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Exhibit 10.14
RETENTION INCENTIVE BONUS ESCROW AGREEMENT
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RETENTION INCENTIVE BONUS PLAN ESCROW AGREEMENT ("Escrow Agreement")
made as of April 3, 1998, by and among Conley, Canitano & Assoc., Inc., an Ohio
corporation ("CCAi"), Kelly-Levey & Associates, Inc., a Kentucky corporation
("KLA"), Burke & Company, P.L.L. (the "Employees' Representative") and Anthony
F. Kelly, Gary Levey, Ronnie Crumpler, Trevor Montgomery, Rob Petersen and Don
Kirby (collectively the "Contributors").
RECITALS
A. On April 3, 1998, pursuant to a Stock Purchase Agreement dated as of
April 3, 1998 (the "Purchase Agreement"), CCAi closed (the "Closing") the
purchase of all of the issued and outstanding capital stock of KLA.
B. The Purchase Agreement provides that CCAi will pay or cause to be
paid a total of Three Million Five Hundred Thousand Dollars ($3,500,000) into an
escrow account (the "Escrow Account") established by the Employees'
Representative for purposes of funding sums due certain of the employees of KLA
(each individually, an "Employee," and collectively the "Employees") under the
KLA Retention Incentive Bonus Plan (the "Plan"). CCM will pay, or cause to be
paid, a total of Three Million Five Hundred Thousand Dollars ($3,500,000) into
the Plan in four installments (individually, a "CCAi Bonus Plan Deposit" and
collectively, "CCAi Bonus Plan Deposits") as follows: (i) $700,000 on October 3,
1998; (ii) $875,000 on April 3, 1999; (iii) $875,000 on April 3, 2000 and (iv)
$1,050,000 on October 3, 2000.
C. The Contributors have agreed to pay or cause to be paid $796,494 at
Closing (the "Initial Deposit," and with the CCAi Bonus Plan Deposits, the
"Deposits") and additional amounts as required by a certain Memorandum of
Understanding by and among the Contributors dated as of April 3, 1998 (the
"Memorandum of Understanding").
D. The parties to this Escrow Agreement have agreed upon and wish to
set forth the terms and conditions with respect to the Deposits to be
distributed by the Employees' Representative.
NOW THEREFORE, the parties agree as follows:
1. CAPITALIZED TERMS. Capitalized terms used in this Escrow Agreement
but not otherwise defined shall have the meanings assigned such terms in the
Plan.
2. EMPLOYEES' REPRESENTATIVE. CCAi, KLA and the Contributors hereby
designate and appoint the Employees' Representative to serve in accordance with
the terms, conditions and provisions of this Escrow Agreement, and the
Employees' Representative hereby agrees to act as such upon the terms,
conditions and provisions provided in this Escrow Agreement.
3. DEPOSITS OF ESCROW AMOUNTS. Immediately following the Closing and
pursuant to a Closing Disbursement Agreement dated as of April 3, 1998, the
Contributors shall deposit the
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Initial Deposit into the Escrow Account. CCAi shall make the CCAi Bonus Plan
Deposits in the amounts and on the dates set forth above.
4. BONUS PLAN PAYMENTS.
(a) On each of the dates hereof, October 3, 1998, April 3, 1999, April
3, 2000 and October 3, 2000 (each, a "Payment Date" and collectively, the
"Payment Dates'), amounts are to be distributed by the Shareholders'
Representative to participants under the Plan (the "Participants") in such
amounts and at such times as set forth on EXHIBIT A, net of all withholding
taxes and deferrals under CCAi's 401k plan or other benefit plans (the "Bonus
Plan Payments"); provided, however, that if a Termination Event (as defined in
the Plan) has occurred with respect to a Participant, such Participant shall no
longer be entitled to receive any future Bonus Plan Payments.
(b) Promptly after a Termination Event has occurred with respect to a
Participant, CCAi will send a letter to the Escrow Agent stating the name of the
former Participant, the date on which such termination is to be effective and
the reasons for such termination. The letter shall be signed by an executive
officer of CCAi or KLA.
(c) If, after giving effect to the Initial Deposit and the CCAi Bonus
Plan Deposits, the Escrow Account does not contain sufficient funds to make a
scheduled Bonus Plan Payment, the additional amount required to make the Bonus
Plan Payment(s) shall be deposited into the Escrow Account by the Contributors
as required by and in accordance with the terms of the Memorandum of
Understanding.
(d) Beginning with the October 3, 1998 Bonus Plan Payment, and after
each such Payment Date, if, immediately alter the Escrow Agent has made all such
Bonus Plan Payments, any funds remain in the Escrow Account, such additional
funds shall be deposited in and distributed pursuant to the provisions of that
certain Disbursement Agreement dated as of April 3, 1998.
5. INVESTMENT OF ESCROW ACCOUNT. Prior to the October 3, 1998 Bonus
Plan Payment, the Employees' Representative shall invest and reinvest any
balance in the Escrow Account in the _____________________. Income and interest
paid upon Deposits shall be retained and disbursed in accordance with the terms
of this Escrow Agreement.
6. RESPONSIBILITIES OF THE EMPLOYEES' REPRESENTATIVE. The Employees'
Representative shall have no duties or responsibilities except those expressly
set forth herein. The Employees' Representative shall have no responsibility or
liability for the truth, accuracy or validity of any agreements referred to in
this Escrow Agreement (including, without limitation, Exhibit A or the Plan), or
for the performance of any such agreements by any parry thereto or for
interpretation of any of the provisions of any of such agreements. The
Employees' Representative shall not be liable for any action or determination
taken or made in good faith with respect to this Escrow Agreement or any other
agreements referenced herein. The liability of the Employees' Representative
hereunder shall be limited solely to bad faith, willful misconduct or gross
negligence on its part. The Employees' Representative shall be protected in
acting upon any certificate, notice or other
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instrument whatsoever received by the Employees' Representative under this
Escrow Agreement, not only as to its due execution and the validity and
effectiveness of its provisions, but also as to the truth and accuracy of any
information therein contained, which the Employees' Representative in good faith
believes to be genuine and to have been signed or presented by a proper person
or persons.
If the Employees' Representative is uncertain as to its duties or
rights hereunder or receives instructions with respect to any funds to be
distributed pursuant to this Escrow Agreement which, in the opinion of the
Employees' Representative and its counsel, are in conflict with any of the
provisions of this Escrow Agreement, the Employees' Representative shall be
entitled to refrain from taking any action until it is directed otherwise in
writing by all of the other parties hereto or by an order of a court of
competent jurisdiction. The Employees' Representative shall be deemed to have no
notice of, or duties with respect to, any agreement or agreements with respect
to any property held by it in escrow pursuant to this Escrow Agreement other
than this Escrow Agreement or except as otherwise provided herein. This Escrow
Agreement sets forth the entire agreement relating to the matters set forth
herein between the parties hereto and the Employees' Representative. If any of
the terms and provisions of any other agreement (excluding any amendment to
this Escrow Agreement) between any of the parties hereto conflict or are
inconsistent with any of the terms and provisions of this Escrow Agreement. the
terms and provisions of this Escrow Agreement shall govern and control in all
respects.
7. RESIGNATION. The Employees' Representative shall have the right, in
its discretion, to resign as agent at any time, by giving at least 30 days'
prior written notice of such resignation to CCAi and KLA. The Employees'
Representative shall be discharged from all further duties hereunder upon the
expiration of such 30-day period provided, however, that during such 30-day
period, CCAi and KLA must appoint a successor escrow agent and cause the Escrow
Agent to transfer any funds remaining in the Escrow Account to such successor
escrow agent.
8. FEES AND EXPENSES. The Contributors shall be liable for the
Employees' Representative's fees and expenses for its services hereunder. For
services rendered under this Escrow Agreement, the Contributors shall pay the
Employees' Representative a fee of $_____.
9. NOTICES. All communications and disbursements required pursuant to
this Escrow Agreement shall be addressed to the Sellers' Representative, CCAi
and KLA, respectively as follows:
If to the Employees' Representative:
Burke & Company P.L.L.
2105 Grandin Road
Cincinnati, Ohio 45208
Attention: Patrick J. Burke
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If to CCAi or KLA:
Conley, Canitano & Assoc., Inc.
CCAi Renaissance Centre
5800 Landerbrook Drive
Mayfield Heights, OH 44124
Facsimile No. (440) 684-6700
Attention: Nicholas A. Canitano
With a copy to counsel:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Facsimile No.: (216) 579-0212
Attention: John M. Saada, Jr., Esq.
If to Contributors:
Anthony F. Kelly
787 Gallant Fox
Union, Kentucky 41091
With a copy to counsel:
Deters, Benzinger & LaVelle, P.S.C.
Thomas More Park
2701 Turkeyfoot Road
Covington, Kentucky 41017
Attention: John C. LaVelle, Esq.
Ronnie Crumpler .
2720 Lakeshore Lane
Carrollton, Texas 75006
With a copy to counsel:
Thompson, Coe, Cousins & Irons, L.L.P.
200 Crescent Court, Eleventh Floor
Dallas, Texas 75201-1853
Attention: Michael A. McClelland, Esq.
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Gary Levey
11424 Kayak Court
Indianapolis, Indiana 46236
With a copy to counsel:
Siegel, Carter & Dassow, LLP
300 North Meridian Street
Suite 1800
Indianapolis, Indiana 46204
Attention: Robert T. Dassow, Esq.
Trevor Montgomery
3191 Somerville-Jacksonburg Road
Middletown, Ohio 45042
With a copy to counsel:
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Rob Petersen
3108 North Southport Avenue
First Floor
Chicago, Illinois 60657
With a copy to counsel:
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Don Kirby
984 Lakepointe Court
Union, Kentucky 41091
With a copy to counsel:
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or to such other address as such party may indicate by a notice delivered to the
other parties hereto.
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Any notice, instructions or delivery under any of the provisions of
this Escrow Agreement shall be in writing and shall be delivered personally, or
sent by reputable courier service, delivery charges prepaid and proof of
delivery requested. Any such notice shall be deemed given (j) if delivered
personally, when so delivered to the applicable address set forth above in this
paragraph 9 or (ii) if sent by courier service to the applicable address set
forth above in this paragraph 9, two days after delivery to such courier
service. Notwithstanding any of the foregoing, no notice or instructions to the
Employees' Representative shall be deemed to have been received by the
Employees' Representative prior to actual receipt by the Employees'
Representative.
10. PARTIES IN INTEREST. This Escrow Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
executors, and administrators, successors and assigns.
11. CAPTIONS. The paragraph captions used herein are for reference
purposes only, and shall not in any way affect the meaning or interpretation of
this Escrow Agreement.
12. EXECUTION BY EMPLOYEES' REPRESENTATIVE. The execution of this
Escrow Agreement by the Employees' Representative shall constitute a receipt for
the Initial Deposit.
13. INDEMNIFICATION OF EMPLOYEES' REPRESENTATIVE. The Contributors,
jointly and severally, agree to hold the Employees' Representative harmless and
to indemnify the Employees' Representative against any loss, liability, claim or
demand arising out of or in connection with the performance of its obligations
in accordance with the provisions of this Escrow Agreement, except for bad
faith, gross negligence or willful misconduct of the Employees' Representative.
The foregoing indemnities in this paragraph 13 shall survive termination of this
Escrow Agreement.
14. DISAGREEMENTS. If any disagreement or dispute arises between the
parties to this Escrow Agreement concerning the meaning or validity of any
provision under this Escrow Agreement or concerning any other matter relating to
this Escrow Agreement, the Employees' Representative (a) shall be under no
obligation to act, except under process or order of court, or until it has been
adequately indemnified to its full satisfaction, and shall sustain no liability
for its failure to act pending such process or court order or indemnification,
and (b) may deposit, in its sole and absolute discretion, the Deposits or that
portion of the Deposits it then holds with any court of competent jurisdiction
and interplead the parties. Upon such deposit and filing of interpleader, the
Employees' Representative shall be relieved of all liability as to the Deposits
and shall be entitled to recover from the parties its reasonable attorneys' fees
and other costs incurred in commencing and maintaining such action.
15. THIRD-PARTY BENEFICIARIES. The Employees and their respective
successors, heirs, executors, administrators and other estate representatives
shall be third party beneficiaries of the provisions of this Escrow Agreement,
and shall be entitled to enforce the provisions hereof, in each such case as
fully and to the same extent as if they were parties to this Escrow Agreement.
Except as provided in the immediately preceding sentence, nothing in this Escrow
Agreement, express or implied, is intended to or shall confer upon any person
any legal or equitable right, benefit or remedy
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of any nature whatsoever under or by reason of this Escrow Agreement, and no
Person (other than as provided in the immediately preceding sentence) shall be
deemed to be a third parry beneficiary under or by reason of this Escrow
Agreement.
16. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed in accordance with the domestic laws of the Ohio without giving effect
to any choice of law or conflict of law provision or rule (whether of the state
of Ohio or any other jurisdiction) that would cause the application of the laws
of any jurisdiction other than the state of Ohio.
17. AMENDMENTS; COUNTERPARTS. This Escrow Agreement may be executed in
one or more counterparts, all of which together shall constitute one instrument
and cannot be amended or modified in any manner other than by a written
instrument duly executed by each parry hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGES TO FOLLOW.]
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IN WITNESS WHEREOF, the parties heretinto have duly caused this Escrow
Agreement to be executed as of the first day above written.
BURKE & COMPANY, P.L.L.,
as Employees' Representative
By: /s/ Patrick Burke
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Its: MANAGING PARTNER
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CONLEY, CANITANO & ASSOC., INC.
By: /s/ Annette Canitano
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Its: Exec VP
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KELLY-LEVEY & ASSOCIATES, INC.
By: /s/ Anthony Kelly
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Its: President/CEO
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/s/ Anthony Kelly
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Anthony Kelly
/s/ Ronnie Crumpler
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Ronnie Crumpler
/s/ Gary Levey
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Gary Levey
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/s/ Trevor Montgomery
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Trevor Montgomery
/s/ Rob Petersen
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Rob Petersen
/s/ Don Kirby
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Don Kirby
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RETENTION INCENTIVE BONUS PLAN ESCROW AGREEMENT
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EXHIBIT A
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NAME OCTOBER 3,1998 APRIL 3, 1999 APRIL 3, 2000 OCTOBER 3, 2000
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Aliberti $ 33,334 $ 15,625 $ 15,625 $ 18,750
Balenciaga 90,369 46,153 46,153 55,384
Ballehr 40,138 20,237 20,237 24,285
Banta 33,334 15,625 15,625 18,750
Bearden 40,368 22,716 22,716 27,259
Belcher 33,334 15,625 15,625 18,750
Booze 33,334 15,625 15,625 18,750
Brennan, Charles 73,702 38,341 38,341 46,009
Brennan, Jennifer 73,702 38,341 38,341 46,009
Chalfant 21,662
Clifton 33,334 15,625 15,625 18,750
Collo 16,667 7,813 7,813 9,375
Crossman 16,667 7,813 7,813 9,375
Dickinson 47,370 22,584 22,584 27,101
Gaby 10,000 -- -- --
Geary 25,000 11,719 11,719 14,063
Goldfine 50,000 23,438 23,438 28,125
Gravitt 56,805 28,050 28,050 33,660
Heitz 3,333 1,563 1,563 1,875
Hiquet 47,370 22,584 22,584 27,101
Kelly -- 146,147* 146,146* 146,146*
Kendler 30,704 14,772 14,772 17,726
Kirby, Dave 25,000 11,719 11,719 14,063
Kirby, Don -- 14,322* 26,598* --
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NAME OCTOBER 3,1998 APRIL 3, 1999 APRIL 3, 2000 OCTOBER 3, 2000
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Knorr 16,667 7,813 7,813 9,375
Luthy 40,368 22,716 22,716 27,259
Mason 33,334 15,625 15,625 18,750
McDonel 47,370 22,584 22,584 27,101
Meckert 25,000 11,719 11,719 14,063
Mohammad 50,000 23,438 23,438 28,125
Montgomery -- 17,970* 33,373* --
Nadeau 25,000 11,719 11,719 14,063
Pepper 11,900 18,285 18,285 21,942
Petersen -- 14,322* 26,598* --
Pollack 33,334 15,625 15,625 18,750
Renneker 53,518 26,983 26,983 32,379
Roenbaugh 47,370 22,584 22,584 27,101
Rottinghaus 56,805 28,050 28,050 33,660
Schulz 33,334 15,625 15,625 18,750
Sensel 33,334 15,625 15,625 18,750
Westberg 33,334 15,625 15,625 18,750
Williams 16,667 7,813 7,813 9,375
Wischer 50,000 23,438 23,438 28,125
Wolfe 37,854 47,140 47,140 56,568
Prado 3,333 1,563 1,563 1,875
TOTAL 1,484,049 942,699 982,653 1,046,067
* Represents payment from CCAi for each individual's common stock of KLA
that was otherwise diverted at the Closing by such individuals to fund
the first 6 months payments to employees of KLA under the Bonus Plan.
Therefore, these amounts represent capital gain income, not ordinary
income and are not subject to employee related withholding taxes.