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EXHIBIT 99(c)(10)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT is entered into as of December 17, 1996 by and among
AMERICAN STUDIOS, INC., a North Carolina corporation ("ASI"), and PCA
INTERNATIONAL, INC., a North Carolina corporation ("PCA").
BACKGROUND STATEMENT
The employees of ASI listed on Schedule A to this agreement (herein
referred to individually as "Employee" and collectively as "Employees") are
parties to the employment agreements with ASI described opposite their names on
Schedule A (herein referred to individually as "Existing Employment Agreement"
and collectively as "Existing Employment Agreements"). ASI, PCA and ASI
Acquisition Corp., a North Carolina corporation ("Purchaser"), have this day
entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant
to which Purchaser will make a tender offer (the "Offer") to purchase the common
stock of ASI (the "Shares"). PCA has requested and ASI has agreed that, upon the
day (the "Effective Date") immediately following the consummation of the Offer,
ASI will terminate the employment of Employees under the Existing Employment
Agreements. PCA has agreed to provide the funding of certain payments to
Employees which will be payable as a result of such termination of the Existing
Employment Agreements. On the Effective Date, PCA and each Employee will enter
into an employment agreement dated as of the Effective Date (the "PCA Employment
Agreement"). PCA has executed and delivered to XXXXXX X. XXXXXX, attorney of
Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.A., as Escrow Agent, two (2) counterparts of the
PCA Employment Agreement for each Employee.
AGREEMENT
In consideration of the premises and the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the parties hereto, intending to be legally bound, agree
for themselves, their successors and assigns, as follows:
1. PCA Employment Agreement. Two (2) counterparts of the PCA Employment
Agreement executed by PCA for each Employee will be held by the Escrow Agent
until the Effective Date at which time Escrow Agent will date each agreement as
of the Effective Date, cause it to be executed by the appropriate Employee and
deliver an executed counterpart of such agreement to such Employee and to PCA,
free of escrow.
2. Termination of Existing Agreement. PCA hereby confirms its request that
ASI terminate the Existing Employment Agreements as of the Effective Date. ASI
hereby terminates each existing Employment Agreement as of the Effective Date,
such termination being conditioned upon the consummation of the Offer.
3. Termination Payment. PCA agrees to provide funds to ASI to pay the
termination payments due the Employees under the Existing Employment Agreements
in the amounts set forth on Schedule A.
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4. Third Party Beneficiary. ASI and PCA intend that each Employee be a
third party beneficiary of this Agreement.
5. Notwithstanding anything herein to the contrary, PCA's obligations
hereunder as to J. Xxxxxx Xxxx, Xx., Xxxxx X. Xxxxx and Xxxxxx Xxxx Xxxxx is
expressly conditioned upon the tender pursuant to the Offer of 230,997 Shares
beneficially owned by the children of Xxxxxx Xxxxxxx and 30,684 Shares owned by
the children of Xxxx Xxxx.
IN WITNESS WHEREOF, the parties have executed this agreement effective as
of the date above written.
AMERICAN STUDIOS, INC.
By: XXXXX XXXXXX XXXX, XX.
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Xxxxx Xxxxxx Xxxx
CEO
PCA INTERNATIONAL, INC.
By: XXXX XXXXXX
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Xxxx Xxxxxx
XXXXXX X. XXXXXX executes this agreement to acknowledge his receipt of the
PCA Employment Agreements executed by PCA and his agreement to comply with
paragraph 1 of this agreement.
By: XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
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SCHEDULE A
EXISTING TERMINATION
ASI EMPLOYEE EMPLOYMENT AGREEMENT PAYMENTS
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J. Xxxxxx Xxxx, Xx......... Employment and Noncompete Agreement $ 539,000
dated January 20, 1993, as amended
through and including the Second
Amendment to Employment and Noncompete
Agreement dated September 14, 1996.
Xxxxx X. Xxxxx............. Employment and Noncompete Agreement $ 550,000
dated July 15, 1988 as amended through
and including the Fifth Amendment to
Employment and Noncompete Agreement
dated November 1, 1995.
Xxxxxx Xxxx Xxxxx.......... Employment and Noncompete Agreement $ 423,971
dated July 15, 1988 as amended through
and including the Fourth Amendment to
Employment and Noncompete Agreement
dated November 1, 1995.
Xxxxxxx X. Xxxxx........... Employment and Noncompete Agreement $ 70,700
dated September 14, 1996.
Xx X. Xxxxxx............... Employment and Noncompete Agreement $ 172,500
dated September 14, 1996.
Xxxxxx X. Xxxxxxx.......... Employment and Noncompete Agreement $ 84,000
dated September 14, 1996.
Xxxx X. Xxxxx.............. Employment and Noncompete Agreement $ 150,000
dated September 14, 1996.
Xxxxx X. Xxxxxx............ Employment and Noncompete Agreement $ 180,000
dated September 14, 1996.
K. Xxxxxxx Xxxxxxx......... Employment and Noncompete Agreement $ 84,400
dated September 14, 1996.
Xxxxx X. Xxxxxx............ Employment and Noncompete Agreement $ 84,500
dated September 14, 1996.
Xxxxx X. Xxxxx............. Employment and Noncompete Agreement $ 250,000
dated May 16, 1996.
