Letter to Mr Geoffrey Robinson MP, Transfer
from Mr Michael Stoney, Pergamon AGB plc
We had a brief discussion with regard to your proposals
of 3 May 1990 in connection with the management agreement between
Transtec and Lock International. I have assumed that this agreement
would cover both Lock International and A M Lock Inc.
1. It was agreed by us that an agreement should
be for a period of at least 2 years, and should provide an incentive
for all parties to return Lock to profitability.
2. It must also be recognised that the forecasts
for this year only envisage that Lock will no more than breakeven.
3. It would appear therefore more equitable to
Transtec if Lock were to pay Transtec a flat fee, inclusive of
all expenses, or say, £150K per annum. In addition, Transtec
would also receive an incentive based on the net profits (after
the fee), perhaps on the following lines:
|% of profit
|Year 1||Profit up to £500k
|Profit in excess of £500k
|Year 2||Profit up to £500k
|Profit between £500k to £750k
|Profit between £750k to £1.5m
|Profit in excess of £1.5m
This compares to your proposal that Transtec would
receive 30% of the profits off Lock during the period of the agreement.
4. Obviously these figures are only ideas at
this stage. However, on this basis, if Lock were to achieve profits
of £1m in year 2, Transtec would receive approximately £250k.
Perhaps when you have had a chance to consider this
we can talk further on this.
23 May 1990