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EXHIBIT 10.32
(Translated from German to English)
MANAGING DIRECTOR'S SERVICE AGREEMENT
-------------------------------------
Between
PRODAC Prozessdatentechnik GmbH
Xxx-Xxxxxx-Xxxxxxx 00
00000 Xxxx
(hereinafter referred to as the "Company")
and
Xx.
Xxxxxx Kaesbach
Xxxxxxxxxxxxxxx 00
00000 Xxxxxxxx
(hereinafter referred to as "Managing Director")
the following contract is concluded:
(S) 1
DUTIES AND RESPONSIBILITY
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1. After the transfer of the Shares in the Company to MagiNet GmbH will have
become effective, Xx. Xxxxxx Kaesbach shall be employed as Managing
Director of the Company on the basis of this Managing Director's Service
Agreement. The managing director's service agreements so far in force and
all related side agreements thereto - also to the extent that they are
based on a shareholder's resolution - shall be terminated. This does not
apply to the pension agreement between the company and the Managing
Director in the version existing at the signing of this contract.
2. The Managing Director shall represent the Company both in and out of court
always alone. He is released from the restrictions set forth in Sec. 181
German Civil Code.
3. Unless otherwise provided for in this Agreement, the rights and duties of
the Managing Director shall be subject to the Articles of Association of
the Company, as amended from time to time, the rules of procedure as
amended from time to time, and the laws, particularly the Limited Liability
Companies' Act.
4. The Company reserves the right at any time to appoint further managing
directors and establish different rules of representation. Prior to
December 31, 1999 the Managing Director shall only be removed and
additional managing directors shall only be appointed, after the minimum
targets - under exception of the category "average monthly net revenue per
room" - of the Earnout-Plan stipulated between MagiNet GmbH, MagiNet Corp.,
the Company, Xx. Xxxxxx Kaesbach and the Managing Director in the Share
Purchase Agreement dated November 05, 1996 (Attachment 3 to the Share
Purchase Agreement) for the preceding fiscal year were not achieved. The
right to remove the managing director for important cause in respect of the
person (in der Person) or the behaviour (im Verhalten) of the Managing
Director and the right to newly appoint a managing director in this
connection remain unaffected.
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(S) 2
REMUNERATION
1. For his activities the Managing Director shall receive a gross annual
salary in the amount of DM 26,000.-- (in words: twentysixthousand
deutschmarks), to be paid in twelve equal monthly instalments in arrears at
the end of each calendar month to a bank account designated by the Managing
Director. The Managing Director shall receive a thirteenth monthly salary
which shall be paid out with the November salary. The Managing Director
shall participate in the same proportion as employees of the Company in
general increases of the salary.
2. The Managing Director shall obtain a yearly bonus of up to 30% of the
yearly base salary payable under para. 1, to the extent that the targets of
the yearly business plan agreed between MagiNet Corporation, Sunnyvale,
California, USA and the Company were met. The bonus is payable upon
establishment of the annual accounts for the respective fiscal year. [The
managing director's bonus claim for 1996 shall remain unaffected.]
3. The above remuneration covers all services rendered by the Managing
Director, including any overtime. The Managing Director is obliged to work
even beyond the usual business working hours if this is required by the
commercial interests of the Company.
4. Additionally the Company shall pay to the Managing Director the legally
prescribed employers' contributions to the health insurance, statutory
pension insurance and unemployment insurance, which are to be borne by law
in equal parts by the Managing Director and the Company. Should the
Managing Director be exempted from his obligation to join the statutory
health insurance, the Company shall pay to him 50% of his contributions to
a private health insurance, at a maximum 50% of the contribution to the
statutory health insurance, if respective proof is furnished.
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5. The assignment and pledge of claims to remuneration require the prior
written approval of the shareholders.
(S) 3
EXPENSES
Upon submission of corresponding receipts, the Company will reimburse all
reasonable and necessary expenses incurred by the Managing Director in the
exercise of his duties for the Company. As a rule, however expenses can at
most be allowed to the same extent in which they are tax deductible as
operating expenses.
(S) 4
COMPANY CAR
1. The Company will furnish the Managing Director with a company car which
corresponds to the category of a BMW 7-model. The Managing Director is
entitled to private usage of the company car. The Company shall bear all
costs arising in connection with the use of the company car such as taxes,
insurance, repairs, maintenance, gasoline and oil, except such gasoline
costs which occur during the Managing Director's vacation outside the
Federal Republic of Germany.
2. The Managing Director herewith explicitly waives all claims to which he or
his family could be entitled in connection with the private use of the
company car. He shall release the Company from any and all claims of his
family or third parties, insofar as such claims are not included in the
Company's insurance coverage.
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3. Income tax which accrues from the monetary value of the benefit of having
the company car for private use shall be borne by the Managing Director.
4. The company car is to be returned including any and all accessories upon
termination of the employment relationship. Any right of retention is
excluded. In the event of a release pursuant to (S) 12.4, the company car
is to be returned including any and all accessories, unless expressly
agreed in writing or otherwise. In the event the company car is returned
prior to the date of expiration of the employment relationship to the
Company, the Managing Director cannot claim compensation for the lost
financial benefit.
(S) 5
SPECIAL ALLOWANCES
The pension agreement dated January 1, 1983 and amended on January 2, 1990
and October 6, 1993 shall be continued.
(S) 6
VACATION
The Managing Director shall be entitled to a vacation of 30 working days
per calendar year. The Managing Director shall coordinate his vacation with
the other members of management in such way that it shall not affect the
interests of the Company.
(S) 7
DISABILITY
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1. The Managing Director shall immediately inform the Company about any work
incapacity and the expected duration thereof as well as the reasons of such
incapacity. In the event of illness, the Managing Director shall submit
upon request a medical certificate attesting to his incapacity to work and
the expected duration thereof.
2. In the event of illness the Company shall continue to pay the contractual
remuneration for a period of 6 months, provided, however, that all benefits
paid to the Managing Director by a statutory or private health insurance as
compensation for the loss of salary shall be deducted.
(S) 8
OUTSIDE ACTIVITIES
1. The Managing Director shall devote all his skills and working capacity
exclusively to the Company. Any outside activities of the Managing Director
for compensation during the term of this Agreement require the prior
written approval of the shareholders. Publications and speeches relating to
the activities of the Managing Director for the Company and for MagiNet
Corp. require the prior coordination with the shareholders.
2. Furthermore any active, entrepreneurial participation in any other company
or the running of his own business require the prior written approval of
the shareholders. The foregoing shall not apply to the purchase of shares
for investment purposes and to the participation in the Xxxx & Kaesbach
civil law partnership.
(S) 9
CONFIDENTIALITY,
NON-COMPETITION CLAUSE DURING THE TERM OF CONTRACT
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1. The Managing Director shall maintain strict confidentiality with respect to
third parties and unauthorized staff members of the Company as to all
confidential events or business matters of the Company or any affiliated
company coming to his attention within the scope of his activities for the
Company, irrespective of how he obtained such knowledge. This does not
apply to such information, for which a disclosure is essential for the due
performance of the functions delegated to the Managing Director or which
has been approved by the shareholders in advance. This duty of
confidentiality shall continue to be valid even after the termination of
this Service Agreement.
2. Furthermore, the Managing Director shall require the prior written approval
of the shareholders for assuming any positions on supervisory boards,
advisory boards and similar institutions of non affiliated companies or
professional organizations.
3. During the term of this Agreement the Managing Director undertakes not to
carry out any activities for any other company competing in any way with
the Company or an affiliated company. Any direct or indirect activity as
employee, self-employed person or consultant, as well as any direct or
indirect participation in such enterprise, is prohibited. (S) 15 of the
Share Purchase Agreement between the Managing Director, Xx. Xxxx, MagiNet
GmbH, Koln and MagiNet Corporation is not affected.
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(S) 10
POST-CONTRACTUAL COMPETITION PROHIBITION
1. For a period of two years after the termination of this Agreement the
Managing Director undertakes not to become active in any way, neither
directly or indirectly, as a self-employed person or as an employee for any
domestic or foreign enterprise competing with the Company or with any of
its affiliates. During the term of this post-contractual competition
prohibition, the Managing Director shall not operate any own enterprise or
participate in any form (manner) in an enterprise which competes with the
Company or with any of its affiliates.
2. The geographical restriction covers the territory of the European Economic
Area (Europaischer Wirtschaftsraum).
3. As compensation for the imposed restrictions the Company shall pay to the
Managing Director for two years after the termination of the service
relationship 50% of the remuneration last received by him.
4. The Company shall be released from the obligation under 3. if it waives the
compliance with the competition restrictions by giving a three months
written notice prior to the termination of the Service Agreement.
5. The Managing Director undertakes to pay to the Company for each instance of
violation of the aforementioned competition restrictions a contractual
penalty in the amount of DM 25,000.--. The assertion of further damages by
the Company remains unaffected.
6. Unless otherwise provided for in this Agreement, Sec. 74 et seq. of the
German Commercial Code shall in other respects be applicable mutatis
mutandis.
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(S) 11
RIGHTS OF USE AND INVENTIONS
1. All work results in connection with the activities of the Managing Director
shall inure exclusively to the Company. Insofar as work results are
protected by copyright, the Managing Director grants the Company the
exclusive and unrestricted right of use for all present and future kinds of
use. Such right of use shall remain valid even after the termination of the
service relationship. There shall be no entitlement to special remuneration
for the granted rights for use. These are rather fully compensated by the
contractual remuneration.
2. Any inventions of the Managing Director and technical suggestions for
improvement as well as methods of engineering, patents, utility models,
design patents and the like developed by the Managing Director in
connection with his activities for the Company inure exclusively to the
Company. The Employee Inventions Act is not applicable. The Company shall
have the unrestricted and exclusive right of use to the exclusion of the
person of the Managing Director who shall not be entitled to any additional
compensation. Insofar as this is necessary, the Managing Director shall
transfer to the Company any respective right and claim which entitles the
Company to register patents, utility models or design patents in its own
name and for its own account.
(S) 12
DURATION OF CONTRACT AND NOTICE OF TERMINATION
1. This Agreement comes into force upon transfer of the shares in the Company
to MagiNet GmbH (condition precedent). It can be terminated by either party
with a notice period of 6 months to the end of a calender year, for the
first time as per December 31, 1999. Prior to December 31, 1999, the
Company has the right to terminate this contract with a notice period of
three months to the end of a month after the minimum targets - under
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exception of the category "average monthly net revenue per room" - of the
Earnout-Plan stipulated between MagiNet GmbH, MagiNet Corp., the Company,
Xx. Xxxxxx Kaesbach and the Managing Director in the Share Purchase
Agreement dated November 05, 1996 (Attachment 3 to the Share Purchase
Agreement) for the preceding fiscal year were not achieved.
2. The right to dismissal without notice for good cause remains unaffected.
3. Any termination must be in writing to be effective.
4. At any time the Company shall be entitled to release the Managing Director
from his duties of service whilst continuing to pay his contractual salary
and to grant the stock option right pursuant to the Agreement of September
9, 1996. Such period of release shall be offset from the Managing
Director's remaining vacation entitlement.
5. The service relationship shall cease without the requirement of a notice of
termination as of the end of the month in which the Managing Director
attains the age of 65.
(S) 13
RETURN OF PROPERTY
Upon leaving the Company or after his release from his duties of service
pursuant to (S) 12.4 the Managing Director shall immediately return to the
Company any and all documents, correspondence, records, drafts and the like
referring to Company's affairs, including any copies thereof, which are
still in his possession. The obligation to return company property extends
also to the company car provided to the Managing Director pursuant to (S) 4
including any accessories thereof. The Managing Director is not entitled to
exercise a right of retention concerning the afore-mentioned documents and
objects.
(S) 14
MISCELLANEOUS
1. This contract contains all of the agreements between the parties with
regard to the Managing Director service relationship. The parties hereto
have not made any side agreements apart from the pension agreement and the
bonus arrangements up to the fiscal year 1996.
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2. Amendments and supplements of this Agreement must be in writing to be
effective. This also applies for an amendment of this provision.
3. As far as in this Agreement written form has been agreed upon, this form is
also observed by the sending of a telegram, telex or telecopy if the author
of a document is indicated.
4. Should any provision of this Agreement be or become invalid, the validity
of the remaining provisions of this Agreement shall not be affected
thereby. Such invalid provision shall be replaced by such provision which
comes closest to the economic intention of the parties.
5. This Agreement is governed by the laws of the Federal Republic of Germany.
6. The Managing Director confirms to have received today an executed copy of
this Agreement signed by the Company.
Frankfurt am Main, November 05, 1996
PRODAC Prozessdatentechnik GmbH
durch:
/s/ Xxxxxx Kaesbach /s/ Xxxxxx Kaesbach
___________________________________ ___________________________________
Xxxxxx Kaesbach Xxxxxx Kaesbach
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/s/Xxxxxxxx X. Xxxx
__________________________________
Xxxxxxxx X. Xxxx
