Exhibit (10)(iii)(A)(12)
EMPLOYMENT AGREEMENT
This Agreement is made as of the Effective Date between Cincinnati Xxxx
Inc., an Ohio corporation ("Employer"), and Xxxxxxx X. Xxxxx ("Employee").
For purposes of this Agreement, the "Effective Date" is January 1, 2000.
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 canceled as of the Effective Date.
2. TERM OF AGREEMENT. The term of this Agreement initially shall be the
two year period commencing on the Effective Date. On the first anniversary of
the Effective Date and on each subsequent anniversary of the Effective Date,
the term of this Agreement automatically shall be extended for a period of
one additional year. Notwithstanding the foregoing, the term of this
Agreement is subject to termination as provided in Section 13.
3. DUTIES.
A. Employee will serve as Chief Legal and Administrative Officer of
Cincinnati Xxxx Inc. or in such other equivalent capacity as may be
designated by the Chief Executive Officer of Employer. Employee will report
to the Chief Executive Officer of Employer or to such other officer as the
Chief Executive Officer of Employer may direct.
B. Employee shall furnish such managerial, executive, financial,
technical, and other skills, advice, and assistance in operating Employer and
its Affiliates as Employer may reasonably request. For purposes of this
Agreement, "Affiliate" means each corporation which is a member of a
controlled group of corporations (within the meaning of section 1563(a) of
the Internal Revenue Code of 1986, as amended (the "Code")) which includes
Employer.
C. Employee shall also perform such other duties, consistent with the
provisions of Section 3.A., as are reasonably assigned to Employee by the CEO
of Employer.
D. Employee shall devote Employee's entire time, attention, and
energies to the business of Employer and its Affiliates. The words "entire
time, attention, and energies" are intended to mean that Employee shall
devote Employee's full effort during reasonable working hours to the business
of Employer and its Affiliates as shall devote at least 40 hours per week to
the business of Employer and its Affiliates. 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 $212,166 per year, payable not less frequently than monthly, for each
year during the term of this Agreement, subject to proration for any partial
year. Such Base Salary, and all other amounts payable under this Agreement,
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. Each year, Employee shall be given
a Bonus target, by Employer's Compensation Committee, of not less than
$106,083, subject to proration for a 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.
5. EXPENSES. All reasonable and necessary expenses incurred by Employee
in the course of the performance of Employee's duties to Employer shall be
reimbursable in accordance with Employer's then current travel and expense
policies.
6. BENEFITS.
A. While Employee remains in the employ of Employer, Employee shall be
entitled to participate in all of the various employee benefit plans and
programs, or equivalent plans and programs, which are made available to
similarly situated officers of Employer.
B. 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 any disability plans made
available to Employee by Employer.
C. As of January 3, 2000, Employee shall be granted options to
purchase 20,000 common shares of Employer under Employer's 1997 Long Term
Incentive Plan and such shares shall vest at 25% per year on each of the
first two anniversaries of the grant and the remaining 50% shall vest on the
third anniversary of the grant. In each year of this Agreement after 2000,
Employee will be granted stock options under Employer's 1997 Long Term
Incentive Plan or any similar plan made available to employees of Employer.
7. CONFIDENTIALITY. Employer and its Affiliates are engaged in the
telecommunications industry within the U.S. Employee acknowledges that in the
course
2
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 the Employer or 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, 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
Employee's duties for Employer, without the express written consent of
Employer; provided that Employee's obligation of confidentiality shall not
extend to any Information which becomes generally available to the public
other than as a result of disclosure by Employee.
8. NEW DEVELOPMENTS. All ideas, inventions, discoveries, concepts,
trademarks, or other developments or improvements, whether patentable or not,
conceived by the 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 ("New Developments"), 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, including the execution of documents assigning and transferring to
Employer, all of Employee's rights, 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 Employee's control that are the property of
Employer or any of its Affiliates, including without any 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.
3
10. REMEDIES.
A. 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 Employee's 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 Sections 7,8,9, 11 and 12 of this Agreement and to secure the enforcement
of this Agreement.
B. Except as provided in Section 10.A., the parties agree 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 either party
would have been otherwise entitled to file or pursue in court or before any
administrative agency (herein "claim"), and waives all right to xxx the other
party.
(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 a party's claims must be presented at a single
arbitration hearing. Any claim not raised at the arbitration hearing is
waived and released. The arbitration hearing will take place in Cincinnati,
Ohio.
(b) 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.
(c) Employee has had an opportunity to review the AAA rules
and the requirements that Employee must pay a filing fee for which the
Employer has agreed to split on an equal basis.
(d) 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.
(e) Any pre-hearing disputes will be presented to the
arbitrator for expeditious, final and binding resolution.
4
(f) The award of the arbitrator will be in writing and will
set forth each issue considered and the arbitrator's finding of fact and
conclusions of law as to each such issue.
(g) The remedy and relief that may be granted by the
arbitrator to Employee 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. 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 cost for its witnesses and proof.
(h) Employer and Employee recognize that a primary benefit
each derives from arbitration 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 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.
(i) 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.
(j) Arbitration must be requested in writing no later than
6 months from the date of the party's knowledge of the matter disputed by the
claim. A party's failure to initiate arbitration within the time limits
herein will be considered a waiver and release by that party with respect to
any claim subject to arbitration under this Agreement.
(k) Employer and Employee consent that judgment upon the
arbitration award may be entered in any federal or state court that has
jurisdiction.
5
(l) Except as provided in Section 10.A., neither party
will commence or pursue any litigation on any claim that is or was subject to
arbitration under this Agreement.
(m) 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. For purposes of this Section 11 only, the term
"Employer" shall mean, collectively, Employer and each of its Affiliates.
During the two-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,
whether as a principal, partner, joint venture, agent, employee, salesman,
consultant, director or officer, where such position would involve Employee
in any business activity in competition with Employer. This restriction will
be limited to the geographical area where Employer is then engaged in such
competing business activity or to such other geographical area as a court
shall find reasonably necessary to protect the goodwill and business of the
Employer.
During the two-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
relationships with any person, firm, association, corporation or other entity
which is known by Employee to be a customer, client, supplier, consultant or
employee of Employer and that Employee will not divert or change, or attempt
to divert or change, any such relationship to the detriment of Employer or to
the benefit of any other person, firm, association, corporation or other
entity.
Employee will not, during or at any time within three years after the
termination of Employee's employment with Employer, induce or seek to induce,
any other employee of Employer to terminate his or her employment
relationship with Employer.
6
12. GOODWILL. Employee will not disparage Employer or any of its Affiliates in
any way which could 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. Employer will not
disparage Employee.
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 any disability benefit plans made available to
Employee by Employer (the "Disability Plans"), over a period of one hundred
twenty consecutive working days during any twelve consecutive month period (a
"Terminating Disability").
(ii) 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.
(iii) Upon termination of this Agreement on account of Terminating
Disability, Employer shall pay Employee Employee's accrued compensation
hereunder, whether Base Salary, Bonus or otherwise (subject to offset for any
amounts received pursuant to the Disability 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 Disability Plans and any other Employer plans in which
Employee is then participating.
(iv) 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 the Employee, provided, however, that the Employee's estate shall be paid
Employee's accrued compensation hereunder, whether Base Salary, Bonus or
otherwise, to the date of death.
C. Employer may terminate this Agreement immediately, upon written notice
to Employee, for Cause. For purposes of this Agreement, Employer shall have
"Cause" to terminate this Agreement only if Employer's Board of Directors
determines that there has been fraud, misappropriation or embezzlement on the
part of Employee.
7
D. Employer may terminate this Agreement immediately, upon written
notice to Employee, for any reason other than those set forth in Sections
13.A., B. and C.; provided, however, that Employer shall have no right to
terminate under this Section 13.D. within two years after a Change in
Control. In the event of a termination by Employer under this Section 13.D.,
Employer shall, within five days after the termination, pay Employee an
amount equal to two times the sum of the annual Base Salary rate in effect at
the time of termination plus the Bonus target in effect at the time of
termination. For the remainder of the Current Term, Employer shall continue
to provide Employee with medical, dental, vision and life insurance coverage
comparable to the medical, dental, vision and life insurance coverage in
effect for Employee immediately prior to the termination; and, to the extent
that Employee would have been eligible for any post-retirement medical,
dental, vision or life insurance benefits from Employer if Employee had
continued in employment through the end of the Current Term, Employer shall
provide such post-retirement benefits to Employee after the end of the
Current Term. For purposes of any stock option or restricted stock grant
outstanding immediately prior to the termination, Employee's employment with
Employer shall not be deemed to have terminated until the end of the Current
Term. In addition, Employee shall be entitled to receive, as soon as
practicable after termination, an amount equal to the sum of (i) any
forfeitable benefits under any qualified or nonqualified pension, profit
sharing, 401(k) or deferred compensation plan of Employer or any Affiliate
which would have vested prior to the end of the Current Term if Employee's
employment had not terminated plus (ii) if Employee is participating in a
qualified or nonqualified defined benefit plan of Employer or any Affiliate
at the time of termination, an amount equal to the present value of the
additional vested benefits which would have accrued for Employee under such
plan if Employee's employment had not terminated prior to the end of the
Current Term and if Employee's annual Base Salary and Bonus target had
neither increased nor decreased after the termination. For purposes of this
Section 13.D., "Current Term" means the two year period beginning at the time
of termination. For purposes of this Section 13.D. and Section 13.E., "Change
in Control" means a change in control as defined in Employer's 1997 Long Term
Incentive Plan.
E. This Agreement shall terminate automatically in the event that there
is a Change in Control and Employee's employment with Employer is actually or
constructively terminated by Employer within two years after the Change in
Control for any reason other than those set forth in Sections 13.A., B. and C.
For purposes of the preceding sentence, a "constructive" termination of
Employee's employment shall be deemed to have occurred if, without Employee's
consent, there is a material reduction in Employee's authority or
responsibilities or if there is a reduction in Employee's Base Salary or Bonus
target from the amount in effect immediately prior to the Change in Control or
if Employee is required by Employer to relocate from the city where Employee is
residing immediately prior to the Change in Control. In the event of a
termination under this Section 13.E., Employer shall pay Employee an amount
equal to two times the sum of the annual Base Salary rate in effect at the time
of termination plus the Bonus target in effect at the time of termination, all
stock options shall become immediately exercisable (and Employee shall be
afforded the opportunity to exercise them), the restrictions applicable to all
restricted stock shall lapse and any long term
8
awards shall be paid out at target. For the remainder of the Current Term,
Employer shall continue to provide Employee with medical, dental, vision and
life insurance coverage comparable to the medical, dental, vision and life
insurance coverage in effect for Employee immediately prior to the
termination; and, to the extent that Employee would have been eligible for
any post-retirement medical, dental, vision and life insurance benefits from
Employer if Employee had continued in employment through the end of the
Current Term, Employer shall provide such post-retirement benefits to
Employee after the end of the Current Term. Employee's accrued benefit under
any nonqualified pension or deferred compensation plan maintained by Employer
or any Affiliate shall become immediately vested and nonforfeitable and
Employee also shall be entitled to receive a payment equal to the sum of (i)
any forfeitable benefits under any qualified pension or profit sharing or
401(k) plan maintained by Employer or any Affiliate plus (ii) if Employee is
participating in a qualified or nonqualified defined benefit plan of Employer
or any Affiliate at the time of termination, an amount equal to the present
value of the additional benefits which would have accrued for Employee under
such plan if Employee's employment had not terminated prior to the end of the
Current Term and if Employee's annual Base Salary and Bonus target had
neither increased nor decreased after the termination. Finally, to the extent
that Employee is deemed to have received an excess parachute payment by
reason of the Change in Control, Employer shall pay Employee an additional
sum sufficient to pay (i) any taxes imposed under section 4999 of the Code
plus (ii) any federal, state and local taxes applicable to any taxes imposed
under section 4999 of the Code. For purposes of this Section 13.E., "Current
Term" means the two year period beginning at the time of termination.
F. Employee may resign upon 60 days' prior written notice to Employer.
In the event of a resignation under this Section 13.F., this Agreement shall
terminate and Employee shall be entitled to receive Employee's Base Salary
through the date of termination, any Bonus earned but not paid at the time of
termination and any other vested compensation or benefits called for under
any compensation plan or program of Employer.
G. Employee may retire (a) upon six months' prior written notice to
Employer at any time after Employee has attained age 55 and completed at
least ten years of service with Employer and its Affiliates or (b) on such
earlier date as may be approved by the Chief Executive Officer of Employer.
In the event of a retirement under this Section 13.G., this Agreement shall
terminate and Employee shall be entitled to receive Employee's Base Salary
through the date of termination and any bonus earned but not paid at the time
of termination. In addition, Employee shall be entitled to receive any
compensation or benefits made available to retirees under Employer's standard
policies and programs, including retiree medical and life insurance benefits,
a prorated Bonus for the year of termination, and the right to exercise
options after retirement.
9
H. 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 (including any Base Salary
accrued through the date of termination, any Bonus earned for the year
preceding the year in which the termination occurs and any nonforfeitable
amounts payable under any employee plan), all further compensation under this
Agreement shall terminate.
I. The termination of this Agreement shall not amend, alter or modify
the rights and obligations of the parties under Sections 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 a trust between Employer and Employee, all rights
and duties of Employee arising under this Agreement, and the Agreement
itself, are non-assignable 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 Employee's 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 enforceability 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 Paragraph 14
above, this Agreement shall be binding upon Employee, Employer and Employer's
successors and assigns.
10
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, unless required by law. 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 Employer. To the extent that the terms of
this Agreement have been disclosed by Employer, in a public filing or
otherwise, the confidentiality requirements of this Section 21 shall no
longer apply to such terms.
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.
Chief Executive Officer
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
------------------------------------
EMPLOYEE
/s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
11
