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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) October 4, 1999
MCM Capital Group, Inc.
(Exact Name of Registrant as Specified in Charter)
Delaware 000-26489 48-1090909
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
500 West First Street, Hutchinson, Kansas 67501
(Address of Principal Executive Offices) (Zip Code)
Registrant"s telephone number, including area code (800) 759-0327
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On October 6, 1999, MCM Capital Group, Inc. (the "Company") announced that
John F. Craven had been named to the newly created position of Chief Operating
Officer of the Company. In connection with his employment, Mr. Craven entered
into a one-year employment agreement and was granted options to purchase up to
25,000 shares of the Company's common stock under the Company's 1999 Equity
Participation Plan.
Copies of Mr. Craven's employment agreement and the press release with
respect to the foregoing announcement are being filed as exhibits hereto.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.1 Employment Agreement between the Company and John F. Craven
99.1 Press Release dated October 6, 1999
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MCM Capital Group, Inc.
/s/ R. Brooks Sherman
By _____________________________
R. Brooks Sherman
Executive Vice President
and Chief Financial Officer
Dated: October 8, 1999
3
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Exhibit Index
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
10.1 Employment Agreement between the Company and John F. Craven
99.1 Press Release dated October 6, 1999
</TABLE>
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Exhibit 10.1
MCM CAPITAL GROUP, INC.
4302 E. BROADWAY
PHOENIX, ARIZONA 85040
October 4, 1999
Mr. John F. Craven
2366 Cherrywood Road
Minnetonka, Minnesota 55305
Dear Mr. Craven:
It is with great pleasure that we hereby confirm your employment as
Executive Vice President and Chief Operating Officer of MCM Capital Group, Inc.
(the "Company"), on the terms and conditions set forth in this letter and in the
attached term sheet (the "Term Sheet"). During the term of your employment with
the Company, you shall also serve as Executive Vice President and Chief
Operating Officer of Midland Credit Management, Inc. and Midland Financial
Services, Inc., wholly owned subsidiaries of the Company.
This letter agreement, which includes the Annex hereto, contains the
entire agreement between the parties with respect to the matters covered herein
and supersedes all prior agreements, written or oral, with respect thereto. This
letter agreement may only be amended, superseded, canceled, extended or renewed
and the terms hereof waived, only by a written instrument signed by the parties
hereto, or in the case of a waiver, by the party waiving compliance.
You will report to the Chief Executive Officer and your duties will
be performed primarily at the Company's offices in Phoenix, Arizona. The Company
shall furnish sufficient facilities, services, staffing and assistance to enable
you to perform your duties hereunder. The term of your employment shall continue
through the first anniversary of the date hereof, provided that such term shall
be automatically extended for successive one year periods unless either you or
the Company gives written notice to the other, at least ninety (90) calendar
days before such extension is to take effect, that they do not wish the term to
be extended. This Agreement may be terminated prior to the expiration of the
original term, or any extension thereof: (i) in the event that you shall die;
(ii) in the event that you shall become Disabled (for purposes of this clause
(ii), "Disabled" shall mean that you shall have failed, due to illness or other
physical or mental incapacity, to render services of the character contemplated
by this Agreement for an aggregate of more than ninety (90) calendar days during
any twelve (12) month period); (iii) for Cause (as
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hereafter defined); or (iv) in the event that you give written notice to the
Company of your resignation.
For purposes of this letter agreement "Cause" means: (i) commission
of any act of fraud or gross negligence by you in the course of your employment
hereunder which, in the case of gross negligence, has a materially adverse
effect on the business or condition (financial or otherwise) of the Company or
any of its subsidiaries or affiliates; (ii) willful material misrepresentation
at any time by you to the Chief Executive Officer, or the Board of Directors of
the Company (the "Board"), or any of Triarc Companies, Inc., C.P. International
Investments Limited or their affiliates (collectively, the "Principal
Stockholders"); (iii) willful failure or refusal to comply with any of your
material obligations hereunder or to comply with a reasonable and lawful
instruction of the Board; (iv) engagement by you in any conduct or the
commission by you of any act which is, in the reasonable opinion of the Board,
materially injurious or detrimental to the substantial interest of any of the
Principal Stockholders, or the Company; (v) indictment for any felony involving
fraud or moral turpitude, or conviction of any felony, whether of the United
States or any state thereof or any similar foreign law to which you may be
subject; (vi) any failure to substantially comply with any written rules,
regulations, policies or procedures of the Company furnished to you which, if
not complied with, could reasonably be expected to have a material adverse
effect on the business of the Company or any of its subsidiaries or affiliates;
or (vii) any willful failure to comply with the Company's, or any of its
subsidiaries' or affiliates' policies regarding insider trading; provided,
however, that in the case of clause (vi) of the definition of "Cause" set forth
in this paragraph, if your failure or refusal referred to therein is curable by
you, then "Cause" shall not be deemed to exist unless you fail or refuse to so
cure within three (3) business days of your receipt from the Company of a
request for such cure and such request to cure is the first such request
delivered under this paragraph. A decision by the Company to deliver the notice
referred to in the third sentence of the third paragraph of this letter
agreement shall not constitute "Cause".
In the event of termination of your employment by the Company for
reasons other than: (i) those set forth in clauses (i) - (iv) of the third
paragraph of this letter agreement, or (ii) a decision by the Company not to
deliver the notice referred to in the third sentence of the third paragraph of
this letter agreement, the Company shall pay to you a sum equal to your annual
base rate of salary in effect as of the effective date of such termination,
payable in semi-monthly installments commencing with the month after such
termination until the earlier of (x) the end of the then effective term of this
letter agreement or (y) the first anniversary of such termination. In addition,
in such event, you will be entitled, (i) to receive a pro rata portion of your
annual bonus for the portion of the calendar year that you worked for the
Company prior to such termination of employment, and (ii) at your election, to
continue your coverage under all health and medical insurance policies, pursuant
to Section 4980B of the Internal Revenue Code, as amended, or under Part 6 of
Title I of the Employee Retirement Income Security Act of 1974, as amended,
maintained by the Company, the cost of such coverage to be allocated between you
and the Company in a manner consistent with the allocation of health and medical
coverage costs applicable to other active executive officers of the Company. In
consideration of the monies to
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be paid and the benefits to be provided to you, you agree to execute and deliver
to the Company on or before any payment by the Company a release substantially
in the form of Annex A hereto, failing which, except to the extent required by
law, the Company shall be relieved of all of its obligations hereunder. Upon any
termination of your employment with the Company, you will return to the Company,
all Company/or its subsidiary-owned property, such as credit cards, computers,
cellular phones, files, etc.
You acknowledge that as the Company's Executive Vice President and
Chief Operating Officer you will be involved, at the highest level, in the
development, implementation, and management of the Company's and its
subsidiaries' businesses, strategies and plans, including those which involve
the Company's and its subsidiaries' finances, marketing operations, industrial
relations, operations and acquisitions. By virtue of your unique and sensitive
position, your employment by a competitor of the Company or its subsidiaries
represents a serious competitive danger to the Company and its subsidiaries and
the use of your talent, knowledge, and information about the Company's and its
subsidiaries' businesses, strategies, and plans can and would constitute a
valuable competitive advantage over the Company and its subsidiaries. In view of
the foregoing, you covenant and agree that, for a period of two (2) years
following the termination of your employment with the Company or the expiration
of the then current term of this letter agreement, as the case may be, you will
not engage or be engaged in any capacity, directly or indirectly, including, but
not limited to, as an employee, agent, consultant, manager, executive, owner or
stockholder (except as a passive investor owning less than one percent (1%)
interest in a publicly held company) in (i) any business or entity that is
engaged in the business of purchasing defaulted or charged-off retail
installment contracts, retail revolving contracts or other promissory notes (and
related security agreements) or other unsecured loan accounts in the auto
deficiency, consumer loan, credit card and student product lines, and managing,
restructuring, reselling and/or liquidating such accounts for itself as the
owner of such accounts, or (ii) any other business that the Company may be
engaged in during the term of this letter agreement. Notwithstanding clause (ii)
above, if this letter agreement is assigned by the Company as provided herein,
the terms of this paragraph shall not apply to any business engaged in by the
assignee that is not related or similar to any business engaged in (or
contemplated to be engaged in) by the Company at the time of such assignment.
You agree to treat as confidential and not to disclose to anyone
other than the Company, its subsidiaries and affiliated companies, and you agree
that you will not at any time during your employment and at any time thereafter,
without the prior written consent of the Company, divulge, furnish, or make
known or accessible to, or use for the benefit of anyone other than the Company,
its subsidiaries and affiliated companies, any information of a confidential
nature relating in any way to the business of the Company, its subsidiaries or
affiliated companies, or any of their respective affiliates, members,
shareholders, officers, employees or directors, or any other Person having a
direct business relationship with the Company or its subsidiaries, unless (i)
you are required to disclose such information by requirements of law, (ii) such
information is in the public domain through no fault of yours, or (iii) such
information has been lawfully acquired by you from other sources unless you know
that such information was obtained in violation of an
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agreement of confidentiality. You further agree, that in consideration of this
letter agreement, that you will refrain from engaging in any conduct or making
any statement, written or oral, which is detrimental to the Company, its
subsidiaries or affiliated companies or any of their respective affiliates,
members, shareholders, officers, employees or directors.
You agree that in addition to any other remedy provided at law or in
equity, (a) the Company shall be entitled to a temporary restraining order, and
both preliminary and permanent injunctive relief restraining you from violating
the provisions of the preceding two paragraphs, (b) you will indemnify and hold
each of the Company, its subsidiaries and either of the Principal Stockholders
harmless from and against any and all damages or loss incurred by either of the
Principal Stockholders, the Company or any of their affiliates (including
reasonable attorneys' fees and expenses; provided, however, that you shall not
in connection with any one action or separate but substantially similar action
arising out of the same allegation, be liable for the fees and expenses of more
than one separate firm of attorneys at any time for all indemnified parties
hereunder, except to the extent that local counsel, in addition to its regular
counsel, is required in order to effectively pursue such claim, or to the extent
that any conflict or potential conflict exists among the indemnified parties
that would make separate representation advisable) as a direct result of any
willful or reckless violation of such provisions; and (c) the Company's
remaining obligations under this letter agreement, if any, shall cease (other
than payment of your base salary through the date of such violation and any
earned but unpaid vacation or except as may be required by law) as a result of
any willful or reckless violation of such provisions.
The provisions of the sixth, seventh and eighth paragraphs of this
letter agreement shall specifically survive any termination of this letter
agreement.
You agree that the Company may withhold from any amounts payable to
you hereunder all federal, state, local or other taxes that the Company
determines are required to be withheld pursuant to any applicable law or
regulation. You further agree that if the Internal Revenue Service or other
taxing authority asserts a liability against the Company for failure to withhold
taxes on any payment hereunder, you will pay to the Company the amount
determined by such taxing authority that had not been withheld, together with
any interest imposed by such taxing authority on such amount, within ninety (90)
days of notice to you of such determination.
Any notice or other communication required or permitted under this
Agreement shall be in writing and shall be delivered personally, or sent by
certified, registered or express mail, postage prepaid, return receipt
requested. Any such notice shall be deemed given when so delivered personally,
or, if mailed, on the date of receipt, (i) if to the Company, to the attention
of the Chief Executive Officer at the address first written above, with a copy
to Snell & Wilmer, One Arizona Center, Phoenix, Arizona 85004-0001, Attention:
Steven D. Pidgeon, Esq., and (ii) if to you, at the address first written above.
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This letter agreement and your rights and obligations hereunder may
not be assigned by you. The Company may assign this letter agreement and its
rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition of all or substantially all of its assets or
business, whether by merger, consolidation or otherwise.
This letter agreement shall be governed by the laws of the State of
Arizona applicable to agreements made and to be performed entirely within such
State.
If you agree with the terms outlined above and in the Term Sheet,
please date and sign the copy of this letter enclosed for that purpose and
return it to me.
Sincerely,
MCM CAPITAL GROUP, INC.
By: /s/Robert E. Koe
---------------------------------------
Robert E. Koe
President and Chief Executive Officer
Agreed and Accepted
this 4th day of October, 1999:
/s/John F. Craven
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John F. Craven
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JOHN F. CRAVEN
EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING OFFICER
OF
MCM CAPITAL GROUP, INC.
MIDLAND CREDIT MANAGEMENT, INC. AND
MIDLAND FINANCIAL SERVICES, INC.
EMPLOYMENT TERM SHEET
<TABLE>
<CAPTION>
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PROVISION TERM COMMENTS
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CONTRACT TERM One year, subject to automatic Automatic one year extensions unless
renewal. the Company or executive gives 90
days' notice of non-renewal.
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BASE SALARY $150,000/year, to be paid on a
regular basis by the Company in
accordance with the Company's
payroll procedures and policies.
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ANNUAL CASH The executive shall be eligible to
INCENTIVE receive annual incentive cash
BONUS bonuses based on Company and
individual performance assessed for
each fiscal year relative to
objectives agreed to in advance
between the executive and the Board.
Executive's bonus target shall be
50% of his annual salary; provided,
however, that in no event will the
cash bonus for fiscal year 1999 be
less than $35,000.
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STOCK OPTIONS 25,000 options to be granted promptly Further performance based grants
following execution of employment to be considered by the Board in a
agreement by all parties. Such options manner consistent with other
will have an exercise price equal to executive officers; provided,
the fair market value on the date of however, that executive shall be
grant and, subject to the terms and granted 25,000 additional stock
conditions of the 1999 Stock Option options during fiscal year 2000 at
Plan and the related stock option the then fair market value.
agreement, will vest 1/3 each year on
the first, second and third
anniversaries of the date of grant.
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BENEFITS Benefits as are generally made
available to other executives of
the Company, including participation
in the Company's health/medical and
insurance programs.
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VACATION 4 weeks per year.
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EXPENSES Reasonable and necessary out-of-pocket
expenses incurred in the performance
of duties shall be reimbursed by the
Company in accordance with its
policies.
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</TABLE>
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<TABLE>
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RELOCATION Executive will be provided
SUPPORT relocation support upon
commencement of his employment as
set forth in the relocation policy
attached hereto
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</TABLE>
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RELOCATION
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RELOCATION ALLOWANCE
Officer will be provided with a relocation allowance payable in one lump
sum (as fully taxed) equal to two months salary at the officer's new salary rate
upon commencement of work at his or her new location. The purpose of the
relocation allowance is to help defray incidental expenses connected with the
move for which reimbursement is not provided. Examples of the types of expenses
for which the relocation allowance are provided are:
- additional return home trips and/or additional travel for the
spouse beyond the provisions of the moving policy
- charges for disconnection, reinstallation and/or alterations of
draperies, carpets, television antennas, etc.
- telephone installation charges and utility deposits
- new automobile license plates and registration fees
HOUSE HUNTING TRIPS
The officer and spouse are authorized three house hunting trips to locate
housing in the new location, each trip not to exceed seven days. All reasonable
expenses for such trips, including lodging, meals, business class air fare, car
rental and car mileage will be reimbursed.
TRANSPORTATION OF HOUSEHOLD GOODS
The Company will be financially responsible for the packing, shipping,
unloading and insurance of all normal household goods and two personal
automobiles.
TRAVEL TO NEW LOCATION
All expenses associated with travelling from the location of the former
residence to the new location will be reimbursed for the officer and spouse,
including business class air fare.
TEMPORARY LIVING AT NEW LOCATION
If it becomes necessary for an officer to occupy temporary living quarters
during the course of the relocation, reasonable expenses for the actual cost of
lodging shall be reimbursed for a period of up to 90 days or the Company will
rent for your use furnished housing for such period.
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RESIDENCE SALE
The Company will pay approved expenses incurred in selling a principal
residence at the old location. Such expenses include:
- broker's commission (normal and customary)
- escrow fees/seller's attorney's fees
- recording fees
- mortgage satisfaction fee
- mortgage prepayment penalty fee
- title policy fee
- documentary tax stamps and state and local sales transfer taxes
MAINTAINING TWO HOMES
If an officer purchases a new home prior to selling the present home, and
therefore incurs duplicate house carrying expenses (subsequent to the provisions
of "Temporary Living at New Location" above), the Company will reimburse the
officer on a pro rated basis for the mortgage interest only for a maximum of 60
days.
RESIDENCE PURCHASE
The officer will be reimbursed for the normal closing costs associated
with buying a new house. Such costs shall include those items which by local
custom are normally paid by the buyer. Typical costs may include escrow fees,
attorney's fees, appraisals, recording fees, state transfer taxes and fee
(owner's) title insurance.
TENANT RELOCATION
If the transferee is a tenant rather than a homeowner, the Company will
reimburse the transferee for reasonable expenses incurred in connection with
early termination or breaking of the transferee's lease.
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Annex A
GENERAL RELEASE
AND COVENANT NOT TO SUE
TO ALL WHOM THESE PRESENTS SHALL COME OR MAY CONCERN, KNOW that:
John F. Craven (the "Executive"), on his own behalf and on behalf of
his descendants, dependents, heirs, executors and administrators and permitted
assigns, past and present, in consideration for the amounts payable to the
undersigned under that Letter Agreement dated October 4, 1999 (the "Employment
Agreement") between Executive and MCM Capital Group, Inc. (the "Company"), does
hereby covenant not to sue or pursue any litigation (or file any charge or
otherwise correspond with any Federal, state or local administrative agency)
against, and waives, releases and discharges the Company, and its respective
assigns, affiliates, subsidiaries, parents, predecessors and successors, and the
past and present shareholders, employees, officers, directors, representatives
and agents or any of them (collectively the "Company Group"), from any and all
claims, demands, rights, judgments, defenses, actions, charges or causes of
action whatsoever, of any and every kind and description, whether known or
unknown, accrued or not accrued, that Executive ever had, now has or shall or
may have or assert as of the date of this General Release against any of them,
including, without limiting the generality of the foregoing, any claims,
demands, rights, judgments, defenses, actions, charges or causes of action
related to employment or termination of employment or that arise out of or
relate in any way to the Age Discrimination in Employment Act of 1967, as
amended, the Older Workers Benefit Protection Act, Title VII of the Civil Rights
Act of 1964, as amended, and other Federal, state and local laws relating to
discrimination on the basis of age, sex or other protected class, all claims
under Federal, state or local laws for express or implied breach of contract,
wrongful discharge, defamation, intentional infliction of emotional distress,
and any related claims for attorneys'
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fees and costs; provided, however, that nothing herein shall release any member
of the Company Group from any of its obligations under the Employment Agreement
or any rights to indemnification under any charter or by-laws (or similar
documents) of any member of the Company Group.
The Company, on its own behalf and on behalf of its assigns, affiliates,
subsidiaries, parents, predecessors and successors, and its past and present
shareholders, employees, officers, directors, representatives and agents or any
of them, does hereby covenant not to sue or pursue any litigation (or file any
charge or otherwise correspond with any Federal, state or local administrative
agency) against, and waives, releases and discharges Executive and his heirs,
successors and assigns, descendants, dependents, executors and administrators,
past and present, and any of his affiliates and each of them (collectively, the
"Executive Releasees") from any and all claims, demands, rights, judgments,
defenses, actions, charges or causes of action whatsoever, of any and every kind
and description, whether known or unknown, accrued or not accrued, that the
Company ever had, now has or shall or may have or assert as of the date of this
General Release against any of them, based on facts known to any current
executive officer of the Company or any subsidiary or other affiliate thereof,
including specifically, but not exclusively and without limiting the generality
of the foregoing, any and all claims, demands, agreements, obligations and
causes of action arising out of or in any way connected with any transaction,
occurrence, act or omission related to Executive's employment by the Company or
the termination of that employment; provided, however, that nothing herein shall
release the Executive Releasees from any obligations arising out of or related
in any way to Executive's obligations under the Employment Agreement or impair
the right or ability of the Company to enforce the terms thereof.
In consideration for the amounts payable to the Executive under the
Employment Agreement, the Executive agrees to cooperate, at the expense of the
Company Group, with the members of the Company Group in connection with all
litigation relating to the activities of the Company and its
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affiliates during the period of the Executive's employment with the Company
including, without limitation, being available to take depositions and to be a
witness at trial, help in preparation of any legal documentation and providing
affidavits and any advise or support that the Company or any affiliate thereof
may request of the Executive in connection with such claims.
This General Release shall be governed by and construed in accordance with
the laws of the State of Arizona, applicable to agreements made and to be
performed entirely within such State.
Each of the Executive and the Company acknowledge that they have entered
into this General Release knowingly and willingly and has had ample opportunity
to consider the terms and provisions of this General Release.
IN WITNESS WHEREOF, the parties hereto have caused this General Release to
be executed on this ____ day of _____________, 200__.
______________________________________
John F. Craven
MCM CAPITAL GROUP, INC.
By: __________________________________
Name:
Title:
<PAGE> 1
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: R. Brooks Sherman
Executive Vice President and Chief Financial Officer
800-265-8825, extension 4120
MCM CAPITAL GROUP, INC. APPOINTS JOHN F. CRAVEN
CHIEF OPERATING OFFICER
HUTCHINSON, KANSAS, OCTOBER 6, 1999 - MCM Capital Group, Inc. (NASDAQ: MCMC)
announced today the appointment of John F. Craven to the newly created
position of Chief Operating Officer. Mr. Craven will report directly to
Robert E. Koe, President and CEO of MCM.
Mr. Craven, 46, joins MCM from US Bancorp where he most recently served as
Senior Vice President, Business Operations Center. While he was at US Bancorp,
Mr. Craven managed the collection, fraud and recovery operations and, most
recently, all deposit processing operations for the bank. Prior to joining US
Bancorp in 1991, Mr. Craven was Vice President and Business Manager of Household
Bank, N.A. where he managed an offsite bankcard facility. From 1984 to 1987, Mr.
Craven held senior credit management positions at both Bank of America and
Citicorp Diners Club. From 1980 to 1984, he was a Senior Consultant at Peat,
Marwick, Mitchell & Co. From 1975 to 1980, Mr. Craven served in the United
States Army where he achieved the rank of Captain.
Mr. Craven holds a bachelor's of science degree in Engineering from the
United States Military Academy at West Point and an MBA from Bryant College.
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In announcing Mr. Craven's appointment, Robert E. Koe said: "Jack has
great credentials for MCM. We expect he will play an important role in
improving our call center operations and in evaluating portfolio
acquisitions."
MCM Capital Group, Inc. acquires, manages and collects distressed
consumer receivables.
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