set forth in
this Agreement, then the Employee's right to severance set forth in the previous
employment agreement shall survive, but any payments made shall be credited
against the severance payments otherwise due under the provisions of Article 4A,
hereof.
D. Employee and ARA acknowledge that for purpose of Article 4
Employee's last hire date with ARA is August 27,1980.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed.
/s/ L. Frederick Sutherland
---------------------------
L. Frederick Sutherland
ARA Services, Inc. ("ARA")
By: /s/ James E. Ksansnak
James E. Ksansnak
Date: June 7, 1993