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                                                                 Exhibit (10)(a)



                SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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     SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") made and
entered into as of the 17th day of August, 1998, by and between THE REYNOLDS AND
REYNOLDS COMPANY, a corporation existing under the laws of the State of Ohio
("Reynolds"), and DAVID R. HOLMES ("Holmes").

                              W I T N E S S E T H:

     WHEREAS, Holmes and Reynolds have entered into an Employment Agreement
dated as of November 9, 1987, as amended effective May 8, 1989 and December 1,
1989, and as amended and restated in its entirety October 1, 1995 (as so amended
and as amended and restated in its entirety the "Employment Agreement"),
pursuant to which Holmes is currently employed as Chairman of the Board,
President and Chief Executive Officer of Reynolds; and

     WHEREAS, Holmes and Reynolds desire again 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, Reynolds and Holmes hereby agree as follows:

1.   AMENDMENT, RESTATEMENT IN ITS ENTIRETY AND CONTINUATION OF EMPLOYMENT
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     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,

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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superseded by this Agreement and shall no longer be of any force and effect.

2.   DEFINITIONS.
     -----------

     For purposes of this Agreement, the terms set forth below shall have the
following meanings:

     (a) "Annual Compensation Value" shall mean Holmes' 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 Reynolds)
earned by Holmes 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 Holmes.

     (c) "Bonuses" shall mean bonus payments earned by Holmes under Reynolds'
Incentive Compensation Plans and under any future bonus or incentive
compensation plans of Reynolds 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
Richard H. Grant, Jr., his children or his grandchildren, Reynolds, any trustee
or other fiduciary holding securities under an employee benefit plan of
Reynolds, or any company owned, directly or indirectly, by the shareholders of
Reynolds in substantially the same proportions as their ownership of stock of
Reynolds), is or becomes the "beneficial owner" (as defined in Rule 



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13d-3 under the Exchange Act), directly or indirectly, of securities of Reynolds
representing fifty percent (50%) or more of the combined voting power of
Reynolds' 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 Reynolds
to effect a transaction described in clause (i), (iii) or (iv) of this Section
whose election by the Board or nomination for election by Reynolds' 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 Reynolds approve a merger or consolidation
of Reynolds with any other company, other than (1) a merger or consolidation
which would result in the voting securities of Reynolds 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 Reynolds or
such surviving entity outstanding immediately after such merger or consolidation
or (2) a merger or consolidation effected to implement a recapitalization of
Reynolds (or similar transaction) in which no "person" (as hereinabove defined)
acquires more than fifty percent (50%) of the combined voting power of Reynolds'
then outstanding securities; or

          (iv) the shareholders of Reynolds approve a plan of liquidation,
dissolution or winding up of Reynolds or an agreement for the sale or
disposition by Reynolds of all or substantially all of Reynolds' assets.



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     (e) "Discharge For Cause" shall be construed to have occurred whenever
occasioned by reason of felonious acts on the part of Holmes, actions by Holmes
involving serious moral turpitude or his misconduct in such manner as to bring
substantial and material discredit upon Reynolds, following the giving of thirty
(30) days' written notice to Holmes specifying the respect in which Reynolds
claims Holmes has violated this provision and the failure, inability or
unwillingness of Holmes to remedy the situation to the satisfaction of Reynolds
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
Holmes and by other comparably situated executive officers prior to the alleged
improper activity of Holmes for which the Discharge For Cause has been made.

     (f) "Escrow Agreement" shall mean the agreement dated November 9, 1987 as
amended October 1, 1995 and as further amended simultaneously herewith entered
into between Reynolds and Bank One, NA, a copy of which (including the first and
second amendments) is attached hereto and made a part hereof as Exhibit A.

     (g) "Escrow Agent" shall mean Bank One, NA.

     (h) "Escrow Amount" shall mean the amounts placed in escrow by Reynolds
pursuant to subsection (e)(iii) of Section 8 of this Agreement.

     (i) "Escrow Funding Event" shall mean the occurrence of any of the
following events:



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          (i) Class A Common Shares of Reynolds have been acquired other than
directly from Reynolds in exchange for cash or property by any person (other
than Richard H. Grant, Jr., his children or his grandchildren, Reynolds, any
trustee or other fiduciary holding securities under an employee benefit plan of
Reynolds, or any company owned directly or indirectly by the shareholders of
Reynolds in substantially the same proportions as their ownership of the stock
of Reynolds) who either thereby becomes the owner of more than nine and one half
percent (9.5%) of Reynolds' outstanding Class A Common Shares, or having
directly or indirectly become the owner of more than five percent (5%) of
Reynolds' Class A Common Shares either alone or in conjunction with another
person has expressed an intent to continue acquiring Reynolds' 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 Richard H. Grant, Jr., his children or
grandchildren, Reynolds, any trustee or other fiduciary holding securities under
an employee benefit plan of Reynolds, or any company owned directly or
indirectly by the shareholders of Reynolds in substantially the same proportions
as their ownership of stock of Reynolds) has made a tender offer for, or a
request for invitations for tenders of, Class A Common Shares of Reynolds.

          (iii) Any person forwards or causes to be forwarded to shareholders of
Reynolds proxy statement(s) in any period of twenty-four (24) consecutive
months, soliciting proxies, to elect to the Board of Reynolds two (2) or more
candidates who were not nominated as candidates in proxy statements forwarded to
shareholders during such period by the Board; or



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          (iv) The Board adopts a resolution to the effect that, for purposes of
this Agreement, an Escrow Funding Event has occurred.

     (j) "Final Annual Compensation" shall mean Holmes' 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 Reynolds) earned by Holmes during the three (3) calendar years
preceding his termination of employment.

     (k) "Final Average Annual Compensation" shall mean the average of Holmes'
Base Compensation and Bonuses (excluding any compensation attributable to stock
options of any type granted by Reynolds) as determined for the five (5)
consecutive calendar years of the last ten (10) calendar years preceding and
including the calendar year in which Holmes' employment terminates which yields
the highest sum.

     (l) "Pension Plan" shall mean the existing Reynolds and Reynolds Company
Non-Union Pension Plan, as the same may be amended from time to time.

     (m) "Retirement Benefits" shall mean payments to Holmes based upon his
lifetime in an annual amount equal to a designated percentage of Holmes' 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) Holmes' 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 Holmes from Reynolds' Supplemental Plan],
(ii) Holmes' pension benefits determined as a life annuity (without regard to
actual payment form) under the Pension Plan and deferred compensation 



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payments under the Non-Qualified Deferred Compensation and Disability Benefit
Agreement dated December 20, 1984 between Holmes and Reynolds, or such other
non-contributory deferred compensation agreement(s) then existing between
Reynolds and Holmes, and (iii) such amount of supplemental retirement benefits
under the Supplemental Plan as shall be necessary to achieve the designated
percentage of Holmes' 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 Holmes' life under Reynolds-sponsored medical benefits and life
insurance programs, but only to the extent applicable to participants in
Reynolds' Qualified Retiree Medical Plans. For purposes of determining the
amount of supplemental retirement benefits to be made by Reynolds pursuant to
the Supplemental Plan, the method of payment of retirement benefits to Holmes
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 Reynolds 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.

     (n) "Supplemental Plan" shall mean Reynolds' 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 August 17, 2003. Holmes shall continue in the employ of Reynolds as Chairman
of the Board, President and Chief Executive Officer or such other reasonably
equivalent position 



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designated by the Board, consistent with the provisions of this Agreement. In
addition, Holmes 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.

     (b) At all times Holmes 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 Reynolds, 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 Reynolds, he
will discontinue such outside activity within thirty (30) days after written
notice from the Board.

     (c) Holmes agrees that during the period of his employment by Reynolds, 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 Reynolds, 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 Reynolds and which do not interfere
with his employment and the performance of his duties to Reynolds hereunder.



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4.   COMPENSATION AND FRINGE BENEFITS.
     --------------------------------

     (a) Effective January 1, 1999, the Base Compensation of Holmes during the
then remaining term of this Agreement shall be $640,000, which may be increased
from time to time by the Board or, in the case of any proposed decrease, such
other amount as mutually may be agreed upon by Holmes and Reynolds; provided,
however, that such Base Compensation may not be reduced below said rate of
$640,000 ($560,000 for the period from the date hereof through December 31,
1998) without Holmes' consent, unless necessitated by general business
conditions adversely affecting Reynolds' 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. Holmes' Base Compensation shall be reviewed at
least annually to determine whether in view of Reynolds' 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) Holmes 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 Reynolds and
shall be entitled to such awards under any future bonus, incentive, or similar
compensation plans of Reynolds, 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 Reynolds.

     (c) Holmes shall continue to be eligible for participation in the Stock
Option Plan -1995 of Reynolds and shall be entitled to the grant of such options
to purchase shares of Class A Common Stock ("Common Stock") of Reynolds under
any other future stock option plans for employees and to participate in such
other executive compensation incentive plans 



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awarding stock as shall, in the determination of the Board, be appropriate and
consistent with the purposes of the plans and with the grants of such options to
the executive officers of Reynolds. Effective the date hereof, Reynolds hereby
awards Holmes non-qualified stock options covering 250,000 shares of Common
Stock on the terms and conditions of the Stock Option Agreements entered into
between the parties simultaneously herewith and attached hereto as Exhibits B
and C and made a part hereof.

     (d) In addition to the specific benefits provided for Holmes under the
terms of this Agreement, Reynolds 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 Reynolds and as set forth on Exhibit D attached hereto and made a
part hereof.

5.   EXPENSES.
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     Holmes shall be reimbursed for his reasonable business-related expenses
incurred for the benefit of Reynolds in accordance with Reynolds' 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
Reynolds to Holmes, Holmes shall account to Reynolds in sufficient detail to
entitle Reynolds to a federal income tax deduction for such reimbursed item if
such item is deductible.

6.   RETIREMENT AND EARLY RETIREMENT BENEFITS.
     ----------------------------------------

     (a) If Holmes continues his employment with Reynolds until he attains age
fifty-nine (59), he shall be entitled to receive at the time of his retirement
Retirement 


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Benefits at a level equal to sixty-five percent (65%) of his Final Average
Annual Compensation. If Holmes continues his employ with Reynolds beyond age
fifty-nine (59), the level of his 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-nine (59).

     (b) Holmes may elect to retire from Reynolds upon giving twelve (12) months
prior written notice and having attained at least age fifty-five (55) and he
shall be entitled to receive at the time of such early retirement Retirement
Benefits at a level equal to sixty-one percent (61%) of his Final Average Annual
Compensation. If Holmes elects to retire upon giving twelve (12) months prior
written notice at any time from age fifty-six (56) through age fifty-nine (59),
the level of his 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-five (55).

     (c) To the extent Holmes receives any similar benefits under the Pension
Plan, Supplemental Plan or other Reynolds benefit plan for any of its employees,
such benefits shall be included in calculating the amount to which Holmes shall
be entitled under Sections 6(a) and 6(b) above; provided, however, that in no
event shall the benefits described in Sections 6(a) and 6(b) above be reduced by
the provisions of this Section 6(c).

7.   DISABILITY AND DEATH BENEFITS.
     -----------------------------

     (a) If Holmes becomes disabled prior to his retirement, he shall be deemed
to have elected retirement under this Agreement. See Section 8(c) below.



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     (b) In the event of Holmes' death while still employed by Reynolds pursuant
to this Agreement, Holmes shall be entitled to Retirement Benefits calculated as
if he had elected retirement as of the day before his actual death. Reynolds
shall also pay to such beneficiary or beneficiaries as he shall have designated
by written notice delivered to Reynolds 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 Holmes 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 Reynolds during
that period. Such payment shall be made in one lump sum or in six (6) equal
monthly installments as Reynolds shall elect and shall be in addition to the
proceeds of any insurance policies carried on Holmes' life with respect to which
he has the right to designate beneficiaries. Also, Reynolds shall pay to Holmes'
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 Holmes' death for a period expiring at
the earlier of: (i) her death; (ii) forty-two (42) months after Holmes' death;
or (iii) eligibility for regular Medicare and Medicaid or any successor programs
furnished by the government. Thereafter, Reynolds shall make available to
Holmes' 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
Reynolds-sponsored medical benefits program, but only to the extent coverage is
available under such program.

8.   TERMINATION; DISCHARGE.
     ----------------------

     (a) Termination or Discharge Without Cause. Reynolds reserves the right to
discharge Holmes at any time and for any reason; but such discharge, unless a
Discharge For 


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Cause, shall not extinguish the obligation of Reynolds to provide Holmes (and,
in the event of his prior death, his designated beneficiary or beneficiaries or
his estate) with the following severance benefits:

          (i) If such discharge occurs prior to August 17, 2003, Holmes shall be
entitled to receive for the balance of the term of this Agreement, payments from
Reynolds in an amount equal to his Annual Compensation Value, which shall be
reduced by seventy percent (70%) of the amount of compensation received by
Holmes from any subsequent employment obtained by him during said payment
period.

          (ii) Holmes shall be entitled, during the period expiring on the
earlier of Holmes' securing other employment or August 17, 2003 (or such longer
period as required by law), to continuing coverage under the then-existing
Reynolds-sponsored medical benefits program, which, at the option of Reynolds,
may be provided outside of such program through the purchase of insurance or
otherwise.

          (iii) For purposes of determining Holmes' benefits under the
Supplemental Plan, Holmes 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 subsection (i) of this Section 8(a). In addition, during
the time period that he receives or is entitled to receive payments under said
subsection (i) of this Section 8(a), Holmes' Base Compensation shall be deemed
to be increased by the annual economic range adjustment for Reynolds' 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) 



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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.

          (iv) Holmes shall be reimbursed for up to $20,000 for out-placement
fees if he chooses to seek other employment following his discharge by Reynolds.
Holmes shall not be obligated to seek other employment in order to mitigate his
damages resulting from his discharge.

          (v) In addition to all of the foregoing, Holmes shall be entitled to
receive the payments required of Reynolds under his then-existing deferred
compensation agreement(s) with Reynolds in accordance with the terms of such
agreement(s).

          Holmes acknowledges that he shall remain subject to and bound by the
restrictive provisions of Section 9 below.

     (b) Discharge For Cause. If Holmes' employment with Reynolds 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
Reynolds; provided, however, that Holmes shall be entitled to receive his
benefits, if any, under the Pension Plan and the payments required of Reynolds
under his then-existing deferred compensation agreement(s) with Reynolds in
accordance with the terms of such agreement(s). Holmes shall remain subject to
the restrictive provisions of Section 9 below for a period for two (2) years
from the date of discharge. Should Holmes disagree that his discharge was a
Discharge For Cause the question shall be submitted to arbitration in accordance
with Section 10 below.



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     (c) Termination Due to Disability. If, by reason of illness, disability, or
other incapacity certified by two (2) physicians competent to do so in the
opinion of Reynolds' Board of Directors, Holmes is unable to perform the duties
required of him under this Agreement for a period of six (6) consecutive months,
Reynolds, following the giving of thirty (30) days' written notice to Holmes and
the failure of Holmes by reason of illness, disability, or other incapacity to
resume his duties within such thirty (30) days and thereafter perform the same
for a period of two (2) consecutive months, may terminate Holmes' employment by
giving Holmes written notice thereof; and in that event all obligations of
Reynolds hereunder shall cease on the date such notice of termination is given
except for payment of the Retirement Benefits under Section 6 above.

     (d) Benefits Upon Termination Under Certain Circumstances. If Holmes
voluntarily terminates his employment or Holmes is discharged by Reynolds 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) Holmes is required by Reynolds, prior to a Change in Control, to
perform duties or services which differ significantly from those performed by
him on the effective date hereof [provided, however, that the relinquishment by
Holmes voluntarily or at the request of the Board of one or two of his present
titles shall not entitle him to the benefits of this Section 8(d)(i)], or which
are not ordinarily and generally performed by a Chairman of the Board, President
or Chief Executive Officer (or any one of the foregoing positions) of a
corporation similar in size and scope to Reynolds; or



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          (ii) The nature of the duties or services which Reynolds, 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 Reynolds, for more than ninety (90) days during any
period of twelve (12) consecutive months; Holmes shall be entitled to receive
from Reynolds all of the severance benefits set forth in Section 8(a) above,
except that Holmes' right to receive his Retirement Benefits shall be based upon
his Final Annual Compensation, as the same may be adjusted pursuant to Section
8(a)(iii) above. Holmes shall remain subject to and bound by the restrictive
provisions of Section 9 below.

     (e) Benefits Upon a Change in Control. Reynolds recognizes that the threat
of a Change in Control would be of significant concern to Holmes. The following
provisions provide termination protection for Holmes in the event of a Change in
Control. These provisions, among other purposes, are intended to foster and
encourage Holmes' continued attention and dedication to his duties in the event
of such potentially disturbing and disruptive circumstances. Reynolds,
therefore, agrees to do the following:

          (i) If Reynolds terminates Holmes' employment for any reason other 
than a Discharge for Cause, or if Holmes terminates his employment with Reynolds
voluntarily for any reason other than disability or retirement within the
twenty-four (24) month period following a Change in Control, Holmes shall be
entitled to receive from Reynolds the following benefits:



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          (A) A lump sum severance payment (the "Severance Payment"), in cash,
equal to three (3) times the sum of (i) the higher of Holmes' 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 Holmes'
Bonuses during the three (3) calendar years immediately preceding the year in
which the date of termination occurs.

          (B) Holmes shall be entitled, during the period expiring on the
earlier of Holmes' 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 Reynolds sponsored medical benefits
program in existence on such date of termination or, if such continued coverage
is barred, Reynolds shall provide equivalent medical benefit coverage through
the purchase of insurance or otherwise.

          (C) For purposes of determining Holmes' benefits under the
Supplemental Plan, Holmes 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, Holmes' Base Compensation shall be deemed to be
increased by the annual economic range adjustment for Reynolds' 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.



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          (D) Holmes shall be reimbursed for up to $20,000 for outplacement fees
if he chooses to seek other employment following his discharge by Reynolds.
Holmes 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, Holmes shall be entitled to
receive the payments required of Reynolds under his then-existing deferred
compensation agreement(s) with Reynolds in accordance with the terms of such
agreement(s), and the retirement benefit provided for in Section 6 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 Holmes in
connection with a Change in Control or the termination of Holmes' employment
(whether pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with Reynolds, any person whose actions result in a Change in
Control or any person affiliated with Reynolds or such person) (all such
payments and benefits, including the Severance Payment, being hereinafter called
"Total Payments") would be subject (in whole or part), to an excise tax pursuant
to Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (such tax hereinafter referred to as the "Excise Tax"), then the
Severance Payment shall be reduced to the extent necessary so that no portion of
the Total Payments is subject to Excise Tax (after taking into account any
reduction in the Total Payments provided by reason of Section 280G of the Code
in such other plan, arrangement or agreement) if (A) the net 



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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 Holmes 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 Holmes 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 Reynolds 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 Reynolds in accordance with the principles
of Sections 280G(d)(3) and (4) of the Code. Prior to the fifth day following the
date of Holmes' termination of employment, Reynolds shall provide Holmes with
its calculation of the amounts referred to in this Section and such supporting
materials as are reasonably necessary for Holmes to evaluate Reynolds'
calculations. If Holmes objects to Reynolds' calculations, he shall notify
Reynolds of his 


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objections prior to the initial payment date set forth in Section 8(e)(vi)
hereof, and Reynolds shall pay to Holmes such portion of the Severance Payment
(up to one hundred percent (100%) thereof) as Holmes determines is necessary to
result in Holmes' receiving the greater of clauses (A) and (B) of this Section.

          (iii) Upon the occurrence of an Escrow Funding Event, Reynolds shall
pay into an escrow account at the Escrow Agent an amount equal to three (3)
times the sum of (i) Holmes' Base Compensation in effect immediately prior to
the Escrow Funding Event and (ii) the average of Holmes' 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, Reynolds shall, in the event that either Holmes' 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 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,
Reynolds 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 Reynolds,
shall distribute to Reynolds such difference in cash; provided, however, that
this sentence shall not apply after the occurrence of a Change in Control.



                                       20
<PAGE>   21

          (iv) Unless the parties otherwise agree, Reynolds 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 Holmes' 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, Reynolds 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), Holmes shall
continue to be entitled to receive all of the benefits from Reynolds under this
Agreement until a termination of employment shall occur.

          (v) Reynolds shall pay the charges of the Escrow Agent for its
services under the Escrow Agreement, and Reynolds 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 Holmes.
All interest or other income arising from the Escrow Amount deposited with the
Escrow Agent shall be paid monthly to Reynolds.

          (vi) If Reynolds terminates Holmes' employment for any reason but a
Discharge for Cause, or if Holmes terminates his employment with Reynolds
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 


                                       21
<PAGE>   22

Amount in accordance with this Section and Holmes shall no longer be subject to
the restrictive provisions of Section 9 below, except for Section 9(e). Holmes
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
Reynolds of the amount of the Severance Payments pursuant to Section 8(e) (iii).
If he has accepted such determination, Reynolds shall provide the Escrow Agent
with Reynolds' written determination as set forth in Section 8(e) (iii) and the
Escrow Agent shall pay to Holmes all or a portion of the Escrow Amount as
provided in such determination, and any remaining amount shall be paid to
Reynolds. If Holmes does not accept Reynolds' determination, Holmes shall
provide to the Escrow Agent his determination of the Severance Payment, and the
Escrow Agent shall pay to Holmes all or a portion of the Escrow Amount as
provided in Holmes' determination and any remaining amount shall be paid to
Reynolds.

          (vii) In the event that, following the creation of a demand right
pursuant to Section 8(e)(vi) above, Holmes 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 Reynolds, 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 Reynolds 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, Reynolds, or such consolidated, surviving or
transferee entity, shall promptly pay to Holmes all such costs and expenses.



                                       22
<PAGE>   23

9.   NON-COMPETITION; CONFIDENTIALITY.
     --------------------------------

     (a) In order to protect Reynolds, it is understood that a covenant not to
compete is a necessary and appropriate adjunct to the other provisions of this
Agreement. Therefore, should Holmes at any time determine prior to the
expiration of this Agreement that he does not desire to remain an employee of
Reynolds and shall terminate his employment for any reason other than the
grounds specified in Section 8(e) above, or should he be Discharged For Cause by
Reynolds, Holmes 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
Reynolds 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 Holmes' employment with
Reynolds 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 Reynolds or
any of its related or affiliated companies. For purposes of this Agreement,
competition with Reynolds 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
Reynolds for sale in the same vertical markets in which Reynolds' products
and/or services are then being marketed at the time of Holmes' termination of
employment or upon the cessation of any retirement, severance or disability
benefits under this Agreement.



                                       23
<PAGE>   24

     (c) From and after the execution of this Agreement and for a period of two
(2) years after termination of his employment with Reynolds and after he shall
have ceased receiving retirement, severance or disability benefits under this
Agreement, whichever shall last occur, Holmes 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 Reynolds or any of its related or
affiliated companies, nor shall he assist any present employees of Reynolds 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 Holmes 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 Holmes' ability to invest in businesses not
competitive with Reynolds.

     (e) Holmes 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 



                                       24
<PAGE>   25

business, properties, accounts, books and records, research and development
information, processes, procedures, products, know-how, trade secrets,
memoranda, devices, suppliers, and customers of Reynolds which he may now know
or hereafter come to know as a result of his affiliation in business with
Reynolds.

     (f) All copyrights, improvements, discoveries and inventions and all
claims, interest and rights thereto relating to any part of the business of
Reynolds conceived, developed or made by Holmes, 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 Reynolds and Holmes hereby assigns to Reynolds
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Holmes will, at any time in the future upon
Reynolds' request, execute specific assignments of any said copyrights,
improvements, discoveries and inventions as well as execute all documents and
perform all lawful acts which Reynolds deems necessary or advisable to vest full
ownership thereof in Reynolds, to register same in the name of Reynolds or its
designee or otherwise to provide legal protection for Reynolds' 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
Reynolds or any of its related or affiliated companies shall be doing business
at the time of the proposed competing entry into business by Holmes, it being
agreed that the contacts of Holmes and the potential scope of operation of
Reynolds is without any limitation within the area of prohibition. Any violation
of this covenant may be enforced by specific performance in any court of



                                       25
<PAGE>   26

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.  RESOLUTION OF DISPUTES; ARBITRATION.
     -----------------------------------

     (a) Except for the breach or threatened breach by Holmes of the
noncompetition provisions of this Agreement which may be enforced by appropriate
injunctive relief at the option of Reynolds, any dispute or controversy arising
out of or relating to this Agreement, including, but not limited to, whether
Holmes 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 Holmes disagree that his termination 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 Reynolds, another of whom shall be selected by Holmes, 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 Reynolds and upon
Holmes and his wife or widow, personal representatives, designated beneficiaries
and heirs, and shall be enforceable in any court having competent jurisdiction
thereof. A discharge which is eventually determined under arbitration to have
been a Discharge for Cause, or no arbitration having been requested and the
discharge being one which Reynolds had determined was for a Discharge for Cause,
shall extinguish any and all liability of Reynolds under this Agreement from and
after the date of termination.



                                       26
<PAGE>   27

     (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 Holmes or Reynolds to the
other to settle matters by arbitration. As stated above, the decision of the
arbitrators shall be final and conclusive.

11.  NONASSIGNABLE RIGHTS.
     --------------------

     Holmes, 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 Holmes or his wife or his widow after his death or
his personal representatives, designated beneficiaries and heirs. Should Holmes
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, Reynolds' 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 Holmes or his wife or his widow after his
death or his personal representatives, designated beneficiaries and heirs,
Reynolds shall make each payment as it becomes due to such person or persons for
the sole benefit of Holmes or his wife or his widow or his personal
representatives, designated beneficiaries and heirs, as the case may be, as
Reynolds may deem expedient.



                                       27
<PAGE>   28

12.  UNFUNDED AGREEMENT.
     ------------------

     (a) Reynolds' obligation under this Agreement shall be unfunded, but
Reynolds 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 Holmes' life) as it may deem
necessary or proper; provided, however, that Holmes' insurability or
non-insurability shall in no way affect Reynolds' obligations pursuant to this
Agreement. Any asset so purchased by Reynolds shall be the sole property of
Reynolds and shall not be deemed to provide funding of Reynolds' obligations
under this Agreement.

     (b) In the event Reynolds determines to purchase any insurance policy or
policies on Holmes' life, Holmes agrees to submit to such examination and to
supply information as may be required by the insurer.

     (c) Any policy so purchased by Reynolds shall be issued so that Reynolds is
the sole, full, and complete owner of the policy or policies, with the right and
power to exercise any and all privileges and options thereof or available under
the rules of the issuing insurer without the consent of any other persons.

     (d) Holmes, 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 Reynolds and shall have
only the status of a general creditor with respect to Reynolds hereunder.



                                       28
<PAGE>   29

13.  FACILITY OF PAYMENT.
     -------------------

     In the event of a physical or mental illness or disability of Holmes 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 Holmes or his
widow or his designated beneficiaries, as the case may be, as Reynolds or, if
applicable, the Escrow Agent may deem proper. In the event of Holmes' 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 Holmes shall have designated in writing, or failing such
writing, to his estate. No liability shall accrue to Reynolds or Escrow Agent
for any alleged payment to an improper person or representative if so made after
such reasonable investigation and Reynolds and Escrow Agent shall have no
responsibility to see to the proper application of such payments.

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 Reynolds, addressed to:

                  The Reynolds and Reynolds Company
                  Attention: Vice President, Corporate Finance and
                             Chief Financial Officer

                  115 South Ludlow St.
                  Dayton, Ohio  45402
                  and, if to Holmes, addressed to:

                  David R. Holmes
                  5 Volusia Avenue
                  Dayton, Ohio  45409

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.



                                       29
<PAGE>   30

     (b) (i) This Agreement shall be binding upon Holmes, 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 Reynolds and its
successor or assigns.

         (ii) Reynolds shall not merge or consolidate with any other entity 
unless and until such other entity shall expressly assume Reynolds' obligations
under this Agreement or Reynolds has provided an appropriate alternative
arrangement covering its contingent liabilities under this Agreement, and
Reynolds shall not voluntarily dissolve without first providing an appropriate
arrangement covering its contingent liabilities under this Agreement.

     (c) This Agreement may be amended, but only with the consent of Holmes
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.



                                       30
<PAGE>   31

     (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 REYNOLDS AND REYNOLDS COMPANY


                                            By__________________________________



                                            ____________________________________
                                            DAVID R. HOLMES



                                       31
<PAGE>   32


                                                                       EXHIBIT A



ESCROW AGREEMENT DATED NOVEMBER 9, 1987 BETWEEN THE REYNOLDS AND REYNOLDS
COMPANY AND BANK ONE N.A., AS AMENDED AS OF OCTOBER 1, 1995 and August 17, 1998


<PAGE>   33


                                 AMENDMENT NO. 2
                                       TO
                                ESCROW AGREEMENT

     THIS AMENDMENT NO. 2 TO ESCROW AGREEMENT ("Amendment") is made and entered
into as of this 17th day of August, 1998 by and between THE REYNOLDS AND
REYNOLDS COMPANY, an Ohio corporation (hereinafter referred to as "Reynolds"),
and BANK ONE, NA (hereinafter referred to as the "Escrow Agent").

                                   WITNESSETH:

     WHEREAS, Reynolds and the Bank have entered into an Escrow Agreement dated
November 9, 1987 and amended October 1, 1995 (as so amended, the "Escrow
Agreement") pursuant to an Employment Agreement dated as of November 9, 1987, as
amended effective May 8, 1989 and December 1, 1989, and as amended and restated
in its entirety October, 1995 (as so amended and as amended and restated in its
entirety the "October 1, 1995 Agreement") between Reynolds and David R. Holmes
("Holmes"), an employee of Reynolds; and

     WHEREAS, Holmes and Reynolds have entered into a Second Amended and
Restated Employment Agreement effective August 17, 1998 (the "Employment
Agreement"), pursuant to which Reynolds has agreed to continue to provide
termination pay protection for Holmes 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 Holmes 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 October 1, 1995 Agreement between Reynolds and
Holmes 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.



<PAGE>   34


         IN WITNESS WHEREOF, the parties hereto have hereunto set their
respective hands as of the day and year first above written.

                                            THE REYNOLDS AND REYNOLDS COMPANY


                                            By_________________________________


                                            BANK ONE, NA


                                            By__________________________________


<PAGE>   35


                                                                       EXHIBIT D


                           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 Holmes may include 
                                            personal passengers, subject to seat
                                            availability. Holmes shall receive
                                            W-2 for personal use value per IRS
                                            regulations

Vacation                                    Five (5) weeks annually at mutually
                                            agreed times.