1
Exhibit 10B
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
-----------------------------------------
AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made and
entered into as of the 1st day of February, 1997, by and between THE XXXXXXXX
AND XXXXXXXX COMPANY, a corporation existing under the laws of the State of Ohio
("Xxxxxxxx"), and XXXXXX X. XXXXX ("Xxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxx and Xxxxxxxx have entered into an Employment Agreement
dated as of November 9, 1987, as amended effective December 1, 1989 and as
further amended and restated in its entirety effective September 30, 1992 (as so
amended and restated the "Employment Agreement"), pursuant to which Xxxxx is
currently employed as President of the Xxxxxxxx Automotive Division; and
WHEREAS, Xxxxx and Xxxxxxxx desire to amend further, again restate in
its entirety, and continue the Employment Agreement and enter into this
Agreement on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual promises set forth below, Xxxxxxxx and Xxxxx hereby agree as follows:
1. AMENDMENT, RESTATEMENT IN ITS ENTIRETY AND CONTINUATION OF
EMPLOYMENT AGREEMENT.
Effective as of the date hereof, the Employment Agreement shall be, and
hereby is, amended, restated in its entirety and continued as set forth in this
Agreement, and all terms, conditions and provisions of the Employment Agreement
shall be, and hereby are, superseded by this Agreement and shall no longer be of
any force and effect.
2
2. DEFINITIONS.
For purposes of this Agreement, the terms set forth below shall have
the following meanings:
(a) "Annual Compensation Value" shall mean Xxxxx'x then-current Base
Compensation plus an amount equal to the average of all Bonuses (excluding any
compensation attributable to stock options of any type granted by Xxxxxxxx)
earned by Xxxxx during the three (3) calendar years preceding the date upon
which the valuation is made.
(b) "Base Compensation" shall mean the then-current annual base salary
(exclusive of Bonuses) of Xxxxx.
(c) "Bonuses" shall mean bonus payments earned by Xxxxx under Xxxxxxxx'
Incentive Compensation Plans and under any future bonus or incentive
compensation plans of Xxxxxxxx for its executive officers.
(d) "Change in Control" shall mean the occurrence of any of the
following:
(i) Any "person," as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren, Xxxxxxxx, any
trustee or other fiduciary holding securities under an employee benefit plan of
Xxxxxxxx, or any company owned, directly or indirectly, by the shareholders of
Xxxxxxxx in substantially the same proportions as their ownership of stock of
Xxxxxxxx), is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of Xxxxxxxx
representing fifty percent (50%) or more of the combined voting power of
Xxxxxxxx' then outstanding securities;
(ii) during any period of two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the
2
3
Board, any new director (other than a director designated by a person who has
entered into an agreement with Xxxxxxxx to effect a transaction described in
clause (i), (iii) or (iv) of this Section whose election by the Board or
nomination for election by Xxxxxxxx' shareholders was approved by a vote of at
least two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election was previously so
approved) cease for any reason to constitute at least a majority thereof;
(iii) the shareholders of Xxxxxxxx approve a merger or
consolidation of Xxxxxxxx with any other company, other than (1) a merger or
consolidation which would result in the voting securities of Xxxxxxxx
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting security of Xxxxxxxx or such surviving entity outstanding immediately
after such merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of Xxxxxxxx (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than fifty percent (50%) of the
combined voting power of Xxxxxxxx' then outstanding securities; or
(iv) the shareholders of Xxxxxxxx approve a plan of liquidation,
dissolution or winding up of Xxxxxxxx or an agreement for the sale or
disposition by Xxxxxxxx of all or substantially all of Xxxxxxxx' assets.
(e) "Disability Benefits" shall mean an annual amount equal to
fifty-five percent (55%) of Xxxxx'x Final Average Annual Compensation,
determined at the time of Xxxxx'x disability rather than his retirement;
provided, however, that the amount of disability benefit payments to be made
3
4
hereunder shall be reduced by the amount of regular disability benefits payable
to Xxxxx under Xxxxxxxx' long-term disability program.
(f) "Discharge For Cause" shall be construed to have occurred whenever
occasioned by reason of felonious acts on the part of Xxxxx, actions by Xxxxx
involving serious moral turpitude or his misconduct in such manner as to bring
substantial and material discredit upon Xxxxxxxx, following the giving of thirty
(30) days' written notice to Xxxxx specifying the respect in which Xxxxxxxx
claims Xxxxx has violated this provision and the failure, inability or
unwillingness of Xxxxx to remedy the situation to the satisfaction of Xxxxxxxx
within said thirty-day period. In establishing whether a Discharge For Cause
shall have occurred, the standard for judgment shall be the level of conduct by
Xxxxx and by other comparably situated executive officers prior to the alleged
improper activity of Xxxxx for which the Discharge For Cause has been made.
(g) "Escrow Agreement" shall mean the agreement dated November 9, 1987
as amended September 30, 1992 and as further amended simultaneously herewith
entered into between Xxxxxxxx and Bank One, Dayton, NA, a copy of which
(including the amendments) is attached hereto and made a part hereof as Exhibit
A.
(h) "Escrow Agent" shall mean Bank One, Dayton, NA.
(i) "Escrow Amount" shall mean the amounts placed in escrow by Xxxxxxxx
pursuant to subsection (e)(iii) of Section 8 of this Agreement.
(j) "Escrow Funding Event" shall mean the occurrence of any of the
following events:
(i) Class A Common Shares of Xxxxxxxx have been acquired other than
directly from Xxxxxxxx in exchange for cash or property by any person (other
than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren, Xxxxxxxx, any
trustee or other fiduciary holding securities under an
4
5
employee benefit plan of Xxxxxxxx, or any company owned directly or indirectly
by the shareholders of Xxxxxxxx in substantially the same proportions as their
ownership of the stock of Xxxxxxxx) who either thereby becomes the owner of more
than nine and one half percent (9.5%) of Xxxxxxxx'
outstanding Class A Common Shares, or having directly or indirectly become the
owner of more than five percent (5%) of Xxxxxxxx' Class A Common Shares either
alone or in conjunction with another person has expressed an intent to continue
acquiring Xxxxxxxx' outstanding Class A Common Shares so as to become thereby
the owner of more than nine and one-half percent (9.5%) of such stock either
directly or indirectly;
(ii) Any person (other than Xxxxxxx X. Xxxxx, Xx., his children or
grandchildren, Xxxxxxxx, any trustee or other fiduciary holding securities under
an employee benefit plan of Xxxxxxxx, or any company owned directly or
indirectly by the shareholders of Xxxxxxxx in substantially the same proportions
as their ownership of stock of Xxxxxxxx) has made a tender offer for, or a
request for invitations for tenders of, Class A Common Shares of Xxxxxxxx.
(iii) Any person forwards or causes to be forwarded to shareholders
of Xxxxxxxx proxy statement(s) in any period of twenty-four (24) consecutive
months, soliciting proxies, to elect to the Board of Xxxxxxxx two (2) or more
candidates who were not nominated as candidates in proxy statements forwarded to
shareholders during such period by the Board; or
(iv) The Board adopts a resolution to the effect that, for purposes
of this Agreement, an Escrow Funding Event has occurred.
(k) "Final Annual Compensation" shall mean Xxxxx'x Base Compensation at
the time of termination of employment plus an amount equal to the average of all
Bonuses (excluding any
5
6
compensation attributable to stock options of any type granted by Xxxxxxxx)
earned by Xxxxx during the three (3) calendar years preceding his termination of
employment.
(l) "Final Average Annual Compensation" shall mean the average of
Xxxxx'x Base Compensation and Bonuses (excluding any compensation attributable
to stock options of any type granted by Xxxxxxxx) as determined for the five (5)
consecutive calendar years of the last ten (10) calendar years preceding and
including the calendar year in which Xxxxx'x employment terminates which yields
the highest sum.
(m) "Pension Plan" shall mean the existing Xxxxxxxx and Xxxxxxxx
Company Non-Union Pension Plan, as the same may be amended from time to time.
(n) "Retirement Benefits" shall mean payments to Xxxxx based upon his
lifetime in an annual amount equal to a designated percentage of Xxxxx'x Final
Average Annual Compensation or, in the case of Section 8(d) below, Final Annual
Compensation, which shall be comprised of the sum of (i) Xxxxx'x primary Social
Security retirement benefits when he is entitled to receive such benefit (age
sixty-two (62)) [until that time an amount equal to the primary Social Security
retirement benefit shall be paid to Xxxxx from Xxxxxxxx' Supplemental Plan],
(ii) Xxxxx'x pension benefits determined as a life annuity (without regard to
actual payment form) under the Pension Plan and deferred compensation payments
under the Non-Qualified Deferred Compensation and Disability Benefit Agreement
dated June 15, 1992 between Xxxxx and Xxxxxxxx, or such other non-contributory
deferred compensation agreement(s) then existing between Xxxxxxxx and Xxxxx, and
(iii) such amount of supplemental retirement benefits under the Supplemental
Plan as shall be necessary to achieve the designated percentage of Xxxxx'x Final
Average Annual Compensation or, in the case of Section 8(d) below, Final Annual
Compensation. In addition to said annual amount,
6
7
Retirement Benefits shall include a continuation of coverage for the remainder
of Xxxxx'x life under Xxxxxxxx-sponsored medical benefits and life insurance
programs, but only to the extent applicable to participants in Xxxxxxxx'
Qualified Retiree Medical Plans. For purposes of determining the amount of
supplemental retirement benefits to be made by Xxxxxxxx pursuant to the
Supplemental Plan, the method of payment of retirement benefits to Xxxxx
pursuant to the Pension Plan shall determine the amount and method of payment of
the supplemental retirement payments pursuant to the Supplemental Plan. These
supplemental retirement payments by Xxxxxxxx pursuant to the Supplemental Plan
shall continue so long as pension benefits are payable under the Pension Plan
and shall be in addition to the pension benefit payments under the Pension Plan.
(o) "Supplemental Plan" shall mean Xxxxxxxx' existing Supplemental
Retirement Plan, as the same may be amended from time to time.
3. TERMS AND DUTIES.
(a) The term of this Agreement shall continue from the date hereof and
end on September 30, 2001. Xxxxx shall continue in the employ of Xxxxxxxx as
President of the Xxxxxxxx Automotive Division or such other substantially
equivalent position designated by the Board, consistent with the provisions of
this Agreement. In addition, Xxxxx agrees to perform such other duties as may be
specifically designated for him from time to time by the Board, consistent with
the provisions of this Agreement.
(b) At all times Xxxxx will, to the best of his ability, energy and
skill, faithfully perform all of the duties that may be required of him from
time to time by the Board and diligently devote his entire working time,
attention and efforts to the business affairs and best interests of Xxxxxxxx,
except for absences for sicknesses and vacations. If the Board determines that
any outside activity
7
8
engaged in by him is detrimental to the best interests of Xxxxxxxx, he will
discontinue such outside activity within thirty (30) days after written notice
from the Board.
(c) Xxxxx agrees that during the period of his employment by Xxxxxxxx,
for so long as he is entitled to receive payments under this Agreement, and for
a period of two (2) years thereafter (subject to the provisions of Section 9
below), he will not, directly or indirectly, further the affairs of any other
corporation, partnership, or any business enterprise by employment of any kind,
investment therein (except as otherwise permitted under Section 9(d) below),
counseling or otherwise, if the same is in competition with Xxxxxxxx, without
the written consent of the Board. This provision, however, shall not be
construed to prevent him from pursuing personal investments in any business or
enterprise which is not in competition with Xxxxxxxx and which do not interfere
with his employment and the performance of his duties to Xxxxxxxx hereunder.
4. COMPENSATION AND FRINGE BENEFITS.
(a) The Base Compensation of Xxxxx during the term of this Agreement
shall be $297,220, which may be increased from time to time by the Board or, in
the case of any proposed decrease, such other amount as mutually may be agreed
upon by Xxxxx and Xxxxxxxx; provided, however, that such Base Compensation may
not be reduced below said rate of $297,220 without Xxxxx'x consent, unless
necessitated by general business conditions adversely affecting Xxxxxxxx'
operations; but, in the event of a reduction, his Base Compensation shall be
fair and reasonable, and any disagreement concerning the same shall be resolved
by arbitration in the manner provided in Section 10 below. Xxxxx'x Base
Compensation shall be reviewed at least annually to determine whether in view of
Xxxxxxxx' performance during the year any increase is warranted. Responsibility
8
9
for this determination rests with the sole discretion of the Board, and this
provision shall not be construed as requiring any such increase for any given
year.
(b) Xxxxx shall continue his participation in the existing Deferred
Compensation Plan and the existing bonus plan arrangements under the Incentive
Compensation Plans (or their equivalent) for executive officers of Xxxxxxxx and
shall be entitled to such awards under any future bonus, incentive, or similar
compensation plans of Xxxxxxxx, as shall, in the determination of the Board, be
appropriate and consistent with the purposes of such plans and with the awards
granted to other executive officers of Xxxxxxxx.
(c) Xxxxx shall continue to be eligible for participation in the Stock
Option Plan - 1995 of Xxxxxxxx and shall be entitled to the grant of such
options to purchase shares of Class A Common Stock of Xxxxxxxx under any other
future stock option plans for employees and to participate in such other
executive compensation incentive plans awarding stock as shall, in the
determination of the Board, be appropriate and consistent with the purposes of
the plans and with the grants of such options to the executive officers of
Xxxxxxxx.
(d) In addition to the specific benefits provided for Xxxxx under the
terms of this Agreement, Xxxxxxxx shall provide him with other fringe benefits
(including bonuses, vacations, health and disability insurance, pension plan
participation and others) at least equivalent to those of the other executive
officers of Xxxxxxxx and as set forth on Exhibit B attached hereto and made a
part hereof.
(e) It is understood and agreed that Xxxxx shall have no rights to
benefits under the Pension Plan unless he becomes vested under the Pension Plan
in accordance with its terms (currently, five (5) Years of Service), and that
Xxxxx shall have no rights to deferred compensation
9
10
payments under the Non-Qualified Deferred Compensation and Disability Benefit
Agreement dated June 15, 1992 between Xxxxx and Xxxxxxxx unless and until Xxxxx
has satisfied the service requirement therein (currently, 174 calendar months of
employment with Xxxxxxxx).
5. EXPENSES.
Xxxxx shall be reimbursed for his reasonable business-related expenses
incurred for the benefit of Xxxxxxxx in accordance with Xxxxxxxx' policies
governing such reimbursement in effect from time to time. Such expenses shall
include, but shall not be limited to, travel, lodging away from home,
entertainment, and meals. With respect to any expenses which are reimbursed by
Xxxxxxxx to Xxxxx, Xxxxx shall account to Xxxxxxxx in sufficient detail to
entitle Xxxxxxxx to a federal income tax deduction for such reimbursed item if
such item is deductible.
6. RETIREMENT BENEFITS.
(a) Xxxxx, having attained age fifty-five (55), may elect to retire
from Xxxxxxxx upon giving twelve (12) months prior written notice and upon
retirement between the ages of fifty-five (55) and fifty-eight (58), shall be
entitled to receive at the time of such early retirement, Retirement Benefits at
a level equal to fifty-five percent (55%) of his Final Average Annual
Compensation, reduced by one-fifteenth (1/15) for each Year of Service (as
defined in the Pension Plan) less than fifteen (15). If Xxxxx elects to retire
upon giving twelve (12) months prior written notice after attaining age
fifty-eight (58), the level of this Retirement Benefits as a percentage of his
Final Average Annual Compensation shall be increased by one percent (1%) for
each additional twelve (12) month period over age fifty-eight (58), but shall
not be reduced even if Years of Service are less than fifteen (15).
10
11
(b) If Xxxxx voluntarily terminates his employment or if Xxxxx is
discharged by Xxxxxxxx (and such discharge is not a Discharge For Cause), or if
Xxxxx'x employment is terminated under the circumstances described in Section
8(e)(i) below, Xxxxx shall be entitled to the benefits set forth in Section 8
and shall be entitled to the Retirement Benefits set forth in this Section 6.
(c) To the extent Xxxxx receives any similar benefits under the Pension
Plan, Supplemental Plan or other Xxxxxxxx benefit plan for any of its employees,
such benefits shall be included in calculating the amount to which Xxxxx shall
be entitled under Sections 6(a) and 6(b), above; provided, however, that in no
event shall the benefits described in Sections said 6(a) and (b) above be
reduced by the provisions of this Section 6(c).
7. DISABILITY AND DEATH BENEFITS.
(a) If Xxxxx becomes so ill or disabled as to be permanently
incapacitated from performing the duties of his employment with Xxxxxxxx (this
disability to be certified by two (2) physicians competent to do so in the
opinion of the Board), Xxxxx shall be deemed to have elected retirement under
this Agreement and shall be entitled to receive the Retirement Benefits set
forth in Section 6(a) above. Such Retirement Benefits, however, shall be
calculated on the basis of Xxxxx'x Final Average Annual Compensation at the time
of his disability, not the time of his retirement. See also Section 8(c) of this
Agreement.
(b) In the event of Xxxxx'x death while still employed by Xxxxxxxx
pursuant to this Agreement, Xxxxxxxx shall pay to such beneficiary or
beneficiaries as he shall have designated by written notice delivered to
Xxxxxxxx prior to his death, or failing such written notice, to his estate, an
amount equal to the Base Compensation plus the Bonuses, if any, which Xxxxx
would have received or which would have been accrued for his benefit during the
period of six (6) months
11
12
immediately following his death if he had lived and had been employed by
Xxxxxxxx during that period. Such payment shall be made in one lump sum or in
six (6) equal monthly installments as Xxxxxxxx shall elect and shall be in
addition to the proceeds of any insurance policies carried on Xxxxx'x life with
respect to which he has the right to designate beneficiaries. Also, Xxxxxxxx
shall pay to Xxxxx'x spouse an amount, periodically as such payments are
required to be made by said spouse, to enable her to continue medical coverage
for her and her dependents in the same manner as immediately prior to Xxxxx'x
death for a period expiring at the earlier of: (i) her death; (ii) forty-two
(42) months after Xxxxx'x death; or (iii) eligibility for regular Medicare and
Medicaid or any successor programs furnished by the government. Thereafter,
Xxxxxxxx shall make available to Xxxxx'x spouse (including her dependents), at
her cost, such medical coverage as shall be available to a person of her then
age under the then-existing Xxxxxxxx-sponsored medical benefits program, but
only to the extent coverage is available under such program.
8. TERMINATION; DISCHARGE.
(a) TERMINATION OR DISCHARGE WITHOUT CAUSE. Xxxxxxxx reserves the right
to discharge Xxxxx at any time and for any reason; but such discharge, unless a
Discharge For Cause, shall not extinguish the obligation of Xxxxxxxx to provide
Xxxxx (and, in the event of his prior death, his designated beneficiary or
beneficiaries or his estate) with the following severance benefits:
(i) If such discharge occurs prior to September 30, 2001,
Xxxxx shall be entitled to receive for a period equal to the lesser of two (2)
years from the date of discharge or the number of full months then remaining on
the term of this Agreement, payments from Xxxxxxxx in an amount equal to his
Annual Compensation Value, which shall be reduced by seventy percent (70%) of
the
12
13
amount of compensation received by Xxxxx from any subsequent employment obtained
by him during said payment period.
(ii) Xxxxx shall be entitled, during the period expiring on the
earlier of Xxxxx'x securing other employment or the end of payment of severance
payments hereunder (or such longer period as required by law), to continuing
coverage under the then-existing Xxxxxxxx-sponsored medical benefits program,
which, at the option of Xxxxxxxx, may be provided outside of such program
through the purchase of insurance or otherwise.
(iii) For purposes of determining Xxxxx'x benefits under the
Supplemental Plan, Xxxxx shall receive credit toward his Years of Service under
the Supplemental Plan for the time period that he receives or is entitled to
receive payments under subsection (i) of this Section 8(a). In addition, during
the time period that he receives or is entitled to receive payments under said
subsection (i) of this Section 8(a), Xxxxx'x Base Compensation shall be deemed
to be increased by the annual economic range adjustment for Xxxxxxxx' salaried
employees announced in October of each year (or, if there is no such announced
economic range adjustment in a given year, by an assumed five (5%) increase for
that year) in order to calculate his highest earnings during five (5)
consecutive years out of the last ten (10) years prior to retirement under the
Supplemental Plan, and his Final Annual Compensation (see Section 8(d) below)
and Final Average Annual Compensation shall be deemed to increase in the same
manner for purposes of determining the amount of his Retirement Benefits under
this Agreement.
(iv) Xxxxx shall be reimbursed for up to $20,000 for out-placement
fees if he chooses to seek other employment following his discharge by Xxxxxxxx.
Xxxxx shall not be obligated to seek other employment in order to mitigate his
damages resulting from his discharge.
13
14
(v) In addition to all of the foregoing, Xxxxx shall be entitled to
receive the payments required of Xxxxxxxx under his then-existing deferred
compensation agreement(s) with Xxxxxxxx in accordance with the terms of such
agreement(s).
Xxxxx acknowledges that he shall remain subject to and bound by the
restrictive provisions of Section 9 below.
(b) DISCHARGE FOR CAUSE. If Xxxxx'x employment with Xxxxxxxx is
terminated by a Discharge For Cause, regardless of whether such Discharge For
Cause occurs after the occurrence of any of the events set forth in Sections
8(d) or 8(e) below, he shall be entitled to receive only his Base Compensation
up to the date of his discharge and no further payments hereunder shall be
required from Xxxxxxxx; provided, however, that Xxxxx shall be entitled to
receive his benefits, if any, under the Pension Plan and the payments required
of Xxxxxxxx under his then-existing deferred compensation agreement(s) with
Xxxxxxxx in accordance with the terms of such agreement(s). Xxxxx shall remain
subject to the restrictive provisions of Section 9 below for a period for two
(2) years from the date of discharge. Should Xxxxx disagree that his discharge
was a Discharge For Cause the question shall be submitted to arbitration in
accordance with Section 10 below.
(c) TERMINATION DUE TO DISABILITY. If, by reason of illness,
disability, or other incapacity (certified in accordance with Section 7(a)
above), Xxxxx is unable to perform the duties required of him under this
Agreement for a period of six (6) consecutive months, Xxxxxxxx, following the
giving of thirty (30) days' written notice to Xxxxx and the failure of Xxxxx by
reason of illness, disability, or other incapacity to resume his duties within
such thirty (30) days and thereafter perform the same for a period of two (2)
consecutive months, may terminate Xxxxx'x employment by giving Xxxxx written
notice thereof; and in that event all obligations of Xxxxxxxx hereunder shall
cease on the date
14
15
such notice of termination is given except for: (i) payment of the Retirement
Benefits under Section 6 above; (ii) payments required of Xxxxxxxx under Xxxxx'x
then-existing deferred compensation agreement(s) in accordance with the terms of
such agreement(s); and (iii) benefits, if any, under medical and hospital care
insurance coverage for Xxxxx comparable to that provided for other employees of
Xxxxxxxx; provided, however, such insurance benefits shall be coordinated with
the benefits Xxxxx is entitled to receive under regular Medicare and Medicaid or
any successor programs furnished by the government.
(d) BENEFITS UPON TERMINATION UNDER CERTAIN CIRCUMSTANCES. If Xxxxx
voluntarily terminates his employment or Xxxxx is discharged by Xxxxxxxx and
such discharge is not a Discharge For Cause, and if such voluntary termination
or involuntary discharge takes place within eighteen (18) months after the
occurrence of any of the following events:
(i) Xxxxx is required by Xxxxxxxx, prior to a Change in Control, to
perform duties or services which differ significantly from those performed by
him on the effective date hereof, or which are not ordinarily and generally
performed by a President of a division or corporation similar in size and scope
to the Xxxxxxxx Automotive Division; or
(ii) The nature of the duties or services which Xxxxxxxx, prior to
a Change in Control, requires him to perform necessitates absence overnight from
his place of residence on the effective date hereof, because of travel involving
the business or affairs of Xxxxxxxx, for more than ninety (90) days during any
period of twelve (12) consecutive months; Xxxxx shall be entitled to receive
from Xxxxxxxx all of the severance benefits set forth in Section 8(a) above,
except that if the remaining term of the Agreement is then more than two (2)
years, severance payments shall be made for the remaining term of the Agreement
and Xxxxx'x right to receive his Retirement Benefits shall
15
16
be based upon his Final Annual Compensation, as the same may be adjusted
pursuant to Section 8(a)(iii) above. Xxxxx shall remain subject to and bound by
the restrictive provisions of Section 9 below.
(e) BENEFITS UPON A CHANGE IN CONTROL. Xxxxxxxx recognizes that the
threat of a Change in Control would be of significant concern to Xxxxx. The
following provisions provide termination protection for Xxxxx in the event of a
Change in Control. These provisions, among other purposes, are intended to
xxxxxx and encourage Xxxxx'x continued attention and dedication to his duties in
the event of such potentially disturbing and disruptive circumstances. Xxxxxxxx,
therefore, agrees to do the following:
(i) If Xxxxxxxx terminates Xxxxx'x employment for any reason other
than a Discharge for Cause, or if Xxxxx terminates his employment with Xxxxxxxx
voluntarily for any reason other than disability or retirement within the
twenty-four (24) month period following a Change in Control, Xxxxx shall be
entitled to receive from Xxxxxxxx the following benefits:
(A) A lump sum severance payment (the "Severance Payment"), in
cash, equal to three (3) times the sum of (i) the higher of Xxxxx'x annual Base
Compensation in effect immediately prior to the occurrence of the event or
circumstance upon which such termination of employment is based or in effect
immediately prior to the Change in Control, and (ii) the average of Xxxxx'x
Bonuses during the three (3) calendar years immediately preceding the year in
which the date of termination occurs.
(B) Xxxxx shall be entitled, during the period expiring on the
earlier of Xxxxx'x securing other employment or twenty-four (24) months from the
date of such termination of employment (or such longer period as required by
law), to continued coverage under the Xxxxxxxx
16
17
sponsored medical benefits program in existence on such date of termination or,
if such continued coverage is barred, Xxxxxxxx shall provide equivalent medical
benefit coverage through the purchase of insurance or otherwise.
(C) For purposes of determining Xxxxx'x benefits under the
Supplemental Plan, Xxxxx shall receive credit toward his Years of Service under
the Supplemental Plan for the two (2) year period following such termination of
employment. In addition, with respect to the two (2) year period following such
termination of employment, Xxxxx'x Base Compensation shall be deemed to be
increased by the annual economic range adjustment for Xxxxxxxx' salaried
employees announced in October of each year (or, if there is no such announced
economic range adjustment in a given year, by an assumed five percent (5%)
increase for that year) in order to calculate his highest earnings during five
(5) consecutive years out of the last ten (10) years prior to retirement under
the Supplemental Plan.
(D) Xxxxx shall be reimbursed for up to $20,000 for outplacement
fees if he chooses to seek other employment following his discharge by Xxxxxxxx.
Xxxxx shall not be obligated to seek other employment in order to mitigate his
damages resulting from his discharge.
(E) In addition to all of the foregoing, Xxxxx shall be entitled
to receive the payments required of Xxxxxxxx under his then-existing deferred
compensation agreement(s) with Xxxxxxxx in accordance with the terms of such
agreement(s).
The benefits provided in this Section 8(e) shall be in lieu of
any benefits provided under Section 8(d) of this Agreement.
(ii) Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by Xxxxx in
connection with a Change in Control or
17
18
the termination of Xxxxx'x employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with Xxxxxxxx, any person
whose actions result in a Change in Control or any person affiliated with
Xxxxxxxx or such person) (all such payments and benefits, including the
Severance Payment, being hereinafter called "Total Payments") would be subject
(in whole or part), to an excise tax pursuant to Sections 280G and 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (such tax hereinafter
referred to as the "Excise Tax"), then the Severance Payment shall be reduced to
the extent necessary so that no portion of the Total Payments is subject to
Excise Tax (after taking into account any reduction in the Total Payments
provided by reason of Section 280G of the Code in such other plan, arrangement
or agreement) if (A) the net amount of such Total Payments, as so reduced, (and
after deduction of the net amount of federal, state and local income tax on such
Total Payments), is greater than (B) the excess of (i) the net amount of such
Total Payments, without reduction (but after deduction of the net amount of
federal, state and local income tax on such Total Payments), over (ii) the
amount of Excise Tax to which Xxxxx would be subject in respect of such Total
Payments. For purposes of determining whether and the extent to which the Total
Payments will be subject to the Excise Tax, (i) no portion of the Total Payments
the receipt or enjoyment of which Xxxxx shall have effectively waived in writing
prior to the date of this termination of employment shall be taken into account,
(ii) no portion of the Total Payments shall be taken into account which in the
opinion of tax counsel selected by Xxxxxxxx does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax,
no portion of such Total Payment shall be taken into account which constitutes
reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4)(B) of the
18
19
Code, in excess of the base amount as defined in Section 280G(b)(3) of the Code
allowable to such reasonable compensation, and (iii) the value of any non-cash
benefit or any deferred payment or benefit included in the Total Payments shall
be determined by Xxxxxxxx in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. Prior to the fifth day following the date of
Xxxxx'x termination of employment, Xxxxxxxx shall provide Xxxxx with its
calculation of the amounts referred to in this Section and such supporting
materials as are reasonably necessary for Xxxxx to evaluate Xxxxxxxx'
calculations. If Xxxxx objects to Xxxxxxxx' calculations, he shall notify
Xxxxxxxx of his objections prior to the initial payment date set forth in
Section 8(e)(vi) hereof, and Xxxxxxxx shall pay to Xxxxx such portion of the
Severance Payment (up to one hundred percent (100%) thereof) as Xxxxx determines
is necessary to result in Xxxxx'x receiving the greater of clauses (A) and (B)
of this Section.
(iii) Upon the occurrence of an Escrow Funding Event, Xxxxxxxx
shall pay into an escrow account at the Escrow Agent an amount equal to three
(3) times the sum of (i) Xxxxx'x Base Compensation in effect immediately prior
to the Escrow Funding Event and (ii) the average of Xxxxx'x Bonuses during the
three (3) calendar years immediately preceding the year in which the Escrow
Funding Event occurs. Subsequent to the delivery to the Escrow Agent of the
Escrow Amount, Xxxxxxxx shall, in the event that either Xxxxx'x Base
Compensation is increased (or decreased) or he receives a Bonus that affects the
amount described in Section 8(e)(i)(A), unless the Escrow Amount shall
theretofore have been released pursuant to this subsection, recalculate the
Escrow Amount as of the date such change in Base Compensation or receipt of
Bonus occurs, treating the Escrow Funding Event as having occurred on such date.
If the amount so calculated exceeds the fair market value of the Escrow Amount,
Xxxxxxxx shall promptly (and in no event later
19
20
than seven (7) days from such date) pay to the Escrow Agent an amount in cash
(or marketable securities or any combination thereof) equal to such excess. If
the Escrow Amount so calculated is less than the fair market value of the Escrow
Amount then held in the escrow account, the Escrow Agent, upon receipt of a
written request from Xxxxxxxx, shall distribute to Xxxxxxxx such difference in
cash; provided, however, that this sentence shall not apply after the occurrence
of a Change in Control.
(iv) Unless the parties otherwise agree, Xxxxxxxx may withdraw the
Escrow Amount when and only when two (2) years have expired from the date of
deposit and no proper demand pursuant to Section 8(e)(vi) below has been made
during the time, or when the conditions requiring the deposit have ceased to
exist for a period of ninety (90) days without a demand right having been
created, or when Xxxxx'x right to a payment under this Section 8(e) has been
forfeited, whichever occurs first. If, before the expiration of such period or
forfeiture, there shall occur another Escrow Funding Event, Xxxxxxxx will not be
required to make an additional deposit, but the two (2) year period shall then
be measured from the date of the last such event. Notwithstanding a deposit with
the Escrow Agent pursuant to subsection (iii) of this Section 8(e), Xxxxx shall
continue to be entitled to receive all of the benefits from Xxxxxxxx under this
Agreement until a termination of employment shall occur.
(v) Xxxxxxxx shall pay the charges of the Escrow Agent for its
services under the Escrow Agreement, and Xxxxxxxx will be entitled to any
interest or other income arising from the date of the deposit of the Escrow
Amount until all payments have been made under the Escrow Agreement to Xxxxx.
All interest or other income arising from the Escrow Amount deposited with the
Escrow Agent shall be paid monthly to Xxxxxxxx.
20
21
(vi) If Xxxxxxxx terminates Xxxxx'x employment for any reason but a
Discharge for Cause, or if Xxxxx terminates his employment with Xxxxxxxx
voluntarily for any reason other than disability or retirement within the
twenty-four (24) month period following the date of a Change in Control, the
Escrow Agent, upon written demand made on or after the tenth (10th) day
following such termination of employment, shall pay the Escrow Amount in
accordance with this Section and Xxxxx shall no longer be subject to the
restrictive provisions of Section 9 below, except for Section 9(e). Xxxxx shall
notify the Escrow Agent prior to the tenth (10th) day following his termination
of employment as to whether he has accepted the determination of Xxxxxxxx of the
amount of the Severance Payments pursuant to Section 8(e) (iii). If he has
accepted such determination, Xxxxxxxx shall provide the Escrow Agent with
Xxxxxxxx' written determination as set forth in Section 8(e) (iii) and the
Escrow Agent shall pay to Xxxxx all or a portion of the Escrow Amount as
provided in such determination, and any remaining amount shall be paid to
Xxxxxxxx. If Xxxxx does not accept Xxxxxxxx' determination, Xxxxx shall provide
to the Escrow Agent his determination of the Severance Payment, and the Escrow
Agent shall pay to Xxxxx all or a portion of the Escrow Amount as provided in
Xxxxx'x determination and any remaining amount shall be paid to Xxxxxxxx.
(vii) In the event that, following the creation of a demand right
pursuant to Section 8(e)(vi) above, Xxxxx incurs any costs or expenses,
including attorneys' fees, in the enforcement of rights under this Section 8(e)
or under any plan for the benefit of employees of Xxxxxxxx, including without
limitation the stock option plan, pension plans, payroll-based stock ownership
plan, tax deferred savings and protection plan, bonus arrangements, supplemental
pension plan, deferred compensation agreements, incentive compensation plans,
and life insurance and compensation program, then, unless Xxxxxxxx or the
consolidated, surviving or transferee entity in the event of a
21
22
consolidation, merger or sale of assets, is wholly successful in defending
against the enforcement of such rights, Xxxxxxxx, or such consolidated,
surviving or transferee entity, shall promptly pay to Xxxxx all such costs and
expenses.
9. NON-COMPETITION; CONFIDENTIALITY.
(a) In order to protect Xxxxxxxx, it is understood that a covenant not
to compete is a necessary and appropriate adjunct to the other provisions of
this Agreement. Therefore, should Xxxxx at any time determine prior to the
expiration of this Agreement that he does not desire to remain an employee of
Xxxxxxxx and shall terminate his employment for any reason other than the
grounds specified in Section 8(e) above, or should he be Discharged For Cause by
Xxxxxxxx, Xxxxx shall remain subject to the restrictive provisions hereinafter
set forth. In addition, these restrictive provisions shall remain in full force
and effect at any other time during which payments are required to be made by
Xxxxxxxx pursuant to the retirement (Section 6), severance (Section 8, except
for Section 8(e)(vi)) or disability (Section 7) provisions of this Agreement.
These restrictive provisions are as follows:
(b) For a period of two (2) years from and after Xxxxx'x employment
with Xxxxxxxx shall have terminated and after he shall have ceased receiving
retirement, severance or disability benefits under this Agreement, whichever
shall last occur, he shall not, directly or indirectly, compete with Xxxxxxxx or
any of its related or affiliated companies. For purposes of this Agreement,
competition with Xxxxxxxx or any of its related or affiliated companies shall
include the manufacture, distribution, and sale of business forms and computer
hardware and software and the furnishing of EDP services which are similar in
nature or function to the products and/or services then being furnished by
Xxxxxxxx for sale in the same vertical markets in which Xxxxxxxx' products
and/or
22
23
services are then being marketed at the time of Xxxxx'x termination of
employment or upon the cessation of any retirement, severance or disability
benefits under this Agreement.
(c) From and after the execution of this Agreement and for a period of
two (2) years after termination of his employment with Xxxxxxxx and after he
shall have ceased receiving retirement, severance or disability benefits under
this Agreement, whichever shall last occur, Xxxxx shall not, directly or
indirectly, by direct participation, by purchase of stocks or bonds or other
evidences of indebtedness, by loaning of money, by guarantee of loans of others,
by gift to establish or assist others, or in any other manner or fashion, engage
in any such restricted activity in competition with Xxxxxxxx or any of its
related or affiliated companies, nor shall he assist any present employees of
Xxxxxxxx or any other person similarly to engage in such competing business for
the full two-year prohibition period set forth in this Agreement.
(d) The restrictive provisions of this Section 9, however, are in no
way intended to prohibit Xxxxx from acquiring in open market transactions
investments in equity stock or evidences of indebtedness of a corporation if the
said stock or if the said evidence of indebtedness is traded on a national or
regional securities exchange or in the over-the-counter market and the
investment therein represents no more than five percent (5%) of the outstanding
securities of the issue being acquired. Moreover, it is not the intention of
this Section 9 to limit in any way Xxxxx'x ability to invest in businesses not
competitive with Xxxxxxxx.
(e) Xxxxx shall keep secret and inviolate all knowledge or information
of a confidential nature (which is not then nor later, through no breach of this
Agreement, in the public domain), including all unpublished matters related to,
without limitation thereof, the business, properties, accounts, books and
records, research and development information, processes, procedures, products,
23
24
know-how, trade secrets, memoranda, devices, suppliers, and customers
of Xxxxxxxx which he may now know or hereafter come to know as a result of his
affiliation in business with Xxxxxxxx.
(f) All copyrights, improvements, discoveries and inventions and all
claims, interest and rights thereto relating to any part of the business of
Xxxxxxxx conceived, developed or made by Xxxxx, either alone or with others,
during the period of his employment, and whether conceived, developed or made
during his regular working hours or at any other time during such period, shall
be and are the sole property of Xxxxxxxx and Xxxxx hereby assigns to Xxxxxxxx
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Xxxxx will, at any time in the future upon
Xxxxxxxx' request, execute specific assignments of any said copyrights,
improvements, discoveries and inventions as well as execute all documents and
perform all lawful acts which Xxxxxxxx deems necessary or advisable to vest full
ownership thereof in Xxxxxxxx, to register same in the name of Xxxxxxxx or its
designee or otherwise to provide legal protection for Xxxxxxxx' ownership
interests therein.
(g) This Agreement shall be without geographical limitation in
continental North America and, in addition, in any other areas of the world in
which Xxxxxxxx or any of its related or affiliated companies shall be doing
business at the time of the proposed competing entry into business by Xxxxx, it
being agreed that the contacts of Xxxxx and the potential scope of operation of
Xxxxxxxx is without any limitation within the area of prohibition. Any violation
of this covenant may be enforced by specific performance in any court of
competent jurisdiction within the area of limitation imposed by this provision.
If any court of competent jurisdiction shall determine that either the period or
the territory covered by this provision against competition in unreasonable,
said
24
25
provision shall not be determined to be null, void, and of no effect but shall
be reformed by said court to impose a reasonable period or a reasonable
geographical limitation, as the case may be.
10. RESOLUTIONS OF DISPUTES; ARBITRATION.
(a) Except for the breach or threatened breach by Xxxxx of the
noncompetition provisions of this Agreement which may be enforced by appropriate
injunctive relief at the option of Xxxxxxxx, any dispute or controversy arising
out of or relating to this Agreement, including, but not limited to, whether
Xxxxx has been Discharged for Cause, shall be submitted to and settled by
arbitration in Dayton, Ohio in accordance with the rules then pertaining of the
American Arbitration Association.
(b) Should Xxxxx disagree that his determination was due to a Discharge
for Cause, the question shall, within thirty (30) days after the termination, be
submitted to arbitration by three (3) arbitrators, one of whom shall be selected
by Xxxxxxxx, another of whom shall be selected by Xxxxx, and the third of whom
shall be selected by the two arbitrators so appointed. The decision of these
arbitrators on the question shall be final and conclusive upon Xxxxxxxx and upon
Xxxxx and his wife or widow, personal representatives, designated beneficiaries
and heirs, and shall be enforceable in any court having competent jurisdiction
thereof. A discharge which is eventually determined under arbitration to have
been a Discharge for Cause, or no arbitration having been requested and the
discharge being one which Xxxxxxxx had determined was for a Discharge for Cause,
shall extinguish any and all liability of Xxxxxxxx under this Agreement from and
after the date of termination.
(c) The arbitrators for all other disputes or controversies under this
Agreement shall be selected as set forth above and the parties shall select the
arbitrators within thirty (30) days after demand from Xxxxx or Xxxxxxxx to the
other to settle matters by arbitration. As stated above, the decision of the
arbitrators shall be final and conclusive.
25
26
11. NONASSIGNABLE RIGHTS.
Xxxxx, his wife, or his widow after his death, or his personal
representatives, designated beneficiaries and heirs, shall not have the right to
anticipate or commute, or to sell, assign, transfer, or otherwise alienate or
convey the right to receive any payments hereunder, whether by his, her or their
voluntary or involuntary act, or by operation of law and, in particular, that
any payments due hereunder shall not be subject to attachment or garnishment or
any other legal proceedings by any creditor, or be in any way responsible for
the debts or liabilities of Xxxxx or his wife or his widow after his death or
his personal representatives, designated beneficiaries and heirs. Should Xxxxx
or his wife or his widow after his death or his personal representatives,
designated beneficiaries and heirs, voluntarily attempt to breach this Section
of this Agreement, Xxxxxxxx' liability to make payments hereunder from and after
the date of said attempt shall be extinguished; and should any attempt be made
to reach the payments by other than Xxxxx or his wife or his widow after his
death or his personal representatives, designated beneficiaries and heirs,
Xxxxxxxx shall make each payment as it becomes due to such person or persons for
the sole benefit of Xxxxx or his wife or his widow or his personal
representatives, designated beneficiaries and heirs, as the case may be, as
Xxxxxxxx may xxxx expedient.
12. UNFUNDED AGREEMENT.
(a) Xxxxxxxx' obligation under this Agreement shall be unfunded, but
Xxxxxxxx reserves the right to provide for its liability under this Agreement in
any manner it deems advisable, including the purchasing of such assets
(including an insurance policy or policies on Xxxxx'x life) as it may deem
necessary or proper; provided, however, that Xxxxx'x insurability or
non-insurability shall in no way affect Xxxxxxxx' obligations pursuant to this
Agreement. Any asset so purchased by
26
27
Xxxxxxxx shall be the sole property of Xxxxxxxx and shall not be deemed to
provide funding of Xxxxxxxx' obligations under this Agreement.
(b) In the event Xxxxxxxx determines to purchase any insurance policy
or policies on Xxxxx'x life, Xxxxx agrees to submit to such examination and to
supply information as may be required by the insurer.
(c) Any policy so purchased by Xxxxxxxx shall be issued so that
Xxxxxxxx is the sole, full, and complete owner of the policy or policies, with
the right and power to exercise any and all privileges and options thereof or
available under the rules of the issuing insurer without the consent of any
other persons.
(d) Xxxxx, his wife, or his widow after his death, or his designated
beneficiaries, personal representatives, heirs, successors and assigns shall
have no claim or rights with respect to, and shall have no property or equitable
interests whatsoever in, any specific funds or assets of Xxxxxxxx and shall have
only the status of a general creditor with respect to Xxxxxxxx hereunder.
13. FACILITY OF PAYMENT.
In the event of a physical or mental illness or disability of Xxxxx or
of his widow after his death or of his designated beneficiaries at a time when
he or she (or they) is (are) entitled to payments hereunder, such payments as
may be due shall be paid to such person or persons for the benefit of Xxxxx or
his widow or his designated beneficiaries, as the case may be, as Xxxxxxxx or,
if applicable, the Escrow Agent may deem proper. In the event of Xxxxx'x death
after he has made demand pursuant to Section 8(e)(v) above, the Escrow Agent
shall pay such amounts as thereafter are due to such beneficiary or
beneficiaries as Xxxxx shall have designated in writing, or failing such
writing, to his estate. No liability shall accrue to Xxxxxxxx or Escrow Agent
for any alleged payment
27
28
to an improper person or representative if so made after such reasonable
investigation and Xxxxxxxx and Escrow Agent shall have no responsibility to see
to the proper application of such payments.
14. MISCELLANEOUS PROVISIONS.
(a) All notices required or permitted to be given under this Agreement
shall be in writing and shall be mailed, postage prepaid, by registered or
certified mail or personally delivered, if to Xxxxxxxx, addressed to:
The Xxxxxxxx and Xxxxxxxx Company
Attention: Vice President, Corporate Finance and
Chief Financial Officer
000 Xxxxx Xxxxxx Xx.
Xxxxxx, Xxxx 00000
and, if to Xxxxx, addressed to:
Xxxxxx X. Xxxxx
000 Xxxxxx'x Xxxxxxxxxx Xx.
Xxxxxxxxxxx, Xxxx 00000-0000
Either party may change the address to which notices to such party are to be
sent by giving written notice of such change to the other party in the manner
specified in this provision.
(b) (i) This Agreement shall be binding upon Xxxxx, his wife, and upon
his or her heirs, executors, administrators, designated beneficiaries and upon
anyone claiming under him or his wife or widow, and upon Xxxxxxxx and its
successor or assigns.
(ii) Xxxxxxxx shall not merge or consolidate with any other entity
unless and until such other entity shall expressly assume Xxxxxxxx' obligations
under this Agreement or Xxxxxxxx has provided an appropriate alternative
arrangement covering its contingent liabilities under this Agreement, and
Xxxxxxxx shall not voluntarily dissolve without first providing an appropriate
arrangement covering its contingent liabilities under this Agreement.
28
29
(c) This Agreement may be amended, but only with the consent of Xxxxx
during his lifetime and, after his death only with the consent of his widow
during her lifetime or his other designated beneficiaries during their lifetime,
as the case may be. Any agreement of amendment shall be executed with the same
formality as this Agreement.
(d) This Agreement supersedes any prior agreements or understandings
covering the subject matter hereof, either written or oral, between the parties.
(e) This Agreement shall be construed under the laws of the State of
Ohio.
(f) The paragraph headings used in this Agreement are for convenience
of reference only and shall not be considered in construing this Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands the year and date first above written.
THE XXXXXXXX AND XXXXXXXX COMPANY
By___________________________________
_____________________________________
XXXXXX X. XXXXX
29
30
EXHIBIT A
ESCROW AGREEMENT DATED NOVEMBER 9, 1987 BETWEEN
THE XXXXXXXX AND XXXXXXXX COMPANY AND BANK ONE
DAYTON, N.A., AS AMENDED AS OF SEPTEMBER 30,
1992 AND AS FURTHER AMENDED AS OF FEBRUARY 1,
1997
31
AMENDMENT NO. 2
TO
ESCROW AGREEMENT
THIS AMENDMENT NO. 2 TO ESCROW AGREEMENT ("Amendment") is made and
entered into as of this 1st day of February, 1997 by and between THE XXXXXXXX
AND XXXXXXXX COMPANY, an Ohio corporation (hereinafter referred to as
"Xxxxxxxx"), and BANK ONE, DAYTON, NA (hereinafter referred to as the "Escrow
Agent").
WITNESSETH:
WHEREAS, Xxxxxxxx and the Bank have entered into an Escrow Agreement
(the "Escrow Agreement") dated November 9, 1987 as amended September 30, 1992
pursuant to an Amended and Restated Employment Agreement dated November 9, 1987
as amended December 1, 1989 and as further amended and restated in its entirety
on September 30, 1992 (the "September 30, 1992 Agreement") between Xxxxxxxx and
Xxxxxx X. Xxxxx ("Xxxxx"), an employee of Xxxxxxxx; and
WHEREAS, Xxxxx and Xxxxxxxx have entered into a new Amended and
Restated Employment Agreement effective February 1, 1997 (the "Employment
Agreement"), pursuant to which Xxxxxxxx has agreed to continue to provide
termination pay protection for Xxxxx and which provides that the required
protective payments under the Employment Agreement are to continue to be paid
into an escrow account at the Escrow Agent; and
WHEREAS, the parties hereto desire that the Escrow Agreement shall
continue in full force and effect and for the benefit of Xxxxx and with full
applicability to the Employment Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Amendment, the parties hereby agree as follows:
1. All references to the September 30, 1992 Agreement between Xxxxxxxx
and Xxxxx contained in the Escrow Agreement shall include and apply with full
force and effect to the Employment Agreement.
2. Except as set forth herein, the Escrow Agreement shall remain
unchanged and continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands as of the day and year first above written.
THE XXXXXXXX AND XXXXXXXX COMPANY
By_________________________________
BANK ONE, DAYTON, NA
By__________________________________
32
EXHIBIT B
SCHEDULE OF FRINGE BENEFITS
PURSUANT TO SECTION 4(d)
Benefit Amount
Annual Physical Exam Local Clinic, maximum of $600
Auto/Gas Allowance $916 monthly
Charitable Allowance $1,000 annually to charities of his choice
Income Tax Planning and $1,000 annually
Preparation
Estate Planning and
Will Preparation
Initial Service $900
Updates $300 annually
Country Club Dues 50% annually, including initiation fee up to $3,500
Luncheon Club Dues 100% annually
Corporate aircraft (personal use) Yes; in connection with company business use
Xxxxx may include personal passengers,
subject to seat availability. Xxxxx shall
receive W-2 for personal use value per IRS
regulations
Vacation Five (5) weeks annually at mutually agreed times.
