CONVENIENCE TRANSLATION
CONTRACT OF EMPLOYMENT
between
Infratest Xxxxx
Aktiengesellschaft Holding
and
Dr. Hartmut Kiock
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CONVENIENCE TRANSLATION
SEC. 1
TASKS
1. Dr. Kiock shall manage the business of the Company in association with
the other members of the Board of Management, in accordance with the
pertinent statutory provisions, the articles of association, the
applicable version of the rules of internal procedure for the Board of
Management that have been issued by the Supervisory Board, and the
present contract.
2. Dr. Kiock shall represent the Company in accordance with the articles
of association, i.e. together with a further member of the Board of
Management.
3. As the chairman of the Board of Management, Dr. Kiock shall represent
the Board of Management; he shall have a presiding function. He shall
co-ordinate the departmental activities of the other members of the
Board of Management.
4. Dr. Kiock shall act during his activity on the Board of Management in
accordance with the principles of due diligence of a prudent manager
within the meaning of the German Stock Corporation Law.
5. In case of losing his capacity as member of the Board of Management
because of a transformation of the Company the Company will confer a
comparable management position with comparable powers of representation
upon Dr. Kiock on terms of this contract.
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CONVENIENCE TRANSLATION
SEC. 2
TERM OF THE CONTRACT, TERMINATION
1. This contract of employment shall come into effect on signing with
retroactive effect on November 20, 1998 and shall be firmly concluded
for the period up to November 20, 2003. It replaces and supersedes the
existing employment contract of May 21st, 1996. The Chairman of the
Supervisory Board will inform Dr. Kiock at the latest 12 months prior
to the expiry of the contract, if the Supervisory Board will appoint
Dr. Kiock again as member of the Management Board and if the
Supervisory Board is willing to extend the present contract for the
duration of the new appointment or to conclude a new contract on at
least the same conditions. Thereupon Dr. Kiock will declare within
three months, if he accepts the appointment and is willing to accept
the conditions for the extension or the renewal of the contract of
employment.
2. This contract can be terminated by Dr. Kiock by notice of three months
prior to the end of the month if
a) any person or group is or becomes the beneficial owner,
directly or indirectly, of securities representing 30% or more
of the combined voting power of NFO Worldwide, Inc. (NFO) then
outstanding securities;
b) at any time during any period of two consecutive years,
individuals who at the beginning of such period constituted
the Board of Directors of NFO and any new directors, whose
election by the Board of Directors of NFO or nomination by
NFO's shareholders was approved by a vote of at least 2/3 of
NFO directors then still in office who either NFO directors at
the beginning of the period or whose election or nomination
for election was previously so approved, for any reason cease
to constitute a majority thereof.
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CONVENIENCE TRANSLATION
The foregoing shall not apply in cases of an acquisition of
NFO securities by, or any consolidation, merger or exchange of
shares with
- a corporate subsidiary, of which 95% of the capital
stock is owned, directly or indirectly, by NFO or
- a subsidiary, organized in a different legal form in
which NFO has, directly or indirectly, an equivalent
degree of ownership.
3. In case of a termination of the contract of employment by Dr. Kiock
according to para. 2, Dr. Kiock shall receive his fixed annual salary
as well as the bonus according to Sec. 5 para. 1 in the amount of the
average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments, for the duration of two years as of
the date the notice of termination becomes valid.
4. The dismissal of Dr. Kiock as member of the Board of Management and/or
as the chairman of the Board of Management shall be possible at any
time within the framework of the statutory provisions, notwithstanding
his claims pursuant to the present contract.
5. If Dr. Kiock becomes permanently unable to work during the term of the
present contract of employment, the contract of employment shall
terminate at the end of the quarter in which the permanent inability to
work has been established. Inability to work for the purposes of the
present contract exists if Dr. Kiock is incapable for longer than six
months of pursuing his activity and the restoration of his ability to
work cannot also be expected within a further six months. The
Supervisory Board shall have the right to demand that the existence of
said prerequisites be verified by
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CONVENIENCE TRANSLATION
a doctor of its choice at the expense of the Company.
SEC. 3
DEPLOYMENT/PLACE OF LABOUR
1. Dr. Kiock shall make available to the Company his entire labour, all
the results of his occupational activity, and all the observations and
experience he makes during his activity for the Company.
2. The duties to be performed by Dr. Kiock shall be performed in Munich
with the exception of reasonable travel requirements on behalf of the
Company.
SEC. 4
SECONDARY OCCUPATION, COMPETITION, COVENANT NOT TO COMPETE
1. Any paid or unpaid secondary occupation, including the holding of any
Supervisory Board seats, as well as any significant and permanent
holding in or other participation in an external company shall require
the prior consent of the chairman of the Supervisory Board.
2. Dr. Kiock shall be obliged to assume, at the request of the overall
Supervisory Board, management functions, Supervisory Board seats or
seats in similar controlling bodies at other companies, as well as
honorary functions in associations
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CONVENIENCE TRANSLATION
to which the Company belongs. He shall resign such offices at any time
at the request of the Supervisory Board, at the latest upon termination
of his appointment as member of the Board of Management.
Dr. Kiock acknowledges that as of the date hereof he has been requested
and has agreed to assume the position of President - European
Operations of NFO Worldwide, Inc. In accordance with the
responsibilities of such position, Dr. Kiock agrees to travel to the
United States at least eight times per year to attend meetings of the
Office of the President and, if so requested, shall also travel to the
United States to attend each meeting of the Board of Directors of NFO.
Dr. Kiock shall not be entitled to any additional compensation in
respect of his services as President - European Operations of NFO
Worldwide, Inc.
3. Publications and talks from the field of activity of the Company shall
be permitted; however, for the purpose of internal co-ordination, Dr.
Kiock shall inform the other members of the Board of Management in
advance.
4. Dr. Kiock undertakes, for a period of two years after the expiration of
the term of employment hereunder, in the area of the European Union,
the U.S.A. and Canada
a) neither to own, manage, control, participate in, consult with,
render services for, or in any manner engage in any business
competing with the Company or any of its affiliated companies;
provided, however, that Dr. Kiock may be a passive owner of
not more than 5% of the outstanding stock of any class of a
corporation which is publicly traded, provided that Dr. Kiock
has no active participation in the business of such
corporation;
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CONVENIENCE TRANSLATION
b) nor to induce or to attempt to induce any employee of the
Company or of any of its affiliated companies to terminate the
employment relations;
c) nor to induce or attempt to induce any customer, supplier,
licensee or other business relation of the Company or any of
its affiliated companies to cease doing business with the
Company or any affiliated companies nor in any way interfere
with the relationship between them and the Company or any of
its affiliated companies.
5. For the duration of the covenant not to compete according to para. 4,
the Company undertakes to pay Dr. Kiock a compensation of 50% of his
last average monthly compensation including the bonus in the amount of
the average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments. Each payment of the compensation is
due at the end of the respective month. This shall not apply in case of
termination of the employment contract by Dr. Kiock according to Sec. 2
para. 2 or within the period of four years after the signing of the
present contract of employment.
In accordance with ss. 74c of the Commercial Code (HGB), all amounts
Dr. Kiock earns through employment elsewhere or maliciously fails to
earn, shall be deducted from his compensation amount, insofar as the
compensation plus his income, including unemployment benefits pursuant
to ss. 148 of the Social Security Code (SGB) III, exceeds 110% of his
most recent monthly compensation, including the bonus in the amount of
the average of the preceding two business years, in case of termination
before the expiration of two business years in the amount of the
average received bonus payments. The compensation shall be set off
against ongoing payments made under an employer's pension commitment.
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CONVENIENCE TRANSLATION
During the period of the prohibition of competition, Dr. Kiock shall
inform the Company of the amount of his salary and the address of his
respective employer.
For each violation of the prohibition of competition, Dr. Kiock shall
pay the Company a contractual penalty in the amount of 100% of his last
monthly compensation, including the bonus in the amount of the average
of the preceding two business years, in case of termination before the
expiration of two business years in the amount of the average received
bonus payments, prior to leaving the Company. In case of an ongoing
violation of the prohibition of competition, the activity during one
month shall be deemed to be a separate violation within the meaning of
sentence 1. Rights or claims of the Company going beyond that shall
remain unaffected.
6. The Company may waive the prohibition of competition before termination
of the employment contract by way of written notice to Dr. Kiock. In
this case, payment of the compensation for the period of restriction
shall end 12 months after the declaration of waiver.
Otherwise, the provisions set forth in xx.xx. 74 et seq. HGB shall
apply accordingly.
7. In case of termination for exceptional cause (but not termination
pursuant to Sec. 2 para. 2 hereof) the party who has the right to give
notice is entitled to avoid the covenant not to compete within one
month after the notice of termination for exceptional cause has been
given by written notice towards the other party.
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CONVENIENCE TRANSLATION
SEC. 5
REMUNERATION
1. Dr. Kiock shall receive for his activity
a) a fixed annual salary in the amount of DM 500,000;
b) a bonus for each business year of the Company.
2. The annual salary shall be paid in twelve equal monthly installments
subsequently at the end of the month, with the statutory deductions
being made. Dr. Kiock is aware that he is not subject to compulsory
social insurance contributions and that the company is thus not obliged
to pay employer's contributions.
3. The Supervisory Board will annually decide on an adjustment of the
fixed salary effective to each January 1st at its discretion for the
first time on January 1st, 2000.
4. The bonus for each business year is performance-related and amounts to
up to 66 2/3% of the fixed salary. The bonus is to be determined
annually in accordance with the annual performance targets of the
Company and its affiliated companies by mutual agreement of the
Supervisory Board and Dr. Kiock. The bonus for the fiscal year ending
December 3lst, 1999, is to amount to up to DM 333,000.
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CONVENIENCE TRANSLATION
SEC. 6
CONTINUED PAYMENT OF SALARY
1. In the event of illness, the emoluments and on a pro rata temporis
basis the bonus shall continue to be paid for the duration of six
months, but at most until termination of the employment.
2. If Dr. Kiock dies, his widow and his children entitled to maintenance
shall receive the full fixed emoluments, but no Fringe Benefits
according to Sec. 7, and on a pro rata temporis basis the bonus for the
period of six months, starting with the expiration of the month of his
death. Continued payment of the emoluments pursuant to para. 1 shall be
set off against this 6-month period.
SEC. 7
FRINGE BENEFITS
1. The Company shall provide Dr. Kiock with a company car which may also
be used privately. In the event Dr. Kiock is suspended from employment
or his appointment to the Management Board is revoked, Dr. Kiock shall
return the car to the Company and he shall not be entitled to further
compensation in respect thereof.
2. The company car shall be appropriate to the position of Dr. Kiock in
the Company as regards its procurement costs. The procurement costs to
be borne by the Company and the duration of use shall be defined in
each case in agreement between the chairman of the supervisory board
and Dr. Kiock.
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CONVENIENCE TRANSLATION
3. The wages or income tax connected as a benefit in money's worth with
the private use of the car shall be borne by Dr. Kiock.
4. Dr. Kiock is furthermore entitled to Fringe Benefits according to the
existing works agreement at the Infratest Xxxxx-Group.
SEC. 8
TRAVEL AND OUT-OF-POCKET EXPENSES
1. The Company shall reimburse Dr. Kiock for travel expenses in accordance
with the applicable version of the travel expense regulations in force
in the Infratest Xxxxx group.
2. Out-of-pocket expenses shall be reimbursed upon submission of proof in
accordance with the tax provisions.
SEC. 9
HOLIDAY
Dr. Kiock's entitlement to holiday shall be derived from the relevant
application of the plant agreements existing in this regard in the Infratest
Xxxxx group. Agreement on the time of taking holidays shall be reached in
accordance with the provisions in the rules of internal procedure for the Board
of Management. Dr. Kiock shall not be entitled to receive payment in respect of
any holiday that is not utilized as of the end of each year.
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CONVENIENCE TRANSLATION
SEC. 10
EMPLOYEE INVENTIONS
The Company shall be exclusively entitled, without paying any additional
compensation to Dr. Kiock, to all the rights from developments, including the
rights from processing data and all copyrights and other industrial property
rights insofar as they arise from the activity for the company. The mutual
rights and obligations in connection with employee inventions shall otherwise
comply with the pertinent statutory provisions.
SEC. 11
OBLIGATION TO MAINTAIN SECRECY
1. Dr. Kiock shall be obliged to maintain strict secrecy towards third
parties regarding all business matters which come to his knowledge
during and in connection with his activity for the Company and which
relate to the Company, companies affiliated to it, its customers and
its shareholders, both for the duration of the present contract and
also after its termination.
2. If he leaves the services of the Company, Dr. Kiock shall return all
the documents relating to matters of the company in his possession
immediately and in full and without any special request being made to
do so. A claim to a right of retention to such documents shall be
excluded.
3. Dr. Kiock shall maintain secrecy on the contents of the present
contract towards unauthorized third parties.
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CONVENIENCE TRANSLATION
SEC. 12
DATA PROTECTION
Dr. Kiock will observe the relevant provisions on data protection during his
activity for the Company.
SEC. 13
FINAL PROVISIONS
1. Modifications and supplements of this contract must be made in writing
in order to be valid.
2. Should an individual provision of this Agreement be or become
ineffective in whole or in part, the effectiveness of the remaining
provisions remains unaffected thereof. Instead of the ineffective
provision such effective provision should be effective, which
corresponds most likely to the economical purpose the parties wanted or
would have wanted having considered the ineffective provision.
3. This Agreement shall be governed by the laws of the Federal Republic of
Germany. The place of venue shall be Munich.
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CONVENIENCE TRANSLATION
4. This Agreement exists in English and German. However, the German
version is legally binding.
Munich, __________, 1998
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Dr. Hartmut Kiock Infratest Xxxxx XX Holding
Chairman of the Supervisory Board
