Family Business Compensation How to Pay or Not to by egm37898


									                            DIRECTOR’S COLUMN:

                            Family Business Compensation:
                            “How to Pay or Not to Pay”...That is the Question
                            W. Kent Lutz, Director

     Please Consider Becoming a Member of the Goering Center…
     We Need Your Support
   If you were to ask several members of There are constant challenges on how to                            ups and downs of the business cycle.
a family employed by their family busi- pay family members and how to distin-                               No foolproof compensation policy
ness how they were paid, what kind of             guish their role as employees, sharehold-             exists to satisfy every unique need that
a response do you think you would get? ers, and loved ones. The more systematic families in business have, but there are
Would it be something like,“We all receive a compensation plan is that encourages steps that can be taken to develop a good
whatever the market rate is for the job           professional growth, the more value it                compensation plan that keeps everyone
we perform,” or “Our business                                                                                      involved in the business work-
only pays family members for the                                                                                   ing for what is best for all.
actual job, not the person, because                                                                                    Developing a family philos-
he or she is a family member.” If          Importance of Shareholder Agreements                                    ophy for compensation is the
you were to probe a little further         in Succession 2            summation of the values, goals,
with the individual family mem-                                                                                    and principles held by the fami-
bers into what they actually were          Telemarketers,Faxes and Spam! Oh My! Legal                              ly, and represent the guiding
paid, you might uncover a dif-             Limits on Unwanted 3                           principles that lead to a sound
ferent answer. It might be that            Fee-Based or Commission-Based:                                          policy. For example, does the
one son actually received $80,000          Choosing a Financial Planner 101 4                       company focus on creating
compared with $40,000 earned by                                                                                    shareholder value? If they do,
others in the same job. It could be
                                           Breakfast Series Registration Form 4                       this philosophy emphasizes
explained by the father that his           2004 Family Business of the Year                                        profit maximization which
son does a good job and after all          Nomination Form 5        translates into hiring and oper-
“he is family.” The second son                                                                                     ating at the lowest possible costs,
                                           Luncheon Series Registration 6
might have received a mid-year                                                                                     and charging the highest prices
raise because his wife gave birth                                                                                  the market will bear. On the
to their first child and she had to quit her adds to the strategic direction of the                     other hand, a business’s philosophy may
full-time job. After all, the father felt he      business and discards the notion of                   be to create the best possible opportunities
had to make up for their lost income.             paying for other emotional purposes.                  and environment for all employees, which
The third child employed in the business,            There are a number of common                       translates into more attractive pay, ben-
a daughter, also received a mid-year raise, causes for family business compensa-                        efits, and perks in order to encourage high
because, according to her father, she, and tion problems. The list may be long,                         performance and improved productivi-
her closest in age sibling were always very but here are ten that seem to stand out: ty. Still other businesses may put service
competitive, and “after all, since he received 1) Confusing roles between job                           to the customer as first and foremost,
a mid-year raise, she needs to get one also,         responsibilities and ownership.                    which results in attracting customers by
so their pay is equal.” Does this sound all       2) Using compensation to achieve tax offering low priced, high quality products
too familiar? Well, I’m sure it does, because        savings.                                           or services, so that such a strategy will
compensation tends to be at the heart of          3) Using compensation to maintain                     allow the business to grow, create new
more family business questions than                  parental control.                                  jobs, and earn higher returns for the
any other issue, except succession.               4) Using compensation to resolve                      shareholders. No two businesses will adopt
   Compensation is an immediate and                  emotional issues.                                  the same values and guiding principles,
tangible symbol of the family business’s 5) Preserving secrecy at all costs.                            but one thing is certain, when developing
multifaceted relationship with the family 6) Confusing business and personal funds. a compensation policy, ideally it should
members and others it employs. It is very 7) Taking relationships for granted.                          be consistent and market driven.
easy to confuse a paycheck with a return 8) Using salary substitutes such as                                The following steps may be helpful
on ownership, parental concern, or ways              titles or perks to appease unhappy                 in building a quality compensation plan:         Ph: 513.556.7185
of achieving emotional goals. This con-              family members.                                    1) Develop a family philosophy to                Fax: 556.6044
fusion can send a mixed message that can 9) Paying everyone too little or too much.                                                            
                                                                                                                                 continued on page 6B
impact both the business and the family.          10)Using compensation to smooth the                                                          
A Supplement to the Business Courier • April 16, 2004
2B April 16, 2004                                                                                                                                                        A Supplement to the Business Courier
                                                                                             GOERING CENTER

Importance of Shareholder Agreements in
Succession Planning
Christopher J. Kramer, Deloitte & Touche

    Suppose you own a successful cor-              unwanted ownership, and perhaps                           4. Combination Book Value with                               definition of “earnings.”
poration with a close friend whose                 most importantly, create a blueprint                          Capitalization of Earnings                                  If an appraisal approach is used,
spouse is also involved in the busi-               for stock ownership that avoids a sig-                    5. Appraisal                                                 consider a mechanism for identifying
ness. Although you have a decent                   nificant disruption in the manage-                           If a fixed price dollar value per                         the independent appraiser, determin-
working relationship with your                     ment of the business during what                          share is used, the established price                         ing who should participate in the
friend’s spouse, he or she has never               typically is a very chaotic period.                       may become quickly outdated. A                               election process, and deciding how
demonstrated an ability to make                       Shareholder agreements can be                          mechanism should exist to use an                             frequently appraisals should be con-
sound business decisions.                                    structured in several ways:                     alternative valuation method if the                          ducted. Also consider the specific
You can imagine what might                                   1. Stock redemption agree-                      agreed price is not current.                                 valuation techniques that should be
happen if your friend’s stock                                    ment: an agreement                             The book value per share deter-                           applied in determining the value of
ownership is transferred to                                      between the business and                    mined with reference to financial                            the entity or specific assets. If the
his or her spouse in the                                         the individual owner.                       accounting records also might not be                         agreement calls for the use of more
event of your friend’s death.                                2. Cross purchase agree-                        satisfactory, since it might not take                        than one appraiser, determine how
Would it be possible for you                                     ment: an agreement                          into account going-concern value and                         disputes on value may be resolved.
to successfully continue run-                                    between the individual                      asset appreciation. The book value                           The appraisal approach is typically
ning the business with your                                      owners.                                     per share method may be adjusted by                          the more expensive option and a
new 50-percent partner?                            3. Third-party buyout agreement: an                       segregating the items which can be                           determination of who will bear the
    Now suppose you own a minority                     agreement between the individual                      separately valued.                                           cost of the appraisal should be made
interest in a closely held manufactur-                 owners and key outside individuals.                      The capitalization of earnings                            prior to drafting the agreement.
ing business. The value of your inter-             4. Hybrid agreement: a combination                        approach averages earnings over a                               Regardless of the valuation
est in that business is significant, and               of the above.                                         specified period of time, then applies                       method used, the stock buyout is typ-
you are reliant on that value to ulti-
mately fund your retirement and pro-
vide an inheritance to your heirs.                 Shareholder agreements...are contracts drawn by legal counsel that establish a
Since the company’s stock is not pub-
licly traded, what happens if upon
                                                     procedure for buying out an ownership interest in a closely-held business,
your retirement, no one purchases
your stock? Consider as well what
may happen to your retirement and                     Key to any of these types of agree-                    a multiplier established by the antici-                      ically self-funded by the corporation
estate plans should you receive an                 ments is the stock buyout price. But                      pated return on investment. If this                          or individuals, or may be funded with
offer to buy your stock at a price far             that price is often difficult to deter-                   method is used, consider the business                        insurance proceeds.
below what you feel it is worth.                   mine. There are five options from                         may not have had a successive num-                              For any business, a change in own-
    These scenarios occur with frequen-            which to choose, and each has its                         ber of “normal” years. Also consider                         ership is inevitable. A well construct-
cy. There is, however, a relatively easy           advantages and disadvantages:                             three factors for the capitalization                         ed shareholder agreement can limit
remedy: shareholder agreements.                    1. Fixed Price Per Share                                  method: the period over which earn-                          the disruption that accompanies such
    Shareholder agreements -- also                 2. Book Value Per Share                                   ings are to be computed; the appro-                          a change, helping the business, its
known as buy-sell agreements -- are                3. Capitalization of Earnings                             priate capitalization rate; and c) the                       customers and employees adapt.
contracts drawn by legal counsel that
establish a procedure for buying out
an ownership interest in a closely-
held business, triggered by a specific
                                                     The Goering Center                                                                                            22nd Member Breakfast Series –
                                                                                                                      May 2004                                          Norwood Quality Inn – 7:30 a.m.
event. The events that are typically                 Calendar of Events                                                                                                 Paul Bransford and Lynn Mangan
considered when designing share-                                                                            11th Next Generation Institute – Session 7 – 7:30 a.m.
                                                                                                                                                                        Generational Transition
holder agreements are death, retire-               April 2004                                                    Topic: Estate Planning
ment or disability of a shareholder.                                                                                                                               30th Family Business of the Year Applications Due
                                                   20th Next Generation Institute Steering                  18th Next Generation Institute Steering
    Shareholder agreements, when                        Committee Meeting                                        Committee Meeting                                 27th Family Business Executive Luncheon Series –
properly designed and implemented,                                                                                                                                      Norwood Quality Inn – 11:30 a.m.
                                                   27th Member Breakfast Series –                           25th Family Business Executive Luncheon Series –
benefit the business and the share-                                                                                                                                     Speaker to be announced
                                                        Norwood Quality Inn – 7:30 a.m.                          Norwood Quality Inn – 11:30 a.m.
holders in many ways. Since closely                     Tim Shepelak,The Growth Coach with Tim                   Mike LaRosa and T. D. Hughes, LaRosa's, Inc.
held businesses are not publicly trad-                  Neihaus, third generation owner of the                                                                         August 2004
ed, shareholder agreements create a                     Miami Corporation “Are You Facing Reality”
                                                                                                            June 2004                                                  24th Family Business of the Year Event
guaranteed market for that closely
                                                   30th Family Business of the Year Nominations Closed                                                                      Cincinnati Music Hall
held stock. A valuation method or a                                                                         4th Board of Advisors Meeting
                                                                                                                                                                            6:00 – 9:00 p.m.
value per share is also established. In                                                                     8th Next Generation Institute Retreat and Graduation
addition, shareholder agreements
lend certainty to the disposition of                            Please call the Center at 513-556-7185 if you would like additional information on Center membership, or visit our web site at
the business, eliminate the risk of

Publisher’s Note:                                                        The Family Business Report                                                                              The Goering Center
         The Family Business Report is a           Sidney L. Barton, Ph.D.                       W. Kent Lutz                         M. B. Hammond                                for Family & Private Business
           monthly advertising supplement to          Executive Director                           Director                                Editor                                                           (513) 556-7185
             the Business Courier in cooperation                                                                                                                                                   E-mail:
               with the Goering Center.                                                                                                                                                     Website:
A Supplement to the Business Courier                                                                                                                            April 16, 2004 3B
                                                                                    GOERING CENTER

Telemarketers, Faxes and Spam! Oh My!
Legal Limits on Unwanted Communications
John P. Colbert, John C. Greiner, and Brian C. Thomas, Graydon Head & Ritchey LLP

    Small businesses these days fre-              in, property, goods or services.             law on Jan. 13, 2004.                        ing of “junk faxes” is illegal in all 50
quently find themselves inundated                 Calling or leaving a message for any                                                      states. In addition, any state law provi-
                                                                                            Q. What does it do?
with communications - many uninvit-               person with whom the caller has an                                                        sions that are more restrictive than
                                                                                            A. Ohio’s Do-Not-Call legislation author-
ed. Whether it’s telemarketers’ calls, fax        established business relationship is                                                      federal law are not preempted. This
                                                                                               izes Ohio’s Attorney General to: file
advertisements or the ubiquitous e-               not a telephone solicitation.                                                             means that states can establish addi-
                                                                                               suit against violators in state court,
mail messages offering any number of                                                                                                        tional restrictions on top of the TCPA
                                                         Q. What does it prohibit?             enforce state and federal telemarket-
unwanted items, these unsolicited                                                                                                           restrictions. At the present time, nei-
                                                         A. The TCPA prohibits tele-           ing laws, conduct investigations, take
transmissions are a drain on                                                                                                                ther Ohio nor Kentucky has enacted
                                                            marketers from soliciting          telemarketing violations to the appro-
time and resources. On the                                                                                                                  state laws relating to junk faxes.
                                                            an individual after that           priate court on behalf of Ohio resi-
other hand, advertisers need
                                                            individual requests that           dents and recover damages or civil        Q. How is the law enforced?
to sell goods and services,
                                                            his telephone number be            penalties. The law also creates the       A. The federal law provides a “private
and they certainly wish to use
                                                            placed on the company’s            Telephone Solicitation Protection            right of action.” That is, the TCPA
all available media to do so.
                                                            do-not-call list. A tele-          Fund in the state treasury where             permits an individual to sue the junk
    State and federal lawmakers
                                                            marketer violates the              civil penalties will be deposited to         faxer in court. Using this law, recip-
have attempted to balance the
                                                            TCPA if the telemarketer           pay the Attorney General for the             ients can collect damages of at least
needs of recipients not to be
                                                            solicits a listed individual       costs associated with investigating          $500 per junk fax. Willful or know-
bothered with the needs of
                                                            more than once during              and enforcing the law. The law will          ing violations can bring damages of
advertisers by passing a variety
                                                            any 12-month period.               go into effect on April 12, 2004.            up to $1,500 per junk fax. Recipients
of laws. Whether these laws
                                                            Unlike the National Do                                                          can also file a complaint with the FCC
are successful is subject to
                                                            Not Call Registry, individ-                                                     (
debate, but it is beyond ques-                                                              Careful,That Fax May Cost You $500
                                                            uals cannot register in one                                                     and/or file a complaint with your
tion that more tools now exist                                                                  In addition to banning telephone
                                                            location. Rather, individ-                                                      state's attorney general. Recently,
to fight unwanted communi-                                                                  solicitations, the TCPA also makes it
                                                            uals must inform each                                                           Hooters of Augusta hired a fax service
cation than ever before. How                                                                illegal to send junk faxes to business
                                                            company that they wish to                                                       that sent six unsolicited junk faxes to
recipients will exercise those                                                              and residential fax machines.
                                                            be placed on that compa-                                                        each of 1,321 fax numbers. A class
tools, and how advertisers will
                                                            ny’s do-not-call list.          Q. What does it cover?                          action TCPA case was brought against
respond, are questions that will
                                                                                            A. “Unsolicited advertisements” or “junk        Hooters and the court ordered Hooters
be preeminent in the coming                              Q. What does it require?
                                                                                               faxes.” The term “unsolicited adver-         to pay treble damages of $11,889,000.
months and years. This arti-                             A. Once requested, a telemar-
                                                                                               tisement” is defined as any material
cle outlines the laws covering                              keter must place an indi-
                                                                                               advertising the commercial availabili-
the three most ubiquitous                                   vidual’s name on its do-                                                     Has “SPAM” Met its Match?
                                                                                               ty or quality of any property, goods,
communications -- telemar-                                  not-call list and honor                                                         The recently enacted federal law
                                                                                               or services which is transmitted to any
keting calls, faxes and e-mails.                            that request for 10 years.                                                   known as “Can-Spam” does not pro-
                                                                                               person without that person's prior
Weary recipients should                                                                                                                  hibit sending spam. Rather, the law,
                                              Q. Are there any defenses?                       express invitation or permission.
know their rights, and advertisers                                                                                                       which took effect on Jan. 1, 2004, seeks
                                              A. The TCPA provides an affirmative
should be careful not to inadvertently                                                      Q. What does it prohibit?                    to eliminate deceptive and misleading
                                                 defense to liability for telemarketers.
trip on the new regulatory landscape.                                                       A. The TCPA prohibits and makes it           e-mails and provides consumers with
                                                 For example, it is a defense to liabil-
                                                                                               unlawful for anyone to use any fax        an opportunity to “opt out” of receiv-
                                                 ity if the telemarketer has estab-
                                                                                               machine, computer or other device         ing additional e-mail messages.
When“Do-Not-Call”Means Do Not Call               lished and implemented, with due
                                                                                               to send a junk fax to a fax machine.
   Many view the recently developed              care, reasonable practices and pro-                                                     Q. What does it cover?
                                                                                               These protections apply to both
National Do Not Call Registry as the             cedures to effectively prevent tele-                                                    A. Unsolicited commercial e-mail mes-
                                                                                               individuals and businesses.
government’s first attempt to curb the           phone solicitations.                                                                       sages (UCE). “Commercial” means
barrage of telemarketers. However,                                                          Q. What does it require?                        any electronic mail message whose
                                              Q. What about state law?
many are unaware of the federal law                                                         A. To be illegal under the TCPA, a fax          primary purpose is to advertise or pro-
                                              A. The federal law does not preempt or
passed in 1991 banning telephone                                                               must be unsolicited and advertise the        mote a commercial product or service.
                                                 supersede state laws that impose more
solicitations, the Telephone Consumer                                                          commercial availability or quality of        This definition thus excludes chari-
                                                 restrictive intrastate requirements.
Protection Act (TCPA). Unlike the                                                              property, goods or services. Generally,      table, religious or political messages.
National Registry, which can impose           Q. How is it enforced?                           a fax advertiser has an obligation to
                                                                                                                                         Q. What does it prohibit?
fines against offending companies, the        A. The federal law provides a “private           obtain prior express consent from
                                                                                                                                         A. Sending UCE that contains materially
TCPA provides citizens with a private            right of action.” That is, the TCPA           the recipients of its advertisements,
                                                                                                                                            false or misleading header informa-
right to sue violating telemarketers.            permits an individual to sue the              and to keep and maintain records
                                                                                                                                            tion (that misleads as to the origin
That means ordinary citizens can sue             telemarketer in court. If successful,         of such consent. Consent may not
                                                                                                                                            of the message) or misleading sub-
telemarketers if the citizen receives a          the individual can recover the                be inferred from the mere distribu-
                                                                                                                                            ject information (that misleads as to
call after he has previously requested           greater of actual monetary loss or            tion or publication of a fax number,
                                                                                                                                            the subject of the e-mail’s content).
that his telephone number be placed              $500 in damages for each unlawful             or the existence of a previous busi-
on the company’s do-not-call list.               telephone solicitation. However, if           ness relationship between an adver-
                                                                                                                                         Q. What does it require?
                                                 the court concludes that the tele-            tiser and the recipient, in the
Q. What does it cover?                                                                                                                   A. The UCE must contain a valid,
                                                 marketer’s violation was “willful” or         absence of specific evidence of
A. Telephone solicitations. The term                                                                                                        functioning return e-mail address
                                                 “knowing,” the court can assess tre-          “prior express invitation or permis-
   “telephone solicitation” is defined as                                                                                                   that allows the recipient to opt out
                                                 ble damages up to $1,500 per tele-            sion” to send advertisements by fax.
   the initiation of a telephone call or                                                                                                    of receiving further e-mails. The
                                                 phone solicitation.
   message transmitted to any person                                                        Q. What about state law?                        UCE must also identify itself as an
   for the purpose of encouraging the         Q. Does Ohio have a Do-Not-Call law?          A. The federal law preempts, or super-
   purchase or rental of, or investment       A. Yes. Ohio enacted a Do-Not-Call               sedes state laws. That means that fax-                           continued on page 6B
4B April 16, 2004                                                                                                                              A Supplement to the Business Courier
                                                                                    GOERING CENTER

Fee-Based or Commission-Based:
Choosing a Financial Planner 101
Bob Moore, Gradison McDonald Financial Group

    Many people find the task of choos-        mutual fund firm may suggest you put                There are three types of commission         an objective and neutral viewpoint
ing a financial planner somewhat               your money and trust in mutual funds.            payments:                                      than those who are inclined to recom-
daunting. However, it is one of the               While one of these solutions may, in          • one-time sales rewards, such as              mend those investments that offer
most important decisions a person can          fact, be right for a particular investor or          mutual fund “loads” or the upfront         them the highest commission.
make.–What do you need to know                 family, each may be only part of the                 payments that come from selling               Fortunately, investors can now resolve
about choosing the right financial             picture that you should examine before               annuities and cash-value life insur-       any confusion they may be experiencing
advisor for your needs?                        deciding on the best financial plan for              ance policies,                             about all this, now that structural changes
    The ideal financial planner                            your future. A financial services    • ongoing, annual service payments,            in the financial services industry have
is a trained, experienced pro-                             provider who offers a broad              such as those made to insurance            allowed full-service banks to become
fessional who inspires trust                               range of options is more likely          agents upon policy renewal and             convenient, comprehensive conduits
and demonstrates the highest                               to meet all your needs over your     • those paid for such transactions as          for investment services.
level of competence and                                    lifetime, to understand your             buying and selling shares of stock.           For example, Key combined the
integrity. His or her role in a                            risk tolerance and goals, and           Other planners are paid fees based          capabilities of its Key PrivateBank
family’s finances is as crucial                            truly to act as a trusted advisor.   either on a percentage of a family’s total     organization (which has roots that go
as that of a family attorney.                                  In addition to differing in      assets or on just those funds the plan-        back well over a century) with the
    Like attorneys or other                                terms of the range of solutions      ner manages. This is the most common           capabilities of the retail brokerage busi-
professionals, some financial planners         they can provide, advisors also differ in        form of payment for independent                ness of its McDonald Investments
specialize in certain areas – insurance for    how they are compensated. The ideal              financial planners.                            organization to create Gradison
instance. The upside of this approach is       financial planner is the professional whose         Some planners are paid fees based on        McDonald Financial Group, which
that the advisor is highly knowledgeable       personal financial incentives best match         an hourly rate, like those paid to a lawyer.   offers truly integrated solutions. Unlike
about that particular product. The chal-       those of his or her customers. In other          Others receive an upfront payment for          many firms, where commission-driven
lenge is that a specialist may have a rather   words, you want an advisor who gets              developing a financial plan, including an      salespeople compete, Gradison
limited focus. For example, a financial        paid for doing a good job for you, not           inventory of assets and a plan of action.      McDonald Financial Group examines
planner at an insurance company may            for selling particular products.                    Planners who are paid on a fee basis        an investor’s circumstances from every
focus on offering insurance products as           Financial planners are paid commis-           are better positioned to advise cus-
a solution to your financial needs. A          sions, fees or a blend of both.                  tomers about investment options from                                  continued on page 5B
A Supplement to the Business Courier                                                                                                                                                       April 16, 2004 5B
                                                                                                    GOERING CENTER
Financial Planner...continued from page 4B

angle and offers a broad, integrated                     customers to implement the strategy                   ing, trust and insurance. The result          Bob Moore is Managing Director of Gradison
and objective perspective that encom-                    and monitor its effectiveness.                        will be a comprehensive, neutral, cus-        McDonald Financial Group. His office is at 580 Walnut
                                                                                                                                                             Street and he may be reached at 579.5089 or

    A financial services provider who offers a broad range of options is more                                                                      

    likely to meet all your needs over your lifetime, to understand your risk                                                                                Choosing a financial advisor is a complex process at

            tolerance and goals, and truly to act as a trusted advisor.                                                                                      best. It requires an understanding of the range of serv-
                                                                                                                                                             ices available and their particular advantages. As a
                                                                                                                                                             helpful starting point, Bob Moore explains fee-based
                                                                                                                                                             and commission-based investment services and rec-
passes banking, brokerage services,                          This approach has generated such                  tomer-oriented approach that puts             ommends an efficient pathway toward choosing
trust and insurance products.                            remarkable loyalty and trust that fami-               you in control of the “big picture.”          which is right for you: Marcia Hagler, 762.8464
    Clearly, the advantage of such broad                 lies often maintain client relationships
service and product offerings is neutral-                over several generations and the span
ity. A financial planner can focus on an                 of decades.
                                                                                                                 The Goering Center                                                 Elroy E. Bourgraf
                                                                                                                                                                                    James Funch, Jr.
individual client’s needs rather than be                     The changes in federal regulations                  Advisory Board                                                     Dean R. Gaudin
motivated to sell a particular commis-                   that made it possible for full-service
sion-rich product. This neutral                          banks to provide customers with a                                                                                         Richard D. Hannan
approach begins with the BluePrint                       more complete array of services and                      John B. Goering,                  W. Kent Lutz,
                                                                                                                                                                                     Lynn Mangan
financial plan, a comprehensive prod-                    advice have significant implications
                                                                                                                     Chairman                         Director
                                                                                                                                                                                     John Steele, Jr
uct-neutral procedure that moves from                    for consumers. When planning for                      Sidney L. Barton, Ph.D.,       Frederick A.Russ,Ph.D.,
                                                                                                                  Executive Director                                                 Molly Vollmer
an objective analysis of an investor’s                   your financial future, seek out a                                                             Dean
current situation and long-term goals                    financial services provider that can                                                                                       Steven A.Wilson
to a practical strategy to meet those                    help you create a broad investment                                                   Board Emeriti:
goals. Gradison McDonald Financial                       framework that takes into account                     Marty Betagole / Otto Budig, Jr. / Thomas L. Neyer, Sr. / Bill Rice, Sr. / Jeffrey L.Wyler
Group planners work closely with their                   fee-based investment services, bank-

       Nomination Form: FBOY 2004                                                                                 August 24, 2004 • 6-9 pm • Music Hall
    Simply fax this completed form to the Goering Center office at (513) 556-6044.                             To honor the enormous positive contributions made by family companies, both large
                                                                                                               and small, the University of Cincinnati and the Goering Center for Family & Private
                                                                                                               Business are pleased to announce the 5th annual Tri-State Family Business of the Year
 About the Nominee..                                                                                           Awards. The competition will work as follows: Nominees will be judged on the
 Company Name ______________________________________________________                                           basis of their positive family-business linkage, their business success, their multiple
                                                                                                               family member and/or multiple generation involvement, their contributions to commu-
 Address ____________________________________________________________
                                                                                                               nity and industry, and their innovative business practices, products or strategies.
 City/State/Zip ________________________________________________________
                                                                                                               Awards will be granted in four categories:
 Phone ______________________________________________________________
                                                                                                               • Under 100 employees       • Innovation (Products, Markets, Organizational)
 Fax ______________________________ E-mail __________________________                                          • Over 100 employees        • Community Service

 Principal Owner ______________________________ # Employees ____________
                                                                                                               The nominations and judging will take place in two steps. Nominations may be
 Principal Product of Service ____________________________________________                                     submitted by anyone and businesses are encouraged to nominate themselves.
                                                                                                               Nominations are due by April 30, 2004. Once a nomination is received, a detailed
                                                                                                               application will be sent to the nominated businesses, which must be returned by
 About the Nominator...                                                                                        June 30, 2004. All applications will be reviewed by a panel of independent judges
 Name ______________________________________________________________                                           from various professional disciplines and by owners of family businesses.

 Company ____________________________________________________________
                                                                                                               Rules for Nominations
 Address ____________________________________________________________                                          1. Businesses must be headquartered in Ohio, Kentucky or Indiana.
                                                                                                               2. A business may be nominated by anyone, including employees or business associates,
 City/State/Zip ________________________________________________________
                                                                                                                  or by self-nomination.
 Phone ______________________________________________________________                                          3. All family businesses are eligible.
                                                                                                               4. All nominations must be recieved by no later than April 30, 2004.
 Fax ______________________________ E-mail __________________________
                                                                                                               5. Awards will be given in the following four categories:
 What is your association with the family business you are nominating? ______________                             • Under 100 employees
                                                                                                                  • Innovation (Products, Markets, Organizational)
                                                                                                                  • Over 100 employees
                            Deadline for submitting nominations is April 30, 2004.
  An application will be forwarded to the nominated business upon receipt of this completed nomination form.
                                                                                                                  • Community Service
                                                                                                               6. Applications sent to nominees must be returned by June 30, 2004.
6B April 16, 2004                                                                                                                                                      A Supplement to the Business Courier
                                                                                                             GOERING CENTER

 Goering Center
 Able Services                         JANCOA Janitorial Services,Inc.
 A C Nielsen BASES                     Janell,Inc.
 Al.Neyer,Inc.                         Jeff Wyler Dealership Group
 Anchor Research,Inc.                  John D.Dovich & Associates,LLC
 Anderson Tool & Die                   John F.Dickey Co.
 Apollo Heating & Air Conditioning     John T.Niehaus,LISW
 ASI Sign Systems/Cincinnati,Inc.      Johnson Investment Counsel
 Astro Met Associates                  Kaiser Foods
 Aurora Casket Company,Inc.            KDM POP Solutions Group
 Baldwin Employee Concepts             Keating,Muething,Klekamp,P.L.L.
 Barnes,Dennig & Co.,Ltd.              Kelly's Crafts,Inc.
 Batesville Products,Inc.              Kennedy,Nelson & Co.
 Baumann Engineering,Inc.              KeyBank
 Big Chief,Inc.                        Key Principal Partners
 Bridge Advisors,Inc.                  King Bag & Manufacturing Co.
 Building Crafts,Inc.                  Krombholz Jewelers
 Burd Brothers                         LaRosa's Inc.
 Burke & Schindler,P.L.L.              LaSalle Bank
 Carstar Collision Center              Leonhardt Plating Co.
 Cassady,Schiller & Associates         Lincoln Financial Advisors
 Casco Manufacturing Solutions         Mass Mutual - The Blue Chip Co.
 Cast-Fab Technologies                 Matlock Electric
 Charles F.Shiels and Company          Mellott & Mellott,P.L.L.
 Cincinnati Growth Partners,LLC        Mench Financial,Inc.
 Clarke Detroit Diesel-Allison,Inc.    Mercury Instruments
 Clarke,Inc.                           Miami Rubber Company
 Clark,Schaefer,Hackett & Co.          Modern Office Methods
 Clayton L.Scroggins Associates,Inc.   Morgal Machine Tool Co.
 Contractors Materials Co.             Multi-Craft Litho,Inc.
 Cors & Bassett,LLC                    Myers Y Cooper Co.
                                                                           Family Business Compensation...continued from page 1B
 Crowley's                             National Band & Tag Co.                either pay family members equally             need to be negotiated each year.           business compensation strategy. Future
 CT Beach & Company,Inc.               Natorp's,Inc.                          or base the compensation on the           7) Establish job classifications and crite-    articles in this column or others in our
 D'Ambrosio,Inc.(Salons)               Neal's Construction Co.
 Dalton Roofing Company                Neiheisel Plumbing,Inc.
                                                                              market value of their jobs.                   ria for assessing performance.             Family Business Report will speak fur-
 Deloitte & Touche                     Northwestern Mutual Financial       2) Determine the market value of par-        8) Determine if you want a longer-term         ther to compensation matters. We hope
 Derrick Company,Inc.
                                                                              ticular jobs.                                 incentive plan.                            if you have some specific questions
 Donahue & Associates
                                       O’Brien Group                       3) Determine if positions only will be       9) If a longer-term incentive plan is          about your own situation, that you will
 Down Lite International
 Dudley Construction Co.
                                       Officeware                             paid at the average of the market             established, what will be the criteria     call us at the Goering Center at 513-
                                       OT S
 Dwyer Insurance Agency,Inc.                                                  value, or above, or below the average.        for awarding special compensation-         556-7185. We have resources to help
                                       Overly Hautz Company
 Eagle Custom Homes                                                        4) Adjustments to pay may reflect qual-          book value increase, profit growth, etc.   you in a variety of ways. Please also
                                       Patrick Nesbitt
 Employee Capital Solutions
 Excel Management Consulting
                                       Paul Hemmer Companies                  itative characteristics of the position   10) Communicate clearly to everyone            remember, that we would like you to
                                       Payne Firm,Inc.                        as it relates to its strategic impor-         the company’s philosophy on com-           consider becoming a member of the
 Family Wealth Advisory Group
                                       Pembaur Homes and Remodeling
 Feilhauer's Machine Shop,Inc.
                                                                              tance to the company.                         pensation and your plan to review          Center. Membership in the Center
 Fenton Rigging Co.
                                       Pilot Contracting,Inc.              5) Determine if you want to offer an             the policy every year.                     offers many benefits, and it’s an impor-
 Findlow Filtration,Inc.
                                       PNC Advisors                           annual incentive plan based on per-          We have only touched on a few issues        tant part of our financial support. We
 Fifth Third Bank                                                             sonal goals and/or performance.           that need to be addressed when evalu-          stand ready to serve you in any way we
                                       Precision Coil Spring
 Florence Hardware
                                       Provident Financial Advisors        6) Personal goals and pay incentives         ating and developing a sound family            can. Until next time…….WKL
 Flottman Printing
                                       Prus Construction
 Food Specialties,Co.
 Forshee Industrial Roofing
 Sheetmetal Work                       Rim & Wheel Service,Inc.            Unwanted Communications...continued from page 3B
 Frankenberg & Associates              Robert Lucke Homes                     advertisement, clearly and conspic-           while a state could pass a law ban-            Many consumer advocates were dis-
 Funch Lumber Company                  Rosselot Financial Group,Inc.
 Gardner Publications                  Scherzinger Corporation
                                                                              uously provide notice of the recipi-          ning e-mail with deceptive headers,        appointed by the Can-Spam Act. They
 Gateway Concrete                      Schiff,Kreidler-Shell                  ent’s right to opt out, and provide a         it could not pass a law banning all        would have preferred a ban on unso-
 Gilson's                              Singer Wallcovers                      valid physical postal address.                commercial e-mail.                         licited commercial e-mail, or at least a
 Global Underwriters,Inc.              Star Moving and Storage
                                                                                                                                                                       procedure where the sender first had to
 Goering & Goering                      Business Brokers of N KY
 Gold Medal Products Co.               The Angus Group Ltd.                Q. Can I make the UCE stop?                  Q. How is the law enforced?                    obtain the recipient’s permission before
 Graeter's,Inc.                        The Child's Center                  A. If the recipient exercises the right      A. The federal law does not provide a          sending the e-mail. But advocates of
 Graydon Head & Ritchey,LLP            The Global Consulting Partnership      to opt out, the sender may not,              “private right of action.” That             the act feel that it targets the “bad
 Great American Marketing              The Greater Cincinnati Foundation
                                       The Gorilla Glue Company
                                                                              more than 10 business days after             means that an individual recipient          guys” and provides consumers with the
 Greater Cincinnati Chamber                                                   the receipt of such a request, send          cannot take a sender directly to            opportunity to limit the amount of
 of Commerce                           The Imbus Roofing Co.,Inc.
 Greenfield Products                   The Lumley Group,Inc.                  UCE that falls within the scope of           court. Rather, the power to                 unwanted e-mail they receive. The
 Griffin Industries                    The Verdin Company
                                       The Walt Lunsford Financial
                                                                              the request. The “opt out” applies           enforce the act is left to the FTC          open question of course is whether it
 H & S Chemical Co.,Inc.
 H.J.Benken Greenhouses
                                       Advisory Group of Advest,Inc.          not only to the “sender,” or the entity      and certain other federal agencies,         will actually work.
                                       The Wise Group
 Hamilton Caster & Manufacturing Co.                                          whose product is being promoted,             state attorneys general, and inter-             (Please remember, this article is not
                                       The Wolfe Practice,LPA
 Hart Industries
                                       Trans-Borders Technology               but also to any person “acting on            net service providers. The FTC              intended as a substitute for legal advice.
 Hart Productions
                                       Truitt Roofing Company                 behalf of the sender.” Thus, a ven-          can seek a fine up to $11,000. In           The specific facts that apply to your
 Hilltop Basic Resources,Inc.
                                       Unistrut Cincinnati                    dor who actually delivers the e-             an action by a state attorney gen-          matter may make the outcome differ-
 Holland Communications
                                       University of Cincinnati
 Horan Associates Inc.                 College of Business                    mail also needs to comply with the           eral, statutory damages can total           ent than would be anticipated by you.
 Huber Lumber Company                  U S Bank                               recipient’s opt out request                  up to $250 per violation, but this          You should consult with an attorney
 ILSCO Corporation                     Verst Group Logistics
 Indrolect Company                     Vinylmax LLC
                                                                                                                           amount may be tripled if the                familiar with the issues and the laws.)
 Information Management                Wardway Fuels,Inc.                  Q. What about state law?                        sender acts willfully, or commits
 Interlube Corporation
                                       Whetstone Management                A. The federal law preempts or super-           certain other aggravating acts, as          John Colbert, Jack Greiner and Brian Thomas are
                                       Wilson Assoc. Financial Group
 Invesmart,Inc.                                                               sedes state laws, except to the extent       defined in the statute. In any suc-         attorneys with Graydon Head & Ritchey LLP in the
                                       Wm.Kramer & Son,Inc.
 J.D.Cloud & Co.
                                       Woodlawn Rubber Co.                    that the state law prohibits mislead-        cessful enforcement action, attor-          Commercial Litigation Department. They can be
 Jackson,Rolfes & Spurgeon & Co.
                                                                              ing or deceptive content. Accordingly,       ney fees may be recovered.                  reached at (513) 621-6464.

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