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IN THE CASE OF ANY DISCREPANCY,
THE GERMAN LANGUAGE VERSION SHALL BE BINDING.
EMPLOYMENT CONTRACT
between
DISTINCTIVE DEVICES INC.
XXX XXXXXX XXXXX XXXXX, XXXXX 000
XXXX XXX, XX 00000
XXX
and
XX.
XXXXXXXX XXXXXXX XXXXXX,
XXXXXXXXXXXXXXX 0
00000 XXX XXXXXXXXX
XXXXXXX
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Xx. Xxxxxxxx Xxxxxxx Xxxxxx and Distinctive Devices Inc. (the "Company"), a US
stock corporation under Delaware law, represented by its President & Chief
Executive Officer, Xx. Xxxxxx Xxxx, have agreed upon an employment contract as
follows:
SS. 1 AREA OF RESPONSIBILITY/RESPONSIBILITIES
(1) By the supervisory board's decision with effect from January 1, 2004,
Xx. Xxxxxx has been appointed member of the board of directors of the
company. The appointment is valid for three years, that is, until
December 31, 2006.
(2) Xx. Xxxxxx represents the Company together with another board member or
holder of a general power of attorney ("Prokurist").
Xx. Xxxxxx'x rights and responsibilities are based upon the law, the
bylaws of the Company, the standing orders of the board and this
employment contract.
Xx. Xxxxxx'x area of responsibility is based upon the current business
distribution plan of the board. It is incumbent upon Xx. Xxxxxx to
responsibly manage the business portfolio strategy, marketing and
sales.
SS. 2 SALARY
(1) As payment for his work activities, Xx. Xxxxxx receives a fixed yearly
base salary in the amount of
(EURO) 180 000.00 (GROSS)
(in words: one hundred eighty thousand euros).
The salary will be paid in twelve equal installments at the end of each
calendar month.
The Company agrees to pay the part of the pension plan fee specified by
law in the case of compulsory insurance contribution. The Company also
makes a corresponding contribution if Xx. Xxxxxx produces proof of a
replacement life insurance. Apart from that, the Company makes the
employer's contribution, as specified by law, to a public or private
health insurance plan.
(2) The base salary will be reexamined every two years. A legal entitlement
to increase does not result from this reexamination.
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(3) In addition, Xx. Xxxxxx receives 1,250,000 stock options in accordance
with Section 6.3 (a) - (c) of the Share Purchase Agreement between
Media-Hill Communication Beratungs- und Vertriebs GmbH and the Company,
which was closed on the basis of the October 3, 2003 Term Sheet, and
which, in this respect, regulates the following:
"XXXXXX EMPLOYMENT AGREEMENTEmployment Terms. The Purchaser shall
cause the Company to execute an employment agreement with
Xxxxxxxx X. Xxxxxx as Managing Director, in the form attached
hereto as Exhibit H (the "Employment Agreement"), effective
immediately after the Closing.
Stock Options. In addition, the Purchaser shall grant to Xxxxxxxx
X. Xxxxxx options (the "Options") to purchase 1,250,000 shares of
Purchaser Common Stock at an exercise price of the lower of (i)
the average market price of Purchaser Common Stock for the ten
trading days immediately preceding the Closing Date or (ii) $0.70
per Share, vesting as to 25% of the shares six (6) months after
grant, and 25% per year on the first three anniversary dates of
the Closing, exercisable for five years from the Closing.
Indemnification Obligations. For the express purpose of securing
the Seller's indemnification obligations pursuant to Article X
hereof, the Purchaser reserves the right to credit the Option
rights to be granted to Xx. Xxxxxx under Section 6.3(b) against
any Losses suffered or incurred by the Purchaser arising under
Article X hereof. The Option will be valued at US$0.50 per Share
solely for the particular purpose of any reduction by reason of
the indemnification obligation."
SS. 3 CONTINUATION OF SALARY PAYMENT IN THE CASE OF SICKNESS OR DEATH
(1) Should Xx. Xxxxxx become handicapped during the execution of his duties
as a result of sickness or another reason not his own fault, he will
continue to receive his base salary in accordance with ss. 2 paragraph
1 for a period of twelve months at the most, or through the end of this
contract. At the same time, the rights in accordance with ss. 2
paragraph 3 remains unchanged; it decreases in proportion to the length
of time if the inability to work is uninterrupted for longer than a six
month period.
(2) In the case of his death, his surviving dependents (widow and children
entitled to maintenance) would continue to receive the base salary in
accordance with ss. 2 paragraph 1 for a period of six months beginning
with the passing of the month of his death. During this time, payments
to the surviving dependents on the basis of an existing company pension
in Xx. Xxxxxx'x name will not be made.
SS. 4 FRINGE BENEFITS
(1) For reimbursement of expenses for business trips, representation and
entertainment of business partners, in so far as they arise in the
interests of the Company, the guidelines of the Company, which inasmuch
as become part of this contract, apply. Expenses exceeding the estimate
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amount permissible under tax regulations are to be covered
individually.
(2) The Company makes available to Xx. Xxxxxx for the duration of the
employment contract an adequate company car, also for private use.
Maintenance and running costs will be covered by the Company. Taxation
of this payment in kind for the private use is chargeable to Xx.
Xxxxxx.
(3) The Company takes out an accident insurance policy in Xx. Xxxxxx'x name
for the duration of the employment contract, which also covers private
risks and which has the following amounts of coverage:
in case of death: DM 500.000,-
in case of disability: DM 1.000.000,-.
Xx. Xxxxxx or his heirs are directly entitled to any claims on the
insurance. Xx. Xxxxxx bears the cost of incurred taxation on the
premium payment.
(4) For telephone calls on his private telephone line given rise to in
carrying out his business duties, the Company will reimburse Xx. Xxxxxx
50% of his private telephone fees upon production of the monthly
telephone xxxx.
SS. 5 VACATION
Xx. Xxxxxx is entitled to a paid vacation of thirty (30) workdays. The
vacation is to be restricted so as not to impair the interests of the
Company.
SS. 6 BUSINESS INVENTIONS
Xx. Xxxxxx'x business inventions will be handled according to the
requirements of the law on employee inventions of July 25, 1957, namely
the "Guidelines for the Payment of Employee Inventions in Private
Business" enacted on July 20, 1957 with respect thereto.
SS. 7 SECRECY
(1) Xx. Xxxxxx is obliged to maintain secrecy regarding all business and
operational matters learned of within the framework of his work
activities, especially business and company secrets. The obligation to
maintain secrecy continues even after the end of the employment
relationship.
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(2) He is obliged, upon leaving, to return all documents in his possession
which are related to his work activities.
SS. 8 LENGTH OF CONTRACT AND TERMINATION
(1) This employment contract is agreed to for the duration of Xx. Xxxxxx'x
appointment, which begins on January 1, 2004 and ends on December 31,
2004.
(2) The contract is renewed for the duration of each renewed appointment.
The Company will inform Xx. Xxxxxx whether his period in office is
renewed no later than eight (8) months before expiration of the
contract. Should the renewal not be expressly arranged otherwise, the
contract regulations established here will apply.
(3) In the event of premature conclusion of this employment contract for an
important reason,ss. 626 BGB applies. The termination must be drawn up
in writing to be effective.
(4) Unless otherwise agreed upon, Xx. Xxxxxx'x employment contract will not
be renewed beyond the calendar year in which he attains the age of
sixty-five (65).
SS. 11 CLOSING PROVISIONS
(1) Agreements outside of this contract were not made. Changes and
amendments to the contract must be drawn up in writing. A verbal
exemption from the requirement to put changes in writing is null and
void.
(2) Should individual provisions of the contract be or become void, the
legal force of the remaining provisions is not affected. A fair
arrangement nearest that which the parties intended according to their
economic goals takes the place of the void provision or shall be used
for the revision of eventual gaps in the contract. German law applies.
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THIS 15TH DAY OF JANUARY 2004
DISTINCTIVE DEVICES INC.
By: /s/ Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: President & Chief Executive Officer
WINFRIED XXXXXXX XXXXXX
By: /s/ Winfried Xxxxxxx Xxxxxx
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Title: Chief Executive Officer
