Document:

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                                                                 EXHIBIT (10)(c)

                              EMPLOYMENT AGREEMENT
                              --------------------

     EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of the 1st day
of May, 1999, and amended and restated as of December 1, 2001, by and between
THE REYNOLDS AND REYNOLDS COMPANY, a corporation existing under the laws of the
State of Ohio ("Reynolds"), and LLOYD G. WATERHOUSE ("Employee").

                              W I T N E S S E T H:

     WHEREAS, Reynolds and Employee desire to 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 Employee hereby agree as follows:

1. DEFINITIONS.
   ------------

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

     (a) "Annual Compensation Value" shall mean Employee's 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 Employee 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 Employee.

     (c) "Bonuses" shall mean bonus payments earned by Employee under Reynolds'
Incentive Compensation Plans and under any future bonus or incentive
compensation plans of Reynolds for its executive officers. Currently Reynolds
has in effect the following

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Incentive Compensation Plans: the Annual Bonus Plan, the Intermediate Bonus Plan
and the Personal Performance Plan, true and correct copies of which have been
delivered to Employee.

     (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), who
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Reynolds representing
twenty percent (20%) or more of the combined voting power of Reynolds' then
outstanding securities;

         (ii) during any period of two consecutive years (not including any
period prior to the execution of this Plan), individuals who at the beginning of
such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with Reynolds to effect
a transaction described in clause (i), (iii) or (iv) of this Section) who
election by Reynolds' shareholders was approved by a vote of at least two-thirds
(2/3) of the directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for any reason to
constitute at least a majority thereof;

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         (iii) the consummation of a merger or consolidation of Reynolds or any
direct or indirect subsidiary of Reynolds with any other corporation, other than
(1) a merger or consolidation which would result in the voting securities of
Reynolds outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or any parent thereof) more than
50% of the combined voting power of the voting securities of Reynolds or such
surviving entity or parent thereof outstanding immediately after such merger or
consolidation or (2) a merger or consolidation effected to implement a
recapitalization of Reynolds (or similar transaction) in which no "person" (as
hereinabove defined) is or becomes the beneficial owner, directly or indirectly,
of securities of Reynolds (not including in the securities beneficially owned by
such person any securities acquired directly from Reynolds or its affiliates
other than in connection with the securities acquired directly from Reynolds or
its affiliates other than in connection with the acquisition by Reynolds or its
affiliates of a business) representing twenty percent (20%) or more 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.

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

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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 Employee and by other comparably situated executive officers prior to
the alleged improper activity of Employee for which the Discharge For Cause has
been made.

     (f) "Escrow Agreement" shall mean the agreement dated May 1, 1999 entered
into between Reynolds and Bank One, NA, a copy of which 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 7 of this Agreement.

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

     (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;

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     (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

     (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 Employee's 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 Employee during the three (3) calendar years
preceding his termination of employment.

     (k) "Final Average Annual Compensation" shall mean the average of
Employee's 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 Employee's employment
terminates which yields the highest sum.

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                  (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 Employee
based upon his lifetime in an annual amount equal to a designated percentage of
Employee's Final Average Annual Compensation or, in the case of Section 7(d)
below, Final Annual Compensation, which shall be comprised of the sum of (i)
Employee's 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 Employee from
Reynolds' Supplemental Plan], (ii) Employee's pension benefits determined as a
life annuity (without regard to actual payment form) under the Pension Plan and
deferred compensation payments under the Non-Qualified Deferred Compensation and
Disability Benefit Agreement dated May 1, 1999 between Employee and Reynolds, or
such other non-contributory deferred compensation agreement(s) then existing
between Reynolds and Employee, and (iii) such amount of supplemental retirement
benefits under the Supplemental Plan as shall be necessary to achieve the
designated percentage of Employee's Final Average Annual Compensation or, in the
case of Section 7(d) below, Final Annual Compensation. In addition to said
annual amount, Retirement Benefits shall include a continuation of coverage for
the remainder of Employee's 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 Employee
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

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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.

2. TERMS AND DUTIES.
   -----------------

     (a) The term of this Agreement shall continue from the date hereof and end
on May 1, 2004. Employee shall be employed by Reynolds as President and Chief
Operating Officer or such other reasonably equivalent position designated by the
Board, consistent with the provisions of this Agreement. In addition, Employee
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. Reynolds shall recommend to the Board that Employee be appointed as a
Director. Subject to Employee's willingness to so extend his employment,
Reynolds may extend the term of this Agreement for additional renewal periods of
not less than one (1) year each by giving written notice thereof not less than
twelve (12) months prior to May 1, 2004, initially and not less than twelve (12)
months prior to each succeeding renewal term termination date thereafter.

     (b) At all times Employee 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.

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     (c) For a period of two (2) years from and after Employee's employment with
Reynolds shall have terminated (provided, however, in the event of termination
of Employee's employment due to Reynolds' decision not to renew this Agreement
the period shall be one (1) year if the renewal period ending is also one (1)
year) and after he shall have ceased receiving retirement (provided that such
retirement benefits have then begun to be paid during the two (2) year (or one
(1) year) period mentioned in this Section 2(c)), severance or disability
benefits under this Agreement, whichever shall last occur, and during the period
of his employment by Reynolds, 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 8(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.

3. COMPENSATION AND FRINGE BENEFITS.
   ---------------------------------

     (a) The Base Compensation of Employee during the term of this Agreement
shall be $500,000, 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 Employee and Reynolds; provided, however, that such Base Compensation
may not be reduced below said rate of $500,000 without Employee's 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 9 below. Employee's Base

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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) Employee shall participate in the non-qualified deferred plan referred
to in Section 1(m) above and the 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) Employee shall be eligible to participate 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 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 Employee
non-qualified stock options covering 300,000 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) Reynolds hereby agrees to grant to Employee additional non-qualified
stock options covering 200,000 shares of Common Stock at the option price of one
cent ($.01)

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per share. The Stock Option Agreement to be used for this option is attached
hereto as Exhibit D and made a part hereof.

     (e) In addition to the specific benefits provided for Employee 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 E attached hereto and made a
part hereof. Notwithstanding anything contained herein or in any Incentive
Compensation Plans in which Employee participates, Reynolds shall pay to
Employee a bonus of at least $350,000 for the period ended September 30, 1999,
payable not later than November 30, 1999; provided, however, Employee shall be
continuously employed by Reynolds from the date hereof at least through
September 30, 1999.

4. EXPENSES
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     Employee 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 Employee, Employee 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.

5. RETIREMENT AND EARLY RETIREMENT BENEFITS.
   -----------------------------------------

     (a) If Employee continues his employment with Reynolds until he attains age
sixty-two (62), he shall be entitled to receive at the time of his retirement,
Retirement Benefits at a level equal to sixty percent (60%) of his Final Average
Annual Compensation. If Employee

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continues his employment with Reynolds beyond age sixty-two (62), 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 sixty-two (62) with a maximum Retirement Benefit of sixty-three
percent (63%) of Final Average Annual Compensation.

     (b) For each year prior to age sixty-two (62) Employee is employed by
Reynolds, his Retirement Benefits as a percentage of his Final Average Annual
Compensation shall accrue at the rate of four percent (4%) per year, payable
beginning at age sixty-two (62). As an example, if Employee terminates
employment due to death, disability, resignation or otherwise after ten (10)
years of employment with Reynolds, he shall be entitled to a Retirement Benefit
equal to forty percent (40%) of his Final Average Annual Compensation payable
beginning at age sixty-two (62). For purposes of this paragraph, a "year of
employment" shall mean each twelve (12) month period or part thereof from the
date hereof in which Employee works at least 1,000 hours.

     (c) In the event Employee remains continuously employed with Reynolds at
least until May 1, 2009, he shall be entitled to an early retirement benefit
payable commencing on the date of termination of employment which shall be
actuarially reduced to reflect the fact that payments shall commence prior to
age sixty-two (62).

     (d) To the extent Employee 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 Employee
shall be entitled under Sections 5(a) and 5(b) above; provided, however, that in
no event shall the benefits described in Sections 5(a) and 5(b) above be reduced
by the provisions of this Section 5(d).

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6. DISABILITY AND DEATH BENEFITS.
   ------------------------------

     (a) If Employee becomes disabled prior to his retirement he shall be
entitled to an annual disability benefit equal to fifty percent (50%) of his
Annual Compensation Value; provided, however, that such annual benefit under
this Agreement shall not exceed $500,000. The disability benefit shall be
provided through the then existing Reynolds sponsored disability plan with
Reynolds making any additional contributions as may be necessary to pay Employee
the required amount, and said benefit shall also be offset by any Retirement
Benefits which Employee may then be receiving. The disability benefit, including
any Reynolds required contribution, shall be paid so long as and on the same
terms and conditions as the payments being made under the Reynolds sponsored
disability plan. See Section 7(c) below.

     (b) In the event of Employee's death while still employed by Reynolds
pursuant to this Agreement, Employee 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 Employee 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 Employee's life
with respect to which he has the right to designate beneficiaries. Also,
Reynolds shall pay to Employee's 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

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manner as immediately prior to Employee's death for a period expiring at the
earlier of: (i) her death; (ii) forty-two (42) months after Employee's death; or
(iii) eligibility for regular Medicare and Medicaid or any successor programs
furnished by the government. Thereafter, Reynolds shall make available to
Employee's 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.

7. TERMINATION; DISCHARGE.
   -----------------------

     (a) TERMINATION OR DISCHARGE WITHOUT CAUSE. Reynolds reserves the right to
discharge Employee at any time and for any reason; but such discharge, unless a
Discharge For Cause, shall not extinguish the obligation of Reynolds to provide
Employee (and, in the event of his prior death, his designated beneficiary or
beneficiaries or his estate) with the following severance benefits:

     (i) If Reynolds does not renew this Agreement, Employee shall be entitled
to receive for a period expiring one (1) year from May 1, 2004 (or any renewal
termination date thereof if the renewal term then ending is also one (1) year)
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 Employee from any subsequent employment obtained by him during said
payment period.

     (ii) If such discharge occurs prior to May 1, 2004 (or thereafter if the
renewal term then ending is greater than one (1) year), Employee shall be
entitled to receive for a period expiring two (2) years from the date of
discharge, payments from Reynolds in an amount equal to his Annual Compensation
Value, which shall be reduced by seventy percent (70%) of the

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amount of compensation received by Employee from any subsequent employment
obtained by him during said payment period.

     (iii) Employee shall be entitled, during the period expiring on the earlier
of Employee's securing other employment or two (2) years from the date of
discharge (or such longer period as required by law), to continuing coverage
under the then-existing 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.

     (iv) For purposes of determining Employee's benefits under the Supplemental
Plan, Employee shall receive credit toward his Years of Service under the
Supplemental Plan for the time period that he receives or is entitled to receive
payments under subsections (i) or (ii) of this Section 7(a). In addition, during
the time period that he receives or is entitled to receive payments under said
subsections (i) or (ii) of this Section 7(a), Employee's 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) years prior to retirement under
the Supplemental Plan, and his Final Annual Compensation (see Section 7(d)
below) and Final Average Annual Compensation shall be deemed to increase in the
same manner for purposes of determining the amount of his Retirement Benefits
under this Agreement.

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

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     (vi) In addition to all of the foregoing, Employee shall be entitled to
receive the payments required of Reynolds under the non-qualified deferred
agreement referred to in Section 1(m) above in accordance with the terms of such
agreement(s).

     Employee acknowledges that he shall remain subject to and bound by the
restrictive provisions of Section 8 below.

     (b) DISCHARGE FOR CAUSE. If Employee's 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
7(d) or 7(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 Employee 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). Employee shall
remain subject to the restrictive provisions of Section 8 below for a period for
two (2) years from the date of discharge. Should Employee disagree that his
discharge was a Discharge For Cause the question shall be submitted to
arbitration in accordance with Section 9 below.

     (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, Employee 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
Employee and the failure of Employee 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
Employee's employment by giving him

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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 disability benefits under Section 6 above and except that Employee's
Retirement Benefits shall continue to accrue at the rate of four percent (4%)
per year for each year he continues to receive disability payments under said
Section 6.

     (d) BENEFITS UPON TERMINATION UNDER CERTAIN CIRCUMSTANCES. If Employee
voluntarily terminates his employment or Employee 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) Employee 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 or which are not ordinarily and generally
performed by a President and Chief Operating Officer (or either one of the
foregoing positions) of a corporation similar in size and scope to Reynolds; or

     (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; Employee shall be entitled to receive
from Reynolds all of the severance benefits set forth in Section 7(a) above,
except that Employee's right to receive his Retirement Benefits shall be based
upon his Final Annual Compensation, as the same may be adjusted pursuant to
Section 7(a)(iv) above. Employee shall remain subject to and bound by the
restrictive provisions of Section 8 below.

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     (e) BENEFITS UPON A CHANGE IN CONTROL. Reynolds recognizes that the threat
of a Change in Control would be of significant concern to Employee. The
following provisions provide termination protection for Employee in the event of
a Change in Control. These provisions, among other purposes, are intended to
foster and encourage Employee's 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 Employee's employment for any reason other than
a Discharge for Cause, or if Employee 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, Employee shall be
entitled to receive from Reynolds the following benefits:

         (A) A lump sum severance payment (the "Severance Payment"), in cash,
equal to three (3) times the sum of (i) the higher of Employee's annual Base
Compensation in effect immediately prior to the occurrence of the event or
circumstance upon which such termination of employment is based or in effect
immediately prior to the Change in Control, and (ii) the average of Employee's
Bonuses during the three (3) calendar years immediately preceding the year in
which the date of termination occurs.

         (B) Employee shall be entitled, during the period expiring on the
earlier of his 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 Employee's benefits under the
Supplemental Plan, Employee shall receive credit toward his Years of Service
under the Supplemental Plan for the two (2) year period following such
termination of employment. In

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addition, with respect to the two (2) year period following such termination of
employment, Employee's Base Compensation shall be deemed to be increased by the
annual economic range adjustment for 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.

         (D) Employee shall be reimbursed for up to $20,000 for outplacement
fees if he chooses to seek other employment following his discharge by Reynolds.
Employee 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, Employee 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 5 of this
Agreement.

     The benefits provided in this Section 7(e) shall be in lieu of any benefits
provided under Section 7(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 Employee in connection
with a Change in Control or the termination of Employee's 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

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necessary so that no portion of the Total Payments is subject to Excise Tax
(after taking into account any reduction in the Total Payments provided by
reason of Section 280G of the Code in such other plan, arrangement or agreement)
if (A) the net amount of such Total Payments, as so reduced, (and after
deduction of the net amount of federal, state and local income tax on such Total
Payments), is greater than (B) the excess of (i) the net amount of such Total
Payments, without reduction (but after deduction of the net amount of federal,
state and local income tax on such Total Payments), over (ii) the amount of
Excise Tax to which Employee would be subject in respect of such Total Payments.
For purposes of determining whether and the extent to which the Total Payments
will be subject to the Excise Tax, (i) no portion of the Total Payments the
receipt or enjoyment of which Employee shall have effectively waived in writing
prior to the date of this termination of employment shall be taken into account,
(ii) no portion of the Total Payments shall be taken into account which in the
opinion of tax counsel selected by 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 Employee's termination of employment, Reynolds
shall provide Employee with its calculation of the amounts referred to in this
Section and such supporting materials as are reasonably necessary for Employee
to evaluate Reynolds' calculations. If Employee objects to

                                       19
<PAGE>

Reynolds' calculations, he shall notify Reynolds of his objections prior to the
initial payment date set forth in Section 7(e)(vi) hereof, and Reynolds shall
pay to Employee such portion of the Severance Payment (up to one hundred percent
(100%) thereof) as Employee determines is necessary to result in Employee's
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) Employee's Base Compensation in effect immediately prior to the
Escrow Funding Event and (ii) the average of Employee's 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 Employee's Base Compensation is
increased (or decreased) or he receives a Bonus that affects the amount
described in Section 7(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.

     (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

                                       20
<PAGE>

demand pursuant to Section 7(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 Employee's right
to a payment under this Section 7(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 7(e), Employee 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 Employee. 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 Employee's employment for any reason but a
Discharge for Cause, or if Employee 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 Amount in
accordance with this Section and Employee shall no longer be subject to the
restrictive provisions of Section 8 below, except for Section 8(e). Employee
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

                                       21
<PAGE>

Section 7(e) (iii). If he has accepted such determination, Reynolds shall
provide the Escrow Agent with Reynolds' written determination as set forth in
Section 7(e) (iii) and the Escrow Agent shall pay to Employee all or a portion
of the Escrow Amount as provided in such determination, and any remaining amount
shall be paid to Reynolds. If Employee does not accept Reynolds' determination,
Employee shall provide to the Escrow Agent his determination of the Severance
Payment, and the Escrow Agent shall pay to Employee all or a portion of the
Escrow Amount as provided in Employee's 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 7(e)(vi) above, Employee incurs any costs or expenses, including
attorneys' fees, in the enforcement of rights under this Section 7(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 Employee all such costs and expenses.

8. 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 Employee 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

                                       22
<PAGE>

any reason other than the grounds specified in Section 7(e) above, or should he
be Discharged For Cause by Reynolds, Employee 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 (subject to
the limitations set forth in Sections 8(b) and 8(c) below) during which payments
are required to be made by Reynolds pursuant to the retirement (Section 5),
severance (Section 7, except for Section 7(e)(vi)) or disability (Section 6)
provisions of this Agreement. These restrictive provisions are as follows:

     (b) For a period of two (2) years from and after Employee's employment with
Reynolds shall have terminated (provided, however, in the event of termination
of Employee's employment due to Reynolds' decision not to renew this Agreement
the period shall be one (1) year if the renewal period ending is also one (1)
year) and after he shall have ceased receiving retirement (provided that such
retirement benefits have then begun to be paid during the two (2) year (or one
(1) year) period mentioned in this Section 8(b)), 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 Employee's termination of employment or upon the
cessation of any retirement, severance or disability benefits under this
Agreement.

                                       23
<PAGE>

     (c) From and after the execution of this Agreement and for a period of two
(2) years after termination (provided, however, in the event of termination of
Employee's employment due to Reynolds' decision not to renew this Agreement the
period shall be one (1) year if the renewal period ending is also one (1) year)
of his employment with Reynolds and after he shall have ceased receiving
retirement (provided that such retirement benefits have then begun to be paid
during the two (2) year (or one (1) year) period mentioned in this Section
8(c)), severance or disability benefits under this Agreement, whichever shall
last occur, Employee 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 8, however, are in no way
intended to prohibit Employee 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 8 to limit in any way Employee's ability to invest in businesses
not competitive with Reynolds.

     (e) Employee shall keep secret and inviolate all knowledge or information
of a confidential nature (which is not then nor later, through no breach of this
Agreement, in the public domain), including all unpublished matters related to,
without limitation thereof, the

                                       24
<PAGE>

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 Employee, either alone or with others,
during the period of his employment, and whether conceived, developed or made
during his regular working hours or at any other time during such period, shall
be and are the sole property of Reynolds and Employee hereby assigns to Reynolds
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Employee 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 Employee, it being
agreed that the contacts of Employee 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
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

                                       25
<PAGE>

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.

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

                  (a) Except for the breach or threatened breach by Employee 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 Employee 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 Employee 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 Employee,
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 Employee 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.

                  (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)

                                       26
<PAGE>

days after demand from Employee or Reynolds to the other to settle matters by
arbitration. As stated above, the decision of the arbitrators shall be final and
conclusive.

10. NONASSIGNABLE RIGHTS.
    ---------------------

     Employee, 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 Employee or his wife or his widow after his death or
his personal representatives, designated beneficiaries and heirs. Should
Employee 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 Employee 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 Employee or his wife or his widow
or his personal representatives, designated beneficiaries and heirs, as the case
may be, as Reynolds may deem expedient.

11. 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

                                       27
<PAGE>

policies on Employee's life) as it may deem necessary or proper; provided,
however, that Employee's 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 Employee's life, Employee 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) Employee, 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.

12. FACILITY OF PAYMENT.
    --------------------

     In the event of a physical or mental illness or disability of Employee 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 Employee
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 Employee's
death after he has made demand pursuant to Section 7(e)(v) above, the Escrow

                                       28
<PAGE>

Agent shall pay such amounts as thereafter are due to such beneficiary or
beneficiaries as Employee 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.

13. 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 Employee, addressed to:

     Lloyd G. Waterhouse
     2245 Ridgeway Road
     Dayton, OH 45419

Either party may change the address to which notices to such party are to be
sent by giving written notice of such change to the other party in the manner
specified in this provision.

     (b) (i) This Agreement shall be binding upon Employee, 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

                                       29
<PAGE>

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 Employee
during his lifetime and, after his death only with the consent of his widow
during her lifetime or his other designated beneficiaries during their lifetime,
as the case may be. Any agreement of amendment shall be executed with the same
formality as this Agreement.

     (d) This Agreement supersedes any prior agreements or understandings
covering the subject matter hereof, either written or oral, between the parties.

     (e) This Agreement shall be construed under the laws of the State of Ohio.

     (f) The paragraph headings used in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement.

     IN WITNESS WHEREOF, the parties hereto have hereunto set their respective
hands on November ____, 2001.

                                            THE REYNOLDS AND REYNOLDS COMPANY

                                            By________________________________
                                              Douglas M. Ventura
                                              General Counsel and Secretary

                                            LLOYD G. WATERHOUSE

                                            __________________________________
                                            Lloyd G. Waterhouse

                                       30<PAGE>
                                                                 EXHIBIT (10)(d)
                                                                 ---------------

                              EMPLOYMENT AGREEMENT

         AGREEMENT made and entered into the 7th day of May, 2001, and amended
and restated as of December 1, 2001, by and between THE REYNOLDS AND REYNOLDS
COMPANY, a corporation existing under the laws of the State of Ohio (hereinafter
referred to as the "Employer"), and Dale L. Medford (hereinafter referred to as
"Employee")

                                   WITNESSETH:

         WHEREAS, Employee is currently an employee of the Employer; and

         WHEREAS, Employer considers Employee a key member of the management
team of Employer and in order to induce and encourage Employee to remain with
Employer, Employer desires to provide Employee with additional benefits of
employment as set forth herein; and

         WHEREAS, the Employer also recognizes that a major change in the
control of the Employer would be of significant concern to Employee; and

         WHEREAS, the parties hereto desire to set forth their mutual agreement
regarding the terms of Employee's employment under certain specified
circumstances in order to induce and encourage Employee to remain with Employer
and to foster and encourage continued attention and dedication to Employee's
assigned duties in the event of a major change in the control of the Employer.

         NOW, THEREFORE, in consideration of the foregoing premises, Employee's
continued employment for any period after execution of this Agreement, and the
mutual promises set forth herein, the parties hereby agree as follows:

1.       DEFINITIONS.

                For purposes of this Agreement:

                (a) "Base Compensation" shall mean the then-current annual base
salary (exclusive of Bonuses) of Employee, as the same may be fixed from time to
time by the Board of Directors or its Compensation Committee or, if applicable,
by the appropriate executive officer of Employer.

                (b) "Bonuses" shall mean bonus payments earned by Employee
under Employer's Incentive Compensation Plans and under any future bonus or
incentive compensation plans of Employer for its executive officers in which
Employee participates.

<PAGE>

                  (c) "Change in Control" shall mean the occurrence of any of
the following events:

                  (i)      Any "person," as such term is used in Sections 13(d)
                           and 14(d) of the Securities Exchange Act of 1934, as
                           amended (the "EXCHANGE ACT") (other than Richard H.
                           Grant, Jr., his children or his grandchildren,
                           Employer, any trustee or other fiduciary holding
                           securities under an employee benefit plan of Employer
                           or any company owned, directly or indirectly, by the
                           shareholders of Employer in substantially the same
                           proportions as their ownership of stock of Employer),
                           who is or becomes the "beneficial owner" (as defined
                           in Rule 13d-3 under the Exchange Act), directly or
                           indirectly, of securities of Employer representing
                           twenty percent (20%) or more of the combined voting
                           power of Employer's then outstanding securities;

                  (ii)     during any period of two consecutive years (not
                           including any period prior to the execution of this
                           Plan), individuals who at the beginning of such
                           period constitute the Board, and any new director
                           (other than a director designated by a person who has
                           entered into an agreement with Employer to effect a
                           transaction described in clause (i), (iii) or (iv) of
                           this Section) who election by Employer's shareholders
                           was approved by a vote of at least two-thirds (2/3)
                           of the directors at the beginning of the period or
                           whose election or nomination for election was
                           previously so approved cease for any reason to
                           constitute at least a majority thereof;

                  (iii)    the consummation of a merger or consolidation of
                           Employer or any direct or indirect subsidiary of
                           Employer with any other corporation, other than (1) a
                           merger or consolidation which would result in the
                           voting securities of Employer outstanding immediately
                           prior to such merger or consolidation continuing to
                           represent (either by remaining outstanding or by
                           being converted into voting securities of the
                           surviving entity or any parent thereof) more than 50%
                           of the combined voting power of the voting securities
                           of Employer or such surviving entity or parent
                           thereof outstanding immediately after such merger or
                           consolidation or (2) a merger or consolidation
                           effected to implement a recapitalization of Employer
                           (or similar transaction) in which no "person" (as
                           hereinabove defined) is or becomes the beneficial
                           owner, directly or indirectly, of securities of
                           Employer (not including in the securities
                           beneficially owned by such person any securities
                           acquired directly from Employer or its affiliates
                           other than in connection with the securities acquired
                           directly from Employer or its affiliates other than
                           in connection with the acquisition by Employer or its
                           affiliates of a business) representing twenty percent
                           (20%) or more of the combined voting power of
                           Employer's then outstanding securities; or

                                       2
<PAGE>

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

                  (d) "Disability" or "Disabled" shall mean the inability of
Employee, because of any mental or physical illness or incapacity, to perform
substantially the duties of his employment with the Employer as determined under
the Employer's long-term disability program.

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

                  (f) "Escrow Agreement" shall mean the agreement entered into
simultaneously herewith between Employer and Bank One Trust Company, NA, a copy
of which is attached hereto and made a part hereof as Exhibit A.

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

                  (h) "Escrow Amount" shall mean the amounts placed in escrow by
Employer pursuant to subsection (a) of Section 2 of this Agreement.

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

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

                                       3
<PAGE>

                            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, Employer any trustee or
                            other fiduciary holding securities under an employee
                            benefit plan of Employer, or any company owned
                            directly or indirectly by the shareholders of
                            Employer in substantially the same proportions as
                            their ownership of the stock of Employer) has made a
                            tender offer for, or a request for invitations for
                            tenders of, Class A Common Shares of Employer;

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

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

                  (j) "Retirement Benefits" shall mean the benefits payable to
Employee under the Employer's Retirement Benefit Plans.

                     (i)    "Retirement Benefit Plans" shall mean:

                     (ii)   The Officers' Supplemental Plan;

                     (iii)  The Non-Qualified Deferred Compensation Plan;

                     (iv)   The Officers' Salary Continuation Plan; and

                     (v)    The Retirement Plan,

as each of the foregoing may be amended, supplemented or succeeded by another
plan from time to time.

2.     PAYMENT OF RETIREMENT BENEFITS.

       (a)    Upon the happening of any of the events set forth below at any
              time after the date hereof, Employee shall be entitled to receive
              Retirement Benefits payable in accordance with Employer's
              Retirement Benefit Plans in which Employee then participates. If
              such event occurs at any time from the date hereof through

                                       4
<PAGE>

              December 31, 2002, the Retirement Benefits shall be calculated as
              if the Employee was age 58 rather than actual age at the time of
              the event. If such event occurs at any time from January 1, 2003
              through May 31, 2012, the Retirement Benefits shall be calculated
              as if the Employee was age 62 rather than actual age at the time
              of the event; provided, however, that the portion of Employee's
              Retirement Benefits under the Employer's Retirement Plan (as
              referred to in Section 1(l)(iv) above) shall be calculated without
              making any age adjustment. Employee shall be entitled to the
              Retirement Benefits in the event any of the following occurs:

              (i)    the Employee's death;

              (ii)   the Employee's Disability;

              (iii)  the termination of Employee's employment by Employer at any
                     time and for any reason unless such termination is a
                     Discharge for Cause;

              (iv)   if, prior to a Change in Control, Employee voluntarily
                     terminates his employment with Employer upon giving the
                     Employer at least 180 days written notice; and

              (v)    if, after a Change in Control, Employee voluntarily
                     terminates his employment upon the giving of at least 180
                     days written notice for reasons other than as set forth in
                     subsection (a) of Section 5 of this Agreement, or his
                     employment is terminated pursuant to subsection (b)(i) of
                     Section 5 of this Agreement.

       (b)    Employer and Employee agree that the Retirement Benefits provided
              hereunder shall be in lieu of all other benefits to which Employee
              may then be entitled upon the happening of any of the events set
              forth in subsections (i) through (v) of Section 2(a) of this
              Agreement, except that Employee shall in all events be entitled
              to:

              (i)    those benefits required by law;

              (ii)   retiree medical coverage to the extent and on the same
                     terms and conditions then being provided by Employer;

              (iii)  any amounts necessary to replace up to age 62 any "Social
                     Security" payments that are taken into consideration (but
                     not yet paid to him due to his age at the time Retirement
                     Benefits hereunder are being paid) for purposes of
                     calculating his Retirement Benefits; and

              (iv)   in the event of a Change in Control, Employee shall be
                     entitled to the Retirement Benefits and the benefits set
                     forth in Section 5 of this Agreement.

                                       5
<PAGE>

Employee shall also be entitled to exercise all then outstanding stock options
in Employer to the extent said options are exercisable in accordance with the
terms thereof; provided, however, that upon an event giving rise to the payment
of Retirement Benefits hereunder, Employee shall for purposes of such options be
considered retired and have the right to exercise such options as fully as if he
had remained continuously employed by the Employer.

3. STOCK OPTIONS AWARD.

         Effective December 28, 2000, Employer hereby awards Employee
non-qualified stock options consisting of 90,000 shares of the Class A Common
Stock of Employer at the option price of $20.06 per share. The Stock Option
Agreement to be used for this option is attached hereto as EXHIBIT B and made a
part hereof.

4. PAYMENTS INTO ESCROW.

         (a) Upon the occurrence of an Escrow Funding Event within five (5)
years after the date of this Agreement, Employer shall pay into an escrow
account at the Escrow Agent an amount equal to two and ninety-nine one
hundredths (2.99) times the sum of the (i) higher of Employee's annual Base
Compensation in effect immediately prior to the occurrence of the event or
circumstance upon which such termination of employment is based or in effect
immediately prior to the Change in Control, and (ii) the average of Employee's
Bonuses during the three (3) calendar years immediately preceding the year in
which the date of termination occurs. Subsequent to the delivery to the Escrow
Agent of the Escrow Amount, Employer shall, in the event that either Employee's
Base Compensation is increased (or decreased) or he receives a Bonus that
affects the amount described in this subsection, unless the Escrow Amount shall
theretofore have been released pursuant to subsection (b) of this Section,
recalculate the Escrow Amount as of the date such change in Base Compensation or
receipt of Bonus occurs, treating the Escrow Funding Event as having occurred on
such date. If the amount so calculated exceeds the fair market value of the
Escrow Amount, Employer shall promptly (and in no event later than seven (7)
days from such date) pay to the Escrow Agent an amount in cash (or marketable
securities or any combination thereof) equal to such excess. If the Escrow
Amount so calculated is less than the fair market value of the Escrow Amount
then held in the escrow account, the Escrow Agent, upon receipt of a written
request from Employer, shall distribute to Employer such difference in cash;
provided, however, that this sentence shall not apply after the occurrence of a
Change in Control. The Escrow Amount shall be governed by the terms and
conditions of this Agreement and the Escrow Agreement.

         (b) Unless the parties otherwise agree, the Employer may withdraw the
Escrow Amount when and only when two (2) years have expired from the date of
deposit and no proper demand pursuant to subsection (b) (i) of Section 5 of this
Agreement has been made during that time, or when the conditions requiring the
deposit have ceased to exist for a period of ninety (90) days without a demand
right having been created, or when Employee's right to a payment under this
Agreement has been forfeited, whichever occurs first. If, before the expiration
of such periods or forfeiture, there shall occur another Escrow Funding Event,
the Employer will not be required to make an additional deposit, but the two (2)
year period shall

                                       6
<PAGE>

then be measured from the date of the last such event. Notwithstanding a deposit
with the Escrow Agent pursuant to subsection (a) of this Section, Employee shall
continue to be entitled to receive all of the normal and usual benefits from
Employer until a termination of employment shall occur.

         (c) The Employer shall pay the charges of the Escrow Agent for its
services under the Escrow Agreement, and the Employer will be entitled to any
interest or other income arising from the date of the deposit of the Escrow
Amount until all payments have been made under the Escrow Agreement to Employee.
All interest or other income arising from the Escrow Amount deposited with the
Escrow Agent shall be paid monthly to Employer.

         (d) In the event that, following the creation of a demand right
pursuant to Section 5 of this Agreement, Employee incurs any costs or expenses,
including attorneys' fees, in the enforcement of rights under this Agreement or,
subject to the limitations set forth in subsection (b) of Section 2 of this
Agreement, under any plan for the benefit of employees of the Employer,
including without limitation the stock option plan, pension plans, payroll-based
stock ownership plan, tax deferred savings and protection plan, bonus
arrangements, supplemental pension plan, deferred compensation agreements,
incentive compensation plans, and life insurance and compensation program, then,
unless the Employer or the consolidated, surviving or transferee entity in the
event of a consolidation, merger or sale of assets, is wholly successful in
defending against the enforcement of such rights, the Employer, or such
consolidated, surviving or transferee entity, shall promptly pay to Employee all
such costs and expenses.

5. EMPLOYMENT TERMS AND SEVERANCE BENEFITS AFTER CHANGE IN CONTROL.

         (a) After a Change in Control has occurred: (i) The Employer shall not
reduce Employee's Base Compensation below the amount of such Base Compensation
in effect immediately preceding the Change in Control without Employee's written
consent; (ii) The Employer shall continue to provide Employee with fringe
benefits (including bonuses, vacation, health and disability insurance, etc.) at
least equivalent to those of other similarly situated executive officers of the
Employer; (iii) Employee shall not be required by the Employer to perform duties
or services which differ significantly from those performed by him prior to the
Change in Control, or which are not ordinarily and generally performed by a
similarly situated executive of a corporation; (iv) The nature of the duties or
services which the Employer requires him to perform shall not necessitate
absence overnight from his place of residence on the effective date hereof,
because of travel involving the business affairs of the Employer for more than
ninety (90) days during any period of twelve (12) consecutive months.

         (b) (i)  If the Employer terminates Employee's employment or if
                  Employee terminates his employment with Employer for any of
                  the reasons specified in subsection (a) of this Section within
                  the twenty-four (24) month period following the date of a
                  Change in Control, the Escrow Agent upon written demand from
                  Employee shall pay promptly to the Employee the Escrow Amount
                  in one (1) lump sum in cash.

                                       7
<PAGE>

             (ii) Employee shall also be entitled to the following benefits
                  commencing as of the date of the payment of the Escrow Amount
                  to Employee:

                  A.       During the period expiring on the earlier of Employee
                           securing other employment or twenty-four (24) months
                           from date of payment of the Escrow Amount (or such
                           longer period as required by law) to continued
                           coverage under the Employer's sponsored medical
                           benefits program in existence on such date of
                           payment, or, if such continued coverage is barred,
                           Employer shall provide equivalent medical benefit
                           coverage through the purchase of insurance or
                           otherwise.

                  B.       In addition to the Retirement Benefits being
                           calculated pursuant to subsection (a) of Section 2 of
                           this Agreement, for purposes of determining
                           Employee's benefits under Employer's Supplemental
                           Plan, Employee shall receive credit toward his Years
                           of Service under the Supplemental Plan for the two
                           (2) year period following his termination of
                           employment. In addition, with respect to the two (2)
                           year period following such termination of employment,
                           Employee's Base Compensation shall be deemed to be
                           increased by the annual economic range adjustment for
                           Employer's salaried employees announced in October of
                           each year (or, if there is no such announced economic
                           range adjustment in a given year, by an assumed five
                           percent (5%) increase for that year) in order to
                           calculate his highest earnings during five (5)
                           consecutive years out of the last ten (10) years
                           prior to retirement under the Supplemental Plan.

                  C.       Employee shall be reimbursed for up to $20,000 for
                           outplacement fees if he chooses to seek other
                           employment following his termination of employment
                           with Employer.

         (c) Notwithstanding anything to the contrary in this Section, Employee
shall not be entitled to any payments pursuant to subsection (b) (i) of this
Section if Employee dies prior to making a demand for payment pursuant to
subsection (b) (i) of this Section, or if the Employer terminates Employee's
employment because of a Discharge for Cause, because of Employee's Disability,
or if Employee voluntarily terminates his employment with the Employer for
reasons other than as set forth in subsection (a) of this Section; provided,
however, Employee shall continue to be entitled to receive the Retirement
Benefits and to have his Retirement Benefits calculated pursuant to subsection
(a) of Section 2 of this Agreement in the event, prior to making a demand for
payment pursuant to subsection (b)(i) of this Section, he dies, becomes Disabled
or voluntarily terminates his employment upon giving at least 180 days written
notice for reasons other than as set forth in subsection (a) of this Section.

                                       8
<PAGE>

         (d) Employee shall not be required to mitigate damages with respect to
the amount of any payments provided for in subsection (b) of this Section by
seeking other employment or otherwise. Employee's sole remedy under this
Agreement for a breach by the Employer of subsection (a) of this Section shall
be to terminate employment and receive any payments to which he is entitled
under Section 2 of this Agreement and subsection (b) of this Section.

         (e) Should Employee disagree that his termination was due to a
Discharge For Cause, the question shall, within thirty (30) days after the
termination of employment, be submitted to arbitration by three (3) arbitrators,
one of whom shall be selected by Employer, another of whom shall be selected by
Employee, and the third of whom shall be selected by the two arbitrators so
appointed. The arbitration shall take place in Dayton, Ohio in accordance with
the then rules of the American Arbitration Association. The decision of these
arbitrators on the question shall be final and conclusive upon Employer and upon
Employee and his wife or widow, personal representatives, designated
beneficiaries and heirs, and shall be enforceable in any court having competent
jurisdiction thereof. A termination which is eventually determined under
arbitration to have been a Discharge For Cause, or no arbitration having been
requested and the termination being one which Employer has determined was a
Discharge For Cause, shall extinguish any and all liability of Employer under
this Agreement from and after the date of the termination of employment.

6. CONFIDENTIALITY; ENFORCEMENT.

         (a) Employee shall keep secret and inviolate all knowledge or
information of a confidential nature (which is not then nor later, through no
breach of this Agreement, in the public domain), including all unpublished
matters related to, without limitation thereof, the business, properties,
accounts, books and records, research and development information, processes,
procedures, products, know-how, trade secrets, memoranda, devices, suppliers,
and customers of Employer which he may now know or hereafter come to know as a
result of his affiliation in business with Employer.

         (b) All copyrights, improvements, discoveries and inventions and all
claims, interests and rights thereto relating to any part of the business of
Employer conceived, developed or made by Employee, either alone or with others,
during the period of his employment, and whether conceived, developed or made
during his regular working hours or at any other time during such period, shall
be and are the sole property of Employer and Employee hereby assigns to Employer
all right, title and interest in and to such copyrights, improvements,
discoveries and inventions. Further, Employee will, at any time in the future
upon Employer's request, execute specific assignments of any said copyrights,
improvements, discoveries and inventions as well as execute all documents and
perform all lawful acts which Employer deems necessary or advisable to vest full
ownership thereof in Employer, to register same in the name of Employer or its
designee or otherwise to provide legal protection for Employer's ownership
interests therein.

         (c) Any violation of this Section 6 by Employee may be enforced by
Employer by specific performance or appropriate injunctive relief in any court
of competent

                                       9
<PAGE>

jurisdiction. Any other dispute or controversy arising under this Agreement
shall be settled by arbitration in the manner set forth in subsection (e) of
Section 5 of this Agreement.

7. UNFUNDED AGREEMENT.

         The Employer's obligations under this Agreement are unfunded other than
from the date of deposit of the Escrow Amount, but the Employer reserves the
right to provide for its liability under this Agreement in any manner it deems
advisable, including the purchasing of such assets as it may deem necessary or
proper. Any asset so purchased by the Employer shall be the sole property of the
Employer and shall not be deemed to provide funding of the Employer's
obligations under this Agreement. Any other provision in this Agreement to the
contrary notwithstanding, Employee shall be only an unsecured general creditor
of the Employer with respect to all payments to be made under the terms of this
Agreement and shall have no claim, equity, interest, or right in or to any
specific assets or funds of the Employer as security for said payments other
than the Escrow Amount.

8. NON-ASSIGNABLE RIGHTS.

         Employee shall not have the right to anticipate or commute with any
third party, or to sell, assign, transfer, or otherwise alienate or convey the
right to receive any payments hereunder, whether by his voluntary or involuntary
act, or by operation of law and, in particular, that any payments due hereunder
shall not be subject to attachment or garnishment or any other legal proceedings
by any creditor, or be in any way responsible for the debts or liabilities of
Employee. Should any attempt be made to reach any payments hereunder by other
than Employee, the Escrow Agent shall make each payment as it becomes due to
such person or persons, for the sole benefit of Employee upon written direction
from Employee.

9. FACILITY OF PAYMENT; LIMITATION.

         In the event of a Disability of Employee after Employee has made demand
hereunder, such payments as may thereafter be due shall be paid to such person
or persons for the benefit of Employee as directed by Employee. In the event of
Employee's death after he has made demand, the Escrow Agent shall pay such
amounts as thereafter are due to such beneficiary or beneficiaries as Employee
shall have designated in writing on Exhibit C attached hereto and made a part
hereof, or failing such writing, to his estate. No liability shall accrue to the
Employer or Escrow Agent for any alleged payment to an improper person or
representative if so made after such reasonable investigation and the Employer
and Escrow Agent shall have no responsibility to see to the proper application
of such payments.

         Notwithstanding any other provisions of this Agreement, in the event
that any payment or benefit received or to be received by Employee in connection
with a Change in Control or the termination of Employee's employment (whether
pursuant to the terms of this Agreement or any other plan, arrangement or
agreement with Employer, any person whose actions result in a Change in Control
or any person affiliated with Employer or such person)(all such payments and
benefits, including the Escrow Amount, being hereinafter called "Total
Payments") would be subject (in whole or part), to an excise tax pursuant to
Sections 280G and

                                       10
<PAGE>

4999 of the Internal Revenue Code of 1986, as amended (the "Code") (such tax
hereinafter referred to as the "Excise Tax"), then the Escrow Amount shall be
reduced to the extent necessary so that no portion of the Total Payments is
subject to Excise Tax (after taking into account any reduction in the Total
Payments provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement) if (A) the net amount of such Total Payments, as so
reduced, (and after deduction of the net amount of federal, state and local
income tax on such Total Payments), is greater than (B) the excess of (i) the
net amount of such Total Payments, without reduction (but after deduction of the
net amount of federal, state and local income tax on such Total Payments), over
(ii) the amount of Excise Tax to which Employee would be subject in respect of
such Total Payments. For purposes of determining whether and the extent to which
the Total Payments will be subject to the Excise Tax, (i) no portion of the
Total Payments the receipt or enjoyment of which Employee shall have effectively
waived in writing prior to the date of this termination of employment shall be
taken into account, (ii) no portion of the Total Payments shall be taken into
account which in the opinion of tax counsel selected by Employer does not
constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code, (including by reason of Section 280G(b)(4)(A) of the Code) and, in
calculating the Excise Tax, no portion of such Total Payment shall be taken into
account which constitutes reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of
the base amount as defined in Section 280G(b)(3) of the Code allowable to such
reasonable compensation, and (iii) the value of any non-cash benefit or any
deferred payment or benefit included in the Total Payments shall be determined
by Employer in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code. Prior to the fifth day following the date of Employee's termination of
employment, Employer shall provide Employee with its calculation of the amounts
referred to in this paragraph and such supporting materials as are reasonably
necessary for Employee to evaluate Employer's calculations. If Employee objects
to Employer's calculations, he shall notify Employer of his objections prior to
the initial payment date set forth in Section 5 hereof, and Employer shall pay
to Employee such portion of the Total Payments (up to one hundred percent (100%)
thereof) as Employee determines is necessary to result in Employee receiving the
greater of clauses (A) and (B) of this paragraph.

10. RESPONSIBILITY FOR LEGAL EFFECT.

         Neither party hereto makes any representations or warranties, express
or implied, or assumes any responsibility concerning the legal, tax, or other
implications or effects of this Agreement. The Employer and the Escrow Agent
shall take all actions required by law with respect to any payments due
hereunder including but not limited to, withholding of tax from such payments.

11. INDEPENDENCE OF AGREEMENT; EMPLOYMENT TERMINATION.

         This Agreement shall be independent of any other contract or agreement
that may exist between the parties hereto from time to time. This Agreement
shall not restrict the Employer's rights to terminate Employee's employment with
the Employer nor Employee's rights to terminate employment with the Employer;
provided, however, that the Employer shall not terminate Employee's employment
prior to a Change in Control solely to avoid its

                                       11
<PAGE>

obligations to make payments required in the event of a Change in Control. No
merger or consolidation with any other entity, or sale of all or substantially
all of Employer's assets constituting an Escrow Funding Event, or thereafter a
Change in Control shall occur without assumption of the Agreement by the
purchaser or payment by purchaser or Employer of the sums set forth in
subsection (a) of Section 4 of this Agreement.

12. SECTION HEADINGS.

         The Section headings used in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement.

13. NOTICES.

         Any notices required or permitted to be given under this Agreement
shall be sufficient if in writing and if personally delivered or sent by
certified or registered mail to his residence as last shown on the employment
records of the Employer in the case of Employee, or to the corporate
headquarters to the attention of the President in the case of the Employer.

14. NON-WAIVER.

         The waiver by the Employer or Employee of a breach of any provision of
this Agreement by Employee or the Employer shall not operate or be construed as
a waiver of any subsequent breach by Employee or the Employer of the same or any
other provision hereof.

15. ENTIRE AGREEMENT; AMENDMENT.

         This Agreement represents the entire understanding of the parties with
respect to the subject matter hereof and supersedes all previous understandings,
written or oral, including the agreement between the parties dated August 17,
1998, which shall be rendered null and void. Any amendment to this Agreement
shall be executed in writing with the same formality as this Agreement.

16. BINDING EFFECT.

         This Agreement shall be binding upon Employee and the Employee's heirs,
executors, administrators, successors and assigns and upon the Employer and its
successors and assigns.

17. GOVERNING LAW.

         This Agreement shall be governed by and construed in accordance with
the laws of the State of Ohio.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
November ___, 2001.

                                  THE REYNOLDS AND REYNOLDS COMPANY

                                  By:
                                     -------------------------------------------
                                     Lloyd G. Waterhouse
                                     President and Chief Executive Officer

                                  ----------------------------------------------
                                  Dale L. Medford

                                       13
<PAGE>

                                                                       EXHIBIT A

                                ESCROW AGREEMENT

         This Escrow Agreement made and entered into as of this 7th day of May,
2001 by and between THE REYNOLDS AND REYNOLDS COMPANY, an Ohio corporation
(hereinafter referred to as "Reynolds") and BANK ONE TRUST COMPANY, N.A.
(hereinafter referred to as the "Escrow Agent").

                                   WITNESSETH:

         WHEREAS, Reynolds, has adopted a policy of providing termination pay
protection for certain of its key management personnel under conditions set
forth in an agreement dated May 7, 2001 (hereinafter referred to as the
"Agreement"); and

         WHEREAS, Reynolds has identified Dale L. Medford (hereinafter referred
to as "Employee") as key management personnel and has entered into the Agreement
with him; and

         WHEREAS, certain required protective payments under the Agreement are
to be paid to an escrow account at the Escrow Agent;

         NOW, THEREFORE, in consideration of the covenants and agreements
contained in this Escrow Agreement, the parties hereby do agree as follows:

         1. ACCEPTANCE OF ESCROW. The Escrow Agent shall serve as Escrow Agent
in accordance with the provisions of this Escrow Agreement, and the duties of
the Escrow Agent shall be solely those imposed by this Escrow Agreement.

         2. TERMS. The Escrow Agent shall receive, hold and disburse funds as
Escrow Agent in accordance with the Agreement, in the form attached hereto as
Exhibit A and made a part hereof. The Escrow Agent acknowledges that it has
reviewed and is familiar with the Agreement and shall be bound by the
obligations, terms and conditions therein relating to the Escrow Agent and its
duties.

         However, the Escrow Agent is not a party to or bound by the Agreement,
except as specifically provided for therein and as provided in Sections 2, 4, 6,
7 and 8 of this Escrow Agreement. The Escrow Agent shall be liable for only such
funds and items as are actually deposited and received by it for the purposes of
said escrow.

         3. INDEMNIFICATION. So long as the Escrow Agent shall follow the terms
of this Escrow Agreement and any instructions issued hereunder in good faith,
relying upon documents which it believes to be genuine and properly signed and
executed, it shall be held free, clear and harmless and shall incur no liability
hereunder. Reynolds shall indemnify and hold the Escrow Agent harmless from any
loss, liability, cost, or expense, including reasonable legal fees and expenses,
which may arise or be incurred by reason of this Escrow Agreement or the Escrow
Agent's performance in good faith of any duty or obligation hereunder.

<PAGE>

         The Escrow Agent shall not be liable for any error of judgment or for
any act done or omitted by it in good faith, or for anything which it may in
good faith do or refrain from doing in connection with said escrow; nor will any
liability be incurred by the Escrow Agent if, in the event of any dispute or
question as to the construction of this Escrow Agreement or any demand or notice
hereunder, the Escrow Agent acts in accordance with the opinion of its legal
counsel.

         4. INVESTMENTS BY ESCROW AGENT; INCOME. The Escrow Agent shall invest
escrow funds in federally-insured interest bearing accounts selected by Reynolds
or in any one or more of the following investments, selected by the Escrow
Agent:

     (a)  Certificates of Deposit of United States commercial banks holding
          membership in the Federal Reserve System. Such U.S. banks shall have
          minimum total assets of $1,000,000,000 and shall not be currently
          listed on any publicly-disclosed report of U.S. banks having financial
          problems warranting close monitoring by the Federal Reserve Board.

     (b)  Euro-dollar Certificates of Deposit issued by the twenty-five (25)
          largest United States commercial banks, which banks shall have minimum
          total assets of $1,000,000,000 and shall not be currently listed on
          any publicly-disclosed report of U.S. banks having financial problems
          warranting close monitoring by the Federal Reserve Board.

     (c)  Bankers Acceptances of United States commercial banks holding
          membership in the Federal Reserve System. Such U.S. banks shall have
          minimum total assets of $1,000,000,000 and shall not be currently
          listed on any publicly-disclosed report of U.S. banks having financial
          problems warranting close monitoring by the Federal Reserve Board.

     (d)  United States Treasury Bills.

     (e)  United States Treasury Notes.

     (f)  United States Government Guaranteed "Project Notes" and/or Tax-Exempt
          Notes rated MIG 1 by Moody's rating agency.

     (g)  Debt instruments issued by the following five United States Government
          agencies:

                           Federal Intermediate Credit Banks
                           Banks for Cooperatives
                           Federal Land Banks
                           Federal Home Loan Banks
                           Federal National Mortgage Association

                                       2
<PAGE>

     (h)  Commercial Paper rated Prime-1 by Moody's rating agency or rated A-1
          by Standard & Poors rating agency.

     (i)  Money market funds (including those managed by the Escrow Agent) the
          assets of which are obligations of or guaranteed by the United States
          of America (or repurchase agreements fully collateralized by such
          obligations) and which funds are rated, at the time of purchase, "Am"
          or "Am-G" or higher by Standard & Poors rating agency.

         In addition, with respect to any corporation's commercial paper being
purchased, such corporation's long-term debt, if any, must be rated either A by
Moody's rating agency or A by Standard & Poors rating agency.

         The total investments in the above-described approved Certificates of
Deposit, Bankers Acceptances, Commercial Paper, and/or Tax-Exempt Notes shall be
limited to a maximum of $1,000,000 at any one time in any one single bank,
corporation, state and/or municipality.

         With respect to funds deposited in escrow by Reynolds pursuant to the
terms of the Agreement, principal shall be used only for the payments to the
Employee. Any and all income on invested funds shall be paid to Reynolds in
accordance with subsection (c) of Section 2 of the Agreement. Fees of the Escrow
Agent shall be paid by Reynolds in accordance with subsection (c) of Section 2
of the Agreement.

         With respect to funds deposited pursuant to the Agreement, the Escrow
Agent shall be authorized to invest such funds. The Escrow Agent will maintain
such liquidity in the investments as will permit them to be cashed when
necessary to fund the required distributions to Employee.

         5. TERMINATION. This Escrow Agreement and all obligations of the Escrow
Agent shall terminate upon satisfaction by the Escrow Agent of all of its
obligations under this Escrow Agreement and the Agreement.

         6. ADVERSE CLAIMS. Escrow Agent shall make delivery or disbursement of
the funds deposited hereunder in accordance with the terms of the Escrow
Agreement and the Agreement, regardless of any disagreement or the presentation
of any adverse claims or demands of any person, unless such person shall have
obtained an injunction from a court having proper jurisdiction, enjoining Escrow
Agent from making such delivery or disbursement. Escrow Agent shall not become
liable to Reynolds or to any other person, for or because of such delivery or
disbursement of such funds, even with knowledge of a disagreement or adverse
claim or demand.

         7. DEMANDS. Except in cases where demand or notice by a single party is
specifically provided for in this Escrow Agreement or in the Agreement, the
Escrow Agent shall not be bound to recognize any notice, demand or change of
instructions as having any effect on this escrow unless given in writing and
signed by all parties considered by the Escrow Agent to be affected thereby.

                                       3
<PAGE>

         8. NOTICES. Any notice required or permitted to be given hereunder
shall be given in writing and shall be sufficiently delivered if sent by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:

                  Bank One Trust Company, NA
                  100 East Broad Street, 8th Floor
                  Columbus, OH 43215
                  Attention:  Corporate Trust Department

                  The Reynolds and Reynolds Company
                  115 S. Ludlow Street
                  Dayton, Ohio 45401
                  Attn: General Counsel

Should the address of any party identified above change for the purposes herein,
such party shall give written notice of the new address to the other parties
identified above.

         All notice hereunder to the Escrow Agent shall be given in writing to
an officer of the Escrow Agent. Unless written notice shall so be given, the
Escrow Agent shall not be required to take or be bound by said notice or to take
action concerning such notice. If written notice be properly given and the
Escrow Agent is required upon receipt thereof to take any action hereunder and
such action involves any expense or liability, the Escrow Agent shall not be
required to take any such action unless it is indemnified against such expense
or liability in a manner reasonably satisfactory to the Escrow Agent. At the
time of depositing funds into escrow on behalf of Employee, Reynolds shall
deliver to the Escrow Agent a written notice setting forth such person's name
and address, and social security number identifying the amounts being deposited
on such person's behalf, and the conditions of the Agreement, which have been
met and which, therefore, require that such deposit be made.

         9. RECORD KEEPING. The Escrow Agent shall maintain records showing the
amount and date of all deposits made by Reynolds for the benefit of Employee and
the amount and date of all disbursements made to Employee, his heirs, successors
and assigns. Reynolds shall be given access to said records at reasonable times
upon request.

         10. ESCROW FEE. Reynolds shall pay to the Escrow Agent for its services
hereunder an escrow fee based upon the then-current schedule of charges for such
services promulgated by the Escrow Agent and shall pay additional reasonable
compensation for any further or extraordinary service which the Escrow Agent may
be required to render pursuant to the terms of this Escrow Agreement.

         11. BINDING EFFECT. This Escrow Agreement shall be binding upon and
inure to the heirs, executors, administrators, personnel representatives,
successors and assigns of all parties hereto.

         12. MISCELLANEOUS. Employee is acknowledged to be third party
beneficiary upon the deposit of any amounts under this Escrow Agreement for his
benefit. This Escrow

                                       4
<PAGE>

Agreement may be modified or amended only by a writing signed (i) by all parties
hereto, (ii) by the third party beneficiary and (iii) by any other person the
Escrow Agent considers to be affected by said modification or amendment. This
Escrow Agreement shall be construed and enforced in accordance with the laws of
the State of Ohio.

         IN WITNESS WHEREOF, the parties hereto have set their respective hands
the year and date first hereinabove written.

                                THE REYNOLDS AND REYNOLDS COMPANY

                                By:
                                   ---------------------------------------------
                                                   "REYNOLDS"

                                BANK ONE TRUST COMPANY, NA

                                By:
                                   ---------------------------------------------

                                       5
<PAGE>

                                                                       EXHIBIT B

                                                                 Dale L. Medford
                            Executive Vice President and Chief Financial Officer

                             STOCK OPTION AGREEMENT
                 GRANTED UNDER THE REYNOLDS AND REYNOLDS COMPANY
                            STOCK OPTION PLAN -- 1995

                NONQUALIFIED STOCK OPTION -- GRANT NUMBER 040219

         A Nonqualified Stock Option is hereby granted this 28th day of
December, 2000 (the "Grant Date") by The Reynolds and Reynolds Company (the
"Company") to Dale L. Medford (the "Employee") in accordance with the provisions
of the Company's Stock Option Plan -- 1995 (the "Plan").

         On May 7, 2001 the Employee and the Company entered into an Agreement
(the "Agreement") conferring certain benefits of employment on Employee.

         In order to give the Employee additional incentive to contribute to the
success of the Company, to induce the Employee to remain in the employ of the
Company and to encourage the Employee to secure or increase on reasonable terms
stock ownership in the Company, the Company effective December 28, 2000 hereby
grants to the Employee a Nonqualified Stock Option (the "Option") to purchase
all or any part of a total of 90,000 of the Company's Class A Common Shares, no
par value per share (the "Option Shares" or "Shares"), at a price of $20.06 per
Option Share, subject to and upon the following terms and conditions:

1.   The term of the Option shall be ten (10) years from the Grant Date and
     shall expire on December 28, 2010 (the "Expiration Date"), unless earlier
     terminated in accordance with the provisions of the Plan.

2.   The Option Shares shall be exercisable in whole or in part at any time
     beginning as follows: twenty-five percent (25%) December 28, 2001; an
     additional twenty-five percent (25%) December 28, 2002; an additional
     twenty-five percent (25%) December 28, 2003; and an additional twenty-five
     percent (25%) December 28, 2004. In the event of a Change in Control (as
     defined in the Plan), all options outstanding on the date of such Change in
     Control (including this Option) shall become immediately and fully
     exercisable. To the extent the Option is then exercisable, it may be
     exercised in whole or in part at any time or from time to time within the
     exercise period, subject to the provisions of the Plan. The exercise of the
     Option shall be effectuated by submitting to the Secretary of the Company
     at its office in Dayton, Ohio: (a) written notice of intent to exercise the
     Option with respect to a specified number of Option Shares; (b) payment, in
     cash, or by check payable to the Company, or with already-owned shares of
     the Company, or a combination of such already-owned shares and cash, of the
     full amount of the purchase price for the number of Option Shares with
     respect to which the Option is then being exercised; and (c) payment in
     cash or by check of the full amount of all federal, state, and local taxes,
     if any, that the Company is required by law to withhold

<PAGE>

     with respect to such exercise. The Option may not be exercised for a
     fraction of an Option Share.

3.   The Option is not transferable other than by will or by laws of descent and
     distribution and may be exercised during the lifetime of the Employee only
     by the Employee.

4.   If Employee's employment is terminated by the Company other than due to a
     Discharge For Cause(as defined in the Agreement), Employee shall be deemed
     to have elected retirement for purposes of the Plan, and the Option,
     subject to the Expiration Date, shall become exercisable by the Employee,
     as if he had remained continuously employed by the Company. If Employee's
     employment is terminated by death, the Option, to the extent not
     theretofore exercised on the date of death, may be exercised within one
     year after the date of death, subject to the Expiration Date, by the person
     to whom the Option is transferred by will or the applicable laws of descent
     and distribution. If Employee's termination is a Discharge For Cause (as
     defined in the Agreement), all options (including this Option) not
     previously exercised shall immediately terminate. If the Employee
     voluntarily terminates his employment upon giving the Company at least 180
     days written notice, or if his employment terminates due to disability (as
     defined in the Employment Agreement), the Option, subject to the Expiration
     Date, shall be exercisable by the Employee in the manner and to the extent
     the Employee was entitled to exercise the Option as of the date of such
     termination. Other than as set forth in the Employment Agreement, nothing
     contained herein shall give the Employee any right with respect to
     continuance of employment with the Company or any subsidiary nor restrict
     in any way the right of the Company or any subsidiary to terminate his or
     her employment at any time.

5.   In the event of any change in the Option Shares by reason of a merger,
     consolidation, reorganization, recapitalization, stock dividend, stock
     split-up, combination or exchange of shares, or other change in the
     corporate structure (provided that the Company remains as the surviving
     entity upon the completion of any of the foregoing transactions) the number
     and class of Option Shares and the option price per Option Share shall be
     appropriately adjusted by the Committee, whose determination in each case
     shall be conclusive.

6.   Anything to the contrary notwithstanding, if the Company is the subject of
     a merger, acquisition, or other reorganization in which the Company is not
     to be the surviving entity, the Company shall, in its discretion
     (exercisable by the affirmative vote of 75% of the Directors of the Company
     in office immediately prior to the proposed transaction), have the right to
     cancel the Option immediately prior to the effective date of such merger,
     acquisition, or reorganization, by giving written notice to the Employee or
     his or her personal representative of its intention to do so and by
     permitting the purchase during the thirty (30) day period next preceding
     such effective date of all Option Shares.

                                       2
<PAGE>

7.   Neither the Employee nor his or her legal representative shall be or have
     any of the rights or privileges of a shareholder of the Company in respect
     to any of the Option Shares unless and until certificates representing such
     Option Shares have been issued.

8.   (a)  This Option is subject to all laws and regulations of any governmental
          authority which may be applicable hereto; notwithstanding any
          provisions hereof, the holder of this Option shall not be entitled to
          exercise such Option nor shall the Company be obligated to issue any
          Option Shares hereunder to the holder if such exercise or issuance
          shall constitute a violation by the Employee or the Company of any
          provisions of any such law or regulation.

     (b)  The Company, in its discretion, may postpone the issuance and delivery
          of Option Shares upon any exercise of this Option until completion of
          any stock exchange listing or registration or other qualification of
          such Shares under any state or federal law, rule, or regulation as the
          Company may consider appropriate and may require any person exercising
          this Option to make such representations and furnish such information
          as it may consider appropriate in connection with the issuance of the
          Option Shares in compliance with applicable law. Under such
          circumstances, the Company shall proceed with reasonable promptness to
          complete any such listing, registration, or other qualification.

     (c)  Option Shares issued and delivered upon exercise of this Option may be
          subject to such restrictions on trading, including appropriate
          legending of certificates to that effect, as the Company, in its
          discretion, shall determine necessary to satisfy applicable legal
          requirements and obligations.

     (d)  The Employee, for himself or herself and his or her transferees by
          will or the laws of descent and distribution, by accepting this
          Option: (i) represents that acquisition of the Option Shares shall be
          for investment purposes only; (ii) agrees that he or she will not
          sell, pledge, hypothecate, or otherwise distribute such Option Shares
          or any interest therein unless a registration statement covering such
          Option Shares is in effect under the Securities Act of 1933, as now or
          hereafter amended (the "ACT"), or unless counsel for the Company shall
          have rendered to the Company an opinion that such sale, pledge,
          hypothecation, or other such distribution may be carried out without
          registration of such Option Shares under the Act; and (iii) agrees
          that an appropriate legend may be placed on the stock certificate or
          certificates evidencing ownership of Option Shares acquired hereunder,
          which legend shall reflect the restrictions on disposition contained
          herein; provided, however, that the foregoing representations and
          agreements in this Paragraph (d) of Section 8 with respect to the
          Option Shares shall be inoperative and shall expire in the event that
          either: (A) the Option Shares shall be registered under the Act; or
          (B) in the opinion of counsel for the Company, such representations
          and agreements are not necessary under the Act or any rule or
          regulation promulgated pursuant thereto.

                                       3
<PAGE>

9.   The terms of this Agreement specifically incorporate and are subject to the
     terms and conditions of the Plan, a copy of which has been furnished to the
     Employee, as the same may be amended from time to time in the future;
     provided, however, that this Option cannot be altered to the detriment of
     the Employee, without his consent.

10.  Inability of the Company to obtain from any regulatory body having
     jurisdiction, the authority deemed by the Company's counsel to be necessary
     to the lawful issuance of any Option Shares hereunder shall relieve the
     Company of any liability in respect of the non-issuance of such Option
     Shares as to which such requisite authority shall not have been obtained.

11.  The interpretation, performance, and enforcement of this option shall be
     governed by the laws of the State of Ohio.

                                THE REYNOLDS AND REYNOLDS COMPANY

                                By:
                                   ---------------------------------------------
                                   Lloyd G. Waterhouse
                                   President and Chief Executive Officer

ATTEST:

---------------------------------
Douglas M. Ventura
General Counsel & Secretary

December 28, 2000 Nonqualified Stock Option Agreement

                                       4
<PAGE>

                         Acceptance of December 28, 2000
                            NONQUALIFIED STOCK OPTION

         I have reviewed a copy of The Reynolds and Reynolds Company Stock
Option Plan -- 1995, and agree to be bound by all of the terms and conditions
thereof and of this Agreement.

                                        ----------------------------------------
                                                     (Signature)

                                        DALE L. MEDFORD
                                        ----------------------------------------
                                                    (Printed Name)

                                        ----------------------------------------
                                               (Social Security Number)

Dated:   May 7, 2001, but effective
         as of December 28, 2000

                             DO NOT RETURN THIS COPY
                   THIS COPY SHOULD REMAIN WITH YOUR AGREEMENT

                                       5
<PAGE>

                                                                       EXHIBIT C

                             BENEFICIARY DESIGNATION

TO:   The President of The Reynolds and Reynolds Company

         Pursuant to the Agreement dated May 7, 2001 the undersigned hereby
designates the following beneficiary (beneficiaries) to receive any benefits
which may be payable under said Agreement subsequent to the undersigned's death:

(1)  Karen L. Medford.

(2)  If the beneficiary (beneficiaries) named in (1) above is not living or is
     no longer in existence, as the case may be, then to: Kristina M. Medford
     and Bethany R. Medford in equal portions.

         This Beneficiary Designation revokes all prior designations made by the
undersigned and is subject to all the terms of the Agreement.

Dated:  May 7, 2001
                                            ------------------------------------
                                                     Dale L. Medford

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