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Exhibit 10.17
DATED 1996
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McCarthy, Cristani & Maffei (Europe) Limited (1)
- and -
Laurette Freda Gell (2)
- and -
MCM Group, Inc. (3)
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SERVICE AGREEMENT
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as Service Director
Lovell White Durrant
37 Avenue Pierre ler de Serbie
75008 Paris
PARIS/JC/DWT
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CONTENTS
CLAUSE PAGE NO
1. APPOINTMENT AND TERM 1
2. DUTIES 2
3. REMUNERATION 3
4. PENSION AND INSURANCE BENEFITS 3
5. EXPENSES 4
6. MOTOR CAR 4
7. HOLIDAYS AND HOLIDAY PAY 4
8. SICKNESS/INCAPACITY 5
9. CONFIDENTIAL INFORMATION 5
10. RESTRICTIVE COVENANTS 5
11. TERMINATION ON THE HAPPENING OF CERTAIN EVENTS 7
12. OBLIGATIONS UPON TERMINATION OF EMPLOYMENT 8
13. OTHER TERMS AND CONDITIONS 9
14. STOCK PURCHASES AND OPTIONS 10
15. DEFINITIONS 11
16. MISCELLANEOUS 11
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SERVICE AGREEMENT
THIS AGREEMENT made the day of 1996
BETWEEN:
(1) McCarthy, Cristani & Maffei (Europe) Limited (Registered Number
3094797) whose registered office is at 21 Holborn Viaduct, London EC1A
2DY (the "Company"); and
(2) Laurette Freda Gell of 31, Culmstock Road, Clapham Common Westside,
London SW11 6LY (the "Executive"); and
(3) MCM Group, Inc., a company organised and existing under the laws of the
State of Delaware ("MCM").
WHEREAS:
(1) The Company wishes to employ the Executive and the Executive has agreed
to serve the Company on the terms and conditions set out in this
Agreement.
(2) MCM is the ultimate parent company of the Company.
IT IS AGREED:
PART I
1. APPOINTMENT AND TERM
The Company shall employ the Executive and the Executive shall serve
the Company as Service Director or in such other capacity as the
Company may reasonably require with effect from the continuation of his
previous employment with McCarthy, Cristani & Maffei, Incorporated
which began on 24th February 1986. Either the Executive or the Company
may terminate the employment at any time by giving to the other not
less than 3 calendar months' notice in writing. The Company reserves
the right to terminate the Executive's employment by payment in lieu of
notice.
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2. DUTIES
2.1 During his employment hereunder the Executive shall:
(a) perform the duties and exercise the powers and functions which
from time to time may reasonably be assigned to or vested in
him by the Board of Directors (the "Board") in relation to the
Company and any Associated Company (as herein defined) at such
place or places both within and outside the United Kingdom as
the Board shall determine;
(b) during working hours devote the whole of his time, attention
and ability to his duties hereunder and shall faithfully and
loyally serve the Company to the best of his ability and use
his utmost endeavours to promote its interests in all
respects;
(c) comply with all reasonable requests, instructions and
regulations given or made by the Board (or by anyone
authorised by it) and promptly provide such explanations,
information and assistance as to his activities or the
business of the Company as the Board may reasonably require;
(d) comply with all group policies and compliance procedures
insofar as relevant to his duties hereunder. For this purpose
the "group" includes MCM and its Associated Companies as
defined in clause 14;
(e) not engage in any activities which would detract from the
proper performance of his duties hereunder, nor without the
prior written consent of the Board in any capacity including
as director, shareholder, principal, consultant, agent,
partner or employee of any other company, firm or person (save
as the holder for investment of securities which do not exceed
three per cent (3%) in nominal value of the share capital or
stock of any class of any company quoted on a recognised stock
exchange) engage or be concerned or interested directly or
indirectly in any other trade, business or occupation
whatsoever.
2.2 Notwithstanding the provisions of clause 2.1 the Company shall:
(a) be entitled at any time to appoint another person or persons
to act jointly with the Executive;
(b) have the right to require the Executive at any time to carry
out such special projects or functions commensurate with his
abilities as the Company shall in its absolute discretion
determine.
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3. REMUNERATION
3.1 As remuneration for his services hereunder the Company shall pay to the
Executive a salary composed of two elements: (a) a base salary at the
rate of ninety six thousand seven hundred and thirty pounds per annum
(which shall be deemed to accrue from day to day) and (b) a bonus in
respect of revenues generated from sales of subscriptions to the
services of the Group (meaning MCM and its Associated Companies) as
outlined in the statement attached as Annex A hereto as amended from
time to time payable as to the base salary in (a) by equal monthly
installments on or about the 15th of each month and the bonus element
in (b) quarterly in arrears such salary being inclusive of any fees to
which the Executive may be entitled as a director of the Company or of
any Associated Company. The said salary shall be reviewed by the Board
from time to time and the rate thereof may be increased with effect
from any such review date. In addition, the Executive shall be entitled
to annual or other bonuses at the absolute discretion of the Company in
accordance with the Company's policy as communicated from time to time
to the Executive.
3.2 For the purposes of the Wages Act 1986 and otherwise the Executive
hereby consents to the deduction of any sums owing by him to the
Company in respect of monies advanced to him by the Company at any time
from his salary or any other payment due from the Company to the
Executive and the Executive hereby also agrees to make any payment to
the Company of any sums owed by him to the Company upon demand by the
Company at any time.
4. PENSION AND INSURANCE BENEFITS
4.1 The Executive shall be entitled to be a member of the MCM Group
Personal Pension Plan (the "Scheme"), particulars of which may be
obtained from the Company Secretary. The Executive's membership of the
Scheme shall be subject to the provisions thereof as amended from time
to time.
4.2 The Company shall provide the Executive with private medical insurance,
income protection in the event of long term disablement and life
assurance, particulars of which may be obtained from the Company
Secretary. The Company shall have the right to change its arrangements
for the provision of such benefits as it sees fit from time to time.
5. EXPENSES
The Company shall reimburse to the Executive all travelling, hotel,
entertainment and other expenses properly and reasonably incurred by
him in the performance of his duties hereunder and properly claimed and
vouched
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for in accordance with the Company's expense reporting procedure in
force from time to time.
6. MOTOR CAR
The Company shall not be obliged to provide the Executive with a motor
car. However, in lieu thereof the Company shall pay to the Executive as
additional salary, an allowance towards the cost and maintenance of a
motor car of (pound) 600 per month (to be paid at the same time as
salary). This shall terminate if the Executive shall cease to own or
lease a motor car suitable to his status or if the Executive ceases for
any reason to hold a valid driving licence.
7. HOLIDAYS AND HOLIDAY PAY
7.1 In addition to the normal Bank and public holidays the Executive shall
be entitled to 25 working days' paid holiday during each calendar year
to be taken at such time or times as may be agreed with the Board. The
Executive may not without the consent of the Board carry forward more
than one week in total any unused part of his holiday entitlement to a
subsequent calendar year.
7.2 For the calendar year during which the Executive's employment hereunder
commences or terminates he shall be entitled to such proportion of his
annual holiday entitlement as the period of his employment in each such
year bears to one calendar year. Upon termination of his employment for
whatever reason he shall if appropriate either be entitled to salary in
lieu of any outstanding holiday entitlement or be required to pay to
the Company any salary received in respect of holiday taken in excess
of his proportionate holiday entitlement, in either case adjusted to
take account of items falling within clause 3.2.
8. SICKNESS/INCAPACITY
8.1 If the Executive shall be prevented by illness, accident or other
incapacity from properly performing his duties hereunder he shall
report this fact forthwith to the Company Secretary's office and if he
is so prevented for more than seven consecutive days (including
weekends) he shall if required by the Company provide an appropriate
doctor's certificate.
8.2 If the Executive shall be absent from his duties hereunder owing to
illness, accident or other incapacity duly certified in accordance with
the provisions of clause 8.1 he shall be paid his full remuneration for
the first three months of such absence and thereafter subject to the
provisions of clause 11 such remuneration as the Board shall in its
discretion allow PROVIDED THAT there shall be deducted from such
remuneration any Statutory Sick Pay or any social
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security or other benefits payable to the Executive including any sums
recoverable from a third party and any sums payable to the Executive
under the permanent health insurance arrangement referred to in clause
4.2 above.
9. CONFIDENTIAL INFORMATION
The Executive shall not during his employment hereunder (save in the
proper course thereof) or at any time after its termination for any
reason whatsoever disclose to any person whatsoever or otherwise make
use of any confidential or secret information which he has or may have
acquired in the course of his employment concerning, but not limited
to, the business, affairs, finance, customers or trade connections of
the Company or any Associated Company or any of its or their suppliers,
agents, distributors or customers and shall use his best endeavours to
prevent the unauthorised publication or disclosure of any such
confidential or secret information.
10. RESTRICTIVE COVENANTS
10.1 Since the Executive will in the course of his employment hereunder have
dealings with customers and obtain knowledge of the trade secrets and
other confidential information in regard to the business of the Company
and its Associated Companies, the Executive hereby agrees and
undertakes with the Company for itself and as trustee for its
Associated Companies that he shall not without the prior written
consent of the Board (such consent to be withheld only so far as may be
reasonably necessary to protect the legitimate interests of the Company
or any Associated Company):
(a) during the period of his employment and for a period of 12
months after the termination for whatever reason of his
employment hereunder be engaged or interested (whether as a
director, shareholder, principal, consultant, agent, partner
or employee) in any business concern (of whatever kind) which
shall be in competition with the Company or with any
Associated Company in the provision of services of a kind with
which the Executive was concerned to a material extent during
the period of one year prior to the termination of his
employment with the Company;
(b) during the period of his employment and for a period of 12
months after the termination for whatever reason of his
employment hereunder either on his own behalf or on behalf of
any other person, firm or company in respect of any services
of a kind provided by the Company and/or any Associated
Company in respect of the provision of which the Executive may
have been engaged during his employment with the Company or
any Associated Company:
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(i) canvass, solicit or approach or cause to be
canvassed, solicited or approached for orders; or
(ii) directly or indirectly deal with any person, firm or
company who at the date of the termination of this
Agreement or within one year prior to such date is or
was a client or customer of the Company or any
Associated Company or was in the habit of dealing
under contract with the Company or any Associated
Company and with whom or which the Executive had
contact during the said period; and
(c) during the period of his employment and for a period of 12
months after the termination for whatever reason of his
employment hereunder either on his own behalf or on behalf of
any other person, firm or company directly or indirectly
solicit or entice or endeavour to solicit or entice away from
the Company or from any Associated Company any employee of
executive or managerial status engaged in its or their
business
Provided that (unless termination is by reason of the default of the
Executive entitling the Company to terminate this contract under clause
11(c) or (e) or if the Executive resigns) the provisions of this clause
shall only apply after the "Compensated Period" so long as the Company
continues to pay the Executive his base salary at the same level as at
the moment immediately prior to termination taking effect. The
"Compensated Period" means a period equal to the number of weeks by
reference to which any payment under Clause 12.2 is calculated
commencing with the date of termination of the Executive's employment
(or, in the event that the Executive is not required to work out any
notice period) from the time the Executive actually ceased working for
the Company.
10.2 Whilst each of the restrictions in clauses 10.1(a), 10.1(b) and 10.1(c)
are considered by the parties to be reasonable in all the circumstances
as at the date hereof it is hereby agreed and declared that if any one
or more of such restrictions shall be found by a court of competent
jurisdiction to be void as going beyond what is reasonable in all the
circumstances for the protection of the interests of the Company and/or
any Associated Company but would be valid if words were deleted
therefrom the said restrictions shall be deemed to apply with such
modifications as may be necessary to make them valid and effective and
any such modification shall not thereby affect the validity of any
other restriction contained herein.
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10.3 INJUNCTIVE RELIEF WITH RESPECT TO COVENANTS
The Executive acknowledges and agrees that the covenants and
obligations of the Executive contained in this clause relate to
special, unique and extraordinary matters and that a breach of any of
the terms of such covenants and obligations will cause the Company
damage for which damages may not be an adequate remedy. Therefore, the
Executive agrees that the Company shall be entitled to seek an
injunction, restraining order or such other relief as a court of
competent jurisdiction may deem necessary or appropriate to restrain
the Executive from committing any breach of the covenants and
obligations contained in this Clause 10. These injunctive remedies are
cumulative and in addition to any other rights and remedies the Company
may have.
11. TERMINATION ON THE HAPPENING OF CERTAIN EVENTS
The Company without prejudice to any remedy which it may have against
the Executive for the breach or non-performance of any of the
provisions of this Agreement may by notice in writing to the Executive
forthwith terminate this Agreement and the Executive's employment if
the Executive shall:
(a) become bankrupt or become the subject of an interim order
under the Insolvency Act 1986 or make any arrangement or
composition with his creditors; or
(b) become a patient as defined in the Mental Health Act 1983; or
(c) be convicted of any criminal offence (other than an offence
under road traffic legislation in the United Kingdom or
elsewhere unless a custodial sentence is imposed); or
(d) be prevented by illness or otherwise from performing his
duties hereunder for a consecutive period of six calendar
months or for an aggregate period of six calendar months in
any period of 12 calendar months; or
(e) be guilty of any serious misconduct, any conduct tending to
bring the Company or himself into disrepute, or any material
or persistent breach or non-observance of any of the
provisions of this Agreement or shall neglect, fail or refuse
without reasonable excuse to carry out duties properly
assigned to him hereunder.
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12. OBLIGATIONS UPON TERMINATION OF EMPLOYMENT
12.1 Upon the termination of his employment hereunder for whatever reason
the Executive shall:
(a) forthwith tender his resignation as a Director of the Company
and of any Associated Company without compensation. To secure
his obligation under this Agreement the Executive irrevocably
appoints the Company to be his attorney in his name and on his
behalf to sign any documents and do any things necessary to
give effect thereto, if the Executive shall fail to sign or do
the same himself;
(b) deliver up to the Company all vehicles, keys, credit cards,
correspondence, documents, specifications, reports, papers and
records (including any computer materials such as discs or
tapes) and all copies thereof and any other property (whether
or not similar to the foregoing or any of them) belonging to
the Company or any Associated Company which may be in his
possession or under his control, and (unless prevented by the
owner thereof) any such property belonging to others which may
be in his possession or under his control and which relates in
any way to the business or affairs of the Company or any
Associated Company or any supplier, agent, distributor or
customer of the Company or any Associated Company, and he
shall not without written consent of the Board retain any
copies thereof;
(c) if so requested send to the Company Secretary a signed
statement confirming that he has complied with clause 12(b);
and
(d) not at any time represent himself still to be connected with
the Company or any Associated Company.
12.2 On termination (otherwise than by virtue of default of the Executive
entitling the Company to terminate this contract under clause 11(c) or
(e) or in a case where the Executive resigns) the Executive shall be
entitled to six weeks' remuneration plus two weeks' remuneration for
each complete year of service with the Company or Associated Companies.
For this purpose "remuneration" means the base salary set out in Clause
3.1(a) based on the last complete calendar year. Any period of paid
notice actually given and not worked shall count towards any obligation
to make payment under this clause.
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13. OTHER TERMS AND CONDITIONS
13.1 The provisions of the Company's standard terms and conditions of
employment shall apply to the Executive's employment hereunder except
so far as inconsistent herewith.
13.2 The following particulars are given in compliance with the requirements
of section 1 Employment Protection (Consolidation) Act 1978:
(a) the Executive's normal place of work is Mill House, Mill
Street, London SE1 but he may be required to work at any other
office or location in the UK as may be directed by the Board
from time to time;
(b) the Executive shall also be required to travel on the
Company's business at all reasonable times and in particular
shall be obliged to make himself available in other locations
in which the group (as defined in clause 2.1(d)) is present at
all reasonable times.
(c) the Executive's continuous employment began on 24th February
1986. No employment of the Executive with a previous employer
counts as part of the Executive's continuous employment with
the Company;
(d) the Executive's hours of work shall be the normal hours of
work of the Company which are from 9.00 am to 6.00 p.m.
together with such additional hours as may be necessary for
the proper discharge of his duties hereunder to the
satisfaction of the Board;
(e) any grievance or other dissatisfaction should in the first
instance be discussed with the Board;
(f) contracting-out certificate pursuant to the provisions of
Pension Schemes Act 1993 is in force in respect of the
Executive's employment hereunder; and
(g) save as otherwise herein provided there are no terms or
conditions of employment relating to hours of work or to
normal working hours or to entitlement to holiday (including
public holidays) or holiday pay or to incapacity for work due
to sickness or injury or to pensions or pension schemes.
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PART II
14. STOCK PURCHASES AND OPTIONS
14.1 The Executive shall be given the opportunity to purchase up to 1,750
shares (the "Shares") of the Class C Common Stock of MCM, par value
US$.01 per share (the "Common Stock"), at a purchase price of US$100
per share, but in no event shall MCM be required to offer to sell or to
sell any Shares to the Executive at any time at which making such an
offer or selling any such Shares would violate any applicable
securities law. The terms and conditions of the Executive's purchase of
any Shares, including the right of first refusal of MCM with respect to
such Shares, the right of MCM to purchase such Shares from the
Executive under certain circumstances and the right of the Executive to
require MCM to purchase such Shares under certain circumstances, shall
be set forth in a separate Management Stock Subscription Agreement,
substantially in the form attached hereto as Annex B, to be entered
into by MCM and the Executive.
14.2 Upon the purchase of the Shares pursuant to Clause 14.1, the Executive
shall be granted nonqualified stock options to purchase additional
shares of the Common Stock, each such option to be granted pursuant to
the terms of the MCM Stock Option Plan (the "Stock Option Plan") and to
have a ten year term, as follows: (i) the Executive shall be granted
options to purchase up to an aggregate of 4,236 shares of Common Stock
(or, if less, a number of Shares purchased by the Executive pursuant to
Clause 14.1, multiplied by (y) 2.42) (the "Options"), (ii) one-half of
the Options shall be granted at an exercise price per share equal to
US$100 (the "Initial Value Options") and the remaining one-half of such
Options shall be granted at an exercise price of US$143.60 (the
"Premium Options"), (iii) one-half of the Initial Value Options and
one-half of the Premium Options shall generally become exercisable in
five equal annual installments on each of the first five anniversaries
of the date of grant and (iv) the remaining one-half of the Initial
Value Options and the remaining one-half of the Premium Options shall
generally become exercisable (A) as of third anniversary of the date of
grant, if and only if MCM and its subsidiaries shall have achieved the
maximum EBITDA target provided for under the terms of the Option
Agreement (as defined below), provided that if MCM and its subsidiaries
shall have achieved EBITDA as of such anniversary date greater than the
minimum EBITDA target specified in the Option Agreement but less than
the maximum EBITDA target so specified, a proportionate share of the
Performance Options shall become exercisable as of such date, or (B)
nine years following the date of grant, subject, in the case of (iii)
and (iv) above, to the Executive's continuous employment through the
applicable vesting date. The terms and conditions of the Options
(including those described therein)
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shall be set forth in the Stock Option Plan and a separate Management
Stock Option Agreement substantially in the form attached hereto as
Annex C, to be entered into by the Executive and MCM (the "Option
Agreement").
PART III
15. DEFINITION
In this Agreement an "Associated Company" means any company which for
the time being is:
(h) a holding company (as defined by s 736 Companies Act 1985) of
the Company; or
(i) any subsidiary (as defined by s 736 Companies Act 1985) of any
such holding company or of the Company; or
(j) a company over which the Company has control within the
meaning of s 840 Income and Corporation Taxes Act 1988.
16. MISCELLANEOUS
16.1 Part I of this Agreement constitutes the entire agreement between the
Company and the Executive and replaces all and any prior agreements
relating to the employment of the Executive with the Company or any
Associated Company. This Agreement may only be modified in writing
signed by the Company and the Executive.
16.2 Part I of this Agreement shall be governed by and construed in
accordance with the laws of England. Part II shall be governed by the
laws of the State of New York. The provisions of Part III shall be
deemed incorporated into each of Part I and Part II.
16.3 SEVERABILITY
In the event that any one or more of the provisions of this Agreement
shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
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16.4 NOTICES
Any notice or other communication required or permitted to be delivered
under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by registered mail, first-class
postage prepaid and return receipt requested, (iii) deemed to have been
received on the date of delivery or (if sent by post) on the third
business day after the mailing thereof, and (iv) addressed to the
intended recipient at the address set out at the head of this Agreement
(or such other address as is notified for the purpose);
16.5 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original and all of which together shall constitute one and
the same instrument.
16.6 HEADINGS
The section and other headings contained in this Agreement are for the
convenience of the parties only and are not intended to be a part
hereof or to affect the meaning or interpretation hereof.
IN WITNESS whereof this deed has been duly executed and delivered the day and
year first before written.
Executed as a deed by )
McCarthy, Cristani and Maffei (Europe) Limited )
acting by )
/s/ illegible
- -----------------------------
Director
/s/ illegible
- -----------------------------
Director/Secretary
Signed as a deed by )
L.F. Gell )
in the presence of: )
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/s/ Erica Francis Martin
- ---------------------------------------
Erica Francis Martin
Witness's name and signature
8 Stratton Ave, Enfield, Middx, ENZ 9AP
- ---------------------------------------
Witness's address
Executed as a deed by )
MCM Group, Inc. )
acting by )
/s/ illegible
- --------------------------------------
Authorised signatory
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Exhibit A
See Exhibit A to Exhibit 10.14
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Exhibit B
See Exhibit B to Exhibit 10.14.
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ANNEX A
Annex A filed as Annex A to Exhibit 10.14.
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Annex B
BONUS
Bonus is based on the achievement of annual budgeted revenue from the
Europe/Africa/Gulf (EAG) region.
BONUS CALCULATION
PERFORMANCE RANGE BONUS AWARD
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120% or greater of objective 150% of year-end salary
115% to 119.9% of objective 135% of year-end salary
110% to 114.9% of objective 120% of year-end salary
105% to 109.9% of objective 110% of year-end salary
100% to 104.9% of objective 100% of year-end salary
90% to 99.9% of objective 90% of year-end salary
80% to 89.9% of objective 60% of year-end salary
70% to 79.9% of objective 30% of year-end salary
Below 70% 0% of year-end salary
PAYMENT
Bonus payments will be made on a quarterly basis based on the following
calculation;
1st quarter award 50% of earned amount
2nd quarter award 50% of earned amount plus balance of 1st quarter
3rd quarter award 50% of earned amount plus balance of 2nd quarter
4th quarter award earned amount plus balance of 3rd quarter