Lead conversion

We are a start up company and new to Zoho CRM, but have entered all 5000 leads (individual people) from about 3500 financial institutions into our Zoho "Leads". Of those leads, we want to target 150 institutions and all of the key people working at that institution for our 2012 prospect list. We have two questions:
1 ) Is it best to pick one lead (e.g. John Smith at ABC Bank) and convert them to an account or should we make them a potential?

AND

2) How do best then go in a grab all other people in our "Leads" list from that same entity (ABC Bank) and associate them together with John Smith at ABC Bank? It seems like "clone" is intended for this...but then we might have duplicates.