EXHIBIT 10.21
SERVICE AGREEMENT
between
Visteon International Business Development, Inc.
000 XXXXXXXX XXXXXX XXXX
XXXXXXXX, XX 00000
- hereinafter referred to as the "Company" -
and
Xx. Xxxxx Xxxxxxxxxxxx
- hereinafter referred to as the "Director" -
- jointly hereinafter referred to as "Parties" -
GENERAL
By resolution of the Board of Directors of Visteon Corporation of Sept. 20, 2001
Xx. Xxxxx Xxxxxxxxxxxx has been appointed an officer of Visteon Corporation. The
appointment will become effective on November 1, 2001. With regard to the
advisory services that Xx. Xxxxxxxxxxxx will render to the Company, the Parties
enter into the following
Service Agreement.
SECTION 1 POSITION OF THE DIRECTOR
(1) The Director has been assigned the title and function of the "President
Europe and South America". He shall be appointed to the Board of
Directors and be a statutory representative of the Company.
(2) The Director will be assigned to Visteon Holdings GmbH, Cologne and
will render comprehensive management services and other advisory
services related to the business operations and the entities of Visteon
Corporation in Europe and South America. He shall render his services
in accordance with applicable law, the Articles of Incorporation and
By-laws of the Company and this Advisory Services Agreement, all as
applicable from time to time.
The Company may request the Director to assume specific functions and
positions in entities affiliated with the Company that are incorporated
in Europe or South America.
(3) The Director shall always safeguard the interests of the Company. Any
business relations with suppliers, clients or other business partners
of the Company must not be used for the personal benefit of the
Director.
(4) The Director declares that he is not bound by obligations to provide
services outside the Visteon group of companies, nor that he is subject
to non-competition obligations.
SECTION 2 DUTIES AND RESPONSIBILITIES
The Director shall conduct the business with the diligence of a
conscientious businessman and shall conscientiously fulfill the
services pursuant to Section 1 (2) of this Service Agreement.
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SECTION 3 FREE DETERMINATION OF WORK PLACE AND TIME AND ADDITIONAL ACTIVITIES
(1) The Director shall be free to determine where and when he conducts the
work underlying the services. The place and time for the performance of
the actual advice shall be agreed among the Parties.
(2) The Company and the Director can agree that the Director shall, without
additional compensation, also assume assignments to the Board of
Directors, the Supervisory Board or similar functions in affiliated
companies. The same shall apply to honorary functions in associations
and similar organizations in which the Company participates or is a
member.
(3) The assumption of any other paid or unpaid additional activity or
honorary position including appointments to supervisory boards etc.
require the prior written approval of the Board of Directors of the
Company. The approval can be revoked at any time, whereby any
provisions as to notice periods for termination of an assumed office
must be taken into consideration.
SECTION 4 SALARY AND FULL COMPENSATION
(1) The annual base salary shall amount to
DM 950,000 gross
(in words: Deutsche Xxxx nine hundred fifty thousand).
(2) The annual base salary shall be paid in thirteen equal installments.
The 13th monthly salary shall be paid together with the salary for the
month of November. When joining or leaving during the course of the
calendar year, the 13th monthly salary shall be paid pro rata temporis.
This compensation shall cover holiday pay, Christmas bonus and the
like, as well as any overtime worked. The salary is payable at the end
of each respective month and shall be transferred to the checking
account indicated by the Director.
(3) The base salary and the other compensation and benefits agreed in this
Service Agreement shall constitute the full and entire compensation of
the Director for the services rendered under this Agreement.
SECTION 5 VARIABLE COMPENSATION
The Director will be entitled to participate in Visteon Corporation's
Long Term Incentive Plans (currently in the form of the Visteon
Corporation 2000 Incentive Plan), as it exists from time to time. The
amounts named below are gross amounts and will be payable net of all
applicable taxes and contributions to social security institutions. The
Director shall be responsible for the payment of all
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taxes, in particular income tax and contributions to social security
institutions. The performance targets will be determined by the Board
of Directors of the Company in accordance with any available
compensation plans applicable to the Company. They also require the
approval of Visteon Corporation.
(a) Under the Short Term Incentive Opportunity the Director shall be
eligible for an amount of sixty percent of the annual base
salary of the Director if the performance targets are reached in
all respects.
(b) Under the Long Term Incentive Plan the Director shall be
eligible for an incentive opportunity of two hundred percent of
the annual base salary of the Director if the performance
targets are reached in all respects. The performance targets
shall be determined as the achievement of certain financial and
operational goals for Visteon Corporation and its affiliates
over a three year period. Fifty percent of the opportunity shall
be paid out in cash adjusted for performance, and twenty-five
percent in Visteon Corporation common stock adjusted for
performance. Twenty-five percent of the opportunity will be
delivered in options relating to common stock in Visteon
Corporation.
SECTION 6 RESTRICTED STOCK, STOCK OPTIONS AND STOCK OWNERSHIP
(1) The Director will be granted, within three months of the commencement
of this Advisory Services Agreement, 25,000 shares of common stock of
Visteon Corporation in the form of restricted stock. The restricted
stock shall not be salable before the fifth anniversary of the
commencement of this Service Agreement. Further details are set forth
in the restricted stock plan of Visteon Corporation (currently in the
form of the Visteon Corporation 2000 Incentive Plan), as it exists from
time to time. The Director shall be responsible for all taxes, in
particular income tax, and contributions payable in connection with the
receipt and sale of the restricted stock.
(2) The Director will be granted, within three months of the commencement
of this Service Agreement, stock options relating to 45,000 shares of
common stock of Visteon Corporation that will vest ratably over a
three-year period starting with the commencement of this Service
Agreement. The strike price for these options shall be the average of
the high and low prices for shares of common stock in Visteon
Corporation quoted on the New York Stock Exchange on the date this
Service Agreement commences or on the next following trading day if
trading does not occur on the commencement date of this agreement.
Further details are set forth in the stock option plan of Visteon
Corporation, as it exists from time to time. The Director shall be
responsible for all taxes, in particular income tax, and contributions
payable in connection with the receipt and exercise of the stock
options and the sale of the shares received upon such exercise.
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SECTION 7 SIGN-ON BONUS
The Director will receive, within three months of the commencement of
this Service Agreement, a sign-on bonus in the amount of the sum of the
lost bonus from his previous employer and the Visteon target for two
months of 2001. The amounts named in this Section 7 are gross and will
be payable net of all applicable taxes and contributions to social
security institutions. The Director shall be responsible for the
payment of all taxes, in particular income tax and contributions to
social security institutions.
(a) The lost bonus constitutes the amount that the Director would
have received as a bonus from his previous employer for the full
calendar year 2001 had he not terminated his employment with his
previous employer effective October 31, 2001. The lost bonus for
the purposes of this Section 7 shall not exceed US$ 350,000
gross.
(b) The Visteon target for the Director for the year 2001 amounts to
US$ 95,000. For the purposes of this Section 7 the annual target
is divided by six to obtain the two-months number.
SECTION 8 FLEXIBLE PERQUISITE PLAN
For each complete calendar year, the Director shall receive
reimbursement of expenses for financial planning, security, physical
examination, membership in clubs or for other purposes, and it shall be
available to the Director during the course of the calendar year as he
sees fit. Reimbursements will be made up to an amount equivalent to US$
15,000.00 gross. If the Director either starts or ends his services
during the course of a calendar year, the amount payable under the
flexible perquisite plan shall be prorated. The Director shall be
liable for all taxes, dues and contributions payable for this amount.
SECTION 9 STATUTORY SOCIAL SECURITY CONTRIBUTIONS
The Company shall pay 50% of the contributions to be made to the
statutory pension-, unemployment-, health-, and nursing insurance on
behalf of the Director. To the extent that the Director is not a member
of a statutory health- or nursing insurance (Pflegeversicherung), the
Company shall pay the Director 50% of those contributions that would
otherwise be made to the respective social security carrier.
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SECTION 10 GROUP ACCIDENT INSURANCE
Within the scope of a voluntary casualty insurance program, the Company
shall take out a casualty insurance (in addition to the statutory
casualty insurance with the vocational league or Berufsgenossenschaft)
for following amounts:
In case of death DM 300,000.00
Invalidity DM 600,000.00
Per diem allowance from the 43rd day DM 100.00
Medical care (Heilkosten) up to DM 2,000.00 (secondary)
Recovery costs up to DM 5,000.00.
The insurance coverage shall include any business related or private
accidents of daily life and shall be applicable anywhere in the world
at land, at sea, or in the air.
In the event of death the legal heirs shall be the beneficiaries.
However, the Director shall be entitled to name a different person as
beneficiary by submitting a respective declaration to the personnel
department.
The Company retains the right to revoke at any time the described
insurance coverage.
Taxes due in connection with the monetary advantages based on payment
of premiums shall be paid as a lump sum. The Company shall charge the
Director the amount of the taxes paid.
The insurance coverage shall expire upon termination of this
Service
Agreement.
SECTION 11 LIFE INSURANCE
The Company shall take out a renewable term insurance policy
(Risikolebensversicherung) for the event of death of the Director in
the amount of DM 400,000. The beneficiaries of this insurance policy
shall be the heirs of the Director.
SECTION 12 COMPANY PENSION SCHEME
The Director shall receive a company pension. The terms shall be
subject to a separate agreement
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SECTION 13 COMPANY CAR
The use of company cars will be provided by Visteon Holdings GmbH under
its pertinent terms and conditions.
SECTION 14 SALARY PAYMENT IN THE EVENT OF ILLNESS OR DEATH
(1) In the event of disability for service due to illness
(krankheitsbedingte Arbeitsunfahigkeit), the Company shall continue to
pay the Director the monthly salary pursuant to Section 4 for up to six
weeks. In addition, the Company shall pay the difference between the
last net monthly salary pursuant to Section 4 and the amount which the
statutory health insurance pays, or would pay, if the Director had
statutory health insurance coverage (company health insurance benefits
or BKK-Krankengeldsatz) for a total period of up to twelve months.
(2) To the extent that the Director has damage claims towards third party
for loss of wages due to disability of service, the Director hereby
assigns such claim to the Company insofar as the Company continues to
pay his salary or other benefits in money's worth and to make
contributions to the social security carrier and other third parties in
accordance with this Agreement. The Director shall immediately provide
the Company with the information which is necessary for the assertion
of the claim.
(3) In the event of death, the dependants (widow and children entitled to
support) shall receive the full salary for the month of death and the
three subsequent months.
SECTION 15 DATA STORAGE
The Director agrees that his personal data is stored and processed in
accordance with statutory provisions.
SECTION 16 NON-COMPETE
During the term of this Service Agreement, the Director shall not be
allowed to act as a self-employed entrepreneur, an employee or in any
other way for or on behalf of a direct or indirect competitor of the
Company. Furthermore, the Director shall not be allowed to establish or
to acquire such a competitor or to directly or indirectly participate
in such a competing company.
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SECTION 17 RETURN OF DOCUMENTS
(1) At the termination of this Service Agreement, or in the event of a
release of the Director from his duties, the Director is obliged to
immediately and fully return to the Company all items of property and
documents that relate to the Company. This shall apply, in particular,
to keys, books, data-carriers, printed items of any kind, documentation
or drafts as well as extracts or copies thereof. The Director shall
have no right of retention with respect to these items and documents.
(2) All aforementioned items shall remain, or become at the time of
creation, the property of the Company.
SECTION 18 INVENTIONS
(1) The Director transfers to the Company in advance all patentable or
other inventions, developments, and industrial property rights eligible
for protection made or acquired by him during the term of this Service
Agreement. To the extent that such transfer cannot be made in advance,
the Director is under the obligation to make such transfers as soon as
possible. These obligations shall apply to domestic, foreign, and
international rights.
(2) The Company shall be obliged to register the inventions of the
Director and to inform the Director of such registration.
(3) The Director receives no special compensation. The compensation for the
transfer of these rights pursuant to subsection (1) is included in the
compensation stipulated in this Agreement.
SECTION 19 TERM
(1) This Service Agreement shall become effective on November 1, 2001.
(2) This Service Agreement ends automatically at the respective times
stated in the cases listed below without requiring a special
termination notice:
(a) upon expiration of the time period for which the Director has
been appointed an officer of Visteon Corporation;
(b) upon resignation from the appointment as an officer of Visteon
Corporation; and
(c) when the Managing Director-Service Agreement between the
Director and Visteon Holdings GmbH ends.
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(3) In addition, the Service Agreement may be terminated by either side (i)
within the first 12 months of this Agreement with a notice period of 36
months, and (ii) after expiry of the first 12 months with a notice
period of 24 months.
Upon declaration of termination of this Service Agreement or upon
declaration of termination of the Managing Director-Service Agreement
between the Director and Visteon Holdings GmbH, the Director may demand
that the payments payable to him under this Service Agreement during
the notice period are settled by payment of a singular amount. This
singular amount shall consist of the sum of all individual amounts
after they have been discounted. In the event of termination after the
expiry of the first 12 months of this Agreement, the Managing Director
may also demand that the payments due to him be distributed evenly over
a period of 36 months. Such distribution shall not otherwise constitute
an extension of this Agreement.
(4) The appointment of the Director as an officer of Visteon Corporation
can be revoked by Visteon Corporation at any time. The revocation of
the appointment shall constitute a termination of this Service
Agreement by the Company with the notice period stated in subsection
(3) above.
SECTION 20 CONFIDENTIALITY
For the duration of this Service Agreement and thereafter the Director
shall be obliged to treat as confidential all information or data
relating to the Company, or any of its affiliated companies, of which
he becomes aware and shall not to disclose any documents concerning the
Companies, or any of its affiliated companies, either himself or
through third parties. This refers specifically to business and
operational secrets, know-how, information, designs, manufacturing
processes, formulas, patents, and improvements as well as financial
information and customer lists that concern the business activities or
products of the Company or of its affiliated companies. The same
obligations shall apply with regard to any predecessors in business,
suppliers, agents, distributors or customers.
SECTION 21 POST-CONTRACTUAL NON-COMPETE
(1) For a duration of two years following the termination of the Service
Agreement, the Director agrees not to work for a company that competes
with the Company, or a company affiliated with the Company (competing
company or Konkurrenzunternehmen). Free-lancing or consulting
activities shall also not be permissible. The non-compete obligation
shall not apply if the Service Agreement terminates due to permanent
disability (dauernde Arbeitsunfahigkeit). The Company may, at any time,
waive the non-compete obligation with a notice period of three months.
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(2) The Company shall pay the Director a compensation for the duration of
the non-compete obligation in the amount of 50% of the salary pursuant
to Section 4.
(3) If the non-compete obligation is breached, the Company shall be under
no obligation to pay the compensation.
SECTION 22 FINAL PROVISIONS
(1) This Service Agreement is agreed under the condition precedent that the
Managing Director-Service Agreement between the Director and Visteon
Holdings GmbH has been duly executed and has come into full force and
effect.
(2) Furthermore, the Director agrees to inform the Company without delay of
any change of residence. In this respect all legal acts of the Company
shall be deemed as having been validly effected, if they have been made
under the address last notified by the Director.
(3) Changes or amendments of this Service Agreement require written form.
(4) If individual provisions of this Service Agreement or parts of
provisions of this Service Agreement are or become void, the validity
of the other provisions of this Agreement shall not be affected
thereby. The void provision shall be replaced by a legal provision
which comes as close as possible to the economic and legal rationale of
the void provision. The same shall apply accordingly to gaps in this
Agreement.
(5) Claims arising under this Service Agreement are to be made within a
period of six months after they become due. Otherwise these claims
shall be excluded.
(6) This contract will be exclusively governed by Michigan law.
Dearborn, October 23, 2001 Bargum, October 23, 2001
For the Company
/s/ Xxxxxx Xxxxxx /s/ Xx. Xxxxx Xxxxxxxxxxxx
----------------- --------------------------
Xxxxxx Xxxxxx Xx. Xxxxx Xxxxxxxxxxxx
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