EXHIBIT 10.1
SERVICE AGREEMENT
between
EVI Audio GmbH, represented by its managing director Xxxx-Xxxxx Xxxxxxx
and
XXXX XX AUDIO DEUTSCHLAND GmbH & Co. KG, represented by its managing director
Xxxx-Xxxxx Xxxxxxx and Prokurist Xxxx Xxxx
each having a principal office at 45 Xxxxxxxxxxxx Ring, 94315 Straubing and both
referred to hereinafter as the "Companies,"
and
Xxxxxxx Xxxxxxx von Heydekampf, 00 xxx Xxxxxx Xxxx, Xxxxx 00000, referred to
hereinafter as "Mr. von Heydekampf."
PREAMBLE
EVI Audio GmbH is acquiring the business of Xxxx XX Audio Deutschland GmbH & Co.
KG; as soon as the formal closing is completed, which is expected to occur by
February 28, 1997, EVI Audio GmbH intends to continue the business as before.
In light of the foregoing, the Companies and Mr. von Heydekampf enter into the
following agreement:
SERVICE AGREEMENT
Mr. von Heydekampf will be appointed as an additional managing director of EVI
Audio GmbH with effect no later than February 17, 1997. Should the acquisition
of the business of Xxxx XX Audio Deutschland GmbH & Co. KG by EVI Audio GmbH be
delayed beyond February 28, 1997, Mr. von Heydekampf will also be appointed as
an additional managing director of Xxxx XX Audio Deutschland GmbH & Co. KG as
well and employed as such. In addition, Mr. von Heydekampf will be appointed as
European sales director with the title "Vice President Marketing and Sales" for
Xxxx XX Audio Europe's business and its successor business EVI Audio Group. He
shall be solely responsible for all marketing and sales matters within Europe
and shall manage these matters at his own responsibility. Furthermore, the
directive attached hereto as attachment 1 shall apply, and shall remain an
integral and material part of this agreement.
SCOPE OF RESPONSIBILITIES
Mr. von Heydekampf shall perform his services and manage the Companies in
accordance with applicable law and the articles of association. As managing
director and sales and distribution manager of Xxxx XX Audio Europe and its
successor EVI Audio Group, Mr. von Heydekampf shall also be responsible for the
achievement of the targets described in attachment 1.
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Mr. von Heydekampf shall be responsible only to the president of Xxxx XX Audio
Europe and, subsequently, the president of EVI Audio Group and shall report
directly to him. Mr. von Heydekampf shall be authorized to give instructions to
all employees of the marketing and sales division.
AUTHORITY
Mr. von Heydekampf shall be granted authority to represent EVI Audio GmbH and
Xxxx XX Audio Deutschland GmbH & Co. KG jointly with another managing director
or a Prokurist.
TERM AND TERMINATION
This service agreement shall take effect on February 17, 1997 and shall be
concluded for a fixed term of three years. After expiration of the three-year
period, or any subsequent extension thereof, this agreement shall automatically
be extended for another two years, unless either Mr. von Heydekampf or the
Companies (together or individually, if merged) give 12 months' written notice
of termination by registered mail. The right to terminate this agreement for
cause in accordance with the provisions of law shall not be affected. For a
six-month trial period, this agreement may be terminated by any party by giving
one month's notice as of the end of a calendar month by registered mail. In case
either of the Companies or both Companies terminate this agreement during the
trial period, they shall be obliged to pay compensation to Mr. von Heydekampf in
an amount equal to six months of salary, as well as all costs for moving to a
place of his choice within Europe. In case of a termination, the Companies
(together or individually, if merged) may relieve Mr. von Heydekampf from his
obligation to perform, notwithstanding the validity of such termination,
provided Mr. von Heydekampf's compensation is continued to be paid and he is
authorized to take up a second job.
REMUNERATION
Mr. von Heydekampf shall receive an annual base salary of DM 215,000, paid in
twelve equal monthly installments. Such installments shall be payable on the
last day of each calendar month, less deductions required by law. The amount of
the salary shall be reviewed each year. No reduction of the annual base salary
shall not be permitted. In addition to his base salary, Mr. von Heydekampf shall
be entitled to a bonus payment in a maximum amount of 40% of his annual base
salary. During the first year of his service, the company guarantees a bonus of
10%. If the budget targets are met by 100%, he shall be entitled to a minimum
bonus of 20% of his annual base salary. This remuneration compensates all
activities by Mr. von Heydekampf, including those for subsidiaries or other
related companies, or work on weekends and public holidays. If Mr. von
Heydekampf receives compensation from other companies of the group, such amount
shall not be credited against his remuneration under this agreement, unless the
parties have expressly agreed otherwise. If Mr. von Heydekampf leaves the
Company as of the end of a year, he shall be entitled to a full bonus payment.
If Mr. von Heydekampf leaves the Company during the year, either by consent or
for a reason beyond his control, he shall be entitled to a pro rata bonus
payment.
WORKING HOURS, PLACE OF PERFORMANCE, OTHER EMPLOYMENT
Mr. von Heydekampf shall devote all of his working time to the business of Xxxx
XX Audio Europe or its successor EVI Audio Group. In the performance of his
duties, he is prepared to
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devote all necessary working time, including occasional work on Saturdays,
Sundays and public holidays.
The place of performance shall be Straubing. Within one month after expiration
of the trial period, Mr. von Heydekampf will move his domicile to Straubing or
the area around Straubing. The Companies shall bear 100% of the costs of moving;
Mr. von Heydekampf will submit two offers from moving companies. Mr. von
Heydekampf may not engage in any other professional occupation without the prior
written consent of the Companies.
COMPANY CAR, BUSINESS TRAVEL
The Companies will make available to Mr. von Heydekampf a company car, which may
also be used for private purposes. All operating costs shall be borne by the
Companies. Mr. von Heydekampf shall be entitled to use of a company car having a
value of up to DM 80,000 (manufacturer's price list including tax). The policies
of Xxxx XX Audio and the EVI Audio Car Policy shall apply. The brand of the car
and the type shall be chosen in agreement with the Companies so that the costs
for leasing and insurance are reasonable. Mr. von Heydekampf shall be
compensated for all costs of business travel and for business promotional costs,
following submittal of written evidence thereof.
VACATION
Mr. von Heydekampf shall be entitled to an annual vacation of 30 working days.
Saturdays shall not count as working days. Mr. von Heydekampf will consult with
the president of Xxxx XX Audio Europe and EVI Audio Group when to take such
vacation.
ILLNESS AND SALARY CONTINUATION
In case of illness or other inability to perform his services, Mr. von
Heydekampf shall communicate such inability and its expected duration to the
Companies immediately. In case of extended illness, Mr. von Heydekampf shall
submit a doctor's statement after the third day. If Mr. von Heydekampf is unable
to perform his services due to illness, he shall be entitled to 100% of his net
salary for three months. In case of illness and any recovery or rehabilitation
periods under doctor's orders, no vacation days shall be deducted. After
expiration of the three-month period during which his salary is to be paid at
100%, he shall be entitled to an additional period of three months paid at the
difference between 100% of his net income and any benefits paid by health
insurance.
CONFIDENTIALITY
Mr. von Heydekampf shall not disclose any confidential business matters or
references, especially business and operational secrets, of which he becomes
aware in the context of his activity hereunder. This obligation shall extend
beyond the term of his employment for so long as Mr. von Heydekampf is under an
obligation not to compete. After expiration of the service agreement, the
Companies may prevent Mr. von Heydekampf from competing with the Companies only
if the parties agree at that time on a non-competition agreement providing
compensation for such restriction which, without taking into account other
earnings, equals at least 50% of his net income for the most recent year of his
service. Upon termination of this agreement, Mr. von Heydekampf shall return all
Company records and data in his possession, regardless of whether such documents
are his own property or the property of the Companies or Xxxx XX Audio Europe,
with written confirmation of full compliance. At the same time, Mr. von
Heydekampf will declare in writing that any data and programs on his
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personal computers and relating to Xxxx XX Audio Europe or the Companies have
been deleted.
INSURANCE
The Companies will obtain accident insurance for Mr. von Heydekampf, in the
amounts of DM 200,000 in case of death and DM 500,000 in case of invalidity.
SIDE AGREEMENTS
This agreement shall take precedent over any prior agreements existing between
the parties. The parties confirm that no side agreements have been entered into.
Any modifications and additions to this agreement shall be in writing. This
agreement shall be subject to German law. The place of performance and place of
jurisdiction shall be Straubing.
Signed: February 21, 1997
/s/ Xxxx-Xxxxx Xxxxxxx /s/Prokurist Xxxx Xxxx /s/ Xxxxxxx Xxxxxxx von Heydekampf
---------------------- ---------------------- ----------------------------------
Xxxx-Xxxxx Xxxxxxx Prokurist Xxxx Xxxx Xxxxxxx Xxxxxxx von Heydekampf
Xxxx XX Audio Deutschland GmbH & Co. KG
/s/ Xxxx-Xxxxx Xxxxxxx
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Xxxx-Xxxxx Xxxxxxx
EVI Audio GmbH
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