<PAGE>

                                  EXHIBIT 10.1

AGREEMENT WITH LLOYD G. WATERHOUSE, FORMER CHIEF EXECUTIVE OFFICER, CHAIRMAN AND
                                   PRESIDENT

I, Lloyd G. Waterhouse, hereby acknowledge and agree as follows:

      1.    I am party to an Employment Agreement ("the Employment Agreement"),
            executed May 1, 1999 as amended and restated as of December 1, 2001
            and as further amended and restated as of September 2, 2003, by and
            between myself and The Reynolds and Reynolds Company ("REYNOLDS").

      2.    Effective July 7, 2004, I resigned as an employee and director of
            REYNOLDS on the condition that I would be treated for purposes of
            the severance of my employment as though I was terminated without
            cause under the Employment Agreement.

      3.    I intend by this Agreement to resolve all issues related to the
            Employment Agreement, and my employment with and separation from
            REYNOLDS.

      4.    In accordance with the condition set forth in the Employment
            Agreement and in consideration of REYNOLDS' promise to treat me as
            having been "terminated without cause" for purposes of Paragraph
            7(a) of the Employment Agreement, provided that I sign and do not
            rescind this waiver of claims, I hereby, for myself and my heirs and
            estate, fully and completely release REYNOLDS from any claim or
            liability under the Employment Agreement (other than its obligations
            under Paragraph 7(a) thereof), and fully and completely release each
            of its subsidiaries and affiliated companies, and each of their
            stockholders, directors, employees, agents, representatives,
            successors, and assigns from any and all claims, liabilities,
            promises, agreements, and lawsuits arising from or related to my
            employment with REYNOLDS, and separation from employment, including
            any and all claims of race, color, sex, national origin, ancestry,
            religion, disability, age or other discrimination, harassment, or
            retaliation, including any and all claims under the Ohio Civil
            Rights Act, Ohio Revised Code ("O.R.C.") Section 4112 (and sections
            following), the Ohio Whistleblower's Act, O.R.C. Section 4113.52
            (and sections following), the Ohio Workers' Compensation Retaliation
            Law, O.R.C. Section 4123.90, Title VII of the Civil Rights Act of
            1964, 42 USC Section 2000e (and sections following), the Employee
            Retirement Income Security Act, 29 USC Section 1001 (and sections
            following), the Reconstruction Era Civil Rights Act, 42 USC Section
            1981 (and sections following), the Age Discrimination in Employment
            Act ("ADEA"), 29 USC Section 621 (and sections following), the
            Americans with Disabilities Act, 42 USC Section 12101 (and sections
            following), the Family and Medical Leave Act, 29 USC Section 2601
            (and sections following), the Worker Adjustment and Retraining
            Notification Act, 29 USC Section 2100 (and sections following), and
            the amendments to such laws, as well as any similar or related
            statute(s) of Ohio or another state or district, and claims for
            breach of contract, promissory estoppel, wrongful termination,
            personal injury, defamation, loss of consortium, distress,
            humiliation, loss of standing and prestige, public policy, or any
            tort, whether such claims are known or unknown, which I now have, or
            claim to have, against REYNOLDS relating to any event or
            circumstance occurring prior to the seventh day following the date
            on which I sign this Agreement, and also including any claims that
            may depend upon the identity person(s) selected to perform some or
            all of the duties that I formerly performed. I agree not to file any
            lawsuit against REYNOLDS in the future with respect to any claim
            released under this Agreement, or any arbitration demand under
            Paragraph 9 of the Employment Agreement. I waive any right to
            re-employment with REYNOLDS, and agree that REYNOLDS may reject any
            application I may make for re-employment without any liability
            whatsoever.

      5.    Notwithstanding the termination of the Employment Agreement, I
            continue to be bound by those obligations set forth in the
            Employment Agreement that survive its termination, including but not
            limited to the non-compete and confidentiality obligations set forth
            therein.

      6.    In accordance with applicable law, I confirm that I have been given
            21 days to consider whether to sign this Agreement, and I have the
            right to rescind this Agreement within a period of seven (7)
            calendar days following its execution, by delivering written notice
            of revocation to REYNOLDS c/o Douglas M. Ventura, General Counsel
            and Secretary, Reynolds and Reynolds, One Reynolds Way, Kettering,
            Ohio 45430, 937-485-0978 (facsimile), and that, in the event of such
            revocation, REYNOLDS shall have no obligation to me under the
            Employment Agreement. I confirm that I have carefully read this
            Agreement, I understand it, I have been advised to consult, and have
            consulted, with counsel of my choice concerning this Agreement, I
            have voluntarily chosen to sign it, and I have not relied upon any
            statement or promise made by or on behalf of REYNOLDS that is not
            contained in this Agreement.

/s/ Lloyd G. Waterhouse
Date: July 29, 2004
Witness: /s/ David E. Ball

                                       25