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Express Escrow Agreement

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EXHIBIT 10.6

ESCROW AGREEMENT

THIS ESCROW AGREEMENT is entered into as of the __ day of the ___ day of ____________, 2004, by and among EXPRESS SYSTEMS CORPORATION (“Company"), and RUBIN, BAILIN, ORTOLI, MAYER & BAKER LLP, a New York limited liability company (the "Escrow Agent").

WITNESSETH:

 

WHEREAS, the Company has filed a registration statement with the Securities and Exchange Commission ("Registration Statement"), contemplating the public offering ("Offering") of 400,000 Shares, shares of common stock, $.001 par value (the "Shares"); the Company proposes to offer the Shares, without the use of an underwriter or selected broker/dealers, on a "best efforts--all or none" basis ("Offering"); the proceeds of sales of Shares made during the offering period described in the prospectus contained in the Registration Statement ("Prospectus") (which period will terminate on the earlier of (i) February 28, 2005 or June 30 2005 if the Company unilaterally extends the offering period; or (ii) the sale of the Offering (either (i), (ii) or (iii) shall be referred to as the "Offering Period")) are to be deposited and held in escrow pending the outcome of the Offering; if the Offering is completed during the Offering Period, such proceeds shall be paid to the Company; and if the Offering is not completed during the Offering Period, all of the funds so held in escrow are to be promptly returned to the purchasers of Shares without interest or deduction.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, as more fully set forth herein, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows:

1.    Rubin, Bailin, Ortoli LLP agrees to act as Escrow Agent in connection with the Offering and, as such, to receive for deposit in its Attorney’s Escrow Account all of the aforesaid proceeds of sale.

2.    Promptly following receipt by the Company of checks, drafts, or other items for the payment of money covering purchased Shares, the Company shall deliver such items to the

Escrow Agent 405 Park Avenue, New York, New York 10022. The Escrow Agent will credit the proceeds of such items and funds to an escrow cash account to be held by it under the terms of this Agreement. Any item returned to the Escrow Agent on its first presentation for payment shall be returned to the investor and need not be again presented by the Escrow Agent for collection. The Company shall deliver only checks, drafts and other items made payable to the Escrow Agent. The requirements of this Paragraph 2 shall remain in effect until the termination of the Offering Period, notwithstanding an earlier completion of the Offering and remission of escrowed funds pursuant to this Paragraph hereof.

	 
	 	 	 
	

	 

3.    At any time the Company delivers such checks, drafts, or other items for payment of money to the Escrow Agent, it shall also furnish the Escrow Agent with a list of the name of each purchaser, his or her address and social security or tax identification number, the number of Shares purchased, and the amount of the check, draft, or other item being delivered to the Escrow Agent.

4.    The effective date of the Prospectus shall be regarded for purposes of this Agreement as the date the Offering Period commences ("Commencement Date"). The Company shall deliver to the Escrow Agent either an affidavit of any one of its officers indicating the Commencement Date or a copy of the Prospectus. The Escrow Agent need not accept deposits prior to receipt of such affidavit or Prospect us.

 

5.    If at or prior to 5:00 P.M., New York Time, on the next business day following either Offering Period, as the case may be, there shall have been deposited with the Escrow Agent the sum of no less than $200,000 representing the aggregate proceeds from the sale of the Shares, the Escrow Agent shall, subject to the final collection of the checks, drafts, and other items for the payment of money so received, remit the balance in the escrow cash account, less such amounts payable to the Escrow Agent under Paragraph 8(ii) hereof, by issuing its check payable to the Company for the total escrow funds. It is understood and agreed that should any check(s) draft(s) or other item(s) for the payment of money be returned and unpaid for any reason whatsoever after the expiration of the Offering Period, as the case may be, that would cause the collected aggregate proceeds of the sale of the Shares to be less than $200,000, no monies shall be payable to the Company from the Escrow Account, and the Escrow Agent shall comply with the provisions of Paragraph 6 hereof.

6.    If by 5:00 P.M., New York Time, on the date provided in Paragraph 5 hereof, there shall not have been deposited with the Escrow Agent the sum of $200,000 as aforesaid, the Escrow Agent shall as soon as practicable thereafter issue and mail checks to the purchasers of the Shares and shall, for this purpose, rely upon the information furnished it as contemplated in Paragraph 3 hereof.

7.    The Company hereby agrees to indemnify the Escrow Agent and hold it harmless from any and all claims, liabilities, losses, actions, suits, or proceedings, at law or in equity, that it may incur or with which it may be threatened by reason of its acting as Escrow Agent as described herein; and in connection herewith, to indemnify the Escrow Agent against any and all expenses (including attorney's fees) or costs of defending any such action, suit, or proceeding or resisting any such claim; provided, however, that the provisions of this paragraph shall not apply in the event of any claim, liability, loss, action, suit, or proceeding resulting from the breach by the Escrow Agent of any provision of this Agreement or from its gross negligence or willful

misconduct.

8.    As consideration for the Escrow Agent's agreement to act hereunder as described herein, the Company agrees to pay to the Escrow Agent an administrative fee of $1,500 paid upon execution of this Agreement.

	 
	 	 	 
	

	 

9.    To induce the Escrow Agent to act hereunder, the undersigned further agrees that:

a.    The Escrow Agent may act in reliance upon any instrument or signature believed to be genuine and may assume that any person purporting to give any writing, notice, advice, or instruction in connection with the provisions hereof has been duly authorized to do so.

b.    The Escrow Agent may act relative hereto upon advice of counsel in reference to any matter connected herewith, and shall not be liable for any mistake of fact or error of judgment, or for any acts or omissions of any kind unless caused by its willful misconduct or gross negligence.

c.    This Agreement sets forth exclusively the duties of the Escrow Agent with respect to any and all matters pertinent hereto and no implied duties or obligations shall be read into this Agreement against the Escrow Agent.

d.    This Agreement shall be construed and enforced according to the laws of the State of New York.

e.    The rights created by this Agreement shall inure to the benefit of, and the obligations created thereby shall be binding upon, the successors and assigns of all parties to this Agreement.

10.    Whenever any notice, payment, or other communication is required to be given or delivered pursuant to this Agreement, such notice shall be given in writing and shall be delivered in person or by certified mail, return receipt requested, and shall be sufficiently given if personally delivered, or by mail addressed as follows:

	
If to the Company: 
	
 Express Systems Corporation
114 W. Magnolia Street, Suite 446
Bellingham, WA 98225 
Tel: 800-661-7830

 

	
 If to the Escrow Agent:
	
 Rubin, Bailin, Ortoli LLP
405 Park Avenue - 15th Floor
New York, NY 10022
Attn: William Rosenstadt
Tel: 212-935-0900

       

     

or to such other address as either party hereto may have by written notice designated to the other party, given in accordance with this Paragraph 10.

11.    This Escrow Agreement may counterparts, each of which when taken together constitute a single document.

	 
	 	 	 
	

	 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

EXPRESS SYSTEMS CORPORATION

By:     

Lawrence Rosenblatt, President

RUBIN, BAILIN, ORTOLI, MAYER & BAKER LLP

By:     

William S. Rosenstadt, Esq.EX-10.1

Exhibit 10.1

AMENDED AND RESTATED

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN AGREEMENT

Effective January 1, 2005

This amended and restated agreement (the “Agreement”) is made and effective as of January 1,
2005 between CSK AUTO, INC., an Arizona corporation (the “Company”) and MAYNARD JENKINS, an
individual residing at 6052 E. Jenan Drive, Scottsdale, AZ 85254 (the “Executive”). This 2005
amendment and restatement of the Agreement is intended to be good faith compliance with the
provisions of the American Jobs Creation Act of 2004.

WHEREAS, the parties have entered into an Employment Agreement, amended and restated as of
June 12, 1998, whereby the Company has secured the exclusive services of the Executive (the
“Employment Agreement”); and

WHEREAS, in addition to the benefits payable pursuant to the Employment Agreement, the
parties wish to have the Company provide supplemental executive retirement plan benefits (“SERP
benefits”) to the Executive on an unfunded basis pursuant to the provisions of this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and
agreements of the parties herein contained, the parties hereto agree as follows:

1. Definitions. Unless otherwise defined herein, terms defined in the Employment
Agreement shall be used as so defined.

2. Supplemental Executive Retirement Benefits.

(a) Duration of SERP Benefits; Time of Payment. Subject to satisfaction of
the vesting requirements set forth in Section 2(c) hereof and except as otherwise provided in this
Section 2, the Executive shall be entitled to receive SERP benefits for a ten (10) year period, to
be paid out (with the exception of payments made pursuant to Section 2(d)(i) or Section 3) as
follows:

(i) Payment In Year One. The first year’s payment shall be made in two (2)
installments: the first installment of $400,000 (i.e., the amount vested as of January 1, 2005,
the effective date of this amended and restated Agreement) shall be paid 30 days after the
effective date of the termination of the Executive’s employment, and the second installment of the
balance of the SERP benefit for such year shall be paid as soon as administratively practicable
following the date that is six (6) months after the effective date of the termination of the
Executive’s employment.

(ii) Payment in Years Two Through Ten. Subsequent years’ payments shall be made on
each succeeding anniversary of the first installment of the first year’s payment (each such date
being hereinafter called a “Benefit Payment Date”).

(iii) Termination for Cause. Notwithstanding anything in this Section 2(a), no
payment shall be made earlier than February 1, 2006 in the event Executive’s employment is
terminated for Cause.

(b) Amount of Benefit. The gross amount payable to the Executive in the first year
following his termination of employment (i.e., the sum of the first and second installments), and
on each Benefit Payment Date in the subsequent nine years, shall be $600,000 less applicable income
and payroll taxes required to be withheld (the “Maximum SERP Benefit”), or, if less than 100%
vesting is attained, such lesser amount as shall correspond to the degree of vesting attained.

(c) Vesting. The Executive shall vest in 331/3% of the Maximum SERP Benefit
on February 1, 2002, provided he is a full time executive of the Company on such date, and shall
vest in an additional 162/3% of the Maximum SERP Benefit on each of the next four
anniversaries of such date provided the Executive is a full time executive of the Company on any
such date. Thus, for example, if the Executive is employed by the Company as of February 1, 2004,
he will have vested by such date in 662/3% of the Maximum SERP Benefit (662/3%
x $600,000 = $400,000 per year for ten years).

(d) Termination of Employment Prior to Full Vesting. In the event the Executive’s
employment with the Company shall terminate prior to February 1, 2006, vesting and payment of SERP
benefits hereunder shall be determined in accordance with the following provisions:

(i) Death or Disability. In the event the Executive’s employment with the Company is
terminated prior to February 1, 2006 because of his death or Disability (as defined below), the
Executive shall be vested in his SERP benefits through the date of such termination pursuant to
Section 2(c), vesting for the year of termination being prorated, on a monthly basis, through the
end of the last complete calendar month preceding such termination. Thus, for example, if such
termination shall occur on July 31, 2004, the Executive shall be deemed to have satisfied 75% of
the vesting requirement and shall be vested in 75% of the Maximum SERP Benefit. In the event of
such a termination because of death or Disability, the Executive or his Beneficiary shall receive
his vested SERP benefit over a ten year period commencing thirty (30) days after the effective date
of the termination of the Executive’s employment or, in the sole and absolute discretion of the
Board of Directors of the Company (the “Board”), in lieu of such benefit, a lump sum payment, as
soon as practicable following such termination, of an actuarially equivalent amount, discounted to
present value at an eight percent (8 %) annual interest rate. The timing of payments specified in
Section 2(a) shall not apply in the case of termination on account of death or Disability.

For purposes of this Section 2(d)(i), “Disability” shall mean the Executive either (i) is
unable to engage in any substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three (3) months under an accident and health plan covering
employees of the Company.

(ii) Termination Without Cause or With Good Reason. In the event that the
Executive’s employment is terminated prior to February 1, 2006 either by the Company without Cause
or by the Executive with Good Reason, then, Executive shall thereupon be deemed to be fully vested
in the Maximum SERP Benefit, such benefit to be paid in accordance with Section 2(a). For all
purposes of this Section 2, the terms “ Cause” and “Good Reason” shall have the meaning ascribed to
them in the Employment Agreement.

(iii) Termination For Cause or Without Good Reason. In the event that the Executive’s
employment is terminated prior to February 1, 2006 either by the Company for Cause or by the
Executive without Good Reason, then the Executive shall be vested in his SERP benefits through the
date of such termination, vesting for the year of termination being prorated, on a monthly basis,
through the end of the last complete calendar month preceding such termination. Payment of such
vested SERP benefits shall be made in accordance with Section 2(a).

3. Unforeseeable Emergency. Notwithstanding the foregoing Section 2, the Board, in
its sole discretion, may accelerate the payment of all or part of the Executive’s SERP benefits if
so requested by the Executive or, after the Executive’s death, by his Beneficiary; provided,
however, that any such accelerated payment may be permitted only in case of an “unforeseeable
emergency,” which is defined as a severe financial hardship to the Executive resulting from an
illness or accident of the Executive, the Executive’s spouse, or a dependent of the Executive, loss
of the Executive’s property due to casualty, or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the Executive. Payment under
this Section 3 may not be made to the extent such emergency is or may be relieved (i) through
reimbursement or compensation by insurance or otherwise; or (ii) by liquidation of the Executive’s
assets, to the extent the liquidation of such assets itself would not cause severe financial
hardship. Any such accelerated payment shall be limited to the amount necessary to meet or satisfy
the emergency and to pay taxes on the payment.

4. Designation of Beneficiary. Executive shall file with the Company a written
designation of one or more persons as the Beneficiary who shall be entitled to receive the amounts,
if any, payable hereunder after Executive’s death. Executive may, from time to time, revoke or
change his Beneficiary designation without the consent of any prior Beneficiary by filing a new
designation with the Company. The last such designation received by the Company shall be
controlling; provided, however, that no designation, or change or revocation thereof, shall be
effective unless received by the Company prior to Executive’s death, and in no event shall it be
effective as of a date prior to such receipt. If no such Beneficiary designation is in effect at
the time of Executive’s death, or if no designated Beneficiary survives Executive, Executive’s
spouse shall be deemed to have been designated his Beneficiary or, if his spouse does not survive
Executive, Executive’s estate shall be deemed to have been designated his Beneficiary and the
executor or administrator thereof shall receive the amount, if any, payable hereunder after
Executive’s death. If the Company is in doubt as to the right of any person to receive all or part
of such amount, the Company may retain such amount until the rights thereto are determined, or the
Company may pay such amount into any court of appropriate jurisdiction and such payment shall be a
complete discharge of the liability of the Company therefor.

5. Administration of the Agreement and Claims.

a) Administration. This Agreement shall be administered by the Compensation Committee
of the Board if such committee exists, otherwise by the Board (“the Committee”), which shall have
full power, discretion and authority to interpret, construe and administer this Agreement and any
part thereof.

b) Claims for Benefits. Any claim for SERP benefits by Executive or anyone claiming
through Executive under this Agreement shall be delivered in writing by the claimant to the
Committee. The claim shall identify the benefits being requested and shall include a statement of
the reasons why the benefits should be granted. The Committee shall grant or deny the claim. If
the claim is denied in whole or in part, the Committee shall give written notice to the claimant
setting forth: (a) the reasons for the denial, (b) specific reference to pertinent provisions of
the Agreement on which the denial is based, (c) a description of any additional material or
information necessary to request a review of the claim and an explanation of why such material or
information is necessary, and (d) an explanation of the Agreement’s claim review procedure. The
notice shall be furnished to the claimant within a period of time not exceeding 90 days after
receipt of the claim, except that such period of time may be extended, if special circumstances
should require, for an additional 90 days commencing at the end of the initial 90-day period.
Written notice of any such extension shall be given to the claimant before the expiration of the
initial 90-day period and shall indicate the special circumstances requiring the extension and the
date by which the final decision is expected to be rendered.

(c) Appeals Procedure. A claimant who has been denied a claim for benefits, in whole
or in part, may, within a period of 60 days following his receipt of the denial, request a review
of such denial by filing a written notice of appeal with the Committee. In connection with an
appeal, the claimant (or his authorized representative) may review pertinent documents and may
submit evidence and arguments in writing to the Committee. The Committee may decide the questions
presented by the appeal, either with or without holding a hearing, and shall issue to the claimant
a written notice setting forth: (a) the specific reasons for the decision and (b) specific
reference to the pertinent provisions of the Agreement on which the decision is based. The notice
shall be issued within a period of time not exceeding 60 days after receipt of the request for
review; except that such period of time may be extended, if special circumstances (including, but
not limited to, the need to hold a hearing) should require, for an additional 60 days commencing at
the end of the initial 60-day period. Written notice of any such extension shall be provided to
the claimant prior to the expiration of the initial 60-day period.

6. Executive is Unsecured Creditor. Executive shall be a general unsecured creditor
of the Company with respect to his right to receive payments of SERP benefits hereunder. This
Agreement represents a mere promise by the Company to make payments of deferred compensation (i.e.,
SERP benefits) in the future. All payments of deferred compensation to be made hereunder shall be
paid from the general funds of the Company. It is the intention of the Company and Executive that
this Agreement and the Company’s obligation to make payments of deferred compensation hereunder be
unfunded both for tax purposes and for purposes of Title I of ERISA.

7. No Assignment of Rights. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns, and Executive, his Beneficiary and his
estate. The rights of Executive, his Beneficiary and his estate to payments of SERP benefits
hereunder are expressly declared not to be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, or garnishment by creditors of Executive,
his Beneficiary or his estate. Any attempted disposition of such rights shall be null and void.

8. Facility of Payment. If the Committee shall find that any person to whom any
payment is payable under the Agreement is unable to care for his affairs because of illness or
accident, or is a minor, then any payment due (unless a prior claim therefor shall have been made
by a duly appointed guardian, committee or other legal representative) may, if the Committee so
elects, be paid to his spouse, a child, a parent, or a brother or sister, or any other person
deemed by the Committee to have incurred expenses for such person otherwise entitled to payment, in
such manner and proportions as the Committee may determine. Any such payment shall be a complete
discharge of the liabilities of the Company under the Agreement as to the amount of the payment.

9. Withholding of Taxes. The Company shall withhold from any and all amounts payable
hereunder appropriate federal, state and local income and payroll taxes.

10. Extension of Medical Benefits. Notwithstanding anything contained in this
Agreement or the Employment Agreement to the contrary, commencing at such time that Executive’s
employment is terminated for any reason other than for Cause, and for a period of ten (10) years
thereafter, Executive shall be entitled to participate in all medical benefit plans and programs
made available by the Company to its executive officers, provided that Executive’s right to
participate in such plans and programs shall not affect the Company’s right to amend or terminate
the general applicability of such plans and programs, and further provided that the Company shall
not be required to provide any such medical benefits that may at any time not be available to
non-employees and in such event the Company shall provide, at its cost, substantially comparable
medical benefits to Executive and his spouse in the form of COBRA benefits, supplemental policies
to any applicable Medicare policy and/or reimbursement of out-of-pocket co-insurance and deductible
payments made by Executive. Additionally, Executive shall not be entitled to participate in the
Company’s medical benefit plans or to otherwise receive medical benefits as provided herein during
such time that Executive is offered the right to participate in medical benefit plans of any future
employer. Executive shall be responsible for the payment of the taxes, if any, owed on imputed
income attributable to his receipt of the medical benefits to be provided herein.

11. Notices. Unless either party notifies the other to the contrary, any notice
required hereunder shall be duly given if delivered in person or by certified or registered first
class mail (a) if to the Company, to the President, CSK Auto Corporation, and (b) if to Executive,
to the address shown at the beginning of this Agreement.

12. Entire Agreement. Except as provided in Section 17, the terms and provisions of
this Agreement constitute the entire agreement between the parties and supersede any previous oral
or written communications, representations or agreements with respect to the subject matter hereof.

13. Severability. The invalidity or unenforceability of any particular provision of
this Agreement shall not affect the other provisions hereof, and this Agreement shall be construed
in all respects as if the invalid or unenforceable provision had been omitted.

14. Successors. The Company’s obligation hereunder shall be binding legal obligations
of any successor to all or substantially all of the Company’s business by purchase, merger,
consolidation or otherwise. The Executive may not assign this Agreement during his life, and upon
his death, this Agreement shall be binding upon and inure to the benefit of his heirs, legatees and
the legal representative of each.

15. Governing Law; Legal Proceedings. This Agreement shall be governed by and
construed and interpreted pursuant to the laws of the State of Arizona from time to time in effect.

16. Amendment. This Agreement may be amended only by a written document signed by
both parties.

17. Effective Date. This Agreement is effective January 1, 2005, with respect to
amounts that become vested on or after such date. Amounts that vested on or before December 31,
2004, shall continue to be governed by the terms of the SERP as in existence prior to this
amendment and restatement, including, but not limited to, the provisions governing payment in the
case of disability or an unforeseeable emergency.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year
first above written.

	 	 	 	 	 
	CSK AUTO, INC.
	 	Executive

	By: __________________________
	 	MAYNARD JENKINS

	Its: __________________________
	 	 	—	 

JENKINS,SERP.AG.AMENDED

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