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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of the
1st day of September, 1995, by and between THE XXXXXXXX AND XXXXXXXX COMPANY, a
corporation existing under the laws of the State of Ohio ("Xxxxxxxx"), and H.
XXXX XXXXX ("Proud").
W I T N E S S E T H:
WHEREAS, Proud is now President of the Healthcare Systems Division of
Xxxxxxxx; and
WHEREAS, Xxxxxxxx desires to retain Proud's services and has offered
him substantial inducements so that he would deem continued employment by
Xxxxxxxx beneficial to him and to provide him reasonable employment security
and economic protection; and
WHEREAS, Proud is willing to accept the same and continue in the
employ of Xxxxxxxx;
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual promises set forth below, Xxxxxxxx and Proud hereby agree as follows:
1. 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 Proud's 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 Proud during the three (3) calendar years preceding the date upon
which the valuation is made.
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(b) "Base Compensation" shall mean the then-current annual base
salary (exclusive of Bonuses) of Proud.
(c) "Bonuses" shall mean bonus payments earned by Proud under
Xxxxxxxx' Incentive Compensation Plans and under any future bonus or incentive
compensation plans of Xxxxxxxx for its executive officers.
(d) "Change in Control" shall mean the occurrence of any of the
following:
(i) Any "person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren,
Xxxxxxxx, any trustee or other fiduciary holding securities under an employee
benefit plan of Xxxxxxxx, or any company owned, directly or indirectly, by the
shareholders of Xxxxxxxx in substantially the same proportions as their
ownership of stock of Xxxxxxxx), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Xxxxxxxx representing fifty percent (50%) or more of the combined
voting power of Xxxxxxxx' then outstanding securities;
(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the 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
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whose election by the Board or nomination for election by Xxxxxxxx'
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election was previously so approved) cease for any reason
to constitute at least a majority thereof;
(iii) the shareholders of Xxxxxxxx approve a merger or
consolidation of Xxxxxxxx with any other company, other than (1) a merger or
consolidation which would result in the voting securities of Xxxxxxxx
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting security of Xxxxxxxx or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of Xxxxxxxx (or similar transaction)
in which no "person" (as hereinabove defined) acquires more than fifty percent
(50%) of the combined voting power of Xxxxxxxx' then outstanding securities; or
(iv) the shareholders of Xxxxxxxx approve a plan of
liquidation, dissolution or winding up of Xxxxxxxx or an agreement for the sale
or disposition by Xxxxxxxx of all or substantially all of Xxxxxxxx' assets.
(e) "Discharge For Cause" shall be construed to have occurred
whenever occasioned by reason of felonious acts on the part of Proud, actions
by Proud involving serious moral turpitude or his
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misconduct in such manner as to bring substantial and material discredit upon
Xxxxxxxx, following the giving of thirty (30) days' written notice to Proud
specifying the respect in which Xxxxxxxx claims Proud has violated this
provision and the failure, inability or unwillingness of Proud 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 Proud and by other comparably
situated executive officers prior to the alleged improper activity of Proud for
which the Discharge For Cause has been made.
(f) "Escrow Agreement" shall mean the agreement dated entered into
simultaneously herewith between Xxxxxxxx and Bank One, Dayton, NA, a copy of
which is attached hereto and made a part hereof as Exhibit A.
(g) "Escrow Agent" shall mean Bank One, Dayton, NA.
(h) "Escrow Amount" shall mean the amounts placed in escrow by
Xxxxxxxx pursuant to subsection (e)(iii) of Section 5 of this Agreement.
(i) "Escrow Funding Event" shall mean the occurrence of any of the
following events:
(i) Class A Common Shares of Xxxxxxxx have been acquired
other than directly from Xxxxxxxx in exchange for cash or property by any
person (other than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren,
Xxxxxxxx, any trustee or other fiduciary holding securities under an employee
benefit plan of Xxxxxxxx, or any
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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 Proud's 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 Proud during the three (3)
calendar years preceding his termination of employment.
(k) "Final Average Annual Compensation" shall mean the average of
Proud's 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 Proud's 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) "Supplemental Plan" shall mean Xxxxxxxx' existing Supplemental
Retirement Plan, as the same may be amended from time to time.
2. TERMS AND DUTIES.
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(a) The term of this Agreement shall continue from the date hereof
and end on September 1, 1999, unless extended in accordance herewith. Proud
shall continue in the employ of Xxxxxxxx as
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President of the Healthcare Systems Division or such other substantially
equivalent position designated by the Board, consistent with the provisions of
this Agreement. In addition, Proud 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. Subject to Proud's willingness to so
extend his employment, Xxxxxxxx may extend the term of this Agreement for
additional renewal periods of one (1) year each by giving written notice
thereof not less than twelve (12) months prior to September 1, 1999 initially
and not less than twelve (12) months prior to each succeeding September 1st
thereafter.
(b) At all times Proud 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) Proud 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 6 below and provided, however, in the event of
termination of Proud's employment due to Xxxxxxxx' decision not to renew this
Agreement the period shall be
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one (1) year), 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 6(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.
3. COMPENSATION AND FRINGE BENEFITS.
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(a) The Base Compensation of Proud during the term of this
Agreement shall be $210,000, 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 Proud and Xxxxxxxx; provided, however, that such Base
Compensation may not be reduced below said rate of $210,000 without Proud's
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 7 below. Proud's
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
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discretion of the Board, and this provision shall not be construed as requiring
any such increase for any given year.
(b) Proud shall continue his participation in 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) Proud shall continue to be eligible for participation in the
Stock Option Plan - 1995 of Xxxxxxxx and shall be entitled to the grant of such
options to purchase shares of Class A Common Stock of Xxxxxxxx under any other
future stock option plans for employees and to participate in such other
executive compensation incentive plans awarding stock as shall, in the
determination of the Board, be appropriate and consistent with the purposes of
the plans and with the grants of such options to the executive officers of
Xxxxxxxx.
(d) In addition to the specific benefits provided for Proud under
the terms of this Agreement, Xxxxxxxx shall provide him with other fringe
benefits (including bonuses, vacations, health and disability insurance,
pension plan participation and others) at least equivalent to those of the
other executive officers of Xxxxxxxx and as set forth on Exhibit B attached
hereto and made a part hereof.
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4. EXPENSES.
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Proud 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 Proud, Proud 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.
5. TERMINATION; DISCHARGE.
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(a) TERMINATION OR DISCHARGE WITHOUT CAUSE. Xxxxxxxx reserves the
right to discharge Proud at any time and for any reason and not to renew this
Agreement; but such non-renewal or discharge, unless a Discharge For Cause,
shall not extinguish the obligation of Xxxxxxxx to provide Proud (and, in the
event of his prior death, his designated beneficiary or beneficiaries or his
estate) with the following severance benefits:
(i) If Xxxxxxxx does not renew this Agreement, Proud
shall be entitled to receive for a period expiring one (1) year from September
1, 1999 (or any renewal thereof) payments from Xxxxxxxx in an amount equal to
his Annual Compensation Value.
(ii) If such discharge occurs prior to September 1, 1999,
Proud shall be entitled to receive for a period expiring two (2) years from the
date of discharge, payments from Xxxxxxxx in an amount equal to his Annual
Compensation Value.
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(iii) Proud shall be entitled, during the period expiring
on the earlier of Proud's securing other employment or two (2) years from the
date of discharge (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.
(iv) For purposes of determining Proud's benefits under
the Supplemental Plan, Proud 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 subsections (i) or (ii) of this Section 5(a). In
addition, during the time period that he receives or is entitled to receive
payments under said subsections (i) or (ii) of this Section 5(a), Proud's Base
Compensation shall be deemed to be increased by the annual economic range
adjustment for Xxxxxxxx' salaried employees announced in October of each year
(or, if there is no such announced economic range adjustment in a given year,
by an assumed five (5%) increase for that year) in order to calculate his
highest earnings during five (5) consecutive years out of the last ten (10)
years prior to retirement under the Supplemental Plan, and his Final Annual
Compensation (see Section 5(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.
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(v) Proud shall be reimbursed for up to $20,000 for
out-placement fees if he chooses to seek other employment following his
discharge by Xxxxxxxx. Proud shall not be obligated to seek other employment
in order to mitigate his damages resulting from his discharge.
Proud acknowledges that he shall remain subject to and bound
by the restrictive provisions of Section 6 below.
(b) DISCHARGE FOR CAUSE. If Proud's 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
5(d) or 5(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 Proud shall be entitled to
receive his benefits, if any, under the Pension Plan and the Supplemental Plan
to the extent applicable. Proud shall remain subject to the restrictive
provisions of Section 6 below for a period for two (2) years from the date of
discharge. Should Proud disagree that his discharge was a Discharge For Cause
the question shall be submitted to arbitration in accordance with Section 7
below.
(c) TERMINATION DUE TO DISABILITY OR DEATH. If, by reason of
illness, disability, or other incapacity certified by two (2) physicians
competent to do so in the opinion of the Board, Proud is unable to perform the
duties required of him under this Agreement for a period of six (6) consecutive
months, Xxxxxxxx, following the
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giving of thirty (30) days' written notice to Proud and the failure of Proud 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 Proud's employment by giving Proud 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 disability
benefits, including medical benefits, to which Proud may then be entitled by
virtue of his participation in any Xxxxxxxx' sponsored programs then in effect.
Similarly, upon his death, all obligations of Xxxxxxxx hereunder shall cease
except for any death benefits to which Proud (or his beneficiaries) may be
entitled by virtue of his participation in any Xxxxxxxx' sponsored programs
then in effect.
(d) BENEFITS UPON TERMINATION UNDER CERTAIN CIRCUMSTANCES. If
Proud voluntarily terminates his employment or Proud 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) Proud is required by Xxxxxxxx, prior to a Change in Control,
to perform duties or services which differ significantly from those performed
by him on the effective date hereof, or which are not ordinarily and generally
performed by a President of a division or corporation similar in size and scope
to the Xxxxxxxx Healthcare Systems Division; 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; Proud shall be
entitled to receive from Xxxxxxxx all of the severance benefits set forth in
Section 5(a) above, except that severance payments shall be made until the
later of the end of the term of this Agreement or two (2) years from the date
of his termination of employment. Proud shall remain subject to and bound by
the restrictive provisions of Section 6 below.
(e) BENEFITS UPON A CHANGE IN CONTROL. Xxxxxxxx recognizes that
the threat of a Change in Control would be of significant concern to Proud.
The following provisions provide termination protection for Proud in the event
of a Change in Control. These provisions, among other purposes, are intended
to xxxxxx and encourage Proud's 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 Proud's employment for any
reason other than a Discharge for Cause, or if Proud 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, Proud
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
Proud's 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 Proud's Bonuses during the three (3) calendar years immediately preceding
the year in which the date of termination occurs.
(B) Proud shall be entitled, during the period expiring
on the earlier of Proud's 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 Proud's benefits under
the Supplemental Plan, Proud 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, Proud's 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
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calculate his highest earnings during five (5) consecutive years out of the
last ten (10) years prior to retirement under the Supplemental Plan.
(D) Proud shall be reimbursed for up to $20,000 for
outplacement fees if he chooses to seek other employment following his
discharge by Xxxxxxxx. Proud shall not be obligated to seek other employment
in order to mitigate his damages resulting from his discharge.
The benefits provided in this Section 5(e) shall be in lieu of
any benefits provided under Section 5(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 Proud in connection with a Change in Control or the termination of
Proud's 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
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agreement) if (A) the net amount of such Total Payments, as so reduced, (and
after deduction of the net amount of federal, state and local income tax on
such Total Payments), is greater than (B) the excess of (i) the net amount of
such Total Payments, without reduction (but after deduction of the net amount
of federal, state and local income tax on such Total Payments), over (ii) the
amount of Excise Tax to which Proud 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 Proud 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 Proud's termination of
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employment, Xxxxxxxx shall provide Proud with its calculation of the amounts
referred to in this Section and such supporting materials as are reasonably
necessary for Proud to evaluate Xxxxxxxx' calculations. If Proud objects to
Xxxxxxxx' calculations, he shall notify Xxxxxxxx of his objections prior to the
initial payment date set forth in Section 8(e)(vi) hereof, and Xxxxxxxx shall
pay to Proud such portion of the Severance Payment (up to one hundred percent
(100%) thereof) as Proud determines is necessary to result in Proud's 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) Proud's Base Compensation in effect immediately prior to
the Escrow Funding Event and (ii) the average of Proud's 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 Proud's Base
Compensation is increased (or decreased) or he receives a Bonus that affects
the amount described in Section 5(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
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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.
(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 5(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 Proud's right to a payment under this Section 5(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
5(e), Proud 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
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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 Proud. 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 Proud's employment for any
reason but a Discharge for Cause, or if Proud terminates his employment with
Xxxxxxxx voluntarily for any reason other than disability or retirement within
the twenty-four (24) month period following the date of a Change in Control,
the Escrow Agent, upon written demand made on or after the tenth (10th) day
following such termination of employment, shall pay the Escrow Amount in
accordance with this Section and Proud shall no longer be subject to the
restrictive provisions of Section 6 below, except for Section 6(e). Proud
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 5(e)(iii).
If he has accepted such determination, Xxxxxxxx shall provide the Escrow Agent
with Xxxxxxxx' written determination as set forth in Section 5(e)(iii) and the
Escrow Agent shall pay to Proud all or a portion of the Escrow Amount as
provided in such determination, and any remaining amount shall be paid to
Xxxxxxxx. If Proud does not accept Xxxxxxxx' determination, Proud shall
provide to the Escrow Agent his determination of the Severance Payment, and the
Escrow Agent shall pay to Proud all or a portion of the Escrow Amount as
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provided in Proud's 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 5(e)(vi) above, Proud incurs any costs or expenses,
including attorneys' fees, in the enforcement of rights under this Section 5(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 Proud all such costs and
expenses.
6. NON-COMPETITION; CONFIDENTIALITY.
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(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 Proud 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 5(e) above, or should he be Discharged For Cause
by Xxxxxxxx, Proud shall remain subject to the restrictive
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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 severance or disability
provisions (Section 5) of this Agreement. These restrictive provisions are as
follows:
(b) For a period of two (2) years from and after Proud's employment
with Xxxxxxxx shall have terminated (provided, however, in the event of
termination of Proud's employment due to Xxxxxxxx' decision not to renew
this Agreement the period shall be one (1) year) and after he shall have ceased
receiving 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 Proud's termination of
employment or upon the cessation of any retirement, severance or disability
benefits under this Agreement.
(c) From and after the execution of this Agreement and for a
period of two (2) years after termination (provided, however, in the event of
termination of Proud's employment due to Xxxxxxxx' decision not to renew this
Agreement the period shall be one (1)
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year) of his employment with Xxxxxxxx and after he shall have ceased receiving
severance or disability benefits under this Agreement, whichever shall last
occur, Proud 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 6, however, are in
no way intended to prohibit Proud 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 6 to limit in any way Proud's ability to invest in businesses not
competitive with Xxxxxxxx.
(e) Proud 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
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thereof, the 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 Proud, 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 Proud hereby assigns to Xxxxxxxx
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Proud 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 Proud, it
being agreed that the
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contacts of Proud and the potential scope of operation of Xxxxxxxx is without
any limitation within the area of prohibition. Any violation of this covenant
may be enforced by specific performance in any court of competent jurisdiction
within the area of limitation imposed by this provision. If any court of
competent jurisdiction shall determine that either the period or the territory
covered by this provision against competition in unreasonable, said 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.
7. RESOLUTION OF DISPUTES; ARBITRATION.
-----------------------------------
(a) Except for the breach or threatened breach by Proud 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 Proud 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 Proud disagree that his determination was due to a
Discharge for Cause, the question shall, within thirty (30) days after the
termination, be submitted to arbitration by three (3) arbitrators, one of whom
shall be selected by Xxxxxxxx, another of whom shall be selected by Proud, and
the third of whom shall be selected by the two arbitrators so appointed. The
decision of
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these arbitrators on the question shall be final and conclusive upon Xxxxxxxx
and upon Proud and his wife or widow, personal representatives, designated
beneficiaries and heirs, and shall be enforceable in any court having competent
jurisdiction thereof. A discharge which is eventually determined under
arbitration to have been a Discharge for Cause, or no arbitration having been
requested and the discharge being one which Xxxxxxxx had determined was for a
Discharge for Cause, shall extinguish any and all liability of Xxxxxxxx under
this Agreement from and after the date of termination.
(c) The arbitrators for all other disputes or controversies under
this Agreement shall be selected as set forth above and the parties shall
select the arbitrators within thirty (30) days after demand from Proud or
Xxxxxxxx to the other to settle matters by arbitration. As stated above, the
decision of the arbitrators shall be final and conclusive.
8. NONASSIGNABLE RIGHTS.
--------------------
Proud, 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 Proud or his wife or
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his widow after his death or his personal representatives, designated
beneficiaries and heirs. Should Proud 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 Proud 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
Proud or his wife or his widow or his personal representatives, designated
beneficiaries and heirs, as the case may be, as Xxxxxxxx may deem expedient.
9. 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 Proud's life) as it may
deem necessary or proper; provided, however, that Proud's 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 Proud's life, Proud agrees to
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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) Proud, 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.
10. FACILITY OF PAYMENT.
-------------------
In the event of a physical or mental illness or disability of Proud 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 Proud 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 Proud's death
after he has made demand pursuant to Section 5(e)(v) above, the Escrow Agent
shall pay such amounts as thereafter are due to such beneficiary or
beneficiaries as Proud shall have designated in writing, or failing such
writing, to his estate. No
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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.
11. 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 Proud, addressed to:
H. Xxxx Xxxxx
0000 Xxxxxx Xxxxx Xxxx
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.
(b) (i) This Agreement shall be binding upon Proud, 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
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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
Proud during his lifetime and, after his death only with the consent of his
widow during her lifetime or his other designated beneficiaries during their
lifetime, as the case may be. Any agreement of amendment shall be executed
with the same formality as this Agreement.
(d) This Agreement supersedes any prior agreements or
understandings covering the subject matter hereof, either written or oral,
between the parties.
(e) This Agreement shall be construed under the laws of the State
of Ohio.
(f) The paragraph headings used in this Agreement are for
convenience of reference only and shall not be considered in construing this
Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands the year and date first above written.
THE XXXXXXXX AND XXXXXXXX COMPANY
By
------------------------------
------------------------------
H. XXXX XXXXX
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EXHIBIT A
---------
ESCROW AGREEMENT
----------------
This Escrow Agreement made and entered into as of this 1st day of
September, 1995, by and between THE XXXXXXXX AND XXXXXXXX COMPANY, an Ohio
corporation (hereinafter referred to as "XXXXXXXX") and BANK ONE, DAYTON, N.A.
(hereinafter referred to as the "ESCROW AGENT"),
WITNESSETH:
WHEREAS, XXXXXXXX, has agreed to provide termination pay protection
for H. Xxxx Xxxxx ("Employee") under conditions set forth in an Employment
Agreement with Employee dated September 1, 1995 (hereinafter referred to as the
"Agreement"); and
WHEREAS, the required protective payments under the Agreement are to
be paid to an escrow account at Bank One, Dayton, N.A.;
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this ESCROW AGREEMENT, the parties hereby do agree as follows:
1. ACCEPTANCE OF ESCROW. The ESCROW AGENT shall serve as ESCROW
AGENT in accordance with the provisions of this ESCROW AGREEMENT, and the
duties of the ESCROW AGENT shall be solely those imposed by this ESCROW
AGREEMENT.
2. TERMS. The ESCROW AGENT shall receive, hold and disburse
funds as ESCROW AGENT in accordance with the Agreement, in the form attached
hereto as Exhibit A and made a part hereof. The ESCROW AGENT acknowledges that
it has reviewed and is familiar with the Agreement and shall be bound by the
obligations, terms and conditions therein relating to the ESCROW AGENT and its
duties.
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However, the ESCROW AGENT is not a party to or bound by the Agreement,
except as specifically provided for therein and as provided in Sections 2, 4,
6, 7 and 8 of this ESCROW AGREEMENT. The ESCROW AGENT shall be liable for only
such funds and items as are actually deposited and received by it for the
purposes of said escrow.
3. INDEMNIFICATION. So long as the ESCROW AGENT shall follow the
terms of this ESCROW AGREEMENT and any instructions issued hereunder in good
faith, relying upon documents which it believes to be genuine and properly
signed and executed, it shall be held free, clear and harmless and shall incur
no liability hereunder. XXXXXXXX shall indemnify and hold the ESCROW AGENT
harmless from any loss, liability, cost, or expense, including reasonable legal
fees, which may arise or be incurred by reason of this ESCROW AGREEMENT or the
ESCROW AGENT's performance in good faith of any duty or obligation hereunder.
The ESCROW AGENT shall not be liable for any error of judgment or for
any act done or omitted by it in good faith, or for anything which it may in
good faith do or refrain from doing in connection with said escrow; nor will
any liability be incurred by the ESCROW AGENT if, in the event of any dispute
or question as to the construction of, this ESCROW AGREEMENT or any demand or
notice hereunder, the ESCROW AGENT acts in accordance with the opinion of its
legal counsel.
4. INVESTMENTS BY ESCROW AGENT; INCOME. The ESCROW AGENT shall
invest escrow funds in federally-insured interest bearing
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accounts selected by the ESCROW AGENT or in any one or more of the following
investments, selected by the ESCROW AGENT:
(a) Certificates of Deposit of United States commercial
banks holding membership in the Federal Reserve
System. Such U.S. banks shall have minimum
total assets of $1,000,000,000 and shall not be
currently listed on any publicly-disclosed report of
U.S. banks having financial problems warranting close
monitoring by the Federal Reserve Board.
(b) Euro-dollar Certificates of Deposit issued by the
twenty-five (25) largest United States commercial
banks, which banks shall have minimum total assets of
$1,000,000,000 and shall not be currently listed on
any publicly-disclosed report of U. S. banks having
financial problems warranting close monitoring by the
Federal Reserve Board.
(c) Bankers Acceptances of United States commercial banks
holding membership in the Federal Reserve System.
Such U.S. banks shall have minimum total assets of
$1,000,000,000 and shall not be currently listed on
any publicly-disclosed report of U.S. banks having
financial problems warranting close monitoring by the
Federal Reserve Board.
(d) United States Treasury Bills.
(e) United States Treasury Notes.
(f) United States Government Guaranteed "Project Notes"
and/or Tax-Exempt Notes rated MIG 1 by Xxxxx'x rating
agency.
(g) Debt instruments issued by the following five United
States Government agencies:
Federal Intermediate Credit Banks
Banks for Cooperatives
Federal Land Banks
Federal Home Loan Banks
Federal National Mortgage Association
(h) Commercial Paper rated Prime-1 by Xxxxx'x rating
agency or rated A-1 by Standard & Poors rating
agency. In addition, with respect to any
corporation's commercial paper being purchased, such
corporation's long-term debt, if any, must be
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rated either A by Xxxxx'x rating agency or A by Standard
& Poors rating agency.
The total investments in the above-described approved Certificates of Deposit,
Bankers Acceptances, Commercial Paper, and/or Tax-Exempt Notes shall be limited
to a maximum of $1,000,000 at any one time in any one single bank, corporation,
state and/or municipality.
With respect to funds deposited in escrow by XXXXXXXX pursuant to the
terms of the Agreement, principal shall be used only for the payments to the
Employee. Any and all income on invested funds shall be paid to XXXXXXXX in
accordance with subsection (c) of Section 2 of the Agreement. Fees of the
Escrow Agent shall be paid by XXXXXXXX in accordance with subsection (e)(v) of
Section 5 of the Agreement.
With respect to funds deposited pursuant to the Agreement, the ESCROW
AGENT shall be authorized to invest such funds. The ESCROW AGENT will maintain
such liquidity in the investments as will permit them to be cashed when
necessary to fund the required distributions to Employee.
5. TERMINATION. This ESCROW AGREEMENT and all obligations of the
ESCROW AGENT shall terminate upon satisfaction by the ESCROW AGENT of all of
its obligations under this ESCROW AGREEMENT and the Agreement.
6. ADVERSE CLAIMS. ESCROW AGENT shall make delivery or disbursement
of the funds deposited hereunder in accordance with the terms of the ESCROW
AGREEMENT and the Agreement, regardless of any disagreement or the presentation
of any adverse claims or
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demands of any person, unless such person shall have obtained an injunction
from a court having proper jurisdiction, enjoining ESCROW AGENT from making
such delivery or disbursement. ESCROW AGENT shall not become liable to
XXXXXXXX or to any other person, for or because of such delivery or
disbursement of such funds, even with knowledge of a disagreement or adverse
claim or demand.
7. DEMANDS. Except in cases where demand or notice by a single
party is specifically provided for in this ESCROW AGREEMENT or in the
Agreement, the ESCROW AGENT shall not be bound to recognize any notice, demand
or change of instructions as having any effect on this escrow unless given in
writing and signed by all parties considered by the ESCROW AGENT to be affected
thereby.
8. NOTICES. Any notice required or permitted to be given
hereunder shall be given in writing and shall be sufficiently delivered if sent
by registered or certified mail, return receipt requested, prepaid, addressed
as follows:
, Trust Officer
-------------------------
Trust Division
Bank One, Dayton, NA
Kettering Tower
Xxxxxx, Xxxx 00000
The Xxxxxxxx and Xxxxxxxx Company
000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attn: Chief Financial Officer
Should the address of any party identified above change for the purposes
herein, such party shall give written notice of the new address to the other
parties identified above.
All notice hereunder to the ESCROW AGENT shall be given in writing to
an officer of the ESCROW AGENT. Unless written notice
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shall so be given, the ESCROW AGENT shall not be required to take or be bound
by said notice or to take action concerning such notice. If written notice be
properly given and the.ESCROW AGENT is required upon receipt thereof to take
any action hereunder and such action involves any expense or liability, the
ESCROW AGENT shall not be required to take any such action unless it is
indemnified against such expense or liability in a manner reasonably
satisfactory to the ESCROW AGENT. At the time of depositing funds into escrow
on behalf of Employee, XXXXXXXX shall deliver to the ESCROW AGENT a written
notice setting forth such person's name and address, and social security number
identifying the amounts being deposited on such person's behalf, and the
conditions of the Agreement, which have been met and which, therefore, require
that such deposit be made.
9. RECORD KEEPING. The ESCROW AGENT shall maintain records
showing the amount and date of all deposits made by XXXXXXXX for the benefit of
Employee and the amount and date of all disbursements made to Employee, his
heirs, successors and assigns. XXXXXXXX shall be given access to said records
at reasonable times upon request.
10. ESCROW FEE. XXXXXXXX shall pay to the ESCROW AGENT for its
services hereunder an escrow fee based upon the then-current schedule of
charges for such services promulgated by the ESCROW AGENT and shall pay
additional reasonable compensation for any further or extraordinary service
which the ESCROW AGENT may be required to render pursuant to the terms of this
ESCROW AGREEMENT.
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11. BINDING EFFECT. This ESCROW AGREEMENT shall be binding upon
and inure to the heirs, executors, administrators, personnel representatives,
successors and assigns of all parties hereto.
12. MISCELLANEOUS. Employee is acknowledged to be third party
beneficiary upon the deposit of any amounts under this ESCROW AGREEMENT for his
benefit. This ESCROW AGREEMENT may be modified or amended only by a writing
signed (i) by all parties hereto, (ii) by the third party beneficiary and (iii)
by any other person the ESCROW AGENT considers to be affected by said
modification or amendment. This ESCROW AGREEMENT shall be construed and
enforced in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have set their respective hands
the year and date first hereinabove written.
THE XXXXXXXX AND XXXXXXXX
COMPANY
By
-------------------------------
"XXXXXXXX"
BANK ONE, DAYTON, NA
By
-------------------------------
"ESCROW AGENT"
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EXHIBIT B
SCHEDULE OF FRINGE BENEFITS
PURSUANT TO SECTION 3(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 Proud may include personal passengers,
subject to seat availability. Proud shall receive W-2 for personal use value per IRS
regulations
Vacation Five (5) weeks annually at mutually agreed times.
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