<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
---------------------------------------------
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from----------------------------to------------
Commission file number 0-4781
--------------------------------------------------
MARKET FACTS, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 36-2061602
- --------------------------------------------------------------- -----------------------------------
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
3040 West Salt Creek Lane, Arlington Heights, Illinois 60005
- ------------------------------------------------------------- --------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 590-7000
------------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
</TABLE>
(Title of Class)
Common Stock, Par Value $1.00 Per Share
- --------------------------------------------------------------------------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS. YES (X) NO ( )
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. ( )
AS OF MARCH 3, 1997, THERE WERE ISSUED AND OUTSTANDING 3,461,854 SHARES OF
COMMON STOCK; THE AGGREGATE MARKET VALUE OF THE SHARES OF SUCH STOCK HELD BY
NONAFFILIATES OF THE REGISTRANT WAS $26,078,731 AS OF THE SAME DATE, ASSUMING
SOLELY FOR PURPOSES OF THIS CALCULATION THAT ALL DIRECTORS AND EXECUTIVE
OFFICERS OF THE REGISTRANT ARE "AFFILIATES." THIS DETERMINATION OF AFFILIATE
STATUS IS NOT NECESSARILY A CONCLUSIVE DETERMINATION FOR OTHER PURPOSES.
DOCUMENTS INCORPORATED BY REFERENCE: LIST THE FOLLOWING DOCUMENTS IF
INCORPORATED BY REFERENCE AND THE PART OF THE FORM 10-K INTO WHICH THE DOCUMENT
IS INCORPORATED: (1) ANY ANNUAL REPORT TO SECURITY HOLDERS; (2) ANY PROXY OR
INFORMATION STATEMENT; AND (3) ANY PROSPECTUS FILED PURSUANT TO RULE 424(b) OR
(c) UNDER THE SECURITIES ACT OF 1933. THE LISTED DOCUMENTS SHOULD BE CLEARLY
DESCRIBED FOR IDENTIFICATION PURPOSES.
1996 Annual Report to Stockholders -- Parts I, II and IV Hereof. Proxy
----------------------------------------------------------------------
Statement for the Registrant's
------------------------------
1997 Annual Meeting to be filed within 120 days after the end of the fiscal
---------------------------------------------------------------------------
year -- Part III Hereof.
-----------------------
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General development and narrative description of business
The predecessor to the Registrant was incorporated in 1946 in Illinois.
The Registrant was incorporated in 1966 in Delaware and is engaged in one
industry segment, namely, providing information to assist clients in their
marketing decisions relating primarily to consumer products and services.
Effective April 29, 1994, the Registrant acquired the remaining 50% of the
common stock of Market Facts of Canada, Ltd.
The Registrant's usual procedure is for its professional research staff to
first define the marketing problem in consultation with the client. It
then develops questionnaires or instruments to be used to elicit the
required information. The remaining procedures involve collecting the
data, processing and evaluating the data and finally analyzing the results.
In any particular project or program, the Registrant may perform one or
more of these functions.
After the problem has been defined, the Registrant submits to the client a
proposed research project or program specifically designed for the problem,
together with a cost estimate. The proposal typically includes one or more
of three basic methods for obtaining the required data, whichever one or
combination is most useful and economical under the circumstances. The
three basic methods for collecting information from respondents are
interviews conducted through the mail, telephone interviews and in-person
interviews. The method to be used is determined by the specific marketing
problem and numerous other factors, including the type of data to be
obtained, the geographical scope of the study, the size of the sample and
budget considerations, among others. The type of product or subject to be
studied generally is not itself determinative of the method to be used.
Interviews are conducted through the mail using panels of consumers
constructed by the Registrant. Currently, there are approximately 500,000
households throughout the continental United States and Canada that
participate in the Registrant's proprietary Consumer Mail Panel (CMP) for
mail interviews. CMP provides clients with many benefits, including (1)
flexibility for conducting national, regional and specific market research
studies, (2) research effectiveness by providing large samples at low cost,
nationally balanced samples and confidentiality, and (3) economy through
cooperative respondents, high response rates and low cost per interview.
The Registrant also gathers data through telephone interviews. In the
United States, this data collection method operates under the name of
National Telephone Center (NTC). The Registrant's telephone interviewing
capabilities provide clients with cost efficient long distance calling
services, high speed response and complete national coverage. The
Registrant operates over 300 interviewing stations in approximately eight
locations throughout Illinois and Canada, using an advanced computer
assisted telephone interviewing system. Given the rapid growth in this
business, the Registrant has increasingly utilized some outsourcing of this
function. Samples include interviewing the general population as well as
hard-to-reach individuals and can be drawn on a nationally representative
basis or confined to a single market.
In-person interviews conducted by the Registrant are primarily performed by
independent field interviewing organizations. This method includes
personal interviews either in a central location, such as a shopping
center, or on a house-to-house basis. The Registrant also operates a
central location interviewing panel, CLIPs, which is a consumer guidance
testing facility with computerized interviewing and state-of-the art
kitchen.
1
<PAGE>
The Registrant's information gathering capabilities include numerous omnibus
products. Data Gage and MiniScreen are CMP's monthly mailing services that
permits non-competing clients to share data collection costs while providing
responses to specific questions from a nationally representative sample of
households. TeleNation is a twice a week national telephone survey that offers
clients the ability to collect consumer opinion, attitude and buying pattern
data from a nationally representative sample at low cost, with short lead time
and rapid turnaround of results. National ShowCase is a weekly mall omnibus
survey conducted in the top 20 ADIs that provides clients with rapid turnaround
of test results where consumer exposure to stimuli is required.
Research assignments performed by the Registrant include the data collection
phase, and in most cases, the data processing requirements. The Registrant
maintains three separate functions relating to data processing. They include
coding, which reviews and assigns numerical codes to questionnaire responses;
data entry, often utilizing imaging technology, which prepares the documents as
input for tabulation; and tabulation, where final tabulated reports are
processed.
In many projects serviced by the Registrant, data analysis reports are also
written. For this service, the research design team who originally drafted the
project proposal is used. The Decision Systems group of the Registrant may also
be used to further review and dissect the gathered data. This group uses
statistical methods such as factor analysis, cluster analysis and analysis of
covariance to aid in the general review of the collected data. Several programs
are maintained in a computer library to complete these functions with
flexibility and efficiency.
While there will always be a need for gathering of raw data, the Registrant
believes that one of the fastest growing areas within the market research
industry today is data interpretation and analysis. In response, the Registrant
has developed or licensed proprietary products and services which provide this
capability for clients. BrandVision is a custom continuous tracking product
which measures the effect of altering components in the advertising mix. In a
BrandVision study, telephone interviews are conducted on a continuous schedule
so that changes in consumers' thinking can be quickly spotted and appropriate
adjustments made. The Conversion Model, which the Registrant has an exclusive
license for in the United States and Canada and has sublicensed to a third party
in the European Economic Community, is a product that examines the dimensions
that lock consumers to their current product choice and thereby measures
consumers' strength of commitment to a given brand and their susceptibility of
conversion to another brand. MarkeTest 2000 is a sales forecasting system which
combines consumer reactions with brand category data and marketing plans to
estimate sales potential for new product concepts, particularly those in the
early stages of the product development process. Compete is a PC-based
multimedia concept database system which enables clients to query a database of
their proprietary concept test results. BehaviorScope is a service which
provides insights into consumer behaviors related to usage of products or
services and competitors.
(1) Clients
Clients are served on a confidential basis under agreements for individual
projects which are negotiated on the basis of estimates prepared by the
Registrant. Inasmuch as profits are determined by the difference between actual
costs and the bid submitted to the client, the ability of the Registrant to make
a profit is partially dependent on accurate estimates of the costs which will be
involved in any project or program. Approximately 87% of the Registrant's
business during the year ended December 31, 1996 was with clients for whom the
Registrant had performed work during the previous year. In 1996, the top five
clients accounted for approximately 26% of total revenues with one client,
Procter & Gamble, accounting for 10% of revenues. Groupings of clients, which
are located primarily in the United States and Canada, are not meaningful as the
Registrant's services do not differ by client type.
2
<PAGE>
(2) Backlog
The Registrant recognizes revenue under the percentage of completion method of
accounting. Revenues are recognized as services are performed. The Registrant
had unrecognized revenue from contracts in process of approximately $21,855,000
and $19,497,000 for the years ended December 31, 1996 and 1995, respectively.
(3) Competition
The business in which the Registrant is engaged is highly competitive. The
industry is characterized by a large number of relatively small organizations
and a few large concerns with resources greater than those of the Registrant.
The Registrant is also subject to indirect competition from the marketing
research departments of clients and potential clients, advertising agencies and
consulting firms. The Registrant believes it is among the ten largest custom
market research firms in the United States as measured by revenue. The
Registrant also believes the principal methods of competition are the ability to
properly design the market research project; perform and report on the research
project in a short period of time; the quality and consistency of information;
and price.
(4) Service Marks
The Registrant believes that all registered service marks and propriety marks
are important to its business. The marks Autoquest(R), BrandVision(R),
Compete(R), Mail Monitor(R), National ShowCase(R) and TeleNation(R) are
registered service marks in the United States. The marks BehaviorScope,
Consumer Mail Panel, Data Gage, MarkeTest 2000, Market Facts, MiniScreen,
National Telephone Center, OmniMax, PatientFacts and ProductQuest are propriety
marks of the Registrant.
Market Facts Canada, Ltd. is the registered owner of the following trademarks in
Canada: CATI(R), ADPAC(R), ADPAC II(R), NATIONAL FLEXIBUS(R) and TeleNation(R).
(5) Employees
The Registrant has approximately 575 salaried employees and employs part-
time help as required. At December 31, 1996, there were approximately 725
part-time employees. The Registrant has never had a work stoppage and
believes it has maintained good employee relations. None of the
Registrant's employees are represented by a union. A substantial number of
employees are skilled personnel trained in the various facets of market
research.
ITEM 2. DESCRIPTION OF PROPERTY
The headquarters of the Registrant are located at 3040 West Salt Creek
Lane, Arlington Heights, Illinois in an office building of approximately
120,000 square feet owned by the Registrant. This location also houses the
Registrant's computer facility, service departments, mail panel operations
and largest sales office. The property is financed through a mortgage loan
discussed in Note 5 of the Notes to Consolidated Financial Statements
contained in the 1996 Annual Report to Stockholders and is incorporated
herein by reference. Other leased sales offices in the United States are
located at 902 Broadway, New York, New York; 65 Madison Avenue, Morristown,
New Jersey; 16133 Ventura Boulevard, Encino, California; 1650 Tysons
Boulevard, McLean, Virginia; One Apple Hill, Natick, Massachusetts; and 201
East Fifth Street, Cincinnati, Ohio. The Registrant has three leased
telephone interviewing facilities located at One Rotary Center, Evanston,
Illinois; 4260 Westbrook Drive, Aurora, Illinois; and 1010 Lake Street, Oak
Park, Illinois.
Canadian operations are headquartered at 77 Bloor Street West, Toronto,
Ontario. This location primarily houses mail panel, telephone interviewing
and sales operations. In addition, two smaller leased offices are located
at 1200 McGill College, Montreal, Quebec and Royal City Centre, 610 - 6th
Street, New Westminster, B.C.
3
<PAGE>
Rental expense for the Registrant's leased locations was approximately
$1,334,000 in 1996. Some of the Registrant's leases provide for future
increases in rental payments to reflect increases in the lessor's taxes,
maintenance, and other operating expenses. The Registrant expects that
additional investment in facilities will be necessary to support
anticipated growth in business. The Registrant also leases some of its
computer and office equipment and vehicles. Additional information
regarding the Registrant's obligations under leases is contained in Note 9
of the Notes to Consolidated Financial Statements contained in the 1996
Annual Report to Stockholders and is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings pending to which the Registrant is
a party or of which the property of the Registrant is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
Age of Offices Held and Business
Name of Officer Officer Experience for Last Five Years
--------------- ------- ------------------------------
<S> <C> <C>
Verne B. Churchill 64 Chairman of the Board of Directors of the
Company; prior thereto Chief Executive
Officer of the Company.
Thomas H. Payne 51 President and Chief Executive Officer of
the Company since 1996; prior thereto
President and Chief Operating Officer of
the Company.
Glenn W. Schmidt 54 Executive Vice President, Assistant
Secretary and Assistant Treasurer of the
Company.
Sanford M. Schwartz 45 Executive Vice President of the Company
and President of Market Facts--New York,
Inc. since 1992; prior thereto President
of Elrick & Lavidge, a market research
firm in New York, New York.
John C. Robertson 65 Chairman of the Board of Directors of
Market Facts of Canada, Ltd. since 1995;
prior thereto President of Market Facts
of Canada, Ltd.
Michael H. Freehill 54 Senior Vice President of the Company.
Lawrence W. Labash 49 Senior Vice President of the Company.
Lawrence R. Levin 42 Senior Vice President of the Company
since 1993; prior thereto Vice President
of the Company.
Donald J. Morrison 38 Senior Vice President of the Company
since 1995; prior thereto Vice President
of the Company since 1993; prior thereto
Marketing Vice President and General
Manager for NFO Research, a market
research firm in Greensboro, North
Carolina.
Timothy Q. Rounds 58 Senior Vice President of the Company.
Timothy J. Sullivan 43 Senior Vice President of the Company since
1996; prior thereto Vice President of the
Company. Treasurer and Assistant Secretary
of the Company.
Stephen J. Weber 52 Senior Vice President of the Company.
</TABLE>
Officers are elected annually in April by the Board of Directors for a
period of one year or until successors are duly elected and qualified. The
executive officers listed above are as of March 3, 1997.
4
<PAGE>
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The following section of the Registrant's 1996 Annual Report to Stockholders is
hereby incorporated by reference:
Dividends and Market Price Statistics - page 1
This referenced section should be read in conjunction with the Consolidated
Financial Statements and related Notes (herein incorporated by reference) on
pages 7-17 of the 1996 Annual Report to Stockholders.
ITEM 6. SELECTED FINANCIAL DATA
The following section of the Registrant's 1996 Annual Report to Stockholders is
hereby incorporated by reference:
Selected Financial Data - page 1
This referenced section should be read in conjunction with the Consolidated
Financial Statements and related Notes (herein incorporated by reference) on
pages 7-17 of the 1996 Annual Report to Stockholders.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following section of the Registrant's 1996 Annual Report to Stockholders is
hereby incorporated by reference:
Management's Discussion and Analysis of Financial Condition and
Results of Operations - pages 5-6
This referenced section should be read in conjunction with the Consolidated
Financial Statements and related Notes (herein incorporated by reference) on
pages 7-17 of the 1996 Annual Report to Stockholders.
5
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements required by this item are listed below:
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
Page Number
-----------
Consolidated Balance Sheets as of December 31, 1996 and 1995 *
For the years ended December 31, 1996, 1995 and 1994:
Consolidated Statements of Earnings *
Consolidated Statements of Stockholders' Equity *
Consolidated Statements of Cash Flows *
Notes to Consolidated Financial Statements *
Independent Auditors' Report *
* Incorporated by reference to the 1996 Annual Report to
Stockholders, filed with the Commission pursuant to Rule 12b-23,
portions of which are attached.
Independent Auditors' Report on Schedule 7
Schedule:
II Valuation and Qualifying Accounts for the years ended
December 31, 1996, 1995 and 1994 8
All other schedules are not submitted because they are not applicable or not
required or because the required information is included in the Consolidated
Financial Statements and related Notes in the 1996 Annual Report to
Stockholders.
6
<PAGE>
INDEPENDENT AUDITORS' REPORT
----------------------------
To the Stockholders and Board of Directors of Market Facts, Inc.:
Under date of February 25, 1997, we reported on the consolidated balance sheets
of Market Facts, Inc. and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of earnings, stockholders' equity, and cash
flows for each of the years in the three-year period ended December 31, 1996, as
contained in the 1996 annual report to stockholders. These consolidated
financial statements and our report thereon are incorporated by reference in the
annual report on Form 10-K for the year 1996. In connection with our audits of
the aforementioned consolidated financial statements, we also have audited the
related financial statement schedule as listed in the accompanying index. This
financial statement schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, the financial statement schedule, when considered in relation to
the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.
KPMG Peat Marwick LLP
Chicago, Illinois
February 25, 1997
7
<PAGE>
MARKET FACTS, INC. AND SUBSIDIARIES
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Allowance For Doubtful Accounts:
Balance at beginning of year $ 838,203 $668,805 $563,500
MFCL's balance at 4/30/94 - - 42,334
Provision 197,602 197,515 101,666
Write-offs of uncollectible accounts (28,260) (29,661) (37,450)
Cumulative foreign currency translation (302) 1,544 (1,245)
---------- -------- --------
Balance at end of year $1,007,243 $838,203 $668,805
========== ======== ========
</TABLE>
8
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding the directors of the Registrant is included under the
caption "Election of Directors" in the Registrant's proxy statement for the
Registrant's 1997 Annual Meeting* and is incorporated herein by reference.
Information regarding the executive officers of the Registrant is included under
a separate caption at the end of Part I hereof, and is incorporated herein by
reference, in accordance with General Instruction G(3) to Form 10-K and
Instruction 3 to Item 401(b) of Regulation S-K. Information regarding compliance
with Section 16(a) of the Securities Exchange Act of 1934 is included under the
caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the
Registrant's proxy statement for the Registrant's 1997 Annual Meeting* and is
incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information regarding the above is included under the captions "Remuneration of
Named Executive Officers", "Stock Options" and "Employment Agreements" in the
Registrant's proxy statement for the Registrant's 1997 Annual Meeting* and is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information regarding the above is included in the following sections of the
Registrant's proxy statement for the Registrant's 1997 Annual Meeting*, which
sections are hereby incorporated by reference:
Voting Securities - page 2
Election of Directors - pages 3 - 6
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information regarding the above is included in the following sections of the
Registrant's proxy statement for the Registrant's 1997 Annual Meeting*, which
sections are hereby incorporated by reference:
Remuneration of Named Executive Officers - pages 7 and 8
Certain Transactions - pages 10 - 13
__________
* to be filed within 120 days after the end of the Registrant's fiscal year.
9
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial Statements as indexed on page 6.
(a) (2) Financial Statement Schedule as indexed on page 6.
The consolidated balance sheets as of December 31, 1996 and 1995, and the
consolidated statements of earnings, stockholders' equity and cash flows for the
years ended December 31, 1996, 1995 and 1994, together with the report of the
independent auditors, and management's discussion and analysis of financial
condition and results of operations are contained in the Registrant's 1996
Annual Report to Stockholders, portions of which are filed with this Form 10-K
and are incorporated herein by reference.
(a) (3) See list of exhibits set forth in the Index on pages 12 and 13.
(b) None.
(c) See list of exhibits set forth in the Index on pages 12 and 13.
(d) Financial Statement Schedule as indexed on page 6.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Annual Report to be signed on
its behalf by the undersigned thereunto duly authorized.
MARKET FACTS, INC.
- ------------------
(Registrant)
By: TIMOTHY J. SULLIVAN
-----------------------
Timothy J. Sullivan
Senior Vice President, Treasurer and
Assistant Secretary
(Principal Financial and Accounting Officer)
Dated: March 24, 1997
10
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
VERNE B. CHURCHILL
- ------------------ ------------------
Verne B. Churchill William W. Boyd
Chairman of the Board Director
and Director
THOMAS H. PAYNE
- --------------- ------------------
Thomas H. Payne Henrik Falktoft
President, Chief Executive Officer Director
and Director
GLENN W. SCHMIDT
- ---------------- ------------------
Glenn W. Schmidt Karen E. Predow
Executive Vice President, Assistant Treasurer, Director
Assistant Secretary and Director
TIMOTHY J. SULLIVAN
- ------------------- ------------------
Timothy J. Sullivan Ned L. Sherwood
Senior Vice President, Treasurer Director
and Assistant Secretary
(Principal Financial and Accounting Officer)
LAWRENCE W. LABASH
- ------------------ ------------------
Lawrence W. Labash Jack R. Wentworth
Senior Vice President Director
and Director
SANFORD M. SCHWARTZ
- -------------------
Sanford M. Schwartz
Executive Vice President, President of
Market Facts - New York, Inc.
and Director
March 24, 1997
11
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
(3)(a) Restated Certificate of Incorporation.(7)
(3)(b) By-laws as Amended and Currently in Effect.(13)
(4)(a) Article Fourth of Restated Certificate of Incorporation
is included in Exhibit (3)(a) above.(7)
(4)(b) Rights Agreement as Amended and Currently in Effect.(4)
(4)(c) Certificate of Designation, Preferences and Rights of
Series B Preferred Stock.(12)
(10.1) Term Note dated February 23, 1995 between Market Facts,
Inc. and Verne Churchill.(6)*
(10.2) Term Note dated February 23, 1995 between Market Facts,
Inc. and Lawrence Labash.(6)*
(10.3) Term Note dated February 23, 1995 between Market Facts,
Inc. and Thomas Payne.(6)*
(10.4) Term Note dated February 23, 1995 between Market Facts,
Inc. and Glenn Schmidt.(6)*
(10.5) Employment Agreement by and among Market Facts of
Canada, Ltd., Market Facts, Inc. and John C. Robertson dated as
of April 14, 1994.(1)*
(10.6) Demand Note and London Interbank Offered Rate Borrowing
Agreement dated April 24, 1996, between the Company and American
National Bank and Trust Company of Chicago.(13)
(10.7) Mortgage and Security Agreement dated April 11, 1990
between American National Bank and Trust Company as Trustee
under Trust No. 110201-04 and The Manufacturers Life Insurance
Company together with Mortgage Note.(3)
(10.8) Credit Agreement dated June 7, 1996, between the Company
and Harris Trust and Savings Bank.(8)
(10.9) Employment Agreement with Verne B. Churchill.(2)*
(10.10) Employment Agreement with Glenn W. Schmidt.(2)*
(10.11) Employment Agreement with Sanford M. Schwartz.(2)*
(10.12) Employment Agreement with Thomas H. Payne.*
(10.13) Employment Agreement with Michael H. Freehill.*
(10.14) Employment Agreement with Lawrence W. Labash.*
(10.15) Employment Agreement with Lawrence R. Levin.*
(10.16) Employment Agreement with Donald J. Morrison.*
(10.17) Employment Agreement with Timothy Q. Rounds.*
(10.18) Employment Agreement with Timothy J. Sullivan.*
(10.19) Employment Agreement with Steven J. Weber.*
(10.20) Indemnity Agreement with Jack R. Wentworth.(2)*
Substantially identical agreements were also entered into with
the following individuals:
William W. Boyd Karen E. Predow
Verne B. Churchill Glenn W. Schmidt
Lawrence W. Labash Sanford M. Schwartz
Thomas H. Payne
(10.21) Term Note dated March 29, 1996 between Market Facts,
Inc. and Verne Churchill.(7)*
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
(10.22) Term Note dated March 29, 1996 between Market Facts,
Inc. and Thomas Payne.(7)*
(10.23) Term Note dated March 29, 1996 between Market Facts,
Inc. and Glenn Schmidt.(7)*
(10.24) Term Note dated March 29, 1996 between Market Facts,
Inc. and Lawrence Labash.(7)*
(10.25) Investment Agreement dated June 6, 1996 among the
Company, MFI Investors L.P. and MFI Associates, Inc.(9)
(10.26) Financial Advisory Agreement dated June 6, 1996 between
the Company and MFI Investors L.P(10)
(10.27) Convertible Note dated June 6, 1996 in the principal
amount of $8,250,000 issued by the Company to MFI Investors L.P.(11)
(10.28) Market Facts, Inc. 1996 Stock Plan.(14)*
(13) Portions of the 1996 Annual Report to Stockholders
incorporated herein by reference.
(21) Subsidiaries of the Registrant.
(23) Consent of KPMG Peat Marwick LLP.
(27) Financial Data Schedule.
</TABLE>
__________________
(1) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q
for the quarterly period ended March 31, 1994.
(2) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1994.
(3) Incorporated by reference to Registrant's Annual Report on Form 10-K for
its fiscal year ended December 31, 1992.
(4) Incorporated by reference to Registrant's Form 8-A dated July 3, 1996,
commission file number 0-04781.
(5) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q/A-1
for the quarterly period ended June 30, 1994.
(6) Incorporated by reference to Registrant's Quarterly Report on Form
10-Q for the quarterly period ended March 31, 1995.
(7) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 1996.
(8) Incorporated by reference to Exhibit No. (b) of Registrant's Schedule 13E-4
dated June 11, 1996, commission file number 5-20859.
(9) Incorporated by reference to Exhibit No. (c)(1) of Registrant's
Schedule 13E-4 dated June 11, 1996, commission file number 5-20859.
(10) Incorporated by reference to Exhibit No. (c)(2) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(11) Incorporated by reference to Exhibit No. (c)(3) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(12) Incorporated by reference to Exhibit No. 99(c)(4) of Registrant's Schedule
13E-4 dated June 11, 1996, commission file number 5-20859.
(13) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 1996.
(14) Incorporated by reference to Registrant's Quarterly Report on Form 10-Q for
the quarterly period ended September 30, 1996.
* Management contract or compensatory plan or arrangement required to be
filed as an exhibit to this Annual Report on Form 10-K pursuant to Item
14(c) of Form 10-K.
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EMPLOYMENT AGREEMENT Exhibit 10.12
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Thomas H. Payne (hereinafter
"Executive"), an individual residing in Evanston, Illinois.
W I T N E S S E T H:
-------------------
WHEREAS, Executive is currently employed as the President and Chief
Executive Officer of MFI and MFI desires to continue to employ Executive on
terms which will encourage the attention and dedication of Executive to MFI as
one of its key employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its President and Chief
Executive Officer, and Executive accepts such employment and agrees to continue
to serve MFI, in each case upon and subject to the terms and conditions set
forth herein, which terms and conditions shall supersede any other oral or
written employment agreement(s) entered into by and between MFI and Executive
prior to the date of this Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Evanston, Illinois area or be absent from Evanston, Illinois
for such extended periods as to make his/her continued residence in Evanston,
Illinois not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$192,504.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on
whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business being
conducted by such customers with MFI or otherwise provide any services similar
to the services provided by MFI to such customers; or
3
<PAGE>
(b) recruit, solicit or otherwise induce or influence any employee
or agent of MFI to terminate their employment or agency relationship with MFI,
or employ, seek to employ, or cause any other business competitive to MFI to
employ or seek to employ any person who is then (or was at any time within the
six months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this
Agreement or thereafter, except in the performance of his/her duties hereunder,
use or disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of
Executive's employment for whatever reason (or in the event of Executive's
death, Executive's personal representative shall return) to MFI at its direction
and expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority
rights in: all tests, procedures, inventions, developments and discoveries,
whether or not patentable, and all suggestions, proposals, computer programs and
writings, including any copyright interests therein, which Executive authors,
conceives or makes, either solely or jointly with others during his/her
employment with MFI which: (i) relate to any subject matter with which
Executive's work for MFI may be concerned; (ii) relate to the business products
or services or actual or demonstrably anticipated research or development
projects of MFI; (iii) involve the use of the time, equipment, materials or
facilities of MFI; or (iv) relate or are applicable to any phase of MFI's
business. Further, Executive agrees to execute all documents and to take all
actions as may be necessary in order to assign all rights to or otherwise vest
good title to MFI in the property and proprietary rights described in this
subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Thomas H. Payne
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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<PAGE>
19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Thomas H. Payne
------------------------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
--------------------------
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EMPLOYMENT AGREEMENT Exhibit 10.13
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Michael H. Freehill (hereinafter
"Executive"), an individual residing in Hinsdale, Illinois.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Hinsdale, Illinois area or be absent from Hinsdale, Illinois
for such extended periods as to make his/her continued residence in Hinsdale,
Illinois not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of $124,800.00
(hereinafter "Base Salary") per year, which shall be payable in accordance with
MFI's customary payroll practices but not less frequently than in equal amounts
payable at two (2) week intervals. MFI may adjust the Base Salary upward from
time to time to conform to alterations, if any, in MFI's compensation policy for
officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on whose
account Executive has worked during the two (2) years prior to the termination
of Executive's employment to terminate their relationship with MFI or otherwise
divert from MFI and/or its affiliates any trade or business being conducted by
such customers with MFI or otherwise provide any services similar to the
services provided by MFI to such customers; or
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(b) recruit, solicit or otherwise induce or influence any employee
or agent of MFI to terminate their employment or agency relationship with MFI,
or employ, seek to employ, or cause any other business competitive to MFI to
employ or seek to employ any person who is then (or was at any time within the
six months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this
Agreement or thereafter, except in the performance of his/her duties hereunder,
use or disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of
Executive's employment for whatever reason (or in the event of Executive's
death, Executive's personal representative shall return) to MFI at its direction
and expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority
rights in: all tests, procedures, inventions, developments and discoveries,
whether or not patentable, and all suggestions, proposals, computer programs and
writings, including any copyright interests therein, which Executive authors,
conceives or makes, either solely or jointly with others during his/her
employment with MFI which: (i) relate to any subject matter with which
Executive's work for MFI may be concerned; (ii) relate to the business products
or services or actual or demonstrably anticipated research or development
projects of MFI; (iii) involve the use of the time, equipment, materials or
facilities of MFI; or (iv) relate or are applicable to any phase of MFI's
business. Further, Executive agrees to execute all documents and to take all
actions as may be necessary in order to assign all rights to or otherwise vest
good title to MFI in the property and proprietary rights described in this
subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Michael H. Freehill
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Michael H. Freehill
----------------------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
------------------------
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EMPLOYMENT AGREEMENT Exhibit 10.14
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Lawrence W. Labash (hereinafter
"Executive"), an individual residing in Westmont, Illinois.
W I T N E S S E T H:
--------------------
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Westmont, Illinois area or be absent from Westmont, Illinois
for such extended periods as to make his/her continued residence in Westmont,
Illinois not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$156,000.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on
whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business being
conducted by such customers with MFI or otherwise provide any services similar
to the services provided by MFI to such customers; or
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(b) recruit, solicit or otherwise induce or influence any employee
or agent of MFI to terminate their employment or agency relationship with MFI,
or employ, seek to employ, or cause any other business competitive to MFI to
employ or seek to employ any person who is then (or was at any time within the
six months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this
Agreement or thereafter, except in the performance of his/her duties hereunder,
use or disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of
Executive's employment for whatever reason (or in the event of Executive's
death, Executive's personal representative shall return) to MFI at its direction
and expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority
rights in: all tests, procedures, inventions, developments and discoveries,
whether or not patentable, and all suggestions, proposals, computer programs and
writings, including any copyright interests therein, which Executive authors,
conceives or makes, either solely or jointly with others during his/her
employment with MFI which: (i) relate to any subject matter with which
Executive's work for MFI may be concerned; (ii) relate to the business products
or services or actual or demonstrably anticipated research or development
projects of MFI; (iii) involve the use of the time, equipment, materials or
facilities of MFI; or (iv) relate or are applicable to any phase of MFI's
business. Further, Executive agrees to execute all documents and to take all
actions as may be necessary in order to assign all rights to or otherwise vest
good title to MFI in the property and proprietary rights described in this
subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Lawrence W. Labash
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Lawrence W. Labash
-----------------------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
-------------------------
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EMPLOYMENT AGREEMENT Exhibit 10.15
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Lawrence R. Levin (hereinafter
"Executive"), an individual residing in Calabasas, California.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Calabasas, California area or be absent from Calabasas,
California for such extended periods as to make his/her continued residence in
Calabasas, California not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$128,000.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by MFI and
Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on whose
account Executive has worked during the two (2) years prior to the termination
of Executive's employment to terminate their relationship with MFI or otherwise
divert from MFI and/or its affiliates any trade or business being conducted by
such customers with MFI or otherwise provide any services similar to the
services provided by MFI to such customers; or
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<PAGE>
(b) recruit, solicit or otherwise induce or influence any employee or
agent of MFI to terminate their employment or agency relationship with MFI, or
employ, seek to employ, or cause any other business competitive to MFI to employ
or seek to employ any person who is then (or was at any time within the six
months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this Agreement
or thereafter, except in the performance of his/her duties hereunder, use or
disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of Executive's
employment for whatever reason (or in the event of Executive's death,
Executive's personal representative shall return) to MFI at its direction and
expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority rights
in: all tests, procedures, inventions, developments and discoveries, whether or
not patentable, and all suggestions, proposals, computer programs and writings,
including any copyright interests therein, which Executive authors, conceives or
makes, either solely or jointly with others during his/her employment with MFI
which: (i) relate to any subject matter with which Executive's work for MFI may
be concerned; (ii) relate to the business products or services or actual or
demonstrably anticipated research or development projects of MFI; (iii) involve
the use of the time, equipment, materials or facilities of MFI; or (iv) relate
or are applicable to any phase of MFI's business. Further, Executive agrees to
execute all documents and to take all actions as may be necessary in order to
assign all rights to or otherwise vest good title to MFI in the property and
proprietary rights described in this subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Lawrence R. Levin
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
/s/ Lawrence R. Levin
--------------------------
Executive
MARKET FACTS, INC.
By: /s/ Glenn W. Schmidt
------------------------
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EMPLOYMENT AGREEMENT Exhibit 10.16
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Donald J. Morrison (hereinafter
"Executive"), an individual residing in Loveland, Ohio.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Loveland, Ohio area or be absent from Loveland, Ohio for such
extended periods as to make his/her continued residence in Loveland, Ohio not
practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$123,500.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on whose
account Executive has worked during the two (2) years prior to the termination
of Executive's employment to terminate their relationship with MFI or otherwise
divert from MFI and/or its affiliates any trade or business being conducted by
such customers with MFI or otherwise provide any services similar to the
services provided by MFI to such customers; or
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(b) recruit, solicit or otherwise induce or influence any employee or
agent of MFI to terminate their employment or agency relationship with MFI, or
employ, seek to employ, or cause any other business competitive to MFI to employ
or seek to employ any person who is then (or was at any time within the six
months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this Agreement
or thereafter, except in the performance of his/her duties hereunder, use or
disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of Executive's
employment for whatever reason (or in the event of Executive's death,
Executive's personal representative shall return) to MFI at its direction and
expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority rights
in: all tests, procedures, inventions, developments and discoveries, whether or
not patentable, and all suggestions, proposals, computer programs and writings,
including any copyright interests therein, which Executive authors, conceives or
makes, either solely or jointly with others during his/her employment with MFI
which: (i) relate to any subject matter with which Executive's work for MFI may
be concerned; (ii) relate to the business products or services or actual or
demonstrably anticipated research or development projects of MFI; (iii) involve
the use of the time, equipment, materials or facilities of MFI; or (iv) relate
or are applicable to any phase of MFI's business. Further, Executive agrees to
execute all documents and to take all actions as may be necessary in order to
assign all rights to or otherwise vest good title to MFI in the property and
proprietary rights described in this subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Donald J. Morrison
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Donald J. Morrison
-----------------------------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
-------------------------------
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EMPLOYMENT AGREEMENT Exhibit 10.17
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Timothy Q. Rounds (hereinafter
"Executive"), an individual residing in Elmhurst, Illinois.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Elmhurst, Illinois area or be absent from Elmhurst, Illinois
for such extended periods as to make his/her continued residence in Elmhurst,
Illinois not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$127,400.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on
whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business being
conducted by such customers with MFI or otherwise provide any services similar
to the services provided by MFI to such customers; or
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(b) recruit, solicit or otherwise induce or influence any employee or
agent of MFI to terminate their employment or agency relationship with MFI, or
employ, seek to employ, or cause any other business competitive to MFI to employ
or seek to employ any person who is then (or was at any time within the six
months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this Agreement
or thereafter, except in the performance of his/her duties hereunder, use or
disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of Executive's
employment for whatever reason (or in the event of Executive's death,
Executive's personal representative shall return) to MFI at its direction and
expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority rights
in: all tests, procedures, inventions, developments and discoveries, whether or
not patentable, and all suggestions, proposals, computer programs and writings,
including any copyright interests therein, which Executive authors, conceives or
makes, either solely or jointly with others during his/her employment with MFI
which: (i) relate to any subject matter with which Executive's work for MFI may
be concerned; (ii) relate to the business products or services or actual or
demonstrably anticipated research or development projects of MFI; (iii) involve
the use of the time, equipment, materials or facilities of MFI; or (iv) relate
or are applicable to any phase of MFI's business. Further, Executive agrees to
execute all documents and to take all actions as may be necessary in order to
assign all rights to or otherwise vest good title to MFI in the property and
proprietary rights described in this subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Timothy Q. Rounds
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Timothy Q. Rounds
-----------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
----------------
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EMPLOYMENT AGREEMENT Exhibit 10.18
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Timothy J. Sullivan (hereinafter
"Executive"), an individual residing in Arlington Heights, Illinois.
W I T N E S S E T H:
-------------------
WHEREAS, Executive is currently employed as the Senior Vice President,
Treasurer and Assistant Secretary of MFI and MFI desires to continue to employ
Executive on terms which will encourage the attention and dedication of
Executive to MFI as one of its key employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President,
Treasurer and Assistant Secretary, and Executive accepts such employment and
agrees to continue to serve MFI, in each case upon and subject to the terms and
conditions set forth herein, which terms and conditions shall supersede any
other oral or written employment agreement(s) entered into by and between MFI
and Executive prior to the date of this Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Arlington Heights, Illinois area or be absent from Arlington
Heights, Illinois for such extended periods as to make his/her continued
residence in Arlington Heights, Illinois not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$145,600.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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<PAGE>
Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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<PAGE>
(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on
whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business being
conducted by such customers with MFI or otherwise provide any services similar
to the services provided by MFI to such customers; or
3
<PAGE>
(b) recruit, solicit or otherwise induce or influence any employee or
agent of MFI to terminate their employment or agency relationship with MFI, or
employ, seek to employ, or cause any other business competitive to MFI to employ
or seek to employ any person who is then (or was at any time within the six
months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this Agreement
or thereafter, except in the performance of his/her duties hereunder, use or
disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of Executive's
employment for whatever reason (or in the event of Executive's death,
Executive's personal representative shall return) to MFI at its direction and
expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority rights
in: all tests, procedures, inventions, developments and discoveries, whether or
not patentable, and all suggestions, proposals, computer programs and writings,
including any copyright interests therein, which Executive authors, conceives or
makes, either solely or jointly with others during his/her employment with MFI
which: (i) relate to any subject matter with which Executive's work for MFI may
be concerned; (ii) relate to the business products or services or actual
or demonstrably anticipated research or development projects of MFI; (iii)
involve the use of the time, equipment, materials or facilities of MFI; or (iv)
relate or are applicable to any phase of MFI's business. Further, Executive
agrees to execute all documents and to take all actions as may be necessary in
order to assign all rights to or otherwise vest good title to MFI in the
property and proprietary rights described in this subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
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<PAGE>
In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Timothy J. Sullivan
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
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<PAGE>
19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
Timothy J. Sullivan
--------------------------
Executive
MARKET FACTS, INC.
By: Glenn W. Schmidt
----------------------
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EMPLOYMENT AGREEMENT Exhibit 10.19
THIS AGREEMENT (the "Agreement"), made this twenty-eighth day of October,
1996 by and between MARKET FACTS, INC., a Delaware corporation (hereinafter
"MFI"), with its principal place of business at 3040 West Salt Creek Lane,
Arlington Heights, Illinois, 60005 and Stephen J. Weber (hereinafter
"Executive"), an individual residing in Reston, Virginia.
W I T N E S S E T H:
-------------------
WHEREAS, Executive is currently employed as the Senior Vice President of
MFI and MFI desires to continue to employ Executive on terms which will
encourage the attention and dedication of Executive to MFI as one of its key
employees; and
WHEREAS, Executive is willing to commit himself/herself to continue to
serve MFI on the terms and conditions set forth below; and
WHEREAS, in order to effect the foregoing, MFI and Executive wish to
enter in an employment agreement on the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties, by the execution hereof do agree as
follows:
1. Employment. MFI employs Executive as its Senior Vice President, and
Executive accepts such employment and agrees to continue to serve MFI, in each
case upon and subject to the terms and conditions set forth herein, which terms
and conditions shall supersede any other oral or written employment agreement(s)
entered into by and between MFI and Executive prior to the date of this
Agreement.
2. Term. MFI agrees to employ Executive as provided in Section 1 hereof
for a term of employment (the "Term of Employment") commencing on such date (the
"Effective Date") as this Agreement shall be ratified and approved by the Board
of Directors of MFI (the "Board of Directors") in accordance with Section 22
hereof and continuing thereafter until terminated in accordance with the
provisions of Section 7 hereof.
3. Duties. MFI hereby employs, engages, and hires Executive in the
capacity set forth in Section 1 hereof and Executive hereby accepts and agrees
to such hiring, engagement and employment, subject to the general supervision
of, and pursuant to the orders, advice and direction of the Board of Directors.
Executive shall perform such other duties as are customarily performed by one
holding such position in other, same, or similar businesses or enterprises as
that engaged in by MFI, and shall also additionally render such other and
unrelated services and duties consistent with his/her executive officer status
in Section 1 hereof as may be assigned to him/her from time to time by MFI.
Executive shall devote all of his/her working time and efforts to the business
and affairs of MFI.
Executive shall perform such services wherever MFI shall in good faith
direct; however, Executive shall not be required to remove his/her permanent
residency from the Reston, Virginia area or be absent from Reston, Virginia for
such extended periods as to make his/her continued residence in Reston, Virginia
not practicable.
4. Compensation. MFI agrees to pay Executive a base salary of
$151,320.00 (hereinafter "Base Salary") per year, which shall be payable in
accordance with MFI's customary payroll practices but not less frequently than
in equal amounts payable at two (2) week intervals. MFI may adjust the Base
Salary upward from time to time to conform to alterations, if any, in MFI's
compensation policy for officers.
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Based upon MFI's performance and Executive's individual performance and
at the sole discretion of the Board of Directors, Executive shall be eligible
for an annual bonus consistent with the provisions and goals set by the Board of
Directors for each bonus year, and shall be entitled to participate in other
stock and bonus compensation programs of MFI, in each case on a basis no less
favorable to Executive than that available to other officers of MFI with similar
responsibilities and duties.
5. Expenses. MFI shall reimburse Executive for his/her business expenses
(including expenditures for travel, meals, hotel accommodations, and the like)
incurred in the course of his/her employment hereunder, provided that Executive
submits the documentation necessary for deduction of the payments by MFI on its
income tax returns. In the event that any of Executive's expenses so reimbursed
pursuant to this Agreement are disallowed as a business expense by the tax
authorities due to lack of supporting evidence Executive shall be responsible to
MFI for any tax consequences incurred by MFI as a result thereof.
6. Executive Benefits. Executive shall be entitled to participate in
MFI's vacation, retirement, insurance, disability, medical coverage and other
fringe benefit programs in accordance with the terms of those programs, and this
Agreement is not intended to be in lieu of any rights, benefits and privileges
to which Executive may be entitled as an employee of MFI under any such programs
as may now be in effect or may hereafter be adopted. In no event shall
Executive's entitlement to vacation be determined under a policy that is less
favorable to him/her than MFI's vacation policy applicable to him/her as of the
date of this Agreement.
Pursuant to the "Market Facts Flexible Benefits Plan" (the "Flex Plan")
as currently in effect, employees of MFI are entitled to select (and pay the
premiums cost for) life insurance coverage in an amount equal to a selected
multiple of their earnings (as defined in the Flex Plan) for the prior calendar
year. For so long as MFI shall elect to maintain a life insurance option for its
executive officers pursuant to the Flex Plan or another comparable successor
plan, MFI shall furnish to Executive, at MFI's expense, life insurance coverage
pursuant to the Flex Plan, or such other comparable plan, in an amount equal to
one (1) year of Executive's calendar year earnings (as determined pursuant to
the Flex Plan or such other comparable plan).
7. Termination.
(a) Basis. Executive's employment may be terminated hereunder by MFI
or Executive without any breach of this Agreement under the following
circumstances and subject to the provisions set forth elsewhere herein:
(i) MFI, Without Cause. MFI may terminate Executive's employment
hereunder at any time by written notice to Executive.
(ii) Executive, Without Cause. Executive may terminate his/her
employment hereunder at any time by giving MFI not less than sixty (60)
days prior written notice.
(iii) Death. Executive's employment hereunder shall terminate upon
his/her death.
(iv) Disability. MFI may terminate the Executive's employment
hereunder at any time in the event of Executive's disability.
"Disability" is defined to mean Executive's inability to substantially
perform his/her normal duties for sixteen (16) weeks (not necessarily
continuous or calendar weeks) during any twelve (12) successive months;
and in the event of a dispute as to Executive's inability to perform
his/her duties, MFI may refer the same to a licensed practicing physician
of MFI's choice, and Executive agrees to submit to such tests and
examination as such physician shall deem appropriate.
(v) For Cause. MFI may terminate Executive's employment hereunder at
any time for Cause. "Cause" shall mean (a) an act of proven fraud or
dishonesty on the part of Executive, or (b) a willful and material breach
of this Agreement by the Executive, which breach has not been cured and
remedied by Executive within sixty (60) days after written notice from
the Board of Directors to Executive describing such breach in reasonable
detail.
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(vi) By Mutual Agreement. This Agreement may be terminated at any
time by the mutual agreement of the parties. Any such termination shall
be memorialized by an agreement which is reduced to writing and signed by
Executive and a duly appointed officer of MFI.
(b) Notice of Termination. Any termination of Executive's employment
by MFI or by Executive (other than pursuant to Section 7(a)(iii) above) shall be
communicated by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment if such termination is
pursuant to clauses (iv) or (v) of Section 7(a).
(c) Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean the date specified in the Notice of Termination as the
last day of employment of Executive or, if no such date is specified, (i) on the
sixtieth (60th) day following Notice of Termination if such notice is given
pursuant to Section 7(a)(ii) above, and (ii) in all other cases, at the end of
the month in which the Notice of Termination is given.
8. Rights Upon Termination.
(a) If Executive's employment is terminated other than pursuant to
Section 7(a)(v) herein, MFI shall pay to Executive the unpaid portion of any
Base Salary due and payable to Executive at and as of the Date of Termination.
In addition, if Executive's employment is terminated other than pursuant to
Sections 7(a)(iii) or (v) herein, Executive shall receive the Base Salary
payable to Executive under Section 4 above at the intervals provided therein,
from the Date of Termination to the respective date set forth below:
(i) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(i) hereof, the one (1) year anniversary date
of the date of the Notice of Termination;
(ii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(ii) hereof, the date specified in the Notice
of Termination or if no such termination date is specified, the 60th day
after the date of the Notice of Termination (or such earlier applicable
date as may be provided herein);
(iii) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(iv) by reason of Executive's Disability, then
until the first anniversary of the Date of Termination, Executive shall
be entitled to receive such portion of Base Salary as would have been
paid to Executive pursuant to MFI's disability programs then in effect,
if such Notice of Termination had not been given by MFI; and
(iv) if Executive's employment is terminated pursuant to the
provisions of Section 7(a)(vi), the termination date mutually agreed by
MFI and Executive.
(b) If Executive's employment is terminated by his/her death, or if
Executive's death shall occur prior to his/her receipt of the payments provided
for in Section 8(a) above, such payment(s) shall be paid to Executive's
designated beneficiary, or if he or she predeceases Executive, to Executive's
estate.
9. Executive's Ability to Contract for Company. To the extent Executive
is so authorized by MFI's Board of Directors or By-Laws, and until such time as
a Notice of Termination is given pursuant to Section 7(b) hereof, Executive
shall have the right to make any contracts or commitments for or on behalf of
MFI, to sign or endorse any commercial paper, contracts, advertisements, or
instrument of any nature, and to enter into any obligation binding MFI to the
payment of money or otherwise.
10. Non-Competition Provisions. Executive agrees that during his/her
employment with MFI and for a period of one (1) year following the Date of
Termination, Executive shall not, directly or indirectly:
(a) solicit or otherwise attempt to induce any clients of MFI on
whose account Executive has worked during the two (2) years prior to the
termination of Executive's employment to terminate their relationship with MFI
or otherwise divert from MFI and/or its affiliates any trade or business being
conducted by such customers with MFI or otherwise provide any services similar
to the services provided by MFI to such customers; or
3
<PAGE>
(b) recruit, solicit or otherwise induce or influence any employee
or agent of MFI to terminate their employment or agency relationship with MFI,
or employ, seek to employ, or cause any other business competitive to MFI to
employ or seek to employ any person who is then (or was at any time within the
six months prior thereto) employed by MFI.
11. Confidential Information. Executive recognizes that as a key member
of the management of MFI, Executive has and will continue to occupy a position
of trust with respect to such business information of a secret or confidential
nature which is the property of MFI or any of its subsidiaries or affiliates and
which has been or will be used by or imparted to Executive from time to time in
the course of Executive's duties. Executive therefore agrees that:
(a) Executive shall not at any time during the term of this
Agreement or thereafter, except in the performance of his/her duties hereunder,
use or disclose directly or indirectly to any third person any such information.
(b) Executive shall return promptly on the termination of
Executive's employment for whatever reason (or in the event of Executive's
death, Executive's personal representative shall return) to MFI at its direction
and expense any and all copies of records, drawings, writings, blueprints,
materials, memoranda and other data pertaining to such secret or confidential
information.
(c) The term "information of a secret or confidential nature" means
information of any nature and in any form which at the time or times concerned
is not generally known to those persons engaged in businesses similar to those
conducted or contemplated by MFI which relates to any one or more of the aspects
of MFI's business, including, but not limited to, tests, test procedures, test
programs and systems, patents and patent applications; copyrights or copyright
applications, inventions and improvements, whether patentable or not; writings
whether copyrightable or not; development projects; machines; machine designs
and the materials for machines; policies, processes, formulas, techniques, know-
how, data, data bases, computer designs, computer programs whether embodied in
source or object code, computer languages or formats and other facts relating to
design, construction, development utilization, manufacturing or servicing of
machines or programs or relating to materials for machines or programs; to plant
layout or to plant operations; policies, processes, formulas, techniques, know-
how and other facts relating to sales, marketing advertising, promotions,
financial matters, customers, customer lists, customers' purchases, or
requirements, and other trade secrets, both tangible and intangible, in writing
and orally imparted.
12. Intellectual Property Rights.
(a) MFI shall have all rights including international priority
rights in: all tests, procedures, inventions, developments and discoveries,
whether or not patentable, and all suggestions, proposals, computer programs and
writings, including any copyright interests therein, which Executive authors,
conceives or makes, either solely or jointly with others during his/her
employment with MFI which: (i) relate to any subject matter with which
Executive's work for MFI may be concerned; (ii) relate to the business products
or services or actual or demonstrably anticipated research or development
projects of MFI; (iii) involve the use of the time, equipment, materials or
facilities of MFI; or (iv) relate or are applicable to any phase of MFI's
business. Further, Executive agrees to execute all documents and to take all
actions as may be necessary in order to assign all rights to or otherwise vest
good title to MFI in the property and proprietary rights described in this
subparagraph (a).
(b) MFI shall have no rights in inventions and writings made or
conceived by Executive prior to his/her employment with MFI which are: (i)
embodied in a United States Letters Patent, Copyright Registration or an
application for United States Letters Patent or Copyright Registration filed
prior to the commencement of his/her employment; or (ii) owned by a former
employer prior to Executive's employment by MFI; or (iii) disclosed in detail in
a writing attached hereto or provided to MFI within one (1) week of the
execution hereof. The acceptance of such disclosure by MFI shall not create a
confidential relationship.
4
<PAGE>
In addition to the foregoing, MFI shall have no rights in any inventions
made or conceived by Executive which do not involve any equipment, supplies,
facilities or materials of MFI and which are developed entirely on Executive's
own time unless: (i) the invention relates to the business, products or services
of MFI; (ii) the invention relates to actual or demonstrably anticipated
research or development projects of MFI, or (iii) the invention results from any
services performed by Executive for MFI.
(c) Executive will disclose promptly in writing to MFI all ideas,
inventions, improvements, discoveries and writings, whether or not patentable or
copyrightable, made or conceived by him/her either solely or in collaboration
with others during his/her employment with MFI, whether or not during regular
working hours, and, if based on confidential information as defined in Paragraph
11(c) hereof, within one (1) year thereafter, if such inventions or writings
relate to either: (i) the subject of Executive's work for MFI; (ii) products,
projects, programs or business of MFI of which Executive had knowledge in the
course of Executive's work or otherwise; or (iii) any business of MFI during
Executive's employment.
(d) Executive shall maintain for disclosure to MFI complete written
records of all such inventions and writings. Such records shall bear dates and
signatures and show (i) the full nature thereof, and (ii) the critical dates
pertaining to conception, development, reduction to practice, and embodiment in
a tangible form. Such records shall be the sole property of and be readily
available to MFI.
(e) Executive will, during the term of his/her employment and
thereafter, at the request of MFI and without expense to Executive: (i)
cooperate in the procurement in the name of Executive of patent, utility model,
design and copyright protection to cover such inventions and writings, including
the execution of domestic, foreign, divisional, continuing and re-issue
applications for Letters Patent, Utility Models, Designs and Copyright
Registrations and assignments thereof; and (ii) execute all documents, make all
rightful oaths, testify in all proceedings in Government Offices or in the
Courts concerning such inventions and writings, and generally do everything
lawfully possible in any controversy or otherwise to aid MFI to obtain, enjoy
and enforce proper protection of such property.
13. Remedy. Executive understands that MFI would not have any adequate
remedy at law for the material breach or threatened breach by Executive of any
one or more of the covenants set forth in this Agreement and agrees that in the
event of any such material breach or threatened breach, MFI shall be entitled to
preliminary and permanent injunctive relief without bond in any court of
competent jurisdiction, which rights shall be cumulative and in addition to any
other rights or remedies to which MFI may be entitled.
14. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part hereof.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original.
16. Assignment. This Agreement shall not be assignable by either party
without the express written consent of the other party hereto.
17. Amendment and Modification. No amendment or modification of the terms
of this Agreement shall be binding upon either party unless reduced to writing
and signed by Executive and a duly appointed officer of MFI.
18. Notices. All notices, reports and payments made pursuant to this
Agreement shall be addressed to MFI to the attention of the Chief Executive
Officer at the address set forth in the first paragraph of this Agreement.
Notices to Executive shall be addressed as set forth hereinafter:
Stephen J. Weber
Market Facts, Inc.
3040 West Salt Creek Lane
Arlington Heights, Illinois 60005
Either addressee may change its (his/her) address upon prior written
notice.
5
<PAGE>
19. Repayment of Compensation. In the event that either (a) all or any
portion of the amounts payable and benefits provided to the Executive under this
Agreement from and after the date hereof are disallowed by the Internal Revenue
Service as deductible expenses on grounds that they do not constitute a
"reasonable allowance" of compensation and/or (b) such amounts and benefits are
deemed by a court of competent jurisdiction (the "court") to constitute a waste
of corporate assets, Executive agrees to reimburse to MFI such amounts and
benefits to the extent of the disallowance and/or the amount of payments and
benefits deemed to constitute such waste within thirty (30) days after MFI has
notified Executive of the amount so disallowed and/or characterized. Executive
hereby also agrees to any modification of the terms of this Agreement which MFI
deems necessary and/or appropriate in light of the Internal Revenue Service's
disallowance and/or the court's finding.
20. Entire Agreement. This Agreement contains the entire agreement
between Executive and MFI and supersedes any and all previous agreements,
written or oral, between the parties relating to the subject matter hereof.
21. Severability. The provisions of this Agreement shall be severable.
The unenforceability or invalidity of any one or more provisions, clauses, or
sentences hereof shall not render any other provision, clause or sentence herein
contained unenforceable or invalid. The portion of the Agreement which is not
invalid or unenforceable shall be considered enforceable and binding on the
parties and the invalid or unenforceable provision(s), clauses(s) or sentence(s)
shall be deemed excised, modified or restricted to the extent necessary to
render the same valid and enforceable, and this Agreement shall be construed as
if such invalid or unenforceable provision(s), clause(s), or sentence(s) were
omitted.
22. Effective Date. This Agreement shall become effective only upon and
subject to the approval of the Board of Directors of MFI.
23. Governing Law. This Agreement shall be governed, construed and
enforced in accordance with the internal laws of the State of Illinois,
excluding any choice of law rules which may direct the application of the laws
of another jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in
duplicate on the date first above written.
/s/ Stephen J. Weber
----------------------------
Executive
MARKET FACTS, INC.
By: /s/ Glenn W. Schmidt
------------------------
6
<PAGE>
Exhibit 13
Selected Financial Data
- -----------------------
<TABLE>
<CAPTION>
1992* 1993 1994 1995 1996
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenue $40,718,225 $45,609,073 $55,483,032 $64,608,724 $83,795,562
- -------------------------------------------------------------------------------------------------------------
Income from operations $ 306,109 $ 2,662,481 $ 3,294,736 $ 5,194,779 $ 8,397,948
- -------------------------------------------------------------------------------------------------------------
Net income (loss) $ (436,808) $ 1,074,352 $ 1,434,167 $ 2,226,119 $ 4,277,656
- -------------------------------------------------------------------------------------------------------------
Weighted average common
and common equivalent
shares outstanding 3,387,678 3,504,346 3,785,650 3,884,412 3,755,411
Earnings per share $ (.13) $ .30 $ .38 $ .57 $ 1.14
- -------------------------------------------------------------------------------------------------------------
Total assets $27,449,730 $27,974,494 $31,681,983 $34,376,637 $38,385,227
- -------------------------------------------------------------------------------------------------------------
Long-term obligations $10,935,854 $10,931,573 $11,523,178 $11,163,037 $10,806,673
- -------------------------------------------------------------------------------------------------------------
Cash dividends declared $ .10 $ .11 $ .14 1/2 $ .19 $ .20
- -------------------------------------------------------------------------------------------------------------
</TABLE>
*Effective January 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109 and reported the cumulative effect of that change
in the method of accounting for income taxes in the 1992 consolidated statement
of earnings.
Dividends & Market Price Statistics
- -----------------------------------
<TABLE>
<CAPTION>
Cash Dividends Declared Market Price Statistics*
- -----------------------------------------------------------------------------
1995 1996
1995 1996 High Low High Low
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
4th Quarter 5c 5c 7 1/4 6 1/4 21 3/8 8 1/8
3rd Quarter 5c 5c 7 1/2 5 8 1/2 7
2nd Quarter 5c 5c 5 1/2 3 3/4 7 7/8 6 3/8
1st Quarter 4c 5c 4 1/8 3 5/8 6 7/8 5
- -----------------------------------------------------------------------------
</TABLE>
*Market Facts, Inc. common stock trades on The Nasdaq Stock Market under the
symbol MFAC.
All common share and per share amounts, unless indicated otherwise, have been
adjusted to give effect to a 2-for-1 stock split in December 1996. The Company
discontinued cash dividends to invest in its future growth. See Management's
Discussion and Analysis. As of March 3, 1997, there were approximately 771
holders of record of Market Facts, Inc. common stock and the closing price of
the common stock was $17.
1
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
During 1996, cash and cash equivalents decreased by $3,400,729.
Significant uses of cash during the year included the purchase of 838,807 pre-
split shares of the Company's common stock for treasury pursuant to a self-
tender offer, purchases of property and payment of stock issuance costs in
connection with the issuance and conversion of an $8,250,000 Convertible Note.
See Note 6 to Notes to Consolidated Financial Statements. Significant sources of
cash during the year included proceeds from the issuance of an $8,250,000
Convertible Note, cash provided by operations and short-term borrowings.
The Company's ratio of current assets to current liabilities was 1.2 to 1
at the end of 1996 compared with 1.5 to 1 at the end of 1995. The decrease in
the ratio was primarily attributable to a decrease in cash and cash equivalents
and higher accounts payable and accrued expenses, partially offset by an
increase in accounts receivable. The decrease in cash was due primarily to the
self-tender offer, and the increase in accounts payable, accrued expenses and
accounts receivable was due to growth in the Company's business.
Stockholders' equity decreased during 1996 by $1,524,597 due to the
purchase of 838,807 pre-split shares of common stock in the self-tender offer,
payment of stock issuance costs, and dividends on common stock paid during the
year. The decrease was partially offset by the conversion of the Convertible
Note into 1,137,930 shares of common stock, net income earned and the exercise
of stock options.
The Company's available borrowings under an established bank credit
facility and lines of credit increased from $7,000,000 to $10,650,000 during
1996. Borrowings outstanding under these arrangements were $1,750,000 at
December 31, 1996. There were no borrowings outstanding at December 31, 1995.
At its October 1996 meeting, the Board of Directors established a policy
to omit future cash dividends. Because of the Company's current successful
financial performance, the Board believes that the resources of the Company
would be better utilized for other growth purposes.
Purchases of property in 1996 were $3,234,009, an increase of $1,663,750
from the prior year. In 1997, the Company expects that additional investment in
equipment and facilities will continue to be necessary to support the
anticipated growth in business and that capital expenditures will be equal to or
higher than 1996.
In April 1994, the Company acquired the remaining 50% of the issued and
outstanding shares of common stock of Market Facts of Canada, Ltd. The purchase
price of $1,017,380 was paid in three equal installments during 1994, 1995 and
1996.
The Company's principal sources of cash flow are provided by operating
activities and bank borrowings. The Company believes that cash flow from
operations, its ability to secure additional leases and borrowings available
from its bank arrangements will be adequate to fund current operating and
capital expenditure needs. It is the Company's intention to pursue acquisition
opportunities as a means to grow, and these acquisitions may require an amount
of capital that exceeds that available from operations and existing bank
arrangements. The Company expects that it may be necessary to raise additional
capital from the sale of common stock or the securing of expanded bank borrowing
capacity in order to finance potential acquisition growth.
RESULTS OF OPERATIONS: COMPARISON OF 1996 TO 1995
The Company had revenue of $83,795,562 during 1996, an increase of 29.7%
over 1995 and an all-time record. The increase in revenue was due to the
addition of major research programs for new clients as well as expansion of
services for existing clients.
Gross margin for 1996 was $35,612,677, an increase of 25.9% over 1995.
The increase in gross margin was due to the growth in revenue. Gross margin as a
percentage of revenue was 42.5% in 1996 compared to 43.8% in 1995. The decline
in the gross margin percentage was primarily attributable to the fact that the
Company experienced growth in certain types of business which yield lower gross
margin percentages but which require only a minimal increase in operating
expenses.
Operating expenses for 1996 rose by $4,114,101, an increase of 17.8%
compared to 1995, due primarily to higher marketing staff expenses to support
the growth in business and continued investments in new products and
technologies. The Company expects in 1997 to continue adding marketing staff to
support higher anticipated levels of business and investing in the development
of proprietary research products and services that utilize sophisticated
applications of technology to create value-added tools for clients. Operating
expenses as a percentage of revenue decreased from 35.8% in 1995 to 32.5% in
1996. This reduction was primarily attributable to the fact that the Company
experienced growth in certain types of business which require only a minimal
increase in operating expenses.
2
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
The Company was able to expand its data gathering capacity with only minimal
expansion of facilities by entering into partnering relationships with third
party providers. The Company expects in 1997 that it may be necessary to acquire
additional real estate to accommodate growth in staff due to higher expected
levels of business.
The 1996 provision for income taxes reflected an effective tax rate of
42.1% versus 47.2% in 1995. The decrease in the effective tax rate was primarily
due to a reduction in state and local income taxes. The Company expects its
effective tax rate to remain in the 42-45% range in 1997.
Net income for 1996 rose 92.2% to a record $4,277,656 or 5.1% of revenue
compared with $2,226,119 and 3.4% of revenue in 1995. Earnings per share doubled
to $1.14 in 1996 from 1995.
RESULTS OF OPERATIONS: COMPARISON OF 1995 TO 1994
The Company had revenue of $64,608,724 during 1995, an increase of 16.4%
over 1994. The growth in revenue was due primarily to higher levels of
utilization of research products and services that are proprietary to the
Company and the acquisition of MFCL.
Gross margin for 1995 was $28,295,407, an increase of 12.1% over 1994.
The increase in gross margin was due to the growth in revenue. Gross margin as a
percentage of revenue was 43.8% in 1995 compared to 45.5% in 1994. The decline
in the gross margin percentage was primarily attributable to two factors. First,
the Company was allocating a greater share of internal operating costs directly
to client research projects, and second, the Company experienced growth in
certain types of business which yield lower gross margin percentages but which
require only a minimal increase in operating expenses.
Operating expenses for 1995 rose by $1,160,683, an increase of 5.3%
compared to 1994. These results were due primarily to the increased level of
business activity, higher marketing staff expenses and the acquisition of MFCL,
partially offset by greater internal operating costs being allocated to client
research projects. Operating expenses as a percentage of revenue decreased from
39.5% in 1994 to 35.8% in 1995 primarily as a result of greater internal
operating costs being allocated to client research projects and the fact that
the Company experienced growth in certain types of business which require only a
minimal increase in operating expenses.
The 1995 provision for income taxes reflected an effective tax rate of
47.2% versus 33.5% in 1994. The increase in the effective tax rate was primarily
due to the elimination in 1994 of the valuation allowance for state deferred tax
assets of $254,107 and higher foreign, state and local income taxes.
Net income for 1995 was $2,226,119 or 3.4% of revenue compared with
$1,434,167 and 2.6% of revenue in 1994. Earnings per share increased by 50.0% to
$.57 in 1995.
FORWARD-LOOKING STATEMENTS
Certain statements contained in paragraph 12 under Message to
Shareholders and in this Management's Discussion and Analysis section constitute
"forward-looking statements" made in reliance upon the safe harbor contained in
Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-
looking statements include those relating to anticipated growth, levels of
capital expenditures, acquisition opportunities, the addition of staff, the
development of new products and services, the need to acquire additional real
estate, and the effective tax rate in 1997. The Company's prospects for growth
are subject to significant economic and other uncertainties, some of which are
beyond the Company's control. Factors which could adversely impact the Company's
revenues include: (i) a downturn in general economic conditions which could
cause a decrease in spending on market research projects, (ii) a change in
client management personnel which could cause the client to lower its purchases
from the Company, and (iii) the impact of competitive pricing and products which
could cause a reduction or loss in client business. In addition, should the
technology used by the industry change so as to differ materially from the type
of technology relied upon by the Company, the Company's business could be
adversely affected. Further, the Company's ability to grow through acquisitions
will be dependent upon, among other things, the availability of suitable
acquisition candidates and related financing on terms deemed reasonable by the
Company, and the Company's ability to successfully integrate future acquisitions
into its existing business. Finally, expansion into global markets is subject to
the ability to fully understand cultural differences, the availability of
suitable joint venture or acquisition candidates, risks of foreign currency
fluctuations and other uncertainties. Any of these factors could cause the
Company's actual results to differ materially from those described in the
forward-looking statements.
3
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended
December 31, 1996, 1995 and 1994
- --------------------------------------------------------------------------------
Consolidated Statements of Earnings
<TABLE>
<CAPTION>
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $83,795,562 $64,608,724 $55,483,032
- --------------------------------------------------------------------------------------------------------------
Direct Costs:
Payroll $16,167,308 $13,853,642 $12,166,287
Other expenses 32,015,577 22,459,675 18,082,064
- --------------------------------------------------------------------------------------------------------------
Total $48,182,885 $36,313,317 $30,248,351
- --------------------------------------------------------------------------------------------------------------
Gross Margin $35,612,677 $28,295,407 $25,234,681
- --------------------------------------------------------------------------------------------------------------
Operating Expenses:
Selling $ 2,600,727 $ 2,292,190 $ 2,076,829
General and administrative 23,562,810 20,005,436 19,285,376
Contributions to profit sharing and employee stock ownership plans 1,051,192 803,002 577,740
- --------------------------------------------------------------------------------------------------------------
Total $27,214,729 $23,100,628 $21,939,945
- --------------------------------------------------------------------------------------------------------------
Income From Operations $ 8,397,948 $ 5,194,779 $ 3,294,736
- --------------------------------------------------------------------------------------------------------------
Other Income (Expense):
Interest expense $(1,214,445) $(1,137,728) $(1,259,887)
Interest income 126,008 77,636 47,718
Equity in income of MFCL -- -- 33,668
Other income, net 75,145 85,432 39,932
- --------------------------------------------------------------------------------------------------------------
Total $(1,013,292) $ (974,660) $(1,138,569)
- --------------------------------------------------------------------------------------------------------------
Income Before Provision For Income Taxes $ 7,384,656 $ 4,220,119 $ 2,156,167
Provision For Income Taxes 3,107,000 1,994,000 722,000
- --------------------------------------------------------------------------------------------------------------
Net Income $ 4,277,656 $ 2,226,119 $ 1,434,167
==============================================================================================================
Earnings Per Share $1.14 $.57 $.38
==============================================================================================================
Common and Common Equivalent Shares 3,755,411 3,884,412 3,785,650
==============================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
4
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Balance Sheets
Assets
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 129,428 $ 3,530,157
Bank certificate of deposit 50,000 50,000
Accounts receivable:
Trade, less allowance for doubtful accounts of
$1,007,243 and $838,203 in 1996 and 1995, respectively 14,630,041 9,547,035
Other 94,846 6,200
Notes receivable 48,037 79,214
Revenue earned on contracts in progress in excess of billings 3,886,057 2,889,027
Deferred income taxes 979,298 747,314
Prepaid expenses and other assets 339,829 309,954
- --------------------------------------------------------------------------------------------
Total Current Assets $ 20,157,536 $17,158,901
- --------------------------------------------------------------------------------------------
Property, at cost:
Land $ 1,221,459 $ 1,221,459
Building and building improvements 12,974,017 12,544,681
Computer and office equipment 8,632,940 7,777,869
Furniture and fixtures 3,607,685 2,906,981
Leasehold improvements 1,596,015 1,318,176
Vehicles 226,438 313,881
- --------------------------------------------------------------------------------------------
$ 28,258,554 $26,083,047
Less accumulated depreciation and amortization (10,776,931) (9,524,466)
- --------------------------------------------------------------------------------------------
Net Property $ 17,481,623 $16,558,581
- --------------------------------------------------------------------------------------------
Other Assets:
Goodwill, net of accumulated amortization $ 515,750 $ 557,568
Other noncurrent assets 230,318 101,587
- --------------------------------------------------------------------------------------------
Total Other Assets $ 746,068 $ 659,155
- --------------------------------------------------------------------------------------------
Total Assets $ 38,385,227 $34,376,637
============================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE>
Market Facts, Inc. and Subsidiaries as of December 31, 1996 and 1995
- --------------------------------------------------------------------------------
Liabilities and Stockholders' Equity
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Current Liabilities:
Accrued expenses $ 6,148,582 $ 5,517,230
Billings in excess of revenues earned on contracts in progress 4,569,609 3,328,937
Accounts payable 3,137,798 1,253,922
Short-term borrowings 1,750,000 --
Income taxes 884,686 387,742
Current portion of long-term debt 363,971 112,555
Current portion of obligations under capital leases 198,698 225,903
Current portion of note payable for acquisition of MFCL -- 339,126
- ----------------------------------------------------------------------------------------------------------------------
Total Current Liabilities $ 17,053,344 $11,165,415
- ----------------------------------------------------------------------------------------------------------------------
Long-Term Liabilities:
Long-term debt $ 10,295,656 $10,419,628
Obligations under capital leases, noncurrent portion 447,332 536,242
Deferred income taxes 63,685 205,545
- ----------------------------------------------------------------------------------------------------------------------
Total Long-Term Liabilities $ 10,806,673 $11,161,415
- ----------------------------------------------------------------------------------------------------------------------
Total Liabilities $ 27,860,017 $22,326,830
- ----------------------------------------------------------------------------------------------------------------------
Stockholders' Equity:
Preferred stock, no par value; 500,000 shares authorized; Series A-none issued
Series B-100 shares issued in 1996 $ -- $ --
Common stock, $1 par value; 5,000,000 shares authorized;
4,483,129 and 4,045,006 shares issued in 1996 and 1995, respectively 4,483,129 4,045,006
Capital in excess of par value 9,497,671 2,328,137
Cumulative foreign currency translation (75,319) (69,144)
Retained earnings 11,333,191 7,586,632
- ----------------------------------------------------------------------------------------------------------------------
$ 25,238,672 $13,890,631
Less 1,021,275 and 167,468 shares of treasury common stock, at cost,
in 1996 and 1995, respectively (13,891,966) (1,189,029)
Less other transactions involving common stock (821,496) (651,795)
- ----------------------------------------------------------------------------------------------------------------------
Total Stockholders' Equity $ 10,525,210 $12,049,807
- ----------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity $ 38,385,227 $34,376,637
=======================================================================================================================
</TABLE>
6
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended December 31, 1996, 1995
and 1994
- --------------------------------------------------------------------------------
Consolidated Statements of Stockholders' Equity
<TABLE>
<CAPTION>
1996 1995 1994
------------ ----------- ------------
<S> <C> <C> <C>
PREFERRED STOCK:
Balance at beginning and end of year $ -- $ -- $ --
=======================================================================================================================
COMMON STOCK:
Balance at beginning of year $ 4,045,006 $ 3,762,080 $ 1,965,741
Impact of a 2-for-1 stock split (853,807) 16,934 1,781,339
Common stock issued during the year 1,291,930 265,992 15,000
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $ 4,483,129 $ 4,045,006 $ 3,762,080
=======================================================================================================================
CAPITAL IN EXCESS OF PAR VALUE:
Balance at beginning of year $ 2,328,137 $ 1,765,776 $ 1,735,214
Common stock issued during the year, net 7,169,434 562,361 30,562
Preferred stock issued during the year 100 -- --
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $ 9,497,671 $ 2,328,137 $ 1,765,776
=======================================================================================================================
ADJUSTMENT FROM FOREIGN CURRENCY TRANSLATION:
Balance at beginning of year $ (69,144) $ (100,391) $ (56,526)
Current year adjustment (6,175) 31,247 (43,865)
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $ (75,319) $ (69,144) $ (100,391)
=======================================================================================================================
RETAINED EARNINGS:
Balance at beginning of year $ 7,586,632 $ 6,232,227 $ 7,104,997
Net income 4,277,656 2,226,119 1,434,167
Cash dividends declared on common stock:
$.20 per share in 1996, $.19 in 1995 and $.14 1/2 in 1994 (738,939) (721,784) (518,098)
Impact of a 2-for-1 stock split 207,842 (149,930) (1,788,839)
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $ 11,333,191 $ 7,586,632 $ 6,232,227
=======================================================================================================================
TREASURY COMMON STOCK:
Balance at beginning of year $ (1,189,029) $(1,310,134) $(1,310,134)
Treasury stock purchased (12,702,937) -- --
Treasury stock issued -- 121,105 --
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $(13,891,966) $(1,189,029) $(1,310,134)
=======================================================================================================================
OTHER TRANSACTIONS INVOLVING COMMON STOCK:
Balance at beginning of year $ (651,795) $ (603,373) $ (616,232)
Issuance of demand notes receivable (245,000) (159,750) (115,500)
Payments received on demand notes receivable 19,867 55,896 75,571
Vesting of restricted stock and demand notes receivable 55,432 55,432 52,788
- -----------------------------------------------------------------------------------------------------------------------
Balance at end of year $ (821,496) $ (651,795) $ (603,373)
=======================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
7
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended December 31, 1996, 1995
and 1994
- --------------------------------------------------------------------------------
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
1996 1995 1994
------------ ----------- -----------
Cash Flows From Operating Activities:
<S> <C> <C> <C>
Net income $ 4,277,656 $ 2,226,119 $ 1,434,167
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 2,495,354 2,164,114 2,055,792
Vesting of restricted stock and demand notes receivable 55,432 55,432 52,788
Deferred income taxes (374,049) 43,783 (185,534)
Net gain on disposal of property (27,715) (39,297) (46,630)
Undistributed earnings of MFCL -- -- (15,972)
Change in assets and liabilities:
Accounts receivable (5,176,560) 31,518 (960,335)
Prepaid expenses and other assets (30,386) 126,853 (269,800)
Other noncurrent assets (210,000) -- --
Billings in excess of (less than) revenues earned on
contracts in progress 242,447 (875,035) (168,847)
Accounts payable and accrued expenses 2,552,391 1,364,902 665,682
Income taxes 496,878 (297,918) 613,280
- -------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities $ 4,301,448 $ 4,800,471 $ 3,174,591
- -------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Investing Activities:
Purchases of property $ (3,234,009) $(1,570,259) $(1,331,484)
Payment for acquisition of MFCL, net of acquired cash (339,126) (339,127) (134,964)
Investment in notes receivable (246,200) (238,945) (182,668)
Proceeds from notes receivable 52,244 114,914 165,831
Proceeds from the sale of property 38,297 65,559 132,760
- -------------------------------------------------------------------------------------------------------------------------------
Net cash used in investing activities $ (3,728,794) $(1,967,858) $(1,350,525)
- -------------------------------------------------------------------------------------------------------------------------------
Cash Flows From Financing Activities:
Proceeds from short-term borrowings $ 13,850,000 $ 2,000,000 $ 6,600,000
Repayment of short-term borrowings (12,100,000) (2,000,000) (7,500,000)
Purchase of treasury stock (12,702,937) -- --
Proceeds from issuance of convertible note 8,250,000 -- --
Payment of stock issuance costs (820,851) -- --
Dividends paid (738,939) (721,784) (518,098)
Proceeds from exercise of stock options 386,250 676,605 38,062
Reduction of obligations under capital leases and long-term debt (96,628) (323,719) (319,159)
Proceeds from the sale of preferred stock 100 -- --
Proceeds from the sale of treasury stock -- 139,857 --
- -------------------------------------------------------------------------------------------------------------------------------
Net cash used in financing activities $ (3,973,005) $ (229,041) $(1,699,195)
- -------------------------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash $ (378) $ 15,376 $ 13,352
- -------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents $ (3,400,729) $ 2,618,948 $ 138,223
Cash and cash equivalents at beginning of year 3,530,157 911,209 772,986
- -------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 129,428 $ 3,530,157 $ 911,209
===============================================================================================================================
Cash Paid During The Year For:
Interest $ 1,237,504 $ 1,140,464 $ 1,227,800
Income taxes $ 2,982,379 $ 2,215,411 $ 321,499
===============================================================================================================================
Supplemental Schedule of Non Cash Activities:
Conversion of convertible note into common stock $ 8,250,000 $ -- $ --
Capital lease obligations incurred on lease of equipment $ 109,463 $ 208,465 $ 189,948
Issuance of note payable $ -- $ -- $ 1,017,380
===============================================================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
8
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended
December 31, 1996, 1995 and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies:
a. Principles of Consolidation and Line of Business:
The accompanying consolidated financial statements include the accounts of
Market Facts, Inc. and its subsidiaries (Company). All significant intercompany
transactions have been eliminated.
The Company's primary line of business is the design, execution and
interpretation of market research conducted on behalf of its clients, which
include a majority of the largest 100 multinational consumer products and
service companies, as well as many government agencies. One client, Procter &
Gamble, accounted for 10%, 12% and 10% of total 1996, 1995 and 1994 revenue,
respectively.
b. Revenue Recognition:
The Company recognizes revenue under the percentage of completion method of
accounting. Revenue on client projects is recognized as services are performed.
Losses expected to be incurred on jobs in progress are charged to income as soon
as such losses are known. Revenue earned on contracts in progress in excess of
billings is classified as a current asset. Amounts billed in excess of revenue
earned are classified as a current liability. Client projects are expected to be
completed within a twelve month period.
c. Cash and Cash Equivalents:
For purposes of the consolidated statements of cash flows, the Company considers
all highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents.
d. Property:
Maintenance and repairs are expensed and renewals and betterments are
capitalized. Upon retirement or disposition of property, the applicable cost and
accumulated depreciation and amortization are removed from the accounts and the
resulting gains or losses are included in income.
Depreciation is provided on the straight-line method at rates considered
adequate to depreciate the costs of property over their estimated useful lives.
The useful life of the building is 31 1/2 years, while all other owned assets
have estimated useful lives of three to ten years.
Property under capital leases is recorded at the lower of the fair market value
of the leased property or the present value of the minimum lease payments.
Amortization of the leased property is computed using the straight-line method
over the lease term.
Property and equipment are reviewed for impairment whenever events or
circumstances indicate that the asset's undiscounted expected cash flows are not
sufficient to recover its carrying value. The Company measures an impairment
loss by comparing the fair value of the asset to its carrying amount.
e. Income Taxes:
The Company applies an asset and liability approach to account for income taxes.
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases.
f. Earnings Per Share:
Earnings per share are based on the weighted average number of common shares and
common share equivalents (resulting from options granted under the Company's
1982 Incentive Stock Option Plan and 1996 Stock Plan) outstanding during the
year.
g. Foreign Currency Translation:
Non-U.S. subsidiaries' assets and liabilities have been translated using the
exchange rate in effect at the balance sheet date. Results of operations are
translated using the average exchange rate prevailing throughout the period.
Resulting translation gains and losses are reported as a component of
stockholders' equity.
h. Disclosure of Certain Significant Risks and Uncertainties:
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
i. Financial Instruments:
The carrying amounts of the Company's financial instruments approximate their
fair values.
9
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended
December 31, 1996, 1995 and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (continued)
2. Notes Receivable:
Notes receivable consist of amounts due from officers and employees. The notes
bear interest at the prime lending rate (8.25% at December 31, 1996).
3. Bank Borrowings:
During 1996, the Company established a revolving and term credit facility
("Credit Facility") with a bank in the amount of $7,000,000. The Credit Facility
bears interest at either the lender's prime lending rate or a reserve adjusted
LIBOR rate, plus between .75% and 1.5% per annum, and expires on June 30, 1998.
At any time prior to June 30, 1998, the Company has a one-time right to convert
up to $4,800,000 of revolving debt into a five-year term loan. The Credit
Facility replaced a $4,000,000 existing line of credit. The Company maintains
other established bank lines of credit totaling $3,650,000 which are renewed
annually and bear interest at the prime lending rate. Borrowings outstanding
under the above arrangements were $1,750,000 at December 31, 1996 and bore
interest at 8.25%. No borrowings were outstanding at December 31, 1995. The
weighted average interest rate outstanding during 1996 and 1995 was 8.2% and
9.0%, respectively.
4. Accrued Expenses:
Accrued expenses consist of the following at December 31:
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Compensation $2,821,991 $2,043,189
Real estate taxes 913,273 858,037
Contributions to employee
benefit plans -- 636,786
Other 2,413,318 1,979,218
- ------------------------------------------------------------
Total $6,148,582 $5,517,230
============================================================
</TABLE>
5. Long-Term Debt:
Long-term debt relates to the mortgage loan on the office building used by the
Company as its corporate and operations headquarters. The loan bears interest at
a fixed rate of 9.7% per annum. Principal payments due under the terms of the
mortgage with the final principal amount due May 1, 2000 are as follows:
<TABLE>
<CAPTION>
<S> <C>
In 1997 $ 123,972
In 1998 $ 136,546
In 1999 $ 150,396
In 2000 $10,008,714
</TABLE>
6. Stockholders' Equity:
In 1986, the stockholders approved an amendment to the Certificate of
Incorporation creating a new class of 500,000 shares of preferred stock, without
par value. In 1989, 25,000 shares were designated as Series A preferred stock;
no Series A shares have been issued to date. In 1996, 100 shares were designated
as Series B preferred stock and issued to MFI Investors L.P.
During 1996, the Company's Board of Directors approved a 2-for-1 stock split in
the form of a common stock dividend which was paid on December 13, 1996. The
stock dividend was not paid on treasury common stock. All common share and per
share amounts, unless indicated otherwise, have been adjusted to give effect to
the stock split.
Pursuant to a self-tender offer commenced in June 1996, the Company purchased
838,807 pre-split shares of its common stock from its stockholders at an
aggregate purchase price of $12,162,701. The Company incurred $354,610 in
related transaction costs.
The self-tender offer was made pursuant to an Investment Agreement dated June 6,
1996 among MFI Investors L.P., MFI Associates, Inc. and the Company ("Investment
Agreement"), whereby MFI Investors L.P. purchased from the Company a ten-year,
7% convertible subordinated note in the principal amount of $8,250,000
("Convertible Note"). Immediately prior to the purchase of the shares in the
self-tender offer, the Convertible Note automatically converted at a rate of
$7.25 per share into 1,137,930 shares of the Company's common stock. The Company
incurred $820,851 in stock issuance costs associated with the Investment
Agreement. A new class of Series B preferred shares was issued to MFI Investors
L.P., granting it the right to elect 3 of the 11 Company directors, subject to
decrease as its ownership interest decreases.
In 1996, independent of the self-tender offer, the Company purchased 30,000
shares of its common stock at a cost of $185,626. In 1995, the Company sold
33,868 shares of its common stock, previously held in treasury, to its employee
benefit plans and received proceeds of $139,857.
10
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended December 31, 1996, 1995
and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (continued)
Other transactions involving common stock consist of demand notes receivable due
from officers and employees and unearned restricted stock. Monies received by
officers and employees under the demand notes receivable were used to purchase
Company common stock. These demand notes receivable, classified as a reduction
of stockholders' equity, amounted to $583,996, $366,795 and $270,873 as of
December 31, 1996, 1995 and 1994, respectively. Some of the notes, which are due
in ten equal annual installments through 2004, provide for the forgiveness of
every other principal payment, contingent upon the borrower's employment with
the Company on the date such payment is due. The Company recognized $7,932,
$7,932 and $5,288 of compensation expense relating to the forgiveness of debt in
1996, 1995 and 1994, respectively. All other notes are due in varying
installments through 2001.
Unearned restricted stock amounted to $237,500, $285,000 and $332,500 as of
December 31, 1996, 1995 and 1994, respectively, and relates to a 1992 restricted
stock grant of 200,000 shares of common stock to a Company executive which vests
at a rate of 10% per year, subject to his continued employment with the Company.
The aggregate fair market value of the shares at date of grant is unearned
compensation and the amount is amortized to compensation expense over the
periods the restrictions lapse. Amortization of this compensation expense
amounted to $47,500 in 1996, 1995 and 1994.
In 1989, the Board of Directors of the Company approved a stockholder rights
agreement which provides for a dividend distribution of one preferred share
purchase right for each outstanding share of common stock. Each right initially
entitled stockholders, upon occurrence of certain events, to purchase one one-
hundredth of a share of Series A preferred stock, at an exercise price of $20
per one one-hundredth of a preferred share, subject to adjustment. Giving effect
to the December 1996 stock split, each share of common stock is entitled to
purchase one two-hundredth of a Series A preferred share at $10 per one two-
hundredth of a preferred share.
The rights become exercisable ten days after a person, group or company acquires
20% or more of Company common stock or announces a tender offer which would
result in ownership of 20% or more of the common stock. The Company is entitled
to redeem the rights at one-half cent per right at any time before a 20% or
greater position has been acquired.
If the Company is acquired in a merger or other business combination transaction
or 50% or more of its consolidated assets or earning power are sold, each right
will entitle its holder to purchase, at the right's then current exercise price,
a number of the acquiring company's common shares having a market value at that
time of twice the right's exercise price. In addition, in the event a person or
group acquires 20% or more of the Company's common stock, each right (other than
those held by the acquiring person or group) will entitle its holder to purchase
a number of shares of the acquiring company's common stock having a market value
of two times the exercise price of the right.
At any time after a person or group acquires 20% or more (but less than 50%) of
the Company's outstanding common stock, the Board of Directors may exchange the
rights at an exchange ratio of one share of common stock for one two-hundredth
of a share of Series A preferred stock per right. The rights will expire on
August 7, 1999.
Pursuant to the Investment Agreement, MFI Investors L.P. agreed not to allow its
holdings of Company voting securities to exceed 37.5% (the "Standstill
Percentage") of the Company's total voting securities outstanding at any time.
The Standstill Percentage will be reduced to 20% if at any time MFI Investors
L.P. holds less than 15% of the Company's total outstanding voting securities.
The stockholders rights agreement was amended in June 1996 to provide that the
rights would not become exercisable by reason of MFI Investors L.P. acquiring
more than 20% of the Company's voting securities, unless and until its holdings
exceed the Standstill Percentage then in effect.
7. Employee Stock Option Plans:
Under terms of the 1982 Incentive Stock Option Plan (1982 Plan) which expired as
of May 1, 1992, options to purchase shares of the Company's common stock had
been granted at a price equal to the market price at the date of grant.
Options from the 1982 Plan were exercisable on or after the first anniversary of
the date of the grant and expired four years after the date of the grant.
842,882 shares of the Company's common stock had been reserved for stock option
grants under the 1982 Plan.
11
<PAGE>
Markets Facts, Inc. and Subsidiaries for the years ended December 31, 1996, 1995
and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (continued)
Shares under option relating to the 1982 Plan are summarized as follows:
<TABLE>
<CAPTION>
1982 Plan
--------------------------------
1996 1995 1994
--------- -------- --------
<S> <C> <C> <C>
Options outstanding
at beginning of year 164,000 587,000 695,800
Options exercised (154,000) (265,992) (15,000)
Options canceled (10,000) (157,008) (93,800)
Options outstanding
and exercisable
at end of year -- 164,000 587,000
==============================================================
Average price of options:
Exercised during year $2.51 $2.54 $2.54
Outstanding at end of year $ -- $2.54 $2.55
==============================================================
</TABLE>
On September 27, 1996, the Company's Board of Directors adopted, subject to
stockholder approval, the 1996 Stock Plan (1996 Plan) whereby the Company may
issue to select officers, directors and key employees any or all of the
following: incentive stock options within the meaning of Section 422 of the
Internal Revenue Code of 1986, non-qualified stock options, stock appreciation
rights and restricted stock. 500,000 shares of the Company's common stock have
been reserved for issuance under the 1996 Plan. Except as otherwise provided,
awards are granted at a price equal to the market price at the date of the
grant, expire ten years after the date of the grant and vest 20% per year over a
five year period.
Under the 1996 Plan, 332,000 non-qualified stock options were granted during
1996, subject to stockholder approval of the Plan, at a weighted average price
of $8.79. All were outstanding at December 31, 1996.
The Company applies APB Opinion No. 25 and related Interpretations in accounting
for the 1996 Plan. Accordingly, no compensation expense has been recognized. Had
compensation cost for the Company's stock-based compensation plan been
determined consistent with FASB Statement No. 123, the Company's net income and
earnings per share would have been reduced to the pro forma amounts indicated
below:
<TABLE>
<CAPTION>
- -------------------------------------
1996
- -------------------------------------
<S> <C> <C>
Net Income As Reported $4,277,656
Pro Forma $4,244,528
- -------------------------------------
Earnings As Reported $ 1.14
Per Share Pro Forma $ 1.13
- -------------------------------------
</TABLE>
The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 1996: expected volatility of 40%, risk-free
interest rates of 6.3% and expected lives of four years for the options. The
Company does not expect to pay dividends in the future.
8. Employee Benefit Plans:
The Company maintains separate defined-contribution profit sharing plans for its
U.S. and Canadian operations which cover substantially all employees.
Contributions to the plans, subject to certain limitations, are at the
discretion of the Company and were $951,192, $753,002 and $577,740 in 1996, 1995
and 1994, respectively.
The Company also maintains an Employee Stock Ownership Plan (ESOP), which covers
substantially all U.S. employees. Under the ESOP, the Company may make
contributions at its discretion, within defined limits, in the form of cash or
common stock of the Company. Cash contributions must be used to purchase shares
of common stock of the Company. The Company made cash contributions of $100,000
and $50,000 in 1996 and 1995, respectively.
9. Commitments and Contingent Liabilities:
The Company leases office facilities, along with some of its computer and office
equipment and vehicles, under operating lease agreements. Total rental expense
was approximately $1,496,000, $1,331,000 and $1,193,000 in 1996, 1995 and 1994,
respectively. Some of the Company's leases provide for escalations based on
increases in the lessors' taxes, maintenance and other operating expenses.
Computer and office equipment include $1,300,071 and $1,444,868 in 1996 and
1995, respectively, of computer and other equipment acquired under capital
leases. Accumulated depreciation and amortization include $650,965 and $667,956
in 1996 and 1995, respectively, of accumulated amortization on capital leases.
The leases provide for the payment of certain insurance and maintenance expenses
and contain renewal options. The leases also provide for upgrading the equipment
under lease and the purchase of equipment. The amortization expense for these
capital leases was $236,019, $274,704 and $188,457 in 1996, 1995 and 1994,
respectively.
12
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended
December 31, 1996, 1995 and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (continued)
The minimum future rentals under capital and operating leases with an initial
term of one year or more as of December 31, 1996 are as follows:
<TABLE>
<CAPTION>
Operating Leases
----------------------
Capital Office Equipment
Year Leases Facilities & Vehicles
- ------------------------------------------------------- ---------- ----------
<S> <C> <C> <C>
1997 239,941 1,367,095 52,614
1998 212,295 1,397,076 26,329
1999 81,558 1,103,158 5,380
2000 65,749 919,185 3,116
2001 65,749 702,463 --
2002 and thereafter 109,582 955,981 --
- -------------------------------------------------------------------------------
Total minimum lease payments $774,874 $6,444,958 $87,439
========== =======
Less amounts representing interest 128,844
--------
Present value of minimum lease payments 646,030
Current portion 198,698
--------
Long-term portion $447,332
===============================================================================
</TABLE>
10. Provision for Income Taxes:
The provision for income taxes consists of the following:
<TABLE>
<CAPTION>
1996 1995 1994
---------- --------- ---------
Currently payable:
<S> <C> <C> <C>
Federal $2,676,000 $1,422,900 $ 637,100
State and local 649,000 349,000 137,000
Foreign 157,000 178,700 133,900
Deferred:
Federal (181,000) (44,000) (8,000)
State and local (173,000) 110,000 (178,000)
Foreign (21,000) (22,600) --
- -------------------------------------------------------------------------------
Total $3,107,000 $1,994,000 $ 722,000
===============================================================================
</TABLE>
The following is a reconciliation between the statutory Federal income tax rate
and the Company's effective income tax rate:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- -----
<S> <C> <C> <C>
Statutory Federal income tax rate 34.0% 34.0% 34.0%
State and local income taxes, net of Federal income
tax benefits 4.3 8.0 7.7
Foreign income taxes .6 1.3 1.8
Foreign tax credit -- -- (1.2)
Distribution of earnings of MFCL -- -- 0.7
Change in the valuation allowance for deferred
tax assets -- -- (11.8)
Other 3.2 3.9 2.3
- -------------------------------------------------------------------------------
Effective income tax rate 42.1% 47.2% 33.5%
===============================================================================
</TABLE>
The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 1996 and
1995 are presented below:
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Significant deferred tax assets (liabilities):
Doubtful accounts $ 408,856 $ 329,689
Vacation 162,968 144,102
Rent abatement 92,371 100,206
Net operating loss carryforwards 155,459 53,297
Other 289,747 120,020
Depreciation (193,788) (205,545)
--------- ---------
Net deferred tax asset $ 915,613 $ 541,769
========== =========
</TABLE>
As a result of a reassessment, which included the consideration of expected
future taxable income and available tax planning strategies, the valuation
allowance related to state deferred tax assets at January 1, 1994 of $254,000
was eliminated. Of that amount, approximately $79,000 was realized in 1994. The
Company has net operating loss carryforwards at December 31, 1996 of
approximately $1,733,000 which are available to offset certain future state
income through 2007. At December 31, 1996, all deferred tax assets are
considered realizable in view of past, current and the expectation of future
taxable income.
13
<PAGE>
Market Facts, Inc. and Subsidiaries for the years ended December 31, 1996, 1995
and 1994
- --------------------------------------------------------------------------------
Notes to Consolidated Financial Statements (continued)
Federal income taxes and foreign withholding taxes have not been provided on the
Company's share of the undistributed earnings of MFCL ($1,384,869 at December
31, 1996) since these earnings are considered to be permanently reinvested. The
net Federal income taxes and foreign withholding taxes which would be payable if
these earnings were distributed would be insignificant to the financial position
and results of operations of the Company.
11. Market Facts of Canada, Ltd. (MFCL):
In April 1994, the Company acquired the remaining 50% of the issued and
outstanding common stock of MFCL in consideration of a note payable for
$1,017,380. The acquisition has been accounted for under the purchase method of
accounting.
The excess of the purchase price over the fair market value of the net assets
acquired has been recorded as goodwill and is being amortized using the
straight-line method over 15 years.
The Company's consolidated financial statements report MFCL's results of
operations and cash flow activity for the periods subsequent to April 1994 under
the consolidated method of accounting.
MFCL maintains offices in Toronto, Montreal and New Westminster and provides
Canadian and American firms with marketing research information on Canadian
consumers. MFCL utilizes the same general methods of marketing research as the
Company and maintains its own survey staff and mail panel. This is the Company's
only foreign subsidiary.
12. Quarterly Results of Operations (Unaudited):
The following is a summary of the unaudited quarterly results of operations for
1996 and 1995 (in thousands, except for earnings per share):
<TABLE>
<CAPTION>
1996 First Second Third Fourth
- --------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue $18,659 $20,127 $20,478 $24,532
Gross margin $ 7,956 $ 8,278 $ 8,878 $10,501
Net income $ 528 $ 704 $ 1,034 $ 2,012
Earnings per share $ .14 $ .18 $ .29 $ .57
========================================================
1995 First Second Third Fourth
- --------------------------------------------------------
Revenue $15,333 $16,332 $15,880 $17,064
Gross margin $ 6,583 $ 7,332 $ 6,979 $ 7,401
Net income $ 417 $ 514 $ 549 $ 746
Earnings per share $ .11 $ .13 $ .14 $ .19
========================================================
</TABLE>
- --------------------------------------------------------------------------------
Independent Auditors' Report
To the Stockholders and Board of Directors of Market Facts, Inc.:
We have audited the accompanying consolidated balance sheets of Market Facts,
Inc. and subsidiaries as of December 31, 1996 and 1995, and the related
consolidated statements of earnings, stockholders' equity, and cash flows for
each of the years in the three-year period ended December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Market
Facts, Inc. and subsidiaries as of December 31, 1996 and 1995, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 1996 in conformity with generally accepted accounting
principles.
KPMG Peat Marwick LLP
Chicago, Illinois
February 25, 1997
14
<PAGE>
Exhibit No. 21
SUBSIDIARIES OF MARKET FACTS, INC.
Place of
Name Incorporation
- ---- -------------
Market Facts - New York, Inc. New York
Market Facts of Canada, Ltd. Canada
<PAGE>
Exhibit No. 23
CONSENT OF KPMG PEAT MARWICK LLP
To the Board of Directors of Market Facts, Inc.:
We consent to incorporation by reference in the registration statement (No.
33-61726) on Form S-8 of Market Facts, Inc. of our reports dated February
25, 1997, relating to the consolidated balance sheets of Market Facts, Inc.
and subsidiaries as of December 31, 1996 and 1995, the related consolidated
statements of earnings, stockholders' equity, and cash flows and related
financial statement schedule for each of the years in the three year period
ended December 31, 1996, which reports appear in or are incorporated by
reference in the December 31, 1996 annual report on Form 10-K of Market
Facts, Inc.
KPMG Peat Marwick LLP
Chicago, Illinois
March 24, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 129,428
<SECURITIES> 50,000
<RECEIVABLES> 15,732,130
<ALLOWANCES> 1,007,243
<INVENTORY> 0
<CURRENT-ASSETS> 20,157,536
<PP&E> 28,258,554
<DEPRECIATION> 10,776,931
<TOTAL-ASSETS> 38,385,227
<CURRENT-LIABILITIES> 17,053,344
<BONDS> 0
<COMMON> 4,483,129
0
0
<OTHER-SE> 6,042,081
<TOTAL-LIABILITY-AND-EQUITY> 38,385,227
<SALES> 83,795,562
<TOTAL-REVENUES> 83,795,562
<CGS> 48,182,885
<TOTAL-COSTS> 48,182,885
<OTHER-EXPENSES> 27,214,729
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,214,445
<INCOME-PRETAX> 7,384,656
<INCOME-TAX> 3,107,000
<INCOME-CONTINUING> 4,277,656
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,277,656
<EPS-PRIMARY> 1.14
<EPS-DILUTED> 1.14
</TABLE>
