EXHIBIT (10)(f)
EMPLOYMENT AGREEMENT
AGREEMENT made and entered into the 15th day of December, 2000, and
amended and restated as of the 1st day of December, 2001, by and between THE
XXXXXXXX AND XXXXXXXX COMPANY, a corporation existing under the laws of the
State of Ohio (hereinafter referred to as the "Employer"), and Xxxxxxx X.
Xxxxxxx (hereinafter referred to as "Employee")
WITNESSETH:
WHEREAS, Employee is currently an employee of the Employer; and
WHEREAS, the Employer considers Employee a key member of the management
team of the Employer and recognizes that a major change in the control of the
Employer would be of significant concern to Employee; and
WHEREAS, the parties hereto desire to set forth their mutual agreement
regarding the terms of Employee's employment under certain specified
circumstances in order to xxxxxx and encourage continued attention and
dedication to Employee's assigned duties in the event of such circumstances;
NOW, THEREFORE, in consideration of the foregoing premises, Employee's
continued employment for any period after execution of this Agreement, and the
mutual promises set forth herein, the parties hereby agree as follows:
1. DEFINITIONS
For purposes of this Agreement:
(a) "Base Compensation" shall mean the then-current annual base salary
(exclusive of Bonuses) of Employee, as the same may be fixed from time to time
by the Board of Directors or its Compensation Committee or, if applicable, by
the appropriate executive officer of Employer.
(b) "Bonuses" shall mean bonus payments earned by Employee under
Employer's Incentive Compensation Plans and under any future bonus or incentive
compensation plans of Employer for its executive officers in which Employee
participates.
(c) "Change in Control" shall mean the occurrence of any of the
following events:
(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), who is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Xxxxxxxx representing twenty percent (20%) or more of the combined
voting power of Xxxxxxxx' then outstanding securities;
(ii) during any period of two consecutive years (not including any
period prior to the execution of this Plan), individuals who at the beginning of
such period constitute the Board, and 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) who
election by Xxxxxxxx' shareholders was approved by a vote of at least two-thirds
(2/3) of the directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any reason to
constitute at least a majority thereof;
(iii) the consummation of a merger or consolidation of Xxxxxxxx or any
direct or indirect subsidiary of Xxxxxxxx with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of
Xxxxxxxx outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) more than
50% of the combined voting power of the voting securities of Xxxxxxxx or such
surviving entity or parent thereof 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) is or becomes the beneficial owner, directly or indirectly,
of securities of Xxxxxxxx (not including in the securities beneficially owned by
such person any securities acquired directly from Xxxxxxxx or its affiliates
other than in connection with the securities acquired directly from Xxxxxxxx or
its affiliates other than in connection with the acquisition by Xxxxxxxx or its
affiliates of a business) representing twenty percent (20%) or more of the
combined voting power of Xxxxxxxx' then outstanding securities; or
(iv) the shareholders of Xxxxxxxx approve a plan of liquidation,
dissolution or winding up of Xxxxxxxx or an agreement for the sale or
disposition by Xxxxxxxx of all or substantially all of Xxxxxxxx' assets.
(d) "Disability" shall mean the inability of Employee, because of any
mental or physical illness or incapacity, to perform substantially the duties of
his employment with the Employer as determined under the Employer's long-term
disability program.
(e) "Discharge For Cause" shall be construed to have occurred whenever
occasioned by reason of felonious acts on the part of Employee, actions by
Employee involving serious moral turpitude or his misconduct in such manner as
to bring substantial and material discredit upon Employer, following the giving
of thirty (30) days' written notice to Employee specifying the respect in which
Employer claims Employee has violated this provision and the failure, inability
or unwillingness of Employee to remedy the situation to the satisfaction of
Employer 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 Employee and by other comparably situated executive officers prior to
the alleged improper activity of Employee for which the Discharge For Cause has
been made.
2
(f) "Escrow Agreement" shall mean the agreement entered into
simultaneously herewith between Employer and Bank One, N.A., a copy of which is
attached hereto and made a part hereof as Exhibit A.
(g) "Escrow Agent" shall mean Bank One, N.A.
(h) "Escrow Amount" shall mean the amounts placed in escrow by Employer
pursuant to subsection (a) of Section 2 of this Agreement.
(i) "Escrow Funding Event" shall mean the occurrence of any of the
following events:
(i) Class A Common Shares of Employer have been acquired other than
directly from Employer in exchange for cash or property by any person (other
than Xxxxxxx X. Xxxxx, Xx., his children or his grandchildren, Employer, any
trustee or other fiduciary holding securities under an employee benefit plan of
Employer, or any company owned directly or indirectly by the shareholders of
Employer in substantially the same proportions as their ownership of the stock
of Employer) who either thereby becomes the owner of more than nine and one-half
percent (9.5%) of Employer's outstanding Class A Common Shares, or having
directly or indirectly become the owner of more than five percent (5%) of
Employer's Class A Common Shares either alone or in conjunction with another
person has expressed an intent to continue acquiring Employer's 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, Employer any trustee or other fiduciary holding securities under
an employee benefit plan of Employer, or any company owned directly or
indirectly by the shareholders of Employer in substantially the same proportions
as their ownership of the stock of Employer) has made a tender offer for, or a
request for invitations for tenders of, Class A Common Shares of Employer;
(iii) Any person forwards or causes to be forwarded to shareholders
of Employer proxy statement(s) in any period of twenty-four (24) consecutive
months, soliciting proxies, to elect to the Board of Directors of Employer two
(2) or more candidates who were not nominated as candidates in proxy statements
forwarded to shareholders during such period by the Board of Directors of
Employer; or
(iv) The Board of Directors of the Employer adopts a resolution to
the effect that, for purposes of this Agreement, an Escrow Funding Event has
occurred.
2. PAYMENTS INTO ESCROW.
(a) Upon the occurrence of an Escrow Funding Event within five (5)
years after the date of this Agreement, Employer shall pay into an escrow
account at the Escrow Agent an amount equal to two and ninety-nine one
hundredths (2.99) times the sum of the (i) higher of Employee's annual Base
Compensation in effect immediately prior to the occurrence of the event or
circumstance upon which such termination of employment is based or in effect
immediately prior to the Change in Control, and (ii) the average of Employee's
Bonuses during
3
the three (3) calendar years immediately preceding the year in which the date of
termination occurs. Subsequent to the delivery to the Escrow Agent of the Escrow
Amount, Employer shall, in the event that either Employee's Base Compensation is
increased (or decreased) or he receives a Bonus that affects the amount
described in this subsection, unless the Escrow Amount shall theretofore have
been released pursuant to subsection (b) of this Section, 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,
Employer 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 Employer,
shall distribute to Employer such difference in cash; provided, however, that
this sentence shall not apply after the occurrence of a Change in Control. The
Escrow Amount shall be governed by the terms and conditions of this Agreement
and the Escrow Agreement.
(b) Unless the parties otherwise agree, the Employer 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 subsection (b) (i) of Section 3 of this
Agreement has been made during that 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 Employee's right to a payment under this
Agreement has been forfeited, whichever occurs first. If, before the expiration
of such periods or forfeiture, there shall occur another Escrow Funding Event,
the Employer 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 (a) of
this Section, Employee shall continue to be entitled to receive all of the
normal and usual benefits from Employer until a termination of employment shall
occur.
(c) The Employer shall pay the charges of the Escrow Agent for its
services under the Escrow Agreement, and the Employer 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 Employee.
All interest or other income arising from the Escrow Amount deposited with the
Escrow Agent shall be paid monthly to Employer.
(d) In the event that, following the creation of a demand right
pursuant to Section 3 of this Agreement, Employee incurs any costs or expenses,
including attorneys' fees, in the enforcement of rights under this Agreement or
under any plan for the benefit of employees of the Employer, 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 the Employer 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, the Employer, or such consolidated, surviving or
transferee entity, shall promptly pay to Employee all such costs and expenses.
4
3. EMPLOYMENT TERMS AND SEVERANCE BENEFITS AFTER CHANGE IN CONTROL
(a) After a Change in Control has occurred: (i) The Employer shall not
reduce Employee's Base Compensation below the amount of such Base Compensation
in effect immediately preceding the Change in Control without Employee's written
consent; (ii) The Employer shall continue to provide Employee with fringe
benefits (including bonuses, vacation, health and disability insurance, etc.) at
least equivalent to those of other similarly situated executive officers of the
Employer; (iii) Employee shall not be required by the Employer to perform duties
or services which differ significantly from those performed by him prior to the
Change in Control, or which are not ordinarily and generally performed by a
similarly situated executive of a corporation; (iv) The nature of the duties or
services which the Employer requires him to perform shall not necessitate
absence overnight from his place of residence on the effective date hereof,
because of travel involving the business affairs of the Employer for more than
ninety (90) days during any period of twelve (12) consecutive months.
(b) (i) If the Employer terminates Employee's employment or if Employee
terminates his employment with Employer for any of the reasons specified in
subsection (a) of this Section within the twenty-four (24) month period
following the date of a Change in Control, the Escrow Agent upon written demand
from Employee shall pay promptly to the Employee the Escrow Amount in one (1)
lump sum in cash.
(ii) Employee shall also be entitled to the following benefits
commencing as of the date of the payment of the Escrow Amount to Employee:
A. During the period expiring on the earlier of Employee securing
other employment or twenty-four (24) months from date of payment of the Escrow
Amount (or such longer period as required by law) to continued coverage under
the Employer's sponsored medical benefits program in existence on such date of
payment, or, if such continued coverage is barred, Employer shall provide
equivalent medical benefit coverage through the purchase of insurance or
otherwise.
B. For purposes of determining Employee's benefits under Employer's
Supplemental Plan, Employee shall receive credit toward his Years of Service
under the Supplemental Plan for the two (2) year period following his
termination of employment. In addition, with respect to the two (2) year period
following such termination of employment, Employee's Base Compensation shall be
deemed to be increased by the annual economic range adjustment for Employer's
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.
C. Employee shall be reimbursed for up to $20,000 for outplacement
fees if he chooses to seek other employment following his termination of
employment with Employer.
5
(c) Notwithstanding anything to the contrary in this Section, Employee
shall not be entitled to any payments pursuant to subsection (b) (i) of this
Section if Employee dies prior to making a demand for payment pursuant to
subsection (b) (i) of this Section, or if the Employer terminates Employee's
employment because of a Discharge for Cause, because of Employee's Disability,
or if Employee voluntarily terminates his employment with the Employer for
reasons other than as set forth in subsection (a) of this Section.
(d) Employee shall not be required to mitigate damages with respect to
the amount of any payments provided for in subsection (b) of this Section by
seeking other employment or otherwise. Employee's sole remedy under this
Agreement for a breach by the Employer of subsection (a) of this Section shall
be to terminate employment and receive any payments to which he is entitled
under subsection (b) of this Section.
(e) Should Employee disagree that his termination was due to a
Discharge For Cause, the question shall, within thirty (30) days after the
termination of employment, be submitted to arbitration by three (3) arbitrators,
one of whom shall be selected by Employer, another of whom shall be selected by
Employee, and the third of whom shall be selected by the two arbitrators so
appointed. The arbitration shall take place in Dayton, Ohio in accordance with
the then rules of the American Arbitration Association. The decision of these
arbitrators on the question shall be final and conclusive upon Employer and upon
Employee and his wife or widow, personal representatives, designated
beneficiaries and heirs, and shall be enforceable in any court having competent
jurisdiction thereof. A termination which is eventually determined under
arbitration to have been a Discharge For Cause, or no arbitration having been
requested and the termination being one which Employer has determined was a
Discharge For Cause, shall extinguish any and all liability of Employer under
this Agreement from and after the date of the termination of employment.
4. CONFIDENTIALITY; ENFORCEMENT
(a) Employee 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, products, know-how, trade secrets, memoranda, devices, suppliers,
and customers of Employer which he may now know or hereafter come to know as a
result of his affiliation in business with Employer.
(b) All copyrights, improvements, discoveries and inventions and all
claims, interests and rights thereto relating to any part of the business of
Employer conceived, developed or made by Employee, 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 Employer and Employee hereby assigns to Employer
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Employee will, at any time in the future
upon Employer's request, execute specific assignments of any said copyrights,
improvements, discoveries and inventions as well as execute all documents and
perform all lawful acts which Employer deems necessary or advisable
6
to vest full ownership thereof in Employer, to register same in the name of
Employer or its designee or otherwise to provide legal protection for Employer's
ownership interests therein.
(c) Any violation of this Section 4 by Employee may be enforced by
Employer by specific performance or appropriate injunctive relief in any court
of competent jurisdiction. Any other dispute or controversy arising under this
Agreement shall be settled by arbitration in the manner set forth in subsection
(e) of Section 3 of this Agreement.
5. UNFUNDED AGREEMENT
The Employer's obligations under this Agreement are unfunded other than
from the date of deposit of the Escrow Amount, but the Employer reserves the
right to provide for its liability under this Agreement in any manner it deems
advisable, including the purchasing of such assets as it may deem necessary or
proper. Any asset so purchased by the Employer shall be the sole property of the
Employer and shall not be deemed to provide funding of the Employer's
obligations under this Agreement. Any other provision in this Agreement to the
contrary notwithstanding, Employee shall be only an unsecured general creditor
of the Employer with respect to all payments to be made under the terms of this
Agreement and shall have no claim, equity, interest, or right in or to any
specific assets or funds of the Employer as security for said payments other
than the Escrow Amount.
6. NON-ASSIGNABLE RIGHTS
Employee shall not have the right to anticipate or commute with any
third party, or to sell, assign, transfer, or otherwise alienate or convey the
right to receive any payments hereunder, whether by his 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
Employee. Should any attempt be made to reach any payments hereunder by other
than Employee, the Escrow Agent shall make each payment as it becomes due to
such person or persons, for the sole benefit of Employee as the Escrow Agent may
deem expedient.
7. FACILITY OF PAYMENT; LIMITATION
(a) In the event of a Disability of Employee after Employee has made
demand hereunder, such payments as may thereafter be due shall be paid to such
person or persons for the benefit of Employee as the Escrow Agent may deem
proper after reasonable investigation. In the event of Employee's death after he
has made demand, the Escrow Agent shall pay such amounts as thereafter are due
to such beneficiary or beneficiaries as Employee shall have designated in
writing on Exhibit B attached hereto and made a part hereof, or failing such
writing, to his estate. No liability shall accrue to the Employer or Escrow
Agent for any alleged payment to an improper person or representative if so made
after such reasonable investigation and the Employer and Escrow Agent shall have
no responsibility to see to the proper application of such payments.
(b) Notwithstanding any other provisions of this Agreement, in the
event that any payment or benefit received or to be received by Employee in
connection with a Change in Control or the termination of Employee's employment
(whether pursuant to the terms of this
7
Agreement or any other plan, arrangement or agreement with Employer, any person
whose actions result in a Change in Control or any person affiliated with
Employer or such person)(all such payments and benefits, including the Escrow
Amount, being hereinafter called "Total Payments") would be subject (in whole or
part), to an excise tax pursuant to Sections 280G and 4999 of the Internal
Revenue Code of 1986, as amended (the "Code") (such tax hereinafter referred to
as the "Excise Tax"), then the Escrow Amount 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 Employee 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 Employee 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 Employer does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax,
no portion of such Total Payment shall be taken into account which constitutes
reasonable compensation for services actually rendered, within the meaning of
Section 280G(b)(4)(B) of the Code, in excess of the base amount as defined in
Section 280G(b)(3) of the Code allowable to such reasonable compensation, and
(iii) the value of any non-cash benefit or any deferred payment or benefit
included in the Total Payments shall be determined by Employer in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. Prior to the
fifth day following the date of Employee's termination of employment, Employer
shall provide Employee with its calculation of the amounts referred to in this
paragraph and such supporting materials as are reasonably necessary for Employee
to evaluate Employer's calculations. If Employee objects to Employer's
calculations, he shall notify Employer of his objections prior to the initial
payment date set forth in Section 3 hereof, and Employer shall pay to Employee
such portion of the Total Payments (up to one hundred percent (100%) thereof) as
Employee determines is necessary to result in Employee receiving the greater of
clauses (A) and (B) of this paragraph.
8. RESPONSIBILITY FOR LEGAL EFFECT
Neither party hereto makes any representations or warranties, express
or implied, or assumes any responsibility concerning the legal, tax, or other
implications or effects of this Agreement. The Employer and the Escrow Agent
shall take all actions required by law with respect to any payments due
hereunder including but not limited to, withholding of tax from such payments.
9. INDEPENDENCE OF AGREEMENT; EMPLOYMENT TERMINATION
This Agreement shall be independent of any other contract or agreement
that may exist between the parties hereto from time to time. This Agreement
shall not restrict the Employer's rights to terminate Employee's employment with
the Employer nor Employee's
8
rights to terminate employment with the Employer; provided, however, that the
Employer shall not terminate Employee's employment prior to a Change in Control
solely to avoid its obligations under this Agreement. No merger or consolidation
with any other entity, or sale of all or substantially all of Employer's assets
constituting an Escrow Funding Event, or thereafter a Change in Control shall
occur without assumption of the Agreement by the purchaser or payment by
purchaser or Employer of the sums set forth in subsection (a) of Section 2 of
this Agreement.
10. SECTION HEADINGS
The Section headings used in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement.
11. NOTICES
Any notices required o r permitted to be given under this Agreement
shall be sufficient if in writing and if personally delivered or sent by
certified or registered mail to his residence as last shown on the employment
records of the Employer in the case of Employee, or to the corporate
headquarters to the attention of the President in the case of the Employer.
12. NON-WAIVER
The waiver by the Employer or Employee of a breach of any provision of
this Agreement by Employee or the Employer shall not operate or be construed as
a waiver of any subsequent breach by Employee or the Employer of the same or any
other provision hereof.
13. ENTIRE AGREEMENT; AMENDMENT
This Agreement represents the entire understanding of the parties with
respect to the subject matter hereof and supersedes all previous understandings,
written or oral. Any amendment to this Agreement shall be executed in writing
with the same formality as this Agreement.
14. BINDING EFFECT
This Agreement shall be binding upon Employee and the Employee's heirs,
executors, administrators, successors and assigns and upon the Employer and its
successors and assigns.
15. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.
9
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
November , 2001.
THE XXXXXXXX AND XXXXXXXX COMPANY
By
---------------------------------------------
Xxxxx X. Xxxxxxxxxx
President and Chief Executive Officer
-----------------------------------------------
Xxxxxxx X. Xxxxxxx
10
Exhibit A
ESCROW AGREEMENT
This Escrow Agreement made and entered into as of this 15th day of
December, 2000, by and between THE XXXXXXXX AND XXXXXXXX COMPANY, an Ohio
corporation (hereinafter referred to as "XXXXXXXX") and BANK ONE, N.A.
(hereinafter referred to as the "ESCROW AGENT"),
WITNESSETH:
WHEREAS, XXXXXXXX, has adopted a policy of providing termination pay
protection for certain of its key management personnel under conditions set
forth in an agreement dated December 15, 2000 (hereinafter referred to as the
"Agreement"); and
WHEREAS, XXXXXXXX has identified Xxxxxxx X. Xxxxxxx (hereinafter
referred to as "Employee") as key management personnel and has entered into the
Agreement with him; and
WHEREAS, the required protective payments under the Agreement are to be
paid to an escrow account at the ESCROW AGENT;
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 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 total assets of $1,000,000,000 and shall not be currently
listed on any publicly-disclosed report of U.S. banks having financial
problems warranting close monitoring by the Federal Reserve Board.
(b) Euro-dollar Certificates of Deposit issued by the twenty-five (25)
largest United States commercial banks, which banks shall have minimum
total assets of $1,000,000,000 and shall not be currently listed on
any publicly-disclosed report of U.S. banks having financial problems
warranting close monitoring by the Federal Reserve Board.
(c) Bankers Acceptances of United States commercial banks holding
membership in the Federal Reserve System. Such U.S. banks shall have
minimum total assets of $1,000,000,000 and shall not be currently
listed on any publicly-disclosed report of U.S. banks having financial
problems warranting close monitoring by the Federal Reserve Board.
(d) United States Treasury Bills.
(e) United States Treasury Notes.
(f) United States Government Guaranteed "Project Notes" and/or Tax-Exempt
Notes rated MIG 1 by Xxxxx'x rating agency.
(g) Debt instruments issued by the following five United States Government
agencies:
Federal Intermediate Credit Banks
Banks for Cooperatives
Federal Land Banks
Federal Home Loan Banks
Federal National Mortgage Association
(h) Commercial Paper rated Prime-1 by Xxxxx'x rating agency or rated A-1
by Standard & Poors rating agency.
2
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 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, NA
Kettering Tower
3
Xxxxxx, Xxxx 00000
The Xxxxxxxx and Xxxxxxxx Company
000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attn: Chief Financial Officer
Should the address of any party identified above change for the purposes herein,
such party shall give written notice of the new address to the other parties
identified above.
All notice hereunder to the ESCROW AGENT shall be given in writing to
an officer of the ESCROW AGENT. Unless written notice 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.
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.
4
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, N.A.
By:
----------------------------------------------
"ESCROW AGENT"
5
Exhibit B
BENEFICIARY DESIGNATION
TO: The President of The Xxxxxxxx and Xxxxxxxx Company
Pursuant to the Agreement dated December 15, 2000 the undersigned
hereby designates the following beneficiary (beneficiaries) to receive any
benefits which may be payable under said Agreement subsequent to the
undersigned's death:
(1)
-----------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(2) If the beneficiary (beneficiaries) named in (1) above is not living or is no
longer in existence, as the case may be, then to:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This Beneficiary Designation revokes all prior designations
made by the undersigned and is subject to all the terms of the Agreement.
Dated: December 15, 2000
------------------------------------
Xxxxxxx X. Xxxxxxx
