Annex L
Letter to Mr Kevin Maxwell, Maxwell Communications
plc,
from Mr Geoffrey Robinson MP
Further to my letter of 3 May, Michael Stoney spoke
to me at your request. He put to me your concern to be fair to
both sides on the Management Contract and your proposal therefore
that it would be better to agree a fixed fee and a smaller share
of profits. He mentioned a fixed fee of £150,000 to £200,000.
Frankly it would cost Lock at normal market rates
the best part of £200,000 to employ the management services
we are providing. To reiterate they are:
Chief Executive
Technical Director
2 Senior Engineers: Software and Hardware
Commercial Director for Lock Inc
These management services are backed up down the
line. In addition we are now also making available an office and
showroom at Birmingham which will be of considerable value to
Lock for the market in the Midlands and to some extent the South
(you will recall we closed the Southern office which was costing
over £75,000 per annum). All of this is free from any cross
charges so the £200,000 figure seems to me more than justified.
I would still like there to be a profit related element
and would suggest 10% of Lock consolidated PBT in addition to
the above fee.
There is a key exhibition—Interpak—next
week at Dusseldorf. I shall be attending since the House is not
sitting, together with our commercial Director. We have two immediate
priorities:
i. To relaunch the Metalchek 10—revamped
by TransTec;
ii. To recruit new distributors to replace the
key ones in Europe who have defected to Safeline.
I'll keep you posted. Meanwhile I'll proceed on the
basis of the above arrangement, if that's OK?
It's still a hard struggle at Lock!
26 May 1990
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