Exhibit 10.22(b)
ESCROW AND SECURITY AGREEMENT
ESCROW AND SECURITY AGREEMENT, dated as of May 4,
1995, by and among LEUCADIA NATIONAL CORPORATION, a New York
corporation ("Employer"), Xxxxxxxx X. Xxxxxxxxxx ("Executive") and
Weil, Gotshal and Xxxxxx (a partnership including professional
corporations) ("Escrow Agent").
W I T N E S S E T H:
WHEREAS, Executive is employed as Executive Vice President of
Employer;
WHEREAS, Employer and Executive have agreed that Executive shall
relocate for a period to Moscow and shall continue to provide services
to, and shall continue to be compensated by, Employer (or its
affiliates);
WHEREAS, Employer and Executive agree that Executive will work
and reside in Russia beginning on or about February 1995;
WHEREAS, Employer and Executive have agreed that Executive will
serve as President of, and provide services to, a wholly-owned
subsidiary of Employer ("Leucadia International") to be formed by
Employer to serve as the vehicle through which investment
opportunities in Russia and the CIS will be explored and developed;
WHEREAS, Executive has determined, based on his own planning
relating to the anticipated United States and Russian tax consequences
of his provision of services and residence in Russia, that the proper
timing of his recognition of compensation income would be beneficial;
WHEREAS, to address these objectives Employer and Executive
desire, among other things, to accelerate the taxation and
deductibility, for United States tax purposes, of certain salary
otherwise expected to be paid by Employer (or its affiliates) to
Executive;
WHEREAS, to address these developments Employer and Executive
have entered into an Agreement dated as of May 4, 1995, providing for
the establishment of an executive compensation arrangement for the
benefit of Executive, a copy of which is attached hereto as Exhibit A
(the "Compensation Agreement");
WHEREAS, the Compensation Agreement provides for the deposit by
Employer of $100,000 (the "Fund Amount") into an escrow account (the
"Escrow Account") and the release of such funds in accordance with the
provision of Section 4 hereof; and
WHEREAS, the Escrow Agent is willing to serve as Escrow Agent and
hold the Fund Amount, plus any interest earned thereon (the "Escrowed
Property") in accordance with and subject to the terms and conditions
hereof.
NOW, THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound, the parties
hereto agree as follows:
1. Employer and Executive hereby consent to the
appointment of and hereby appoint Weil, Gotshal & Xxxxxx as Escrow
Agent, to serve as escrow agent in accordance with the terms and
conditions herein set forth, and Escrow Agent hereby accepts such
appointment.
2. Security Interest. The parties hereto agree that the
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Fund Amount is intended to secure any and all liabilities of Employer
to Executive under the Compensation Agreement. Employer hereby grants
to Employee an irrevocable security interest in the Fund Amount and
the parties hereto agree that the Fund Amount (i) shall be received
and held by Escrow Agent for the benefit of Employee and to protect
the interest of Employee in the Fund Amount, and (ii) shall be
disbursed by Escrow Agent in accordance with the terms hereof.
3. The Fund Amount shall be deposited with Escrow Agent as
follows:
(a) On the date hereof, Employer shall deliver to Escrow
Agent the Fund Amount. Escrow Agent shall not be liable or
responsible for the collection of the proceeds of any check payable or
endorsed to Escrow Agent hereunder.
(b) Escrow Agent shall, in accordance with direction
provided by the Chief Financial Officer of Employer, deposit the Fund
Amount in certificates of deposit or interest bearing accounts of any
bank or trust company, incorporated under the laws of the United
States of America or any state, which has combined capital and surplus
of not less than $100,000,000.
(c) All interest earned on the Fund Amount ("Interest")
shall be the property of Employer and shall not be added to or become
part of the Escrow Amount (as defined). All Interest shall be paid by
the Escrow Agent, on a current basis, to Employer without the need for
any further action on the part of Employer.
(d) The Fund Amount, as such may from time to time be
decreased by the release of monies from the Fund Amount pursuant to
the terms hereof, shall constitute the "Escrow Amount."
4. The Escrow Amount shall be released by the Escrow Agent
as follows:
(a) Upon receipt by the Escrow Agent of Disbursing
Instructions in the form attached as Annex A hereto executed by both
Executive and Employer, Escrow Agent shall release to Executive so
much of the Escrow Amount as indicated in the Disbursing Instructions;
and
(b) Upon receipt by the Escrow Agent of Disbursing
Instructions in the form attached as Annex B hereto executed by both
Executive and Employer, Escrow Agent shall release to Employer so much
of the Escrow Amount as indicated in the Disbursing Instructions.
5. Any notice or certificate given to Escrow Agent under
Section 4 shall be by hand or overnight delivery to the parties at the
addresses set forth in Section 16 of this Agreement. In the event of
any dispute, Escrow Agent shall retain the Escrow Amount until the
dispute is resolved by the final order or judgment of a court having
jurisdiction with respect thereto. Reasonable fees and costs of the
other party or parties shall be advanced by the party giving notice of
a dispute, and shall be borne by the party or parties not prevailing
in the action.
6. Escrow Agent shall be entitled to rely upon, and shall
be fully protected from all liability, loss, cost, damage or expense
in acting or omitting to act pursuant to, any instruction, order,
judgment, certification, affidavit, demand, notice, opinion,
instrument or other writing delivered to it hereunder without being
required to determine the authenticity of such document, the
correctness of any fact stated therein, the propriety of the service
thereof or the capacity, identity or authority of any party purporting
to sign or deliver such document.
7. The duties of Escrow Agent are only as herein
specifically provided, and are purely ministerial in nature. Escrow
Agent shall neither be responsible for, or under, nor chargeable with
knowledge of, the terms and conditions of any other agreement,
instrument or document in connection herewith, and shall be required
to act in respect of the Fund Amount and the Escrow Property only as
provided in this Agreement. This Agreement sets forth all the
obligations of Escrow Agent with respect to any and all matters
pertinent to the escrow contemplated hereunder and no additional
obligations of Escrow Agent shall be implied from the terms of this
Agreement or any other agreement. Escrow Agent shall incur no
liability in connection with the discharge of its obligations under
this Agreement or otherwise in connection therewith, except such
liability as may arise from the willful misconduct or gross negligence
of Escrow Agent.
8. Escrow Agent may consult with counsel of its choice,
which may include attorneys in the firm of Weil, Gotshal & Xxxxxx, and
shall not be liable for any action taken or omitted to be taken by
Escrow Agent in accordance with the advice of such counsel.
9. Escrow Agent shall not be bound by any modification,
cancellation or rescission of this Agreement unless in writing and
signed by Escrow Agent.
10. Escrow Agent shall have no tax reporting duties with
respect to the Fund Amount, the Escrow Amount, the Escrowed Property
or income thereon, such duties being the responsibility of the party
or parties which receive, or have the right to receive, any taxable
income hereunder. Notwithstanding the foregoing, Escrow Agent has the
authority to comply with the provisions of Section 468B(g) of the
Internal Revenue Code of 1986 and any regulations promulgated
thereunder. Such authority shall include, without limitation, (i) the
filing of tax returns (including information returns) with respect to
the Fund Amount, the Escrow Amount, the Escrowed Property or income
thereon, (ii) the payment of any tax, interest or penalties imposed
thereon, (iii) the withholding of any amounts which are required to be
withheld and (iv) the payment over of such withheld amounts to the
appropriate taxing authority. The parties to this Agreement, other
than Escrow Agent, shall provide Escrow Agent with all information
necessary to enable Escrow Agent to comply with the foregoing. Escrow
Agent may withdraw from the Fund Amount or the Escrow Amount amounts
necessary to pay all applicable income or withholding taxes (plus
interest and penalties thereon) that are required to be paid.
The parties hereto acknowledge that the Fund Amount and the Escrow
Amount, excluding any Interest thereon, shall be the Executive's
property unless and until disbursed to Employer pursuant to
Section 4(b) hereof.
11. Escrow Agent is acting as a stakeholder only with
respect to the Escrowed Property. If any dispute arises as to whether
Escrow Agent is obligated to deliver the Escrowed Property or as to
whom the Escrowed Property is to be delivered or the amount thereof,
Escrow Agent shall not be required to make any delivery, but in such
event Escrow Agent may hold the Escrowed Property until receipt by
Escrow Agent of instructions in writing, signed by all parties which
have, or claim to have, an interest in the Escrowed Property,
directing the disposition of the Escrowed Property, or in the absence
of such authorization, Escrow Agent may hold the Escrowed Property
until receipt of a certified copy of a final judgment of a court of
competent jurisdiction providing for the disposition of the Escrowed
Property. Escrow Agent may require, as a condition to the disposition
of the Escrowed Property pursuant to written instructions,
indemnification and/or opinions of counsel, in form and substance
satisfactory to Escrow Agent, from each party providing such
instructions. If such written instructions, indemnification and
opinions are not received, or proceedings for such determination are
not commenced within 30 days after receipt by Escrow Agent of notice
of any such dispute and diligently continued, or if Escrow Agent is
uncertain as to which party or parties are entitled to the Escrowed
Property, Escrow Agent may either (i) hold the Escrowed Property until
receipt of (A) such written instructions and indemnification or (B) a
certified copy of a final judgment of a court of competent
jurisdiction providing for the disposition of the Escrowed Property,
or (ii) deposit the Escrowed Property in the registry of a court of
competent jurisdiction; provided, however, that notwithstanding the
foregoing, Escrow Agent may, but shall not be required to, institute
legal proceedings of any kind.
12. Employer and Executive, jointly and severally, agree to
reimburse Escrow Agent on demand for, and to indemnify and hold Escrow
Agent harmless against and with respect to, any and all loss,
liability, damage, or expense (including, without limitation, taxes,
attorneys' fees and costs) that Escrow Agent may suffer or incur in
connection with the entering into of this Agreement and performance of
its obligations under this Agreement or otherwise in connection
therewith, except to the extent such loss, liability, damage or
expense arises from the willful misconduct of Escrow Agent. Escrow
Agent, after not less than ten days prior written notice to the
other parties hereto, shall have the right at any time and from
time to time to charge, and reimburse itself from, the Escrowed
Property for all amounts to which it is entitled pursuant this
Agreement.
13. Escrow Agent and any successor escrow agent may at any
time resign as such by delivering the Escrowed Property to either (i)
any successor escrow agent designated by all the parties hereto (other
than Escrow Agent) in writing, or (ii) any court having competent
jurisdiction. Upon its resignation and delivery of the Escrowed
Property as set forth in this paragraph, Escrow Agent (or any
successor escrow agent, as the case may be) shall be discharged of,
and from, any and all further obligations arising in connection with
the escrow contemplated by this Agreement.
14. Escrow Agent shall have the right to represent any
party hereto in any dispute between the parties hereto with respect to
the Escrowed Property or otherwise.
15. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective permitted
successors and assigns. Nothing in this Agreement, express or
implied, shall give to anyone, other than the parties hereto and their
respective permitted successors and assigns, any benefit, or any legal
or equitable right, remedy or claim, under or in respect of this
Agreement or the escrow contemplated hereby.
16. Except as specifically provided otherwise herein, any
notice authorized or required to be given to a party hereto pursuant
to this Agreement shall be deemed to have been duly given when
delivered by hand or facsimile transmission or when deposited in the
United States mail, by registered or certified mail, return receipt
requested, postage prepaid, as follows:
If to Employer, to:
Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman, Compensation Committee
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
If to Executive, to:
Xxxxxxxx X. Xxxxxxxxxx
c/o Leucadia National Corporation
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
O'Melveny & Xxxxx
000 00xx Xxxxxx X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, X.X. 00000-0000
If to Escrow Agent, to:
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any party may change its respective address by giving notice thereof
in writing to the other parties hereto in the same manner as set forth
above.
17. This Agreement shall terminate on the date on which all
Escrowed Property has been fully disbursed from the Escrow Account in
accordance with Section 3(c) and Section 4 hereof.
18. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York. All actions
against Escrow Agent arising under or relating to this Agreement shall
be brought against Escrow Agent exclusively in the appropriate court
in the County of New York, State of New York. Each of the parties
hereto agrees to submit to personal jurisdiction and to waive any
objection as to venue in the County of New York, State of New York.
Service of process on any party hereto in any action arising out of or
relating to this Agreement shall be effective if mailed to such party
and such party's counsel as set forth in Section 16 hereof.
19. TO THE FULL EXTENT PERMITTED BY LAW, EACH OF THE
PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
THE RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR ESCROW AGENT ENTERING INTO THIS
AGREEMENT.
20. This Agreement may be executed in any number of
separate counterparts, each of which shall, collectively and
separately, constitute one agreement.
21. All pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the parties hereto taken within context may require.
22. The rights of Escrow Agent contained in this Agreement,
including without limitation the right to indemnification, shall
survive the resignation of Escrow Agent and the termination of the
escrow contemplated hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first written
above.
LEUCADIA NATIONAL CORPORATION
By: /s/ XXXXXX X. ORLANDO
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Xxxxxx X. Orlando
Vice President and Comptroller
/s/ XXXXXXXX X. XXXXXXXXXX
-----------------------------------------
Xxxxxxxx X. Xxxxxxxxxx
/s/ WEIL, GOTSHAL & XXXXXX
-----------------------------------------
Weil, Gotshal & Xxxxxx, Escrow Agent
NYFS04...:\30\76830\0001\1211\AGR1265R.23A
ANNEX A
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Disbursing Instructions for Release
of Escrow Funds to Executive
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Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Pursuant to and in accordance with that certain ESCROW AND
SECURITY AGREEMENT, dated as of , 1995, by and among
Leucadia National Corporation, Xxxxxxxx X. Xxxxxxxxxx, and Weil,
Gotshal & Xxxxxx as Escrow Agent, you are hereby directed to disburse
from the Escrow Account established under said Agreement $
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of the Escrow Amount, and to pay such disbursed amount to Xxxxxxxx X.
Xxxxxxxxxx.
Leucadia National Corporation
________________________ By: ________________________
Xxxxxxxx X. Xxxxxxxxxx
XXXX00...:\00\00000\0000\0000\XXX0000X.00X
ANNEX B
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Disbursing Instructions for Release
of Escrow Funds to Employer
------------------------------------
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Pursuant to and in accordance with that certain ESCROW AND
SECURITY AGREEMENT, dated as of May 4, 1995, by and among Leucadia
National Corporation, Xxxxxxxx X. Xxxxxxxxxx and Weil, Gotshal &
Xxxxxx, as Escrow Agent, you are hereby directed to disburse from the
Escrow Account established under said Agreement $___________ of the
Escrow Amount and to pay such disbursed amount to Leucadia National
Corporation.
Leucadia National Corporation
________________________ By: ________________________
Xxxxxxxx X. Xxxxxxxxxx
XXXX00...:\00\00000\0000\0000\XXX0000X.00X
