EMPLOYMENT AGREEMENT
This Agreement is made as of January 1, 1998 (the "Effective Date")
between Cincinnati Xxxx Inc., an Ohio corporation ("Employer" or "CBI"), and
Xxxxxxx X. Xxxxxxx III ("Employee").
Employer and Employee agree as follows:
1. EMPLOYMENT. By this Agreement, Employer and Employee set forth the
terms of Employer's employment of Employee on and after the Effective Date.
Any prior agreements or understandings with respect to Employee's employment
by Employer are cancelled as of the Effective Date.
2. PERIOD OF EMPLOYMENT. This Agreement begins on the Effective Date
and, subject to the terms of Section 13, will end on the day immediately
preceding the fifth anniversary of the Effective Date.
3. DUTIES.
A. Employee will serve as Chief Legal Officer of CBI. Employee
will report to the President of CBI or such other officer of CBI as may be
designated by the President of CBI.
B. Employee shall furnish such managerial, executive, financial,
technical, and other skills, advice and assistance in operating CBI as
Employer may request.
C. Employee shall also perform such other duties as are assigned
to Employee by the CBI officer to whom Employee reports.
D. Employee shall devote Employee's entire time, attention, and
energies to the business of Employer. The words "entire time, attention, and
energies" are intended to mean that Employee shall devote his full effort
during reasonable working hours to the business of Employer and shall devote
at least 40 hours per week to the business of Employer. Employee shall
travel to such places as are necessary in the performance of Employee's
duties.
4. COMPENSATION.
A. Employee shall receive a base salary (the "Base Salary") of at
least $275,000 for each calendar year, subject to proration for any partial
year, during the term of this Agreement. Such Base Salary, and any other
amounts payable hereunder, shall be subject to withholding as required by law.
B. In addition to the Base Salary, Employee shall be entitled to
receive an annual bonus (the "Bonus") for each calendar year for which
services are performed under this Agreement. Any Bonus for a calendar year
shall be payable after the conclusion of the calendar year in accordance with
Employer's regular bonus payment policies. Employee shall be given a Bonus
target of not less than $125,000 per year, subject to proration for any
partial year.
C. On at least an annual basis, Employee shall receive a formal
performance review and be considered for Base Salary and/or Bonus target
increases.
D. In addition to the Bonuses referred to in Section 4.B., the
bonus otherwise payable to Frost & Xxxxxx in 1998 for Employee's dedicated
service to Employer during 1997 shall be paid directly to Employee.
5. EXPENSES. All reasonable and necessary expenses incurred by
Employee in the course of the performance of his duties to Employer shall be
reimbursable in accordance with Employer's then current travel and expense
policies.
6. BENEFITS.
A. In each year of this Agreement, Employee will be granted
options to purchase common shares of CBI at the time and on the terms
approved by the Compensation Committee of CBI. All provisions of this
Agreement which relate to the terms under which stock options will be granted
to Employee are subject to approval by the Compensation Committee. Such
options may be granted under CBI's 1997 Long Term Incentive Plan (the "1997
Plan") or similar stock option plan.
B. While Employee remains in the employ of Employer, Employee
shall be entitled to participate in all of the various employee benefit plans
and programs in which sixth level managers of CBI are participating.
C. Employee shall receive a restricted stock award of 20,000
common shares of CBI as of the Effective Date. All provisions of this
Agreement which relate to the terms under which restricted stock will be
granted to Employee are subject to approval by the Compensation Committee.
Such award shall be made under the 1997 Plan on the terms set forth in
Exhibit A. Such award shall be further subject to the terms of the 1997 Plan.
D. Notwithstanding anything contained herein to the contrary, the
Base Salary and Bonuses otherwise payable to Employee shall be reduced by any
benefits paid to Employee by Employer under Employer's Sickness and Accident
Disability Plan and Long Term Disability Plan for Salaried Employees and
under any other disability plan made available to Employee by Employer.
E. If Employee's employment with CBI is terminated for any reason
prior to the fifth anniversary of the Effective Date, Employee or Employee's
estate, as the case may be, shall be entitled to receive a lump sum payment,
payable within 30 days after Employee's employment terminates, equal to the
sum of (i) the present value, on the date Employee's employment terminates,
of the non-vested portion (if any) of Employee's accrued benefit under
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Cincinnati Xxxx Management Pension Plan or any successor plan, plus (ii) the
value, on the date Employee's employment terminates, of the non-vested
portion (if any) of Employee's accrued benefit under Cincinnati Xxxx Inc.
Retirement Savings Plan (the "Savings Plan") or any successor plan, plus
(iii) the present value, on the date Employee's employment terminates, of the
non-vested portion (if any) of Employee's accrued benefit under Cincinnati
Xxxx Inc. Executive Deferred Compensation Plan or any successor plan.
F. To compensate Employee for the period Employee is not eligible
to participate in the Savings Plan, Employee shall be entitled to receive
$10,000 on the first anniversary of the Effective Date, provided that
Employee remains employed through that date. This payment shall not be used
in the calculation of any benefits that are otherwise provided by Employer.
G. If Employee's employment with Employer is terminated after the
fifth anniversary of the Effective Date for any reason other than those set
forth in Sections 13.A., B. and C., Employer shall pay Employee an amount
equal to two times Employee's annual Base Salary rate in effect on the date
of termination.
7. CONFIDENTIALITY. Employer and its Affiliates are engaged in the
telecommunications services, information services and telecommunications
support services industries within the U.S. and world wide. Employee
acknowledges that in the course of employment with the Employer, Employee
will be entrusted with or obtain access to information proprietary to the
Employer and its Affiliates with respect to the following (all of which
information is referred to hereinafter collectively as the "Information");
the organization and management of Employer and its Affiliates; the names,
addresses, buying habits and other special information regarding past,
present and potential customers, employees and suppliers of Employer and its
Affiliates; customer and supplier contracts and transactions or price lists
of Employer, its Affiliates and their suppliers; products, services, programs
and processes sold, licensed or developed by Employer and its Affiliates;
technical data, plans and specifications, present and/or future development
projects of Employer and its Affiliates; financial and/or marketing data
respecting the conduct of the present or future phases of business of
Employer and its Affiliates; computer programs, systems and/or software;
ideas, inventions, trademarks, business information, know-how, processes,
improvements, designs, redesigns, discoveries and developments of Employer
and its Affiliates; and other information considered confidential by any of
the Employer, its Affiliates or customers or suppliers of Employer and its
Affiliates. Employee agrees to retain the Information in absolute confidence
and not to disclose the Information to any person or organization except as
required in the performance of his duties for Employer, without the express
written consent of Employer. For purposes of this Agreement, "Affiliate"
means each direct and indirect subsidiary of CBI.
8. NEW DEVELOPMENTS. All ideas, inventions, discoveries, concepts,
trademarks, or other developments or improvements, whether patentable or not,
conceived by Employee, alone or with others, at any time during the term of
Employee's employment, whether or not during working hours or on Employer's
premises, which are within the scope of or related to the business operations
of Employer or its Affiliates or that relate to Employer or Affiliates' work
or project, present, past or contemplated, shall be and remain the exclusive
property of Employer. Employee shall, do all things reasonably necessary to
ensure ownership of such New Developments by Employer,
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including the execution of documents assigning and transferring to Employer,
all of Employee's right, title and interest in and to such New Developments,
and the execution of all documents required to enable Employer to file and
obtain patents, trademarks and copyrights in the United States and foreign
countries on any of such New Developments.
9. SURRENDER OF MATERIAL UPON TERMINATION. Employee hereby agrees
that upon cessation of Employee's employment, for whatever reason and whether
voluntary or involuntary, Employee will immediately surrender to Employer all
of the property and other things of value in his possession or in the
possession of any person or entity under his control that are the property of
Employer or any of its Affiliates, including without limitation all personal
notes, drawings, manuals, documents, photographs, or the like, including
copies and derivatives thereof, relating directly or indirectly to any
confidential information or materials or New Developments, or relating
directly or indirectly to the business of Employer or any of its Affiliates.
10. REMEDIES.
A. EMPLOYER'S REMEDIES. Employer and Employee hereby acknowledge and
agree that the services rendered by Employee to Employer, the information
disclosed to Employee during and by virtue of his employment, and Employee's
commitments and obligations to Employer and its Affiliates herein are of a
special, unique and extraordinary character, and that the breach of any
provision of this Agreement by Employee will cause Employer irreparable
injury and damage, and consequently the Employer shall be entitled to, in
addition to all other remedies available to it, injunctive and equitable
relief to prevent a breach of this Agreement, or any part of it, and to
secure the enforcement of this Agreement.
B. EMPLOYEE'S REMEDIES. Employee agrees to submit to final and
binding arbitration any dispute, claim or controversy, whether for breach of
this agreement or for violation of any of Employee's statutorily created or
protected rights, arising between the parties that Employee would have been
otherwise entitled to file or pursue in court or before any administrative
agency (herein "claim"), and Employee waives all right to xxx Employer, its
Affiliates, and all of their agents, employees, officers and directors.
(i) This agreement to arbitrate and any resulting arbitration
award are enforceable under and subject to the Federal Arbitration Act, 9
U.S.C. Section 1 ET SEQ. ("FAA"). If the FAA is held not to apply for any
reason then Ohio Revised Code Chapter 2711 regarding the enforceability of
arbitration agreements and awards will govern this Agreement and the
arbitration award.
(ii)(a) All of Employee's claims must be presented at a single
arbitration hearing under this Agreement. Any claim not raised at the
arbitration hearing is waived and released. The arbitration hearing will
take place in Cincinnati, Ohio.
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(a) The arbitration process will be governed by the Employment
Dispute Resolution Rules of the American Arbitration Association ("AAA") except
to the extent they are modified by this Agreement.
(b) Employee has had an opportunity to review the AAA rules
and the requirement that Employee must pay a filing fee which Employer has
agreed to split on an equal basis.
(c) The arbitrator will be selected from a panel of
arbitrators chosen by the AAA in White Plains, New York. After the filing of
a Request for Arbitration, the AAA will send simultaneously to Employer and
Employee an identical list of names of five persons chosen from the panel.
Each party will have 10 days from the transmittal date in which to strike up
to two names, number the remaining names in order of preference and return
the list to the AAA.
(d) Any pre-hearing disputes will be presented to the
arbitrator for expeditious, final and binding resolution.
(e) The award of the arbitrator will be in writing and will
set forth each issue considered and the arbitrator's findings of fact and
conclusions of law as to each such issue.
(f) The remedy and relief that may be granted by the
arbitrator are limited to lost wages, benefits, cease and desist and
affirmative relief, compensatory, liquidated and punitive damages and
reasonable attorney's fees, and will not include reinstatement or promotion.
If the arbitrator would have awarded reinstatement or promotion, but for the
prohibition in this Agreement, the arbitrator may award front pay.
Compensatory, liquidated and punitive damages for breach of this Agreement,
if awarded, may not exceed the greater of (i) the amount provided in case of
a termination under Section 13.D, and (ii) the maximum amount otherwise
payable under the applicable terms of this Agreement. Compensatory,
liquidated and punitive damages, for a dispute, claim or controversy other
than for breach of this Agreement, if awarded, are limited to a combined
total of one year's salary. The arbitrator may assess to either party, or
split, the arbitrator's fee and expenses and the cost of the transcript, if
any, in accordance with the arbitrator's determination of the merits of each
party's position, but each party will bear any costs for its witnesses and
proof.
(g) Employer and Employee recognize that a primary benefit
each derives from entering this Agreement is avoiding the delay and costs
normally associated with litigation. Therefore, neither party will be
entitled to conduct any discovery prior to the arbitration hearing except
that: (i) Employer will furnish Employee with copies of all non-privileged
documents in Employee's personnel file; (ii) if the claim is for discharge,
Employee will furnish Employer with records of earnings and benefits relating
to Employee's subsequent employment (including self-employment) and all
documents relating to Employee's efforts to obtain subsequent employment;
(iii) the parties will exchange copies of all documents they intend to
introduce as
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evidence at the arbitration hearing at least 10 days prior to such hearing;
(iv) Employee will be allowed (at Employee's expense) to take the
depositions, for a period not to exceed four hours each of two
representatives of Employer, and Employer will be allowed (at its expense) to
depose Employee for a period not to exceed four hours; and (v) Employer or
Employee may ask the arbitrator to grant additional discovery to the extent
permitted by AAA rules upon a showing that such discovery is necessary.
(h) Nothing herein will prevent either party from taking the
deposition of any witness where the sole purpose for taking the deposition is
to use the deposition in lieu of the witness testifying at the hearing and
the witness is, in good faith, unavailable to testify in person at the
hearing due to poor health, residency and employment more than 50 miles from
the hearing site, conflicting travel plans or other comparable reason.
(iii) Arbitration must be requested in writing no later than 6
months from the date of Employee's knowledge of the matter disputed by the
claim. Employee's failure to initiate arbitration under this Agreement within
the time limits herein will be considered a waiver and release by Employee
with respect to any claim subject to arbitration under this Agreement.
(iv) Employer and Employee consent that judgment upon the
arbitration award may be entered in any federal or state court that has
jurisdiction.
(v) Employee will not commence or pursue any litigation on any
claim that is or was subject to arbitration under this Agreement.
(vi) All aspects of any arbitration procedure under this
Agreement, including the hearing and the record of the proceedings, are
confidential and will not be open to the public, except to the extent the
parties agree otherwise in writing, or as may be appropriate in any
subsequent proceedings between the parties, or as may otherwise be
appropriate in response to a governmental agency or legal process.
11. COVENANT NOT TO COMPETE. During the three year period following
termination of Employee's employment with Employer for any reason (or if this
period is unenforceable by law, then for such period as shall be enforceable)
Employee will not engage in any business offering services related to the
current business of Employer or any of its Affiliates in any capacity which
requires or utilizes the skill, training and knowledge acquired by Employee
while employed by Employer, whether such capacity be as a principal, partner,
joint venturer, agent, employee, salesman, consultant, director or officer,
where such position would involve Employee (i) in any business activity in
competition with Employer or any of its Affiliates; (ii) in any position with
any customer of Employer or any of its Affiliates which involves such
customer's billing and/or billing related systems; or (iii) in any business
that provides billing and/or billing related systems to third parties engaged
in the communication business (including wireless, wireline and cable
communication businesses). This restriction will be limited to the
geographical area where Employer or any of its Affiliates is then engaged in
such competing business activity or to such
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other geographical area as a court shall find reasonably necessary to protect
the goodwill and business of Employer.
During the three year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable
by law, then for such period as shall be enforceable) Employee will not
interfere with or adversely affect, either directly or indirectly, Employer's
or Employer's Affiliates' relationships with any person, firm, association,
corporation or other entity which is known by Employee to be, or is included
on any listing to which Employee had access during the course of employment
as a customer, client, supplier, consultant or employee of Employer or any of
its Affiliates and that Employee will not divert or change, or attempt to
divert or change, any such relationship to the detriment of Employer or any
of its Affiliates or to the benefit of any other person, firm, association,
corporation or other entity.
During the three year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable
by law, then for such period as shall be enforceable) Employee shall not,
without the prior written consent of Employer, accept employment, as an
employee, consultant, or otherwise, with any company or entity which is a
customer or supplier of Employer or any of its Affiliates at any time during
the final year of Employee's employment with Employer.
Employee will not, during or at any time after the termination of
Employee's employment with Employer, induce or seek to induce, any other
employee of Employer or any of its Affiliates to terminate his or her
employment relationship with Employer or the Affiliate which employs such
other employee.
12. GOODWILL. Employee will not disparage or act in any manner,
directly or indirectly, which may damage the business of Employer or any of
its Affiliates or which would adversely affect the goodwill, reputation, and
business relationships of Employer or any of its Affiliates with the public
generally, or with any of their customers, suppliers or employees.
13. TERMINATION.
A. (i) Employer or Employee may terminate this Agreement upon
Employee's failure or inability to perform the services required hereunder
because of any physical or mental infirmity for which Employee receives
disability benefits under Employer's Sickness and Accident Disability Benefit
Plan and/or Employer's Long Term Disability Plan for Salaried Employees as
the case may be (the "Plans"), over a period of one hundred twenty
consecutive working days during any twelve consecutive month period (a
"Terminating Disability").
(i) If Employer or Employee elects to terminate this
Agreement in the event of a Terminating Disability, such termination shall be
effective immediately upon the giving of written notice by the terminating
party to the other.
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(ii) Upon termination of this Agreement on account of
Terminating Disability, Employer shall pay Employee his accrued compensation
hereunder, whether Base Salary or otherwise (subject to offset for any
amounts received pursuant to the Plans), to the date of termination. For as
long as such Terminating Disability may exist, Employee shall continue to be
an employee of Employer for all other purposes and Employer shall provide
Employee with disability benefits and all other benefits according to the
provisions of the Plans and any other Employer plans in which Employee is
then participating.
(iii) If the parties elect not to terminate this Agreement
upon an event of a Terminating Disability and Employee returns to active
employment with Employer prior to such a termination, or if such disability
exists for less than one hundred twenty consecutive working days, the
provisions of this Agreement shall remain in full force and effect.
B. This Agreement terminates immediately and automatically on the
death of Employee, provided, however, that the Employee's estate shall be
paid Employee's accrued compensation hereunder, whether Base Salary or
otherwise, to the date of death.
C. Employer may terminate this Agreement immediately for Cause.
For purposes of this Agreement, Employer shall have Cause to terminate this
Agreement only if the CBI Board of Directors determines that there has been
fraud, misappropriation or embezzlement on the part of Employee.
D. Employer may terminate this Agreement upon 60 days written
notice for any reason other than those set forth in Sections 13.A., B. and C.
In the event of a Termination under this Section 13.D., Employer shall pay
Employee (i) an amount equal to two times the sum of the annualized Base
Salary as it exists at the time of termination plus the annualized Bonus
target as it exists at the time of termination, plus (ii) the amount (if any)
called for under Section 6.E. In addition, the restrictions applied to the
restricted stock awarded to Employee under Section 6.C shall lapse.
E. Upon Termination of this Agreement as a result of an event of
termination described in this Section 13 and except for Employer's payment of
the required payments under this Section 13, all further compensation under
this Agreement shall terminate; provided, however, that all qualified
deferred compensation which Employee may be entitled to receive pursuant to
any of Employer's pension or profit sharing plans in which Employee may
participate during Employee's employment with Employer shall be paid pursuant
to the provisions of such plans at such times as any such amounts become
payable to Employee. It is further understood that for purposes of this
Section 13, the term "accrued compensation" shall include all non-qualified
deferred compensation, of whatever type or form, either previously granted to
Employee by Employer or otherwise earned or received by Employee.
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F. The termination of this Agreement shall not amend, alter or
modify the rights and obligations of the parties under Sections 6.E., 6.G.,
7, 8, 9, 10, 11, and 12 hereof, the terms of which shall survive the
termination of this Agreement.
14. ASSIGNMENT. As this is an agreement for personal services
involving a relation of confidence and trust between Employer and Employee,
all rights and duties of Employee arising under this Agreement, and the
Agreement itself, are nonassignable by Employee.
15. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient, if in writing, and if delivered personally or
by certified mail to Employee at his place of residence as then recorded on
the books of Employer or to Employer at its principal office.
16. WAIVER. No waiver or modification of this Agreement or the terms
contained herein shall be valid unless in writing and duly executed by the
party to be charged therewith. The waiver by any party hereto of a breach of
any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by such party.
17. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Ohio.
18. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties with respect to Employee's employment by Employer. There are no
other contracts, agreements or understandings, whether oral or written,
existing between them except as contained or referred to in this Agreement.
19. SEVERABILITY. In case any one or more of the provisions of this
Agreement is held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or other unenforceability shall not affect any
other provisions hereof, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions have never been contained herein.
20. SUCCESSORS AND ASSIGNS. Subject to the requirements of Section 14
above, this Agreement shall be binding upon Employee, Employer and Employer's
successors and assigns.
21. CONFIDENTIALITY OF AGREEMENT TERMS. The terms of this Agreement
shall be held in strict confidence by Employee and shall not be disclosed by
Employee to anyone other than Employee's spouse, Employee's legal counsel,
and Employee's other advisors. Further, except as provided in the preceding
sentence, Employee shall not reveal the existence of this Agreement or
discuss its terms with any person (including but not limited to any employee
of Employer or its Affiliates) without the express authorization of the
President of CBI.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CINCINNATI XXXX INC.
By /s/ Xxxx X. XxXxxxxxx
-------------------------------
Xxxx X. XxXxxxxxx, President
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxx III
------------------------------
Xxxxxxx X. Xxxxxxx III
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Attachment A
RESTRICTED STOCK AWARD
UNDER THE PROVISIONS OF
THE CINCINNATI XXXX INC.
1997 LONG TERM INCENTIVE PLAN
NAME OF EMPLOYEE: XXXXXXX X. XXXXXXX, III
AWARD DATE: JANUARY 2, 1998
NUMBER OF RESTRICTED SHARES: 20,000
Pursuant to the provisions of the Cincinnati Xxxx Inc. 1997 Long Term
Incentive Plan (the "Plan"), a copy of which has been delivered to you, the
Compensation Committee of the Board of Directors of Cincinnati Xxxx Inc. (the
"Compensation Committee") has granted you an award of 20,000 common shares,
par value $1.00 per share, of Cincinnati Xxxx Inc. (the "Shares"), on and
subject to the terms of the Plan and your agreement to the following terms,
conditions and restrictions.
1. SECURITIES SUBJECT TO THIS AGREEMENT. This Agreement is made with
respect to the Shares and any securities (including additional common shares
of Cincinnati Xxxx Inc. (the "Company")) issued in respect of the Shares,
whether by way of a share dividend, a share split, any reorganization or
recapitalization of the Company or its stock or any merger, exchange of
securities or like event or transaction as the result of which any security
or securities of any kind are issued to you by reason of your ownership of
the Shares. Reference herein to the Shares shall include any such securities
issued in respect of the Shares.
2. RIGHTS OF OWNERSHIP. Except for the Restrictions (as defined in Section
3 hereof and subject to the provisions regarding forfeiture set forth in
Section 8 hereof, you are the record and beneficial owner of the Shares, with
all rights and privileges (including but not limited to the right to vote, to
receive dividends and to receive distributions upon liquidation of the
Company) appertaining thereto.
3. RESTRICTIONS. Neither the Shares nor any interest therein may be
transferred or conveyed by you in any manner whatsoever, whether or not for
consideration (the "Restrictions"), except upon the passage of time or
occurrence of events as specified in Sections 4, 5, 6, and 7 hereof.
4. LAPSE. The Restrictions shall lapse and be of no further force and
effect as to 12,000 shares on December 31, 2000, as to an additional 4,000
shares on December 31, 2001, and as to the remaining 4,000 shares on December
31, 2002.
5. TERMINATION OF RESTRICTIONS - DEATH. In the event of your death while
employed by the Company or any of its subsidiaries the Restrictions shall
terminate and be of no further force or effect, effective as of the date of
death: (a) if death occurs prior to December 31, 2000, with respect to the
number of Shares (rounded up to the nearest whole Share) remaining subject to
Restrictions immediately prior to death that bears the same ratio to the
total number of Shares remaining subject to Restrictions immediately prior to
death as the number of days from January 1, 1998 through the date of your
death bears to the number of days from January 1, 1998 through December 31,
2002; (b) if death occurs on or after January 1, 2000 and prior to December
31, 2001, with respect to the number of Shares (rounded up to the nearest
whole Share) remaining subject to
Restrictions immediately prior to death that bears the same ratio to the
total number of Shares remaining subject to Restrictions immediately prior to
death as the number of days from January 1, 2000 through the date of your
death bears to the number of days from January 1, 2000 through December 31,
2002; and (c) if death occurs on or after January 1, 2001 and prior to
December 31, 2002, with respect to the number of Shares (rounded up to the
nearest whole Share) remaining subject to Restrictions immediately prior to
death that bears the same ratio to the total number of Shares remaining
subject to Restrictions immediately prior to death as the number of days
from January 1, 2001 through the date of your death bears to the number of
days from January 1, 2001 through December 31, 2002. Any Shares which remain
subject to the Restrictions after the calculation prescribed in the preceding
sentence shall be forfeited to the Company as of your date of death. Upon
the Restrictions terminating with respect to certain Shares, the executor,
administrator or other personal representative of your estate, or the trustee
of any trust becoming entitled thereto be reason of your death, may transfer
the unrestricted Shares to any person or persons entitled thereto under your
will or under your trust or other instrument (or in the absence of any will
under the laws of descent and distribution) governing the distribution of
your estate in the event of your death.
6. TERMINATION OF RESTRICTIONS - DISABILITY. If you (a) shall become
disabled and as a result thereof cease to be an employee of the Company or
any of its subsidiaries under and pursuant to applicable disability
provisions of any employment contract to which you and the Company or any of
its subsidiaries are parties or, (b) shall become disabled to such extent
that you are unable to perform the usual duties of your job for a period of
12 consecutive weeks or more and if as the result thereof the Compensation
Committee approves the termination of your employment within 12 months
following the first day of the 12 consecutive week period on terms that
include the right to transfer the Shares free of the Restrictions, then and
in either such event the Restrictions shall terminate and be of no further
force and effect as of the date you cease to be an employee in the same
manner as prescribed in the event of death outlined in Section 5 above.
7. TERMINATION OF RESTRICTIONS - TERMINATION WITHOUT CAUSE. In the event
that your employment is terminated without Cause (within the meaning of
Section 13.C of your Employment Agreement dated January 1, 1998), the
Restrictions shall terminate and be of no further force and effect as of the
date you cease to be an employee in the same manner as prescribed in the
event of death outlined in Section 5 above.
8. FORFEITURE. If you cease to be an employee of the Company or any of
its subsidiaries, except as provided in Section 4, 5, 6, and 7 hereof, any
Shares which remain subject to the Restrictions of the date such employment
terminates shall be at once forfeited to the Company as of the date of such
termination of employment (the "Forfeiture Date"). Upon such forfeiture
all of your rights in respect of such Shares shall cease automatically and
without further action by the Company or you. For the purpose of giving
effect to this provision, you have executed and delivered to the Company a
stock power with respect to each certificate evidencing any of the Shares,
thereby assigning to the Company all of your interest in the Shares. By
the execution and delivery of this Agreement, you authorize and empower the
Company, in the event of a forfeiture of any of the Shares under this
Section 9 to (a) date (as of the Forfeiture Date) those stock powers
relating to Shares that remain subject to the Restrictions as of the
Forfeiture Date and (b) present such stock powers and the certificates to
which they relate to the Company's transfer agent or other appropriate party
for the sole purpose of transferring the forfeited Shares to the Company.
9. MATTERS RELATING TO CERTIFICATES.
(a) Upon their issuance, the certificates representing the Shares
shall be deposited with the Secretary of the Company and shall be
released to you only pursuant to the provisions of this Section 10.
(b) Each certificate for Shares issued to you in accordance with this
Agreement shall bear the following legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF
A RESTRICTED STOCK AGREEMENT BETWEEN THE REGISTERED HOLDER HEREOF AND
CINCINNATI XXXX INC., DATED AS OF JANUARY 2, 1998, AND MAY NOT BE
TRANSFERRED BY THE HOLDER, EXCEPT AS PROVIDED BY THE TERMS OF SUCH
AGREEMENT, A COPY OF WHICH IS ON DEPOSIT WITH THE SECRETARY OF
CINCINNATI XXXX INC. AND WHICH WILL BE MAILED TO A SHAREHOLDER OF
CINCINNATI XXXX INC. WITHOUT CHARGE WITHIN FIVE DAYS AFTER RECEIPT OF
A WRITTEN REQUEST."
Upon the lapse or termination of the Restrictions as to any Shares, the
certificate evidencing such Shares shall be promptly presented to the
Company's transfer agent or other appropriate party with instructions to
cause such certificate to be reissued, to the extent appropriate, in your
name and without the foregoing legend. Any Shares evidenced by such
certificate which remain subject to the Restrictions shall be evidenced by a
new certificate, bearing the foregoing legend, which shall be returned to the
Company. Upon the lapse or termination of the Restrictions as to any Shares,
the stock power or powers held by the Company with respect to such Shares
shall be surrendered to you (in exchange, if applicable, for a stock power
relating to any Shares which remain subject to the Restrictions).
10. INTERPRETATION. You acknowledge that the Compensation Committee has the
authority to construe and interpret the terms of the Plan and this Agreement
if and when any questions of meaning arises under the Plan or this Agreement,
and any such construction or interpretation shall be binding on you, your
heirs, executors, administrators, personal representatives and any other
persons having or claiming to have an interest in the Shares.
11. WITHHOLDING. In connection with the award of Shares to you and any
dividend payments made while such Shares remain subject to restrictions
hereunder, the Company will withhold or cause to be withheld from your salary
payments such amounts of tax at such times as may be required by law to be
withheld with respect to the Shares and/or dividends, provided that if your
salary is not sufficient for such purpose, you shall remit to the Company, on
request, the amount required for such withholding taxes. Within 45 days after
issuance of the certificates representing the Shares, you shall advise the
Company in writing whether or not you have made an election, under Section
83(b) of the Internal Revenue Code of 1986, to include the fair market value
of the Shares in your gross income for the calendar year in which the
certificates are issued.
12. NOTICES. All notices and other communications to be given hereunder
shall be in writing and shall be deemed to have been duly given when
delivered personally or when deposited in the United States mail, first
class postage prepaid, and addressed as follows:
TO THE COMPANY: Cincinnati Xxxx Inc.
000 Xxxx Xxxxxx Xxxxxx, XX. 000-0000
Xxxxxxxxxx, Xxxx 00000
Attention: Secretary of the Compensation Committee
TO THE EMPLOYEE: Xxxxxxx X. Xxxxxxx, III
Xxxxxxxxxx, Xxxx 00000
or to any other address as to which notice has been given in the manner
herein provided.
13. MISCELLANEOUS. This Agreement shall be binding upon the parties
hereto and their respective heirs, executors, administrators, personal
representatives, successors and assigns. Subject to the provisions of the
Plan, this Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and shall be construed and
interpreted in accordance with the laws of the State of Ohio. This
Agreement may not be amended except in a writing signed by each of the
parties hereto. If any provisions of this Agreement shall be deemed to be
invalid or void under any applicable law, the remaining provisions hereof
shall not be affected thereby and shall continue in full force and effect.
Please indicate your acceptance by signing at the place provided and returning
this Agreement.
COMPENSATION COMMITTEE OF
THE BOARD OF DIRECTORS OF
CINCINNATI XXXX INC.
Dated: Janaury 2, 1998 By: /s/ Xxxxxx Xxxxxxxx
Secretary
Dated: Janaury 15, 1998 /s/ Xxxxxxx X. Xxxxxxx III
Accepted and Agreed
