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AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made and
entered into as of the 31st day of May, 1995, by and between THE XXXXXXXX AND
XXXXXXXX COMPANY, a corporation existing under the laws of the State of Ohio
("Xxxxxxxx"), and XXXXXX X. XXXXXXX ("Xxxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxxx and Xxxxxxxx have entered into an Employment
Agreement dated as of May 8, 1989, as amended effective December 1, 1989 and
extended effective May 31, 1994 (as so amended and extended the "Employment
Agreement"), pursuant to which Xxxxxxx is currently employed as President of
the Xxxxxxxx Automotive Systems Division; and
WHEREAS, Xxxxxxx and Xxxxxxxx desire to amend, restate in its
entirety, and continue the Employment Agreement and enter into this Agreement
on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the foregoing premises and of the
mutual promises set forth below, Xxxxxxxx and Xxxxxxx hereby agree as follows:
1. AMENDMENT, RESTATEMENT IN ITS ENTIRETY AND CONTINUATION OF EMPLOYMENT
AGREEMENT.
Effective as of the date hereof, the Employment Agreement shall be,
and hereby is, amended, restated in its entirety and continued as set forth in
this Agreement, and all terms, conditions and provisions of the Employment
Agreement shall be, and hereby are, superseded by this Agreement and shall no
longer be of any force and effect.
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2. DEFINITIONS.
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For purposes of this Agreement, the terms set forth below shall have
the following meanings:
(a) "Annual Compensation Value" shall mean Xxxxxxx'x then-current
Base Compensation plus an amount equal to the average of all Bonuses (excluding
any compensation attributable to stock options of any type granted by Xxxxxxxx)
earned by Xxxxxxx during the three (3) calendar years preceding the date upon
which the valuation is made.
(b) "Base Compensation" shall mean the then-current annual base
salary (exclusive of Bonuses) of Xxxxxxx.
(c) "Bonuses" shall mean bonus payments earned by Xxxxxxx 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
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(50%) or more of the combined voting power of Xxxxxxxx' then outstanding
securities;
(ii) during any period of two (2) consecutive years (not
including any period prior to the execution of this Agreement), individuals who
at the beginning of such period constitute the Board, any new director (other
than a director designated by a person who has entered into an agreement with
Xxxxxxxx to effect a transaction described in clause (i), (iii) or (iv) of this
Section whose election by the Board or nomination for election by Xxxxxxxx'
shareholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election was previously so approved) cease for any reason
to constitute at least a majority thereof;
(iii) the shareholders of Xxxxxxxx approve a merger or
consolidation of Xxxxxxxx with any other company, other than (1) a merger or
consolidation which would result in the voting securities of Xxxxxxxx
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the combined voting power of
the voting security of Xxxxxxxx or such surviving entity outstanding
immediately after such merger or consolidation or (2) a merger or consolidation
effected to implement a recapitalization of Xxxxxxxx (or similar transaction)
in which no "person" (as hereinabove defined) acquires more than fifty percent
(50%) of the combined voting power of Xxxxxxxx' then outstanding securities; or
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(iv) the shareholders of Xxxxxxxx approve a plan of
liquidation, dissolution or winding up of Xxxxxxxx or an agreement for the sale
or disposition by Xxxxxxxx of all or substantially all of Xxxxxxxx' assets.
(e) "Disability Benefits" shall mean an annual amount equal to
fifty-five percent (55%) of Xxxxxxx'x Final Average Annual Compensation,
determined at the time of Xxxxxxx'x disability rather than his retirement;
provided, however, that the amount of disability benefit payments to be made
hereunder shall be reduced by the amount of regular disability benefits payable
to Xxxxxxx under Xxxxxxxx' long-term disability program.
(f) "Discharge For Cause" shall be construed to have occurred
whenever occasioned by reason of felonious acts on the part of Xxxxxxx, actions
by Xxxxxxx involving serious moral turpitude or his misconduct in such manner
as to bring substantial and material discredit upon Xxxxxxxx, following the
giving of thirty (30) days' written notice to Xxxxxxx specifying the respect in
which Xxxxxxxx claims Xxxxxxx has violated this provision and the failure,
inability or unwillingness of Xxxxxxx 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 Xxxxxxx and by other comparably situated
executive officers prior to the alleged improper activity of Xxxxxxx for which
the Discharge For Cause has been made.
(g) "Escrow Agreement" shall mean the agreement dated May 8, 1989
as amended simultaneously herewith entered into between
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Xxxxxxxx and Bank One, Dayton, NA, a copy of which (including the amendment) is
attached hereto and made a part hereof as Exhibit A.
(h) "Escrow Agent" shall mean Bank One, Dayton, NA.
(i) "Escrow Amount" shall mean the amounts placed in escrow by
Xxxxxxxx pursuant to subsection (e)(iii) of Section 8 of this Agreement.
(j) "Escrow Funding Event" shall mean the occurrence of any of the
following events:
(i) Class A Common Shares of Xxxxxxxx have been acquired
other than directly from Xxxxxxxx in exchange for cash or property by any
person (other than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren,
Xxxxxxxx, any trustee or other fiduciary holding securities under an employee
benefit plan of Xxxxxxxx, or any company owned directly or indirectly by the
shareholders of Xxxxxxxx in substantially the same proportions as their
ownership of the stock of Xxxxxxxx) who either thereby becomes the owner of
more than nine and one half percent (9.5%) of Xxxxxxxx' outstanding Class A
Common Shares, or having directly or indirectly become the owner of more than
five percent (5%) of Xxxxxxxx' Class A Common Shares either alone or in
conjunction with another person has expressed an intent to continue acquiring
Xxxxxxxx' outstanding Class A Common Shares so as to become thereby the owner
of more than nine and one-half percent (9.5%) of such stock either directly or
indirectly;
(ii) Any person (other than Xxxxxxx X. Xxxxx, Xx., his
children or grandchildren, Xxxxxxxx, any trustee or other fiduciary holding
securities under an employee benefit plan of Xxxxxxxx, or
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any company owned directly or indirectly by the shareholders of Xxxxxxxx in
substantially the same proportions as their ownership of stock of Xxxxxxxx) has
made a tender offer for, or a request for invitations for tenders of, Class A
Common Shares of Xxxxxxxx.
(iii) Any person forwards or causes to be forwarded to
shareholders of Xxxxxxxx proxy statement(s) in any period of twenty-four (24)
consecutive months, soliciting proxies, to elect to the Board of Xxxxxxxx two
(2) or more candidates who were not nominated as candidates in proxy statements
forwarded to shareholders during such period by the Board; or
(iv) The Board adopts a resolution to the effect that, for
purposes of this Agreement, an Escrow Funding Event has occurred.
(k) "Final Annual Compensation" shall mean Xxxxxxx'x 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 Xxxxxxx during the three (3)
calendar years preceding his termination of employment.
(l) "Final Average Annual Compensation" shall mean the average of
Xxxxxxx'x Base Compensation and Bonuses (excluding any compensation
attributable to stock options of any type granted by Xxxxxxxx) as determined
for the five (5) consecutive calendar years of the last ten (10) calendar years
preceding and including the calendar year in which Xxxxxxx'x employment
terminates which yields the highest sum.
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(m) "Pension Plan" shall mean the existing Xxxxxxxx and Xxxxxxxx
Company Non-Union Pension Plan, as the same may be amended from time to time.
(n) "Retirement Benefits" shall mean payments to Xxxxxxx based
upon his lifetime in an annual amount equal to a designated percentage of
Xxxxxxx'x Final Average Annual Compensation or, in the case of Section 8(d)
below, Final Annual Compensation, which shall be comprised of the sum of (i)
Xxxxxxx'x primary Social Security retirement benefits when he is entitled to
receive such benefit (age sixty-two (62)) [until that time an amount equal to
the primary Social Security retirement benefit shall be paid to Xxxxxxx from
Xxxxxxxx' Supplemental Plan], (ii) Xxxxxxx'x pension benefits determined as a
life annuity (without regard to actual payment form) under the Pension Plan and
deferred compensation payments under the Non-Qualified Deferred Compensation
and Disability Benefit Agreement dated December 20, 1984 between Xxxxxxx and
Xxxxxxxx, or such other non-contributory deferred compensation agreement(s)
then existing between Xxxxxxxx and Xxxxxxx, and (iii) such amount of
supplemental retirement benefits under the Supplemental Plan as shall be
necessary to achieve the designated percentage of Xxxxxxx'x Final Average
Annual Compensation or, in the case of Section 8(d) below, Final Annual
Compensation. In addition to said annual amount, Retirement Benefits shall
include a continuation of coverage for the remainder of Xxxxxxx'x life under
Xxxxxxxx-sponsored medical benefits and life insurance programs, but only to
the extent applicable to participants in Xxxxxxxx' Qualified Retiree Medical
Plans. For
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purposes of determining the amount of supplemental retirement benefits to be
made by Xxxxxxxx pursuant to the Supplemental Plan, the method of payment of
retirement benefits to Xxxxxxx pursuant to the Pension Plan shall determine the
amount and method of payment of the supplemental retirement payments pursuant
to the Supplemental Plan. These supplemental retirement payments by Xxxxxxxx
pursuant to the Supplemental Plan shall continue so long as pension benefits
are payable under the Pension Plan and shall be in addition to the pension
benefit payments under the Pension Plan.
(o) "Supplemental Plan" shall mean Xxxxxxxx' existing Supplemental
Retirement Plan, as the same may be amended from time to time.
3. TERMS AND DUTIES.
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(a) The term of this Agreement shall continue from the date hereof
and end on May 31, 2000, unless extended in accordance herewith. Xxxxxxx shall
continue in the employ of Xxxxxxxx as President of the Xxxxxxxx Automotive
Systems Division or such other substantially equivalent position designated by
the Board, consistent with the provisions of this Agreement. In addition,
Xxxxxxx 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 Xxxxxxx'x 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 May 31, 2000 initially and not less than twelve (12) months
prior to each succeeding May 31st thereafter.
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(b) At all times Xxxxxxx 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) Xxxxxxx agrees that during the period of his employment by
Xxxxxxxx, for so long as he is entitled to receive payments under this
Agreement, and for a period of two (2) years thereafter (subject to the
provisions of Section 9 below), he will not, directly or indirectly, further
the affairs of any other corporation, partnership, or any business enterprise
by employment of any kind, investment therein (except as otherwise permitted
under Section 9(d) below), counseling or otherwise, if the same is in
competition with Xxxxxxxx, without the written consent of the Board. This
provision, however, shall not be construed to prevent him from pursuing
personal investments in any business or enterprise which is not in competition
with Xxxxxxxx and which do not interfere with his employment and the
performance of his duties to Xxxxxxxx hereunder.
4. COMPENSATION AND FRINGE BENEFITS.
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(a) The Base Compensation of Xxxxxxx during the term of this
Agreement shall be $280,160, which may be increased from time to time by the
Board or, in the case of any proposed decrease, such
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other amount as mutually may be agreed upon by Xxxxxxx and Xxxxxxxx; provided,
however, that such Base Compensation may not be reduced below said rate of
$280,160 without Xxxxxxx'x consent, unless necessitated by general business
conditions adversely affecting Xxxxxxxx' operations; but, in the event of a
reduction, his Base Compensation shall be fair and reasonable, and any
disagreement concerning the same shall be resolved by arbitration in the manner
provided in Section 10 below. Xxxxxxx'x Base Compensation shall be reviewed at
least annually to determine whether in view of Xxxxxxxx' performance during the
year any increase is warranted. Responsibility for this determination rests
within the sole discretion of the Board, and this provision shall not be
construed as requiring any such increase for any given year.
(b) Xxxxxxx shall continue his participation in the existing
Deferred Compensation Plan and the existing bonus plan arrangements under the
Incentive Compensation Plans (or their equivalent) for executive officers of
Xxxxxxxx and shall be entitled to such awards under any future bonus,
incentive, or similar compensation plans of Xxxxxxxx, as shall, in the
determination of the Board, be appropriate and consistent with the purposes of
such plans and with the awards granted to other executive officers of Xxxxxxxx.
(c) Xxxxxxx 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
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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 Xxxxxxx
under the terms of this Agreement, Xxxxxxxx shall provide him with other fringe
benefits (including bonuses, vacations, health and disability insurance,
pension plan participation and others) at least equivalent to those of the
other executive officers of Xxxxxxxx and as set forth on Exhibit B attached
hereto and made a part hereof.
(e) It is understood and agreed that Xxxxxxx shall have no rights
to benefits under the Pension Plan unless he becomes vested under the Pension
Plan in accordance with its terms (currently, five (5) Years of Service), and
that Xxxxxxx shall have no rights to deferred compensation payments under the
Non-Qualified Deferred Compensation and Disability Benefit Agreement dated
December 20, 1984 between Xxxxxxx and Xxxxxxxx unless and until Xxxxxxx has
satisfied the service requirement therein (currently, 174 calendar months of
employment with Xxxxxxxx).
5. EXPENSES.
Xxxxxxx 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 Xxxxxxx, Xxxxxxx shall account to Xxxxxxxx in
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sufficient detail to entitle Xxxxxxxx to a federal income tax deduction for
such reimbursed item if such item is deductible.
6. RETIREMENT AND EARLY RETIREMENT BENEFITS.
(a) If Xxxxxxx continues his employment with Xxxxxxxx until he
attains age sixty-five (65), he shall be entitled to receive at the time of his
retirement Retirement Benefits at a level equal to sixty-five percent (65%) of
his Final Average Annual Compensation.
(b) If Xxxxxxx continues his employment with Xxxxxxxx until he
attains age fifty-five (55), he may elect to retire from Xxxxxxxx upon giving
twelve (12) months prior written notice and having attained at least age
fifty-five (55) but not yet having attained age fifty-eight (58), and he shall
be entitled to receive at the time of such early retirement, Retirement
Benefits at a level equal to fifty-five percent (55%) of his Final Average
Annual Compensation, reduced by one-fifteenth (1/15) for each Year of Service
(as defined in the Pension Plan) less than fifteen (15). If Xxxxxxx shall
elect to retire upon giving twelve (12) months prior written notice at an age
between fifty-eight (58) and sixty-five (65), the level of this Retirement
Benefits as a percentage of his Final Average Annual Compensation shall be
increased by one percent (1%) for each additional twelve (12) month period over
age fifty-eight (58), but shall not be reduced even if Years of Service are
less than fifteen (15).
(c) If Xxxxxxx voluntarily terminates his employment or if Xxxxxxx
is discharged by Xxxxxxxx (and such discharge is not a Discharge For Cause)
prior to the date that he attains fifty-five (55), Xxxxxxx will be entitled to
receive, commencing on the date
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he attains age fifty-five (55), (i) the total amount of his benefits under the
Non-Qualified Deferred Compensation and Disability Benefit Agreement dated
December 20, 1984 between Xxxxxxx and Xxxxxxxx (the "Continuation Agreement"),
or such other deferred compensation agreement(s) then existing between Xxxxxxxx
and Xxxxxxx to the extent benefits are then payable under such agreements, (ii)
the benefits paid under Section 4.1 of the Supplemental Plan, and (iii) the
difference between the Retirement Benefits provided under this Agreement less
the benefits payable under Section 4.1 of the Supplemental Plan multiplied by a
fraction (A) the numerator of which is the sum of his Years of Service (as
defined in the Pension Plan) accrued after November 9, 1987 and (B) the
denominator of which is the number of years from November 9, 1987 until the
date that Xxxxxxx would attain age fifty-five (55). The benefits described in
the preceding sentence shall be payable in the manner set forth in the
Continuation Agreement (or any other applicable deferred compensation
agreement) and in the Supplemental Plan. Except for the benefits provided for
in this section and Sections 8(d) and (e) of the Agreement, Xxxxxxx shall not
be entitled to any other benefits under this Agreement upon his voluntary
termination of employment prior to his attainment of age fifty-five (55) (other
than upon his disability or death). The preceding sentence shall not affect
Xxxxxxx'x benefit under his then existing deferred compensation agreement.
(d) If Xxxxxxx'x employment is terminated under the circumstances
described in Section 8(e)(i) below, prior to the date that he attains age
fifty-five (55), he will be entitled to
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receive, commencing on the date that he attains age fifty-five (55), Retirement
Benefits at a level equal to fifty-five percent (55%) of his Final Average
Annual Compensation.
(e) To the extent Xxxxxxx receives any similar benefits under the
Pension Plan, Supplemental Plan or other Xxxxxxxx benefit plan for any of its
employees, such benefits shall be included in calculating the amount to which
Xxxxxxx shall be entitled under Sections 6(a) -- (d), above; provided, however,
that in no event shall the benefits described in Sections 6(a) -- (d) above be
reduced by the provisions of this Section 6(e).
7. DISABILITY AND DEATH BENEFITS.
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(a) If prior to his attaining age fifty-five (55) Xxxxxxx becomes
so ill or disabled as to be permanently incapacitated from performing the
duties of his employment with Xxxxxxxx (this disability to be certified by two
(2) physicians competent to do so in the opinion of the Board), Xxxxxxxx shall
provide Xxxxxxx with Disability Benefits until either the disability
terminates, if earlier, or until Xxxxxxx reaches age fifty-five (55) at which
time he shall be entitled to receive the Retirement Benefits set forth in
Section 6(b) above. Such Retirement Benefits, however, shall be calculated on
the basis of Xxxxxxx'x Final Average Annual Compensation at the time of his
disability, not the time of his retirement. If Xxxxxxx becomes disabled
subsequent to his attaining age fifty-five (55), but prior to his retirement,
Xxxxxxx shall be deemed to have elected retirement under this Agreement. See
also Section 8(c) of this Agreement.
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(b) In the event of Xxxxxxx'x death while still employed by
Xxxxxxxx pursuant to this Agreement, Xxxxxxxx shall pay to such beneficiary or
beneficiaries as he shall have designated by written notice delivered to
Xxxxxxxx prior to his death, or failing such written notice, to his estate, an
amount equal to the Base Compensation plus the Bonuses, if any, which Xxxxxxx
would have received or which would have been accrued for his benefit during the
period of six (6) months immediately following his death if he had lived and
had been employed by Xxxxxxxx during that period. Such payment shall be made
in one lump sum or in six (6) equal monthly installments as Xxxxxxxx shall
elect and shall be in addition to the proceeds of any insurance policies
carried on Xxxxxxx'x life with respect to which he has the right to designate
beneficiaries. Also, Xxxxxxxx shall pay to Xxxxxxx'x spouse an amount,
periodically as such payments are required to be made by said spouse, to enable
her to continue medical coverage for her and her dependents in the same manner
as immediately prior to Xxxxxxx'x death for a period expiring at the earlier
of: (i) her death; (ii) forty-two (42) months after Xxxxxxx'x death; or (iii)
eligibility for regular Medicare and Medicaid or any successor programs
furnished by the government. Thereafter, Xxxxxxxx shall make available to
Xxxxxxx'x spouse (including her dependents), at her cost, such medical coverage
as shall be available to a person of her then age under the then-existing
Xxxxxxxx-sponsored medical benefits program, but only to the extent coverage is
available under such program.
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8. TERMINATION; DISCHARGE.
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(a) TERMINATION OR DISCHARGE WITHOUT CAUSE. Xxxxxxxx reserves the
right to discharge Xxxxxxx 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 Xxxxxxx (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, Xxxxxxx
shall be entitled to receive for a period expiring one (1) year from May 31,
2000 (or any renewal thereof) payments from Xxxxxxxx in an amount equal to his
Annual Compensation Value, which shall be reduced by seventy percent (70%) of
the amount of compensation received by Xxxxxxx from any subsequent employment
obtained by him during said payment period.
(ii) If such discharge occurs prior to May 31, 2000,
Xxxxxxx 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, which shall be reduced by seventy percent (70%) of the
amount of compensation received by Xxxxxxx from any subsequent employment
obtained by him during said payment period.
(iii) Xxxxxxx shall be entitled, during the period expiring
on the earlier of Xxxxxxx'x 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
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of Xxxxxxxx, may be provided outside of such program through the purchase of
insurance or otherwise.
(iv) For purposes of determining Xxxxxxx'x benefits under
the Supplemental Plan, Xxxxxxx 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 8(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 8(a), Xxxxxxx'x
Base Compensation shall be deemed to be increased by the annual economic range
adjustment for Xxxxxxxx' salaried employees announced in October of each year
(or, if there is no such announced economic range adjustment in a given year,
by an assumed five (5%) increase for that year) in order to calculate his
highest earnings during five (5) consecutive years out of the last ten (10)
years prior to retirement under the Supplemental Plan, and his Final Annual
Compensation (see Section 8(d) below) and Final Average Annual Compensation
shall be deemed to increase in the same manner for purposes of determining the
amount of his Retirement Benefits under this Agreement.
(v) Xxxxxxx shall be reimbursed for up to $20,000 for
out-placement fees if he chooses to seek other employment following his
discharge by Xxxxxxxx. Xxxxxxx shall not be obligated to seek other employment
in order to mitigate his damages resulting from his discharge.
(vi) In addition to all of the foregoing, Xxxxxxx shall be
entitled to receive the payments required of Xxxxxxxx under his
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then-existing deferred compensation agreement(s) with Xxxxxxxx in accordance
with the terms of such agreement(s).
Xxxxxxx acknowledges that he shall remain subject to and
bound by the restrictive provisions of Section 9 below.
(b) DISCHARGE FOR CAUSE. If Xxxxxxx'x employment with Xxxxxxxx is
terminated by a Discharge For Cause, regardless of whether such Discharge For
Cause occurs after the occurrence of any of the events set forth in Sections
8(d) or 8(e) below, he shall be entitled to receive only his Base Compensation
up to the date of his discharge and no further payments hereunder shall be
required from Xxxxxxxx; provided, however, that Xxxxxxx shall be entitled to
receive his benefits, if any, under the Pension Plan and the payments required
of Xxxxxxxx under his then-existing deferred compensation agreement(s) with
Xxxxxxxx in accordance with the terms of such agreement(s). Xxxxxxx shall
remain subject to the restrictive provisions of Section 9 below for a period
for two (2) years from the date of discharge. Should Xxxxxxx disagree that his
discharge was a Discharge For Cause the question shall be submitted to
arbitration in accordance with Section 10 below.
(c) TERMINATION DUE TO DISABILITY. If, by reason of illness,
disability, or other incapacity (certified in accordance with Section 7(a)
above), Xxxxxxx is unable to perform the duties required of him under this
Agreement for a period of six (6) consecutive months, Xxxxxxxx, following the
giving of thirty (30) days' written notice to Xxxxxxx and the failure of
Xxxxxxx by reason of illness, disability, or other incapacity to resume his
duties within such thirty (30) days and thereafter perform the same
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for a period of two (2) consecutive months, may terminate Xxxxxxx'x employment
by giving Xxxxxxx 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: (1) Xxxxxxxx' obligation to pay the Disability Benefits under
Section 7 above; (ii) payment of the Retirement Benefits under Section 6 above;
(iii) payments required of Xxxxxxxx under Xxxxxxx'x then-existing deferred
compensation agreement(s) in accordance with the terms of such agreement(s);
and (iv) benefits, if any, under medical and hospital care insurance coverage
for Xxxxxxx comparable to that provided for other employees of Xxxxxxxx;
provided, however, such insurance benefits shall be coordinated with the
benefits Xxxxxxx is entitled to receive under regular Medicare and Medicaid or
any successor programs furnished by the government. If Xxxxxxx is at least age
fifty-five (55) at the time Xxxxxxxx gives notice under this Section 8(c), he
shall be deemed to have elected retirement under this Agreement.
(d) BENEFITS UPON TERMINATION UNDER CERTAIN CIRCUMSTANCES. If
Xxxxxxx voluntarily terminates his employment or Xxxxxxx 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) Xxxxxxx 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
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President of a division or corporation similar in size and scope to the
Xxxxxxxx Computer Systems Division; or
(ii) The nature of the duties or services which Xxxxxxxx,
prior to a Change in Control, requires him to perform necessitates absence
overnight from his place of residence on the effective date hereof, because of
travel involving the business or affairs of Xxxxxxxx, for more than ninety (90)
days during any period of twelve (12) consecutive months; Xxxxxxx shall be
entitled to receive from Xxxxxxxx all of the severance benefits set forth in
Section 8(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 and Xxxxxxx'x right to receive his Retirement
Benefits upon attaining age fifty-five (55) shall be based upon his Final
Annual Compensation, as the same may be adjusted pursuant to Section 8(a)(iv)
above. Xxxxxxx shall remain subject to and bound by the restrictive provisions
of Section 9 below.
(e) BENEFITS UPON A CHANGE IN CONTROL. Xxxxxxxx recognizes that
the threat of a Change in Control would be of significant concern to Xxxxxxx.
The following provisions provide termination protection for Xxxxxxx in the
event of a Change in Control. These provisions, among other purposes, are
intended to xxxxxx and encourage Xxxxxxx'x continued attention and dedication
to his duties in the event of such potentially disturbing and disruptive
circumstances. Xxxxxxxx, therefore, agrees to do the following:
(i) If Xxxxxxxx terminates Xxxxxxx'x employment for any reason
other than a Discharge for Cause, or if Xxxxxxx terminates
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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, Xxxxxxx shall be entitled to receive from Xxxxxxxx the following
benefits:
(A) A lump sum severance payment (the "Severance
Payment"), in cash, equal to three (3) times the sum of (i) the higher of
Xxxxxxx'x annual Base Compensation in effect immediately prior to the
occurrence of the event or circumstance upon which such termination of
employment is based or in effect immediately prior to the Change in Control,
and (ii) the average of Xxxxxxx'x Bonuses during the three (3) calendar years
immediately preceding the year in which the date of termination occurs.
(B) Xxxxxxx shall be entitled, during the period expiring
on the earlier of Xxxxxxx'x securing other employment or twenty-four (24)
months from the date of such termination of employment (or such longer period
as required by law), to continued coverage under the Xxxxxxxx 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 Xxxxxxx'x benefits under
the Supplemental Plan, Xxxxxxx 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, Xxxxxxx'x Base Compensation
shall be deemed to be increased by the annual economic range adjustment for
Xxxxxxxx'
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salaried employees announced in October of each year (or, if there is no such
announced economic range adjustment in a given year, by an assumed five percent
(5%) increase for that year) in order to calculate his highest earnings during
five (5) consecutive years out of the last ten (10) years prior to retirement
under the Supplemental Plan.
(D) Xxxxxxx shall be reimbursed for up to $20,000 for
outplacement fees if he chooses to seek other employment following his
discharge by Xxxxxxxx. Xxxxxxx shall not be obligated to seek other employment
in order to mitigate his damages resulting from his discharge.
(E) In addition to all of the foregoing, Xxxxxxx shall be
entitled to receive the payments required of Xxxxxxxx under his then-existing
deferred compensation agreement(s) with Xxxxxxxx in accordance with the terms
of such agreement(s), and the retirement benefit provided for in Section 6(d)
of this Agreement.
The benefits provided in this Section 8(e) shall be in lieu of
any benefits provided under Section 8(d) of this Agreement.
(ii) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by Xxxxxxx in connection with a Change in Control or the termination of
Xxxxxxx'x employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Xxxxxxxx, any person whose actions
result in a Change in Control or any person affiliated with Xxxxxxxx or such
person) (all such payments and benefits, including the Severance Payment, being
hereinafter called "Total Payments") would be subject (in whole or
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part), to an excise tax pursuant to Sections 280G and 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") (such tax hereinafter referred to
as the "Excise Tax"), then the Severance Payment shall be reduced to the extent
necessary so that no portion of the Total Payments is subject to Excise Tax
(after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or
agreement) if (A) the net amount of such Total Payments, as so reduced, (and
after deduction of the net amount of federal, state and local income tax on
such Total Payments), is greater than (B) the excess of (i) the net amount of
such Total Payments, without reduction (but after deduction of the net amount
of federal, state and local income tax on such Total Payments), over (ii) the
amount of Excise Tax to which Xxxxxxx 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 Xxxxxxx 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
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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 Xxxxxxx'x
termination of employment, Xxxxxxxx shall provide Xxxxxxx with its calculation
of the amounts referred to in this Section and such supporting materials as are
reasonably necessary for Xxxxxxx to evaluate Xxxxxxxx' calculations. If
Xxxxxxx 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 Xxxxxxx such portion of the Severance Payment
(up to one hundred percent (100%) thereof) as Xxxxxxx determines is necessary
to result in Xxxxxxx'x receiving the greater of clauses (A) and (B) of this
Section.
(iii) Upon the occurrence of an Escrow Funding Event,
Xxxxxxxx shall pay into an escrow account at the Escrow Agent an amount equal
to three (3) times the sum of (i) Xxxxxxx'x Base Compensation in effect
immediately prior to the Escrow Funding Event and (ii) the average of Xxxxxxx'x
Bonuses during the three (3) calendar years immediately preceding the year in
which the Escrow Funding Event occurs. Subsequent to the delivery to the
Escrow Agent of the Escrow Amount, Xxxxxxxx shall, in the event that either
Xxxxxxx'x Base Compensation is increased (or decreased) or he receives a Bonus
that affects the amount described in Section 8(e)(i)(A), unless the Escrow
Amount shall theretofore have been
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released pursuant to this subsection, recalculate the Escrow Amount as of the
date such change in Base Compensation or receipt of Bonus occurs, treating the
Escrow Funding Event as having occurred on such date. If the amount so
calculated exceeds the fair market value of the Escrow Amount, Xxxxxxxx shall
promptly (and in no event later than seven (7) days from such date) pay to the
Escrow Agent an amount in cash (or marketable securities or any combination
thereof) equal to such excess. If the Escrow Amount so calculated is less than
the fair market value of the Escrow Amount then held in the escrow account, the
Escrow Agent, upon receipt of a written request from Xxxxxxxx, shall distribute
to Xxxxxxxx such difference in cash; provided, however, that this sentence
shall not apply after the occurrence of a Change in Control.
(iv) Unless the parties otherwise agree, Xxxxxxxx may
withdraw the Escrow Amount when and only when two (2) years have expired from
the date of deposit and no proper demand pursuant to Section 8(e)(vi) below has
been made during the time, or when the conditions requiring the deposit have
ceased to exist for a period of ninety (90) days without a demand right having
been created, or when Xxxxxxx'x right to a payment under this Section 8(e) has
been forfeited, whichever occurs first. If, before the expiration of such
period or forfeiture, there shall occur another Escrow Funding Event, Xxxxxxxx
will not be required to make an additional deposit, but the two (2) year period
shall then be measured from the date of the last such event. Notwithstanding a
deposit with the Escrow Agent pursuant to subsection (iii) of this Section
8(e), Xxxxxxx shall continue to be entitled to receive all of the benefits from
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Xxxxxxxx under this Agreement until a termination of employment shall occur.
(v) Xxxxxxxx shall pay the charges of the Escrow Agent
for its services under the Escrow Agreement, and Xxxxxxxx will be entitled to
any interest or other income arising from the date of the deposit of the Escrow
Amount until all payments have been made under the Escrow Agreement to Xxxxxxx.
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 Xxxxxxx'x employment for any
reason but a Discharge for Cause, or if Xxxxxxx 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 Xxxxxxx shall no longer be subject to the
restrictive provisions of Section 9 below, except for Section 9(e). Xxxxxxx
shall notify the Escrow Agent prior to the tenth (10th) day following his
termination of employment as to whether he has accepted the determination of
Xxxxxxxx of the amount of the Severance Payments pursuant to Section 8(e)
(iii). If he has accepted such determination, Xxxxxxxx shall provide the
Escrow Agent with Xxxxxxxx' written determination as set forth in Section 8(e)
(iii) and the Escrow Agent shall pay to Xxxxxxx all or a portion of the Escrow
Amount as provided in such determination, and any remaining amount shall be
paid to Xxxxxxxx. If Xxxxxxx does
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not accept Xxxxxxxx' determination, Xxxxxxx shall provide to the Escrow Agent
his determination of the Severance Payment, and the Escrow Agent shall pay to
Xxxxxxx all or a portion of the Escrow Amount as provided in Xxxxxxx'x
determination and any remaining amount shall be paid to Xxxxxxxx.
(vii) In the event that, following the creation of a demand
right pursuant to Section 8(e)(vi) above, Xxxxxxx incurs any costs or expenses,
including attorneys' fees, in the enforcement of rights under this Section 8(e)
or under any plan for the benefit of employees of Xxxxxxxx, including without
limitation the stock option plan, pension plans, payroll-based stock ownership
plan, tax deferred savings and protection plan, bonus arrangements,
supplemental pension plan, deferred compensation agreements, incentive
compensation plans, and life insurance and compensation program, then, unless
Xxxxxxxx or the consolidated, surviving or transferee entity in the event of a
consolidation, merger or sale of assets, is wholly successful in defending
against the enforcement of such rights, Xxxxxxxx, or such consolidated,
surviving or transferee entity, shall promptly pay to Xxxxxxx all such costs
and expenses.
9. NON-COMPETITION; CONFIDENTIALITY.
---------------------------------
(a) In order to protect Xxxxxxxx, it is understood that a covenant
not to compete is a necessary and appropriate adjunct to the other provisions
of this Agreement. Therefore, should Xxxxxxx 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
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specified in Sections 8(d) and 8(e) above, or should he be Discharged For Cause
by Xxxxxxxx, Xxxxxxx shall remain subject to the restrictive provisions
hereinafter set forth. In addition, these restrictive provisions shall remain
in full force and effect at any other time during which payments are required
to be made by Xxxxxxxx pursuant to the retirement (Section 6), severance
(Section 8, except for Section 8(e)(vi)) or disability (Section 7) provisions
of this Agreement. These restrictive provisions are as follows:
(b) For a period of two (2) years from and after Xxxxxxx'x
employment with Xxxxxxxx shall have terminated and after he shall have ceased
receiving retirement, severance or disability benefits under this Agreement,
whichever shall last occur, he shall not, directly or indirectly, compete with
Xxxxxxxx or any of its related or affiliated companies. For purposes of this
Agreement, competition with Xxxxxxxx or any of its related or affiliated
companies shall include the manufacture, distribution, and sale of business
forms and computer hardware and software and the furnishing of EDP services
which are similar in nature or function to the products and/or services then
being furnished by Xxxxxxxx for sale in the same vertical markets in which
Xxxxxxxx' products and/or services are then being marketed at the time of
Xxxxxxx'x termination of employment or upon the cessation of any retirement,
severance or disability benefits under this Agreement.
(c) From and after the execution of this Agreement and for a
period of two (2) years after termination of his employment with Xxxxxxxx and
after he shall have ceased receiving retirement,
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29
severance or disability benefits under this Agreement, whichever shall last
occur, Xxxxxxx shall not, directly or indirectly, by direct participation, by
purchase of stocks or bonds or other evidences of indebtedness, by loaning of
money, by guarantee of loans of others, by gift to establish or assist others,
or in any other manner or fashion, engage in any such restricted activity in
competition with Xxxxxxxx or any of its related or affiliated companies, nor
shall he assist any present employees of Xxxxxxxx or any other person similarly
to engage in such competing business for the full two-year prohibition period
set forth in this Agreement.
(d) The restrictive provisions of this Section 9, however, are in
no way intended to prohibit Xxxxxxx from acquiring in open market transactions
investments in equity stock or evidences of indebtedness of a corporation if
the said stock or if the said evidence of indebtedness is traded on a national
or regional securities exchange or in the over-the-counter market and the
investment therein represents no more than five percent (5%) of the outstanding
securities of the issue being acquired. Moreover, it is not the intention of
this Section 9 to limit in any way Xxxxxxx'x ability to invest in businesses
not competitive with Xxxxxxxx.
(e) Xxxxxxx shall keep secret and inviolate all knowledge or
information of a confidential nature (which is not then nor later, through no
breach of this Agreement, in the public domain), including all unpublished
matters related to, without limitation thereof, the business, properties,
accounts, books and records, research and development information, processes,
procedures,
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30
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 Xxxxxxx, 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 Xxxxxxx hereby assigns to Xxxxxxxx
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Xxxxxxx 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 Xxxxxxx,
it being agreed that the contacts of Xxxxxxx 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
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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.
10. RESOLUTIONS OF DISPUTES; ARBITRATION.
-------------------------------------
(a) Except for the breach or threatened breach by Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx 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 Xxxxxxx,
and the third of whom shall be selected by the two arbitrators so appointed.
The decision of these arbitrators on the question shall be final and conclusive
upon Xxxxxxxx and upon Xxxxxxx and his wife or widow, personal representatives,
designated beneficiaries and heirs, and shall be enforceable in any court
having competent jurisdiction thereof. A
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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 Xxxxxxx or
Xxxxxxxx to the other to settle matters by arbitration. As stated above, the
decision of the arbitrators shall be final and conclusive.
11. NONASSIGNABLE RIGHTS.
---------------------
Xxxxxxx, 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 Xxxxxxx or his wife or his widow
after his death or his personal representatives, designated beneficiaries and
heirs. Should Xxxxxxx 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'
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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 Xxxxxxx 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
Xxxxxxx or his wife or his widow or his personal representatives, designated
beneficiaries and heirs, as the case may be, as Xxxxxxxx may xxxx expedient.
12. UNFUNDED AGREEMENT.
-------------------
(a) Xxxxxxxx' obligation under this Agreement shall be unfunded,
but Xxxxxxxx reserves the right to provide for its liability under this
Agreement in any manner it deems advisable, including the purchasing of such
assets (including an insurance policy or policies on Xxxxxxx'x life) as it may
deem necessary or proper; provided, however, that Xxxxxxx'x 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 Xxxxxxx'x life, Xxxxxxx agrees to submit to such
examination and to supply information as may be required by the insurer.
(c) Any policy so purchased by Xxxxxxxx shall be issued so that
Xxxxxxxx is the sole, full, and complete owner of the policy or policies, with
the right and power to exercise any and all
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privileges and options thereof or available under the rules of the issuing
insurer without the consent of any other persons.
(d) Xxxxxxx, his wife, or his widow after his death, or his designated
beneficiaries, personal representatives, heirs, successors and assigns shall
have no claim or rights with respect to, and shall have no property or
equitable interests whatsoever in, any specific funds or assets of Xxxxxxxx and
shall have only the status of a general creditor with respect to
Xxxxxxxx hereunder.
13. FACILITY OF PAYMENT.
--------------------
In the event of a physical or mental illness or disability of Xxxxxxx
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
Xxxxxxx 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
Xxxxxxx'x death after he has made demand pursuant to Section 8(e)(v) above, the
Escrow Agent shall pay such amounts as thereafter are due to such beneficiary
or beneficiaries as Xxxxxxx shall have designated in writing, or failing such
writing, to his estate. No liability shall accrue to Xxxxxxxx or Escrow Agent
for any alleged payment to an improper person or representative if so made
after such reasonable investigation and Xxxxxxxx and Escrow Agent shall have no
responsibility to see to the proper application of such payments.
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14. MISCELLANEOUS PROVISIONS.
-------------------------
(a) All notices required or permitted to be given under this
Agreement shall be in writing and shall be mailed, postage prepaid, by
registered or certified mail or personally delivered, if to Xxxxxxxx, addressed
to:
The Xxxxxxxx and Xxxxxxxx Company
Attention: Vice President, Corporate Finance and
Chief Financial Officer
000 Xxxxx Xxxxxx Xx.
Xxxxxx, Xxxx 00000
and, if to Xxxxxxx, addressed to:
Xxxxxx X. Xxxxxxx
000 Xxxxxxx Xxx
Xxxxxxxxx, 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 Xxxxxxx, his
wife, and upon his or her heirs, executors, administrators, designated
beneficiaries and upon anyone claiming under him or his wife or widow, and upon
Xxxxxxxx and its successor or assigns.
(ii) Xxxxxxxx shall not merge or consolidate with any
other entity unless and until such other entity shall expressly assume
Xxxxxxxx' obligations under this Agreement or Xxxxxxxx has provided an
appropriate alternative arrangement covering its contingent liabilities under
this Agreement, and Xxxxxxxx shall not voluntarily dissolve without first
providing an appropriate arrangement covering its contingent liabilities under
this Agreement.
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(c) This Agreement may be amended, but only with the consent of
Xxxxxxx during his lifetime and, after his death only with the consent of his
widow during her lifetime or his other designated beneficiaries during their
lifetime, as the case may be. Any agreement of amendment shall be executed
with the same formality as this Agreement.
(d) This Agreement supersedes any prior agreements or
understandings covering the subject matter hereof, either written or oral,
between the parties.
(e) This Agreement shall be construed under the laws of the State
of Ohio.
(f) The paragraph headings used in this Agreement are for
convenience of reference only and shall not be considered in construing this
Agreement.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands the year and date first above written.
THE XXXXXXXX AND XXXXXXXX
COMPANY
By___________________________________
_____________________________________
XXXXXX X. XXXXXXX
648000\440JAM2.AGR
5-3-95-5
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EXHIBIT A
ESCROW AGREEMENT DATED MAY 8, 1989 BETWEEN THE XXXXXXXX AND
XXXXXXXX COMPANY AND BANK ONE DAYTON, N.A., AS AMENDED AS OF
MAY 31, 1995
38
ESCROW AGREEMENT
----------------
This Escrow Agreement made and entered into as of this 8th day of May,
1989, 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
Xxxxxx X. Xxxxxxx ("Employee") under conditions set forth in an Employment
Agreement with Employee dated May 8, 1989 (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.
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
39
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 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 tota I
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.
40
(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 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
(c) of Section 2 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
41
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 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, postage 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
00
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 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.
43
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
44
AMENDMENT NO. 1
TO
ESCROW AGREEMENT
----------------
THIS AMENDMENT NO. 1 TO ESCROW AGREEMENT ("Amendment") is made and
entered into as of this 31st day of May, 1995 by and between THE XXXXXXXX AND
XXXXXXXX COMPANY, an Ohio corporation (hereinafter referred to as "Xxxxxxxx"),
and BANK ONE, DAYTON, NA (hereinafter referred to as the "Escrow Agent").
WITNESSETH:
-----------
WHEREAS, Xxxxxxxx and the Bank have entered into an Escrow Agreement
dated May 8, 1989 pursuant to an Employment Agreement dated as of May 8, 1989,
as amended effective December 1, 1989 and extended May 31, 1994 (as so amended
and extended (the "May 8, 1989 Agreement") between Xxxxxxxx and Xxxxxx X.
Xxxxxxx ("Xxxxxxx"), an employee of Xxxxxxxx; and
WHEREAS, Xxxxxxx and Xxxxxxxx have entered into a new Amended and
Restated Employment Agreement effective May 31, 1995 (the "Employment
Agreement"), pursuant to which Xxxxxxxx has agreed to continue to provide
termination pay protection for Xxxxxxx and which provides that the required
protective payments under the Employment Agreement are to continue to be paid
into an escrow account at the Escrow Agent; and
WHEREAS, the parties hereto desire that the Escrow Agreement shall
continue in full force and effect and for the benefit of Xxxxxxx and with full
applicability to the Employment Agreement;
NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Amendment, the parties hereby agree as follows:
1. All references to the May 8, 1989 Agreement between Xxxxxxxx
and Xxxxxxx contained in the Escrow Agreement shall include and apply with full
force and effect to the Employment Agreement.
2. Except as set forth herein, the Escrow Agreement shall remain
unchanged and continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands as of the day and year first above written.
THE XXXXXXXX AND XXXXXXXX COMPANY
By_________________________________
BANK ONE, DAYTON, NA
By_________________________________
45
EXHIBIT B
SCHEDULE OF FRINGE BENEFITS
PURSUANT TO SECTION 4(d)
------------------------
BENEFIT AMOUNT
------- ------
Annual Physical Exam Local Clinic, maximum of $600
Auto/Gas Allowance $916 monthly
Charitable Allowance $1,000 annually to charities of his choice
Income Tax Planning and $1,000 annually
Preparation
Estate Planning and
Will Preparation
Initial Service $900
Updates $300 annually
Country Club Dues 50% annually, including initiation fee up to $3,500
Luncheon Club Dues 100% annually
Corporate aircraft (personal use) Yes; in connection with company business use Xxxxxxx may include personal passengers,
subject to seat availability. Xxxxxxx shall receive W-2 for personal use value per IRS
regulations
Vacation Five (5) weeks annually at mutually agreed times.
