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Exhibit (10)(a)
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made and
entered into as of the 17th day of August, 1998, by and between THE XXXXXXXX AND
XXXXXXXX COMPANY, a corporation existing under the laws of the State of Ohio
("Xxxxxxxx"), and XXXXX X. XXXXXX ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx and Xxxxxxxx have entered into an Employment Agreement
dated as of November 9, 1987, as amended effective May 8, 1989 and December 1,
1989, and as amended and restated in its entirety October 1, 1995 (as so amended
and as amended and restated in its entirety the "Employment Agreement"),
pursuant to which Xxxxxx is currently employed as Chairman of the Board,
President and Chief Executive Officer of Xxxxxxxx; and
WHEREAS, Xxxxxx and Xxxxxxxx desire again to amend, 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 Xxxxxx hereby agree as follows:
1. AMENDMENT, RESTATEMENT IN ITS ENTIRETY AND CONTINUATION OF EMPLOYMENT
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AGREEMENT.
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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,
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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superseded by this Agreement and shall no longer be of any force and effect.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. DEFINITIONS.
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For purposes of this Agreement, the terms set forth below shall have the
following meanings:
(a) "Annual Compensation Value" shall mean Xxxxxx' 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 Xxxxxx 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 Xxxxxx.
(c) "Bonuses" shall mean bonus payments earned by Xxxxxx 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
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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 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.
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(e) "Discharge For Cause" shall be construed to have occurred whenever
occasioned by reason of felonious acts on the part of Xxxxxx, actions by Xxxxxx
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 Xxxxxx specifying the respect in which Xxxxxxxx
claims Xxxxxx has violated this provision and the failure, inability or
unwillingness of Xxxxxx 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
Xxxxxx and by other comparably situated executive officers prior to the alleged
improper activity of Xxxxxx for which the Discharge For Cause has been made.
(f) "Escrow Agreement" shall mean the agreement dated November 9, 1987 as
amended October 1, 1995 and as further amended simultaneously herewith entered
into between Xxxxxxxx and Bank One, NA, a copy of which (including the first and
second amendments) is attached hereto and made a part hereof as Exhibit A.
(g) "Escrow Agent" shall mean Bank One, NA.
(h) "Escrow Amount" shall mean the amounts placed in escrow by Xxxxxxxx
pursuant to subsection (e)(iii) of Section 8 of this Agreement.
(i) "Escrow Funding Event" shall mean the occurrence of any of the
following events:
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(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 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
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(iv) The Board adopts a resolution to the effect that, for purposes of
this Agreement, an Escrow Funding Event has occurred.
(j) "Final Annual Compensation" shall mean Xxxxxx' Base Compensation at the
time of termination of employment 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 Xxxxxx during the three (3) calendar years
preceding his termination of employment.
(k) "Final Average Annual Compensation" shall mean the average of Xxxxxx'
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 Xxxxxx' employment terminates which yields
the highest sum.
(l) "Pension Plan" shall mean the existing Xxxxxxxx and Xxxxxxxx Company
Non-Union Pension Plan, as the same may be amended from time to time.
(m) "Retirement Benefits" shall mean payments to Xxxxxx based upon his
lifetime in an annual amount equal to a designated percentage of Xxxxxx' 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) Xxxxxx' 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 Xxxxxx from Xxxxxxxx' Supplemental Plan],
(ii) Xxxxxx' pension benefits determined as a life annuity (without regard to
actual payment form) under the Pension Plan and deferred compensation
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payments under the Non-Qualified Deferred Compensation and Disability Benefit
Agreement dated December 20, 1984 between Xxxxxx and Xxxxxxxx, or such other
non-contributory deferred compensation agreement(s) then existing between
Xxxxxxxx and Xxxxxx, and (iii) such amount of supplemental retirement benefits
under the Supplemental Plan as shall be necessary to achieve the designated
percentage of Xxxxxx' Final Average Annual Compensation or, in the case of
Section 8(d) below, Final Annual Compensation. In addition to said annual
amount, Retirement Benefits shall include a continuation of coverage for the
remainder of Xxxxxx' 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 Xxxxxx
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.
(n) "Supplemental Plan" shall mean Xxxxxxxx' existing Supplemental
Retirement Plan, as the same may be amended from time to time.
3. TERMS AND DUTIES.
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(a) The term of this Agreement shall continue from the date hereof and end
on August 17, 2003. Xxxxxx shall continue in the employ of Xxxxxxxx as Chairman
of the Board, President and Chief Executive Officer or such other reasonably
equivalent position
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designated by the Board, consistent with the provisions of this Agreement. In
addition, Xxxxxx 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 Xxxxxx 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 sickness and vacations. If the Board determines that any outside
activity 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) Xxxxxx 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.
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4. COMPENSATION AND FRINGE BENEFITS.
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(a) Effective January 1, 1999, the Base Compensation of Xxxxxx during the
then remaining term of this Agreement shall be $640,000, 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 Xxxxxx and Xxxxxxxx; provided,
however, that such Base Compensation may not be reduced below said rate of
$640,000 ($560,000 for the period from the date hereof through December 31,
1998) without Xxxxxx' 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. Xxxxxx' Base Compensation shall be reviewed at
least annually to determine whether in view of Xxxxxxxx' performance during the
year any increase is warranted. Responsibility for this determination rests
within the sole discretion of the Board, and this provision shall not be
construed as requiring any such increase for any given year.
(b) Xxxxxx 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) Xxxxxx 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 ("Common Stock") of Xxxxxxxx under
any other future stock option plans for employees and to participate in such
other executive compensation incentive plans
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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. Effective the date hereof, Xxxxxxxx hereby
awards Xxxxxx non-qualified stock options covering 250,000 shares of Common
Stock on the terms and conditions of the Stock Option Agreements entered into
between the parties simultaneously herewith and attached hereto as Exhibits B
and C and made a part hereof.
(d) In addition to the specific benefits provided for Xxxxxx 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 D attached hereto and made a
part hereof.
5. EXPENSES.
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Xxxxxx 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 Xxxxxx, Xxxxxx 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 AND EARLY RETIREMENT BENEFITS.
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(a) If Xxxxxx continues his employment with Xxxxxxxx until he attains age
fifty-nine (59), he shall be entitled to receive at the time of his retirement
Retirement
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Benefits at a level equal to sixty-five percent (65%) of his Final Average
Annual Compensation. If Xxxxxx continues his employ with Xxxxxxxx beyond age
fifty-nine (59), the level of his 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-nine (59).
(b) Xxxxxx may elect to retire from Xxxxxxxx upon giving twelve (12) months
prior written notice and having attained at least age fifty-five (55) and he
shall be entitled to receive at the time of such early retirement Retirement
Benefits at a level equal to sixty-one percent (61%) of his Final Average Annual
Compensation. If Xxxxxx elects to retire upon giving twelve (12) months prior
written notice at any time from age fifty-six (56) through age fifty-nine (59),
the level of his 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-five (55).
(c) To the extent Xxxxxx 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 Xxxxxx shall
be entitled under Sections 6(a) and 6(b) above; provided, however, that in no
event shall the benefits described in Sections 6(a) and 6(b) above be reduced by
the provisions of this Section 6(c).
7. DISABILITY AND DEATH BENEFITS.
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(a) If Xxxxxx becomes disabled prior to his retirement, he shall be deemed
to have elected retirement under this Agreement. See Section 8(c) below.
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(b) In the event of Xxxxxx' death while still employed by Xxxxxxxx pursuant
to this Agreement, Xxxxxx shall be entitled to Retirement Benefits calculated as
if he had elected retirement as of the day before his actual death. Xxxxxxxx
shall also 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 Xxxxxx would have received or which would have been
accrued for his benefit during the period of six (6) months 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 Xxxxxx' life with respect to which
he has the right to designate beneficiaries. Also, Xxxxxxxx shall pay to Xxxxxx'
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 Xxxxxx' death for a period expiring at
the earlier of: (i) her death; (ii) forty-two (42) months after Xxxxxx' death;
or (iii) eligibility for regular Medicare and Medicaid or any successor programs
furnished by the government. Thereafter, Xxxxxxxx shall make available to
Xxxxxx' 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.
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(a) Termination or Discharge Without Cause. Xxxxxxxx reserves the right to
discharge Xxxxxx at any time and for any reason; but such discharge, unless a
Discharge For
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Cause, shall not extinguish the obligation of Xxxxxxxx to provide Xxxxxx (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 August 17, 2003, Xxxxxx shall be
entitled to receive for the balance of 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 amount of compensation received by
Xxxxxx from any subsequent employment obtained by him during said payment
period.
(ii) Xxxxxx shall be entitled, during the period expiring on the
earlier of Xxxxxx' securing other employment or August 17, 2003 (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 Xxxxxx' benefits under the
Supplemental Plan, Xxxxxx 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), Xxxxxx' 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)
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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) Xxxxxx shall be reimbursed for up to $20,000 for out-placement
fees if he chooses to seek other employment following his discharge by Xxxxxxxx.
Xxxxxx shall not be obligated to seek other employment in order to mitigate his
damages resulting from his discharge.
(v) In addition to all of the foregoing, Xxxxxx 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).
Xxxxxx acknowledges that he shall remain subject to and bound by the
restrictive provisions of Section 9 below.
(b) Discharge For Cause. If Xxxxxx' 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 Xxxxxx 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). Xxxxxx shall remain subject to
the restrictive provisions of Section 9 below for a period for two (2) years
from the date of discharge. Should Xxxxxx disagree that his discharge was a
Discharge For Cause the question shall be submitted to arbitration in accordance
with Section 10 below.
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(c) Termination Due to Disability. If, by reason of illness, disability, or
other incapacity certified by two (2) physicians competent to do so in the
opinion of Xxxxxxxx' Board of Directors, Xxxxxx 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 Xxxxxx and
the failure of Xxxxxx 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 Xxxxxx' employment by
giving Xxxxxx written notice thereof; and in that event all obligations of
Xxxxxxxx hereunder shall cease on the date such notice of termination is given
except for payment of the Retirement Benefits under Section 6 above.
(d) Benefits Upon Termination Under Certain Circumstances. If Xxxxxx
voluntarily terminates his employment or Xxxxxx 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) Xxxxxx 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 [provided, however, that the relinquishment by
Xxxxxx voluntarily or at the request of the Board of one or two of his present
titles shall not entitle him to the benefits of this Section 8(d)(i)], or which
are not ordinarily and generally performed by a Chairman of the Board, President
or Chief Executive Officer (or any one of the foregoing positions) of a
corporation similar in size and scope to Xxxxxxxx; or
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(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; Xxxxxx shall be entitled to receive
from Xxxxxxxx all of the severance benefits set forth in Section 8(a) above,
except that Xxxxxx' right to receive his Retirement Benefits shall be based upon
his Final Annual Compensation, as the same may be adjusted pursuant to Section
8(a)(iii) above. Xxxxxx 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 Xxxxxx. The following
provisions provide termination protection for Xxxxxx in the event of a Change in
Control. These provisions, among other purposes, are intended to xxxxxx and
encourage Xxxxxx' 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 Xxxxxx' employment for any reason other
than a Discharge for Cause, or if Xxxxxx 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, Xxxxxx shall be
entitled to receive from Xxxxxxxx the following benefits:
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(A) A lump sum severance payment (the "Severance Payment"), in cash,
equal to three (3) times the sum of (i) the higher of Xxxxxx' 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 Xxxxxx'
Bonuses during the three (3) calendar years immediately preceding the year in
which the date of termination occurs.
(B) Xxxxxx shall be entitled, during the period expiring on the
earlier of Xxxxxx' 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 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 Xxxxxx' benefits under the
Supplemental Plan, Xxxxxx 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, Xxxxxx' 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.
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(D) Xxxxxx shall be reimbursed for up to $20,000 for outplacement fees
if he chooses to seek other employment following his discharge by Xxxxxxxx.
Xxxxxx 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, Xxxxxx 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), and the retirement benefit provided for in Section 6 of this
Agreement.
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 Xxxxxx in
connection with a Change in Control or the termination of Xxxxxx' 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
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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 Xxxxxx 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 Xxxxxx 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 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 Xxxxxx' termination of employment, Xxxxxxxx shall provide Xxxxxx with
its calculation of the amounts referred to in this Section and such supporting
materials as are reasonably necessary for Xxxxxx to evaluate Xxxxxxxx'
calculations. If Xxxxxx objects to Xxxxxxxx' calculations, he shall notify
Xxxxxxxx of his
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objections prior to the initial payment date set forth in Section 8(e)(vi)
hereof, and Xxxxxxxx shall pay to Xxxxxx such portion of the Severance Payment
(up to one hundred percent (100%) thereof) as Xxxxxx determines is necessary to
result in Xxxxxx' 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) Xxxxxx' Base Compensation in effect immediately prior to
the Escrow Funding Event and (ii) the average of Xxxxxx' 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 Xxxxxx' 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 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.
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(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 Xxxxxx' 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), Xxxxxx 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 Xxxxxx.
All interest or other income arising from the Escrow Amount deposited with the
Escrow Agent shall be paid monthly to Xxxxxxxx.
(vi) If Xxxxxxxx terminates Xxxxxx' employment for any reason but a
Discharge for Cause, or if Xxxxxx 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
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Amount in accordance with this Section and Xxxxxx shall no longer be subject to
the restrictive provisions of Section 9 below, except for Section 9(e). Xxxxxx
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 Xxxxxx all or a portion of the Escrow Amount as
provided in such determination, and any remaining amount shall be paid to
Xxxxxxxx. If Xxxxxx does not accept Xxxxxxxx' determination, Xxxxxx shall
provide to the Escrow Agent his determination of the Severance Payment, and the
Escrow Agent shall pay to Xxxxxx all or a portion of the Escrow Amount as
provided in Xxxxxx' 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, Xxxxxx 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 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 Xxxxxx all such costs and expenses.
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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 Xxxxxx 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, Xxxxxx 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 Xxxxxx' 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 services are then being marketed at the time of Xxxxxx' termination of
employment or upon the cessation of any retirement, severance or disability
benefits under this Agreement.
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(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, Xxxxxx 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 Xxxxxx 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 Xxxxxx' ability to invest in businesses not
competitive with Xxxxxxxx.
(e) Xxxxxx 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
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business, properties, accounts, books and records, research and development
information, processes, procedures, products, 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 Xxxxxx, 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 Xxxxxx hereby assigns to Xxxxxxxx
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Xxxxxx 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 Xxxxxx, it being
agreed that the contacts of Xxxxxx 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
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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 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. RESOLUTION OF DISPUTES; ARBITRATION.
-----------------------------------
(a) Except for the breach or threatened breach by Xxxxxx 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
Xxxxxx 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 Xxxxxx disagree that his termination 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 Xxxxxx, 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
Xxxxxx 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.
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(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 Xxxxxx or Xxxxxxxx to the
other to settle matters by arbitration. As stated above, the decision of the
arbitrators shall be final and conclusive.
11. NONASSIGNABLE RIGHTS.
--------------------
Xxxxxx, 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 Xxxxxx or his wife or his widow after his death or
his personal representatives, designated beneficiaries and heirs. Should Xxxxxx
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 Xxxxxx 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 Xxxxxx or his wife or his widow or his personal
representatives, designated beneficiaries and heirs, as the case may be, as
Xxxxxxxx may xxxx expedient.
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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 Xxxxxx' life) as it may deem
necessary or proper; provided, however, that Xxxxxx' insurability or
non-insurability shall in no way affect Xxxxxxxx' obligations pursuant to this
Agreement. Any asset so purchased by 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 Xxxxxx' life, Xxxxxx 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) Xxxxxx, 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.
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13. FACILITY OF PAYMENT.
-------------------
In the event of a physical or mental illness or disability of Xxxxxx 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 Xxxxxx 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 Xxxxxx' 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 Xxxxxx 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 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 Xxxxxx, addressed to:
Xxxxx X. Xxxxxx
0 Xxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
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.
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(b) (i) This Agreement shall be binding upon Xxxxxx, 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.
(c) This Agreement may be amended, but only with the consent of Xxxxxx
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.
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(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__________________________________
____________________________________
XXXXX X. XXXXXX
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EXHIBIT A
ESCROW AGREEMENT DATED NOVEMBER 9, 1987 BETWEEN THE XXXXXXXX AND XXXXXXXX
COMPANY AND BANK ONE N.A., AS AMENDED AS OF OCTOBER 1, 1995 and August 17, 1998
33
AMENDMENT NO. 2
TO
ESCROW AGREEMENT
THIS AMENDMENT NO. 2 TO ESCROW AGREEMENT ("Amendment") is made and entered
into as of this 17th day of August, 1998 by and between THE XXXXXXXX AND
XXXXXXXX COMPANY, an Ohio corporation (hereinafter referred to as "Xxxxxxxx"),
and BANK ONE, NA (hereinafter referred to as the "Escrow Agent").
WITNESSETH:
WHEREAS, Xxxxxxxx and the Bank have entered into an Escrow Agreement dated
November 9, 1987 and amended October 1, 1995 (as so amended, the "Escrow
Agreement") pursuant to an Employment Agreement dated as of November 9, 1987, as
amended effective May 8, 1989 and December 1, 1989, and as amended and restated
in its entirety October, 1995 (as so amended and as amended and restated in its
entirety the "October 1, 1995 Agreement") between Xxxxxxxx and Xxxxx X. Xxxxxx
("Xxxxxx"), an employee of Xxxxxxxx; and
WHEREAS, Xxxxxx and Xxxxxxxx have entered into a Second Amended and
Restated Employment Agreement effective August 17, 1998 (the "Employment
Agreement"), pursuant to which Xxxxxxxx has agreed to continue to provide
termination pay protection for Xxxxxx 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 Xxxxxx 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 October 1, 1995 Agreement between Xxxxxxxx and
Xxxxxx 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.
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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, NA
By__________________________________
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EXHIBIT D
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 Xxxxxx may include
personal passengers, subject to seat
availability. Xxxxxx shall receive
W-2 for personal use value per IRS
regulations
Vacation Five (5) weeks annually at mutually
agreed times.
