Employment Agreement - Cincinnati Bell Information Systems Inc. and Brian C. Henry
EMPLOYMENT AGREEMENT
This Agreement is made as of March 1, 1998 (the "Effective Date")
between Cincinnati Bell Information Systems Inc., an Ohio corporation
("Employer" or "CBIS"), and Brian C. Henry ("Employee").
Employer and Employee agree as follows:
1. EMPLOYMENT. By this Agreement, Employer and Employee set
forth the terms of Employer's employment of Employee on and after the
Effective Date. Any prior agreements or understandings with respect to
Employee's employment by Employer are canceled as of the Effective Date.
2. PERIOD OF AGREEMENT. This Agreement begins on the Effective
Date and, subject to the terms of Section 13, will end on February 28, 2003.
3. DUTIES.
A. Employee will serve as Chief Operating Officer of CBIS or
in such other equivalent capacity as may be designated by President of CBIS.
Employee will report to the President of CBIS.
B. Employee shall furnish such managerial, executive,
financial, technical, and other skills, advice, and assistance in operating CBIS
as Employer may reasonably request.
C. Employee shall also perform such other duties as are
reasonably assigned to Employee by the President of CBIS.
D. Employee shall devote Employee's entire time, attention,
and energies to the business of Employer. The words "entire time, attention, and
energies" are intended to mean that Employee shall devote his full effort during
reasonable working hours to the business of Employer and shall devote at least
40 hours per week to the business of Employer. Employee shall travel to such
places as are necessary in the performance of Employee's duties.
4. COMPENSATION.
A. Employee shall receive a base salary (the "Base Salary") of
at least $320,000 per year, payable not less frequently than monthly, for each
year during the term of this Agreement, subject to proration for any partial
year. Such Base Salary, and any other amounts payable hereunder, shall be
subject to withholding as required by law.
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B. In addition to the Base Salary, Employee shall be entitled
to receive an annual bonus (the "Bonus") for each calendar year for which
services are performed under this Agreement. Any Bonus for a calendar year shall
be payable after the conclusion of the calendar year in accordance with
Employer's regular bonus payment policies. Each year, employee shall be given a
Bonus target of not less than $120,000, subject to proration for a partial year.
C. On at least an annual basis, Employee shall receive a
formal performance review and be considered for Base Salary and/or Bonus target
increases.
5. EXPENSES. All reasonable and necessary expenses incurred by
Employee in the course of the performance of Employee's duties to Employer
shall be reimbursable in accordance with Employer's then current travel and
expense policies.
6. BENEFITS.
A. While Employee remains in the employ of Employer, Employee
shall be entitled to participate in all of the various employee benefit plans
and programs in which fifth level managers and above of CBIS are participating.
B. Notwithstanding anything contained herein to the contrary,
the Base Salary and Bonuses otherwise payable to Employee shall be reduced by
any benefits paid to Employee by Employer under any disability plans made
available to Employee by Employer.
C. In 1998, Employee shall be granted options to purchase
28,600 common shares of Cincinnati Bell Inc. ("CBI") on terms approved by CBI's
Compensation Committee. In each year of this Agreement after 1998, Employee will
be granted stock options under CBI's 1997 Long Term Incentive Plan or any
similar plan made available to employees of Employer.
D. Notwithstanding anything contained in Section 6.A. to the
contrary, during the period from the Effective Date through October 7, 1998,
Employee shall not receive the automobile allowance otherwise payable to fifth
level managers. In lieu of such allowance, Employee shall continue to have the
use of the automobile leased for Executive by CBI on the Effective Date, with
all maintenance costs being paid by Employer, until October 7, 1998, the
expiration of the lease term.
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E. The Executive Employment Agreement between Employee and CBI
dated March 29, 1993 (the "Prior Agreement") made provision for a supplemental,
non-qualified pension to be paid to Employee by CBI. Notwithstanding the
termination of the Prior Agreement, if Employee's employment with Employer is
terminated prior to December 31, 2002 for any reason and if the recognizable
value of the restricted stock granted to Employee under Section 6.F. of this
Agreement is less than the lump sum value (on the date of termination) of the
supplemental, non-qualified pension which would have been payable to Employee
under the Prior Agreement if the Prior Agreement had not been terminated,
Employer shall pay such difference to Employee. For purposes of this Section
6.E., the recognizable value of the restricted stock granted to Employee under
Section 6.F. of this Agreement shall be equal to the ordinary income which
Employer is or has been required to recognize for federal income tax purposes
for all years (or would have been required to recognize but for an election by
Employee to defer under the CBI Executive Deferred Compensation Plan or any
similar deferred compensation plan made available to Employee by Employer) with
respect to the restricted stock, including both income from dividends and income
from the lapsing of restrictions.
F. Employee shall receive a restricted stock award of
25,000 common shares of CBI. All provisions of this Agreement which relate to
the terms under which restricted stock will be granted to Employee are
subject to approval by the Compensation Committee. Such award shall be made
under the Cincinnati Bell Inc. 1997 Long Term Incentive Plan on the terms set
forth in Attachment A.
G. If Employee's employment with Employer is terminated after
the fifth anniversary of the Effective Date for any reason other than those set
forth in Sections 13.A., B. and C., Employer shall pay Employee an amount equal
to two times the sum of Employee's annual Base Salary rate in effect on the date
of termination plus Employee's Bonus target in effect on the date of
termination.
7. CONFIDENTIALITY. Employer and its Affiliates are engaged in
the telecommunications services, information services, and telecommunications
support services industries within the U.S. and world wide. Employee
acknowledges that in the course of employment with the Employer, Employee
will be entrusted with or obtain access to information proprietary to the
Employer and its Affiliates with respect to the following (all of which
information is referred to hereinafter collectively as the "Information");
the organization and management of Employer and its Affiliates; the names,
addresses, buying habits, and other special information regarding past,
present and potential customers, employees and suppliers of Employer and its
Affiliates; customer and supplier contracts and transactions or price lists
of Employer, its Affiliates and their suppliers; products, services, programs
and processes sold, licensed or developed by the Employer or its Affiliates;
technical data, plans and specifications, present and/or future development
projects of Employer and its Affiliates; financial and/or marketing data
respecting the conduct of the present or future phases of business of
Employer and its Affiliates; computer programs, systems and/or software;
ideas, inventions, trademarks, business information, know-how, processes,
improvements, designs, redesigns, discoveries and developments of Employer
and its Affiliates; and other information considered confidential by any of
the Employer, its Affiliates or customers or suppliers of Employer, its
Affiliates.
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Employee agrees to retain the Information in absolute confidence and not to
disclose the Information to any person or organization except as required in
the performance of Employee's duties for Employer, without the express
written consent of Employer. For purposes of this Agreement, "Affiliate"
means each corporation which is a member of a controlled group of
corporations (within the meaning of section 1563(a) of the Internal Revenue
Code of 1986, as amended) which includes Employer.
8. NEW DEVELOPMENTS. All ideas, inventions, discoveries,
concepts, trademarks, or other developments or improvements, whether
patentable or not, conceived by the Employee, alone or with others, at any
time during the term of Employee's employment, whether or not during working
hours or on Employer's premises, which are within the scope of or related to
the business operations of Employer or its Affiliates or that relate to
Employer or Affiliates' work or project, present, past or contemplated ("New
Developments"), shall be and remain the exclusive property of Employer.
Employee shall do all things reasonably necessary to ensure ownership of such
New Developments by Employer, including the execution of documents assigning
and transferring to Employer, all of Employee's rights, title and interest in
and to such New Developments, and the execution of all documents required to
enable Employer to file and obtain patents, trademarks, and copyrights in the
United States and foreign countries on any of such New Developments.
9. SURRENDER OF MATERIAL UPON TERMINATION. Employee hereby
agrees that upon cessation of Employee's employment, for whatever reason and
whether voluntary or involuntary, Employee will immediately surrender to
Employer all of the property and other things of value in his possession or
in the possession of any person or entity under Employee's control that are
the property of Employer or any of its Affiliates, including without any
limitation all personal notes, drawings, manuals, documents, photographs, or
the like, including copies and derivatives thereof, relating directly or
indirectly to any confidential information or materials or New Developments,
or relating directly or indirectly to the business of Employer or any of its
Affiliates.
10. REMEDIES.
A. EMPLOYER'S REMEDIES. Employer and Employee hereby
acknowledge and agree that the services rendered by Employee to Employer, the
information disclosed to Employee during and by virtue of his employment, and
Employee's commitments and obligations to Employer and its Affiliates herein are
of a special, unique and extraordinary character, and that the breach of any
provision of this Agreement by Employee will cause Employer irreparable injury
and damage, and consequently the Employer shall be entitled to, in addition to
all other remedies available to it, injunctive and equitable relief to prevent a
breach of this Agreement, or any part of it, and to secure the enforcement of
this Agreement.
B. EMPLOYEE'S REMEDIES. Employee agrees to submit to final and
binding arbitration any dispute, claim or controversy, whether for breach of
this agreement or for violation of any of Employee's statutorily created or
protected rights, arising between the parties that Employee would have been
otherwise entitled to file or pursue in court or before any administrative
agency (herein "claim"), and Employee waives all right to sue Employer, its
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Affiliates, and all of their agents, employees, officers and directors.
(i) This agreement to arbitrate and any resulting arbitration award are
enforceable under and subject to the Federal Arbitration Act, 9 U.S.C. Section 1
ET SEQ. ("FAA"). If the FAA is held not to apply for any reason then Ohio
Revised Code Chapter 2711 regarding the enforceability of arbitration agreements
and awards will govern this Agreement and the arbitration award.
(ii) (a) All of Employee's claims must be presented at a single
arbitration hearing under this Agreement. Any claim not raised at the
arbitration hearing is waived and released. The arbitration hearing will take
place in Cincinnati, Ohio.
(b) The arbitration process will be governed by the Employment
Dispute Resolution Rules of the American Arbitration Association ("AAA")
except to the extent they are modified by this Agreement.
(c) Employee has had an opportunity to review the AAA rules and
the requirements that Employee must pay a filing fee for which the Employer
has agreed to split on an equal basis.
(d) The arbitrator will be selected from a panel of arbitrators
chosen by the AAA in White Plains, New York. After the filing of a Request
for Arbitration, the AAA will send simultaneously to Employer and Employee an
identical list of names of five persons chosen from the panel. Each party
will have 10 days from the transmittal date in which to strike up to two
names, number the remaining names in order of preference and return the list
to the AAA.
(e) Any pre-hearing disputes will be presented to the
arbitrator for expeditious, final and binding resolution.
(f) The award of the arbitrator will be in writing and will set
forth each issue considered and the arbitrator's finding of fact and
conclusions of law as to each such issue.
(g) The remedy and relief that may be granted by the arbitrator
are limited to lost wages, benefits, cease and desist and affirmative relief,
compensatory, liquidated and punitive damages and reasonable attorney's fees,
and will not include reinstatement or promotion. If the arbitrator would have
awarded reinstatement or promotion, but for the prohibition in this
Agreement, the arbitrator may award front pay. Compensatory, liquidated and
punitive damages for breach of this Agreement, if awarded, may not exceed the
greater of (i) the amount provided in case of a termination under Section
13.D, and (ii) the maximum amount otherwise payable under the applicable
terms of this Agreement. Compensatory, liquidated and punitive damages, for a
dispute, claim or controversy other than for breach of this Agreement, if
awarded, are limited to a combined total of one year's salary. The arbitrator
may assess to either party, or split, the arbitrator's fee and expenses and
the cost of the transcript, if any, in accordance with the arbitrator's
determination of the merits of each
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party's position, but each party will bear any cost for its witnesses and
proof.
(h) Employer and Employee recognize that a primary benefit each
derives from entering this Agreement is avoiding the delay and costs normally
associated with litigation. Therefore, neither party will be entitled to
conduct any discovery prior to the arbitration hearing except that: (i)
Employer will furnish Employee with copies of all non-privileged documents in
Employee's personnel file; (ii) if the claim is for discharge, Employee will
furnish Employer with records of earnings and benefits relating to Employee's
subsequent employment (including self-employment) and all documents relating
to Employee's efforts to obtain subsequent employment; (iii) the parties will
exchange copies of all documents they intend to introduce as evidence at the
arbitration hearing at least 10 days prior to such hearing; (iv) Employee
will be allowed (at Employee's expense) to take the depositions, for a period
not to exceed four hours each, of two representatives of Employer, and
Employer will be allowed (at its expense) to depose Employee for a period not
to exceed four hours; and (v) Employer or Employee may ask the arbitrator to
grant additional discovery to the extent permitted by AAA rules upon a
showing that such discovery is necessary.
(i) Nothing herein will prevent either party from taking the
deposition of any witness where the sole purpose for taking the deposition is
to use the deposition in lieu of the witness testifying at the hearing and
the witness is, in good faith, unavailable to testify in person at the
hearing due to poor health, residency and employment more than 50 miles from
the hearing site, conflicting travel plans or other comparable reason.
(iii) Arbitration must be requested in writing no later than 6 months
from the date of Employee's knowledge of the matter disputed by the claim.
Employee's failure to initiate arbitration under this Agreement within the time
limits herein will be considered a waiver and release by Employee with respect
to any claim subject to arbitration under this Agreement.
(iv) Employer and Employee consent that judgment upon the arbitration
award may be entered in any federal or state court that has jurisdiction.
(v) Employee will not commence or pursue any litigation on any claim
that is or was subject to arbitration under this Agreement.
(vi) All aspects of any arbitration procedure under this Agreement,
including the hearing and the record of the proceedings, are confidential and
will not be open to the public, except to the extent the parties agree otherwise
in writing, or as may be appropriate in any subsequent proceedings between the
parties, or as may otherwise be appropriate in response to a governmental agency
or legal process.
11. COVENANT NOT TO COMPETE. For purposes of this Section 11
only, the term "Employer" shall mean, collectively, Employer and each of its
Affiliates. During the two-year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable
by law, then for such period as shall be enforceable) Employee will not
engage in any business offering services related to the current business of
Employer, whether as a
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principal, partner, joint venturer, agent, employee, salesman, consultant,
director or officer, where such position would involve Employee (i) in any
business activity in competition with Employer; (ii) in any position with any
customer of Employer which involves such customer's billing and/or billing
related systems; or (iii) in any business that provides billing and/or
billing related systems to third parties engaged in the communication
business (including wireless, wireline and cable communication businesses).
This restriction will be limited to the geographical area where Employer is
then engaged in such competing business activity or to such other
geographical area as a court shall find reasonably necessary to protect the
goodwill and business of the Employer.
During the two-year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable by
law, then for such period as shall be enforceable) Employee will not interfere
with or adversely affect, either directly or indirectly, Employer's
relationships with any person, firm, association, corporation or other entity
which is known by Employee to be, or is included on any listing to which
Employee had access during the course of employment as a customer, client,
supplier, consultant or employee of Employer and that Employee will not divert
or change, or attempt to divert or change, any such relationship to the
detriment of Employer or to the benefit of any other person, firm, association,
corporation or other entity.
During the two-year period following termination of Employee's
employment with Employer for any reason (or if this period is unenforceable by
law, then for such period as shall be enforceable) Employee shall not, without
the prior written consent of Employer, accept employment, as an employee,
consultant, or otherwise, with any company or entity which is a customer or
supplier of Employer at any time during the final year of Employee's employment
with Employer.
Employee will not, during or at any time after the termination of
Employee's employment with Employer, induce or seek to induce, any other
employee of Employer to terminate his or her employment relationship with
Employer.
12. GOODWILL. Employee will not disparage or act in any
manner, directly or indirectly, which may damage the business of Employer or
any of its Affiliates or which would adversely affect the goodwill,
reputation, and business relationships of Employer or any of its Affiliates
with the public generally, or with any of their customers, suppliers or
employees.
13. TERMINATION.
A. (i) Employer or Employee may terminate this Agreement upon
Employee's failure or inability to perform the services required hereunder
because of any physical or mental infirmity for which Employee receives
disability benefits under any disability benefit plans made available to
Employee by Employer (the "Disability Plans"), over a period of one hundred
twenty consecutive working days during any twelve consecutive month period (a
"Terminating Disability").
(ii) If Employer or Employee elects to terminate this
Agreement in the
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event of a Terminating Disability, such termination shall be effective
immediately upon the giving of written notice by the terminating party to the
other.
(iii) Upon termination of this Agreement on account of
Terminating Disability, Employer shall pay Employee Employee's accrued
compensation hereunder, whether Base Salary or otherwise (subject to offset
for any amounts received pursuant to the Plans), to the date of termination.
For as long as such Terminating Disability may exist, Employee shall continue
to be an employee of Employer for all other purposes and Employer shall
provide Employee with disability benefits and all other benefits according to
the provisions of the Disability Plans and any other Employer plans in which
Employee is then participating.
(iv) If the parties elect not to terminate this
Agreement upon an event of a Terminating Disability and Employee returns to
active employment with Employer prior to such a termination, or if such
disability exists for less than one hundred twenty consecutive working days,
the provisions of this Agreement shall remain in full force and effect.
B. This Agreement terminates immediately and automatically on
the death of the Employee, provided, however, that the Employee's estate shall
be paid Employee's accrued compensation hereunder, whether Base Salary or
otherwise, to the date of death.
C. Employer may terminate this Agreement immediately for
Cause. For purposes of this Agreement, Employer shall have Cause to terminate
this Agreement only if the CBI Board of Directors determines that there has been
fraud, misappropriation or embezzlement on the part of Employee.
D. Employer may terminate this Agreement upon prior written
notice for any reason other than those set forth in Sections 13.A., B., and C.,
provided, however, that Employer shall have no right to terminate this Agreement
during the 90-day period following a Change in Control of Employer. This
Agreement shall terminate automatically in the event that Employee elects to
resign within 90 days after a Change in Control of Employer. In the event of a
termination under the first sentence of this Section 13.D., Employer shall pay
Employee two times the Base Salary as it exists at the time of termination. In
the event of a termination under the second sentence of this Section 13.D.,
Employer shall pay Employee 2.99 times the Base Salary as it exists at the time
of termination. For purposes of this Agreement, a "Change in Control" of
Employer shall be deemed to have occurred if 50% or more of the outstanding
shares of Employer are acquired, directly or indirectly, by an entity which, at
the time of acquisition, is unrelated to CBI or if 50% or more of the assets of
Employer are acquired, directly or indirectly, by an entity which, at the time
of acquisition, is unrelated to CBI.
E. Upon termination of this Agreement as a result of an event
of termination described in this Section 13 and except for Employer's payment of
the required payments under this Section 13, all further compensation under this
Agreement shall terminate.
F. The termination of this Agreement shall not amend, alter or
modify the rights and obligations of the parties under Sections 6.G., 7, 8, 9,
10, 11, and 12 hereof, the terms of which shall survive the termination of this
Agreement.
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14. ASSIGNMENT. As this is an agreement for personal services
involving a relation of confidence and a trust between Employer and Employee,
all rights and duties of Employee arising under this Agreement, and the
Agreement itself, are non-assignable by Employee.
15. NOTICES. Any notice required or permitted to be given under
this Agreement shall be sufficient, if in writing, and if delivered
personally or by certified mail to Employee at Employee's place of residence
as then recorded on the books of Employer or to Employer at its principal
office.
16. WAIVER. No waiver or modification of this Agreement or the
terms contained herein shall be valid unless in writing and duly executed by
the party to be charged therewith. The waiver by any party hereto of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by such party.
17. GOVERNING LAW. This agreement shall be governed by the laws
of the State of Ohio.
18. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties with respect to Employee's employment by Employer.
There are no other contracts, agreements or understandings, whether oral or
written, existing between them except as contained or referred to in this
Agreement.
19. SEVERABILITY. In case any one or more of the provisions of
this Agreement is held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or other enforceability shall not
affect any other provisions hereof, and this Agreement shall be construed as
if such invalid, illegal, or unenforceable provisions have never been
contained herein.
20. SUCCESSORS AND ASSIGNS. Subject to the requirements of
Paragraph 14 above, this Agreement shall be binding upon Employee, Employer
and Employer's successors and assigns.
21. CONFIDENTIALITY OF AGREEMENT TERMS. The terms of this
Agreement shall be held in strict confidence by Employee and shall not be
disclosed by Employee to anyone other than Employee's spouse, Employee's
legal counsel, and Employee's other advisors, unless required by law.
Further, except as provided in the preceding sentence, Employee shall not
reveal the existence of this Agreement or discuss its terms with any person
(including but not limited to any employee of Employer or its Affiliates)
without the express authorization of the President of CBIS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CINCINNATI BELL INFORMATION SYSTEMS INC.
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By:
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Robert J. Marino
EMPLOYEE
By:
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Brian C. Henry