SERVICE AGREEMENT
Between
TIWR HOLDING GMBH & CO. KG
- hereinafter called "Company" -
a n d
DIETER RIETSCHLE
- hereinafter called "General Manager" -
1. SCOPE OF DUTIES
1.1 The Company hereby employs the General Manager as its general manager.
The General Manager shall represent the Company and conduct any Company
business pursuant to applicable laws, the provisions of the Company's
Articles of Association, any rules of procedure applicable to
Management, and instructions given by the Shareholders.
1.2 The Company may appoint further general managers. In any such event,
the General Manager shall represent the Company with another general
manager and/or a Prokurist. The Company may grant any individual
general manager sole power of representation.
1.3 It shall be incumbent upon the Shareholder Meeting to determine, from
time to time, the allocation of business among the various general
managers.
2. TERM
2.1 The Employment of the General Manager shall commence on August 30,
2002.
2.2 This Service Agreement shall be concluded until December 31, 2004. This
Service Agreement shall be automatically extended by successive one
years' periods unless it is terminated 6 months prior to its
expiration.
2.3 Any notice of termination shall be given in writing.
2.4 In the event of a termination of this Service Agreement by either party
the Company may release the General Manager from his services until the
end of the termination period and subject to continuing payments
attributable to him under this Service Agreement.
2.5 This Service Agreement shall terminate without requiring any further
notice at the end of the month during which the General Manager attains
the age of 65.
3. TRANSACTIONS SUBJECT TO CONSENT
Any business transactions beyond the normal scope of business shall be
subject to the prior consent of the Shareholder Meeting. This shall
include but not be limited to:
- purchase, disposal and mortgaging of real property and rights
equivalent to real property;
- taking up new, abandoning existing, Company businesses;
- formation and discontinuance of branch offices and branch operations;
- purchase and disposal of operations and permanent holdings;
- conclusion, amendment and revocation of contracts for the lease of
running concerns, profit-and-loss assumption agreements as well as
other corporate agreements;
- taking out and repayment of loans;
- agreeing upon credit lines for current account and acceptance credits,
as well as amending any such agreement;
- granting loans;
- providing collateral for any third party, including but not limited to
standing surety and providing warranties;
- conclusion, amendment and termination of license agreements regarding
industrial property rights and know how;
- realization of investments (including leasing) if the purchase or
production costs exceed EUR 150,000 in a business year or EUR 100,000
in a single case;
- conclusion, amendment and termination of rent, lease and licence
agreements as well as any other agreeement with a term or notice period
of more than five years or an annual rent or lease of more than EUR
100,000;
- granting and withdrawing powers of commercial representation or agency;
- conclusion, amendment and termination of contracts for the service of
managers holding commercial powers of representation, commercial powers
of agency or of employees performing similar functions;
- pension agreements, profit sharing agreements and any other allowances
granted by the Company to the staff except for the usual Christmas
allowance and holiday allowance;
- execution of voting rights in holding companies if the legal
transaction to be resolved is a legal transaction or act which requires
consent within the meaning of this contract or if the shareholders'
meeting would be responsible;
- agreements with shareholders or persons associated with them.
4. REMUNERATION
4.1 The General Manager shall be entitled to an annual salary of EUR
232.000,00 gross, payable in 12 equal monthly instalments, statutory
deductions being retained.
The Company shall reimburse the General Manager 50% of his social
security contributions (pension, health, unemployment, health care) up
to a maximum amount under the German social security system.
4.2 The Managing Director is entitled to receive a director's bonus. The
director's bonus is calculated as follows:
Calculation basis is the profit of the group (referring to the Company
as parent company of the group) before the reduction of trade tax. The
following graduation is hereby applicable:
- up to EUR 100,000 group profit - 0,
- up to EUR 150,000 group profit - 2.5 %,
- up to EUR 200,000 group profit - 5 %,
- up to EUR 300,000 group profit - 7.5 %,
- above EUR 300,000 group profit - 10 %.
The director's bonus can only amount to a maximum of 30 % of the
current salary.
4.3 Travel and other expenses shall be reimbursed to the Managing Director
in accordance with the Company's expense policy and within the scope of
the amounts permissable under the tax regulations.
4.4 The General Manager shall be entitled to a upper class Company car
which may be also used for private use. The Company shall bear all
current expenses pertaining to the car, except fuel expenses on
vacation trips. Any income tax payable for the monetary value inherent
in the benefit of said private use shall be borne by the General
Manager.
4.5 The General Manager is entitled to the remuneration received from
Rietschle S.p.a., Rietschle U.K. Ltd., Rietschle B.V. and Rietschle
S.A.S.
5. INABILITY TO WORK
In the event of any temporary inability to work due to illness the
General Manager's remuneration pursuant to the provision preceding
shall be payable for a twelve-month period, but in no event longer than
up to the termination of this Service Agreement, the amount
corresponding to the sickness benefits paid by the health insurance of
the General Manager being deducted.
6. VACATION
6.1 The General Manager shall be entitled to 30 holidays.
6.2 When scheduling any such vacations, the General Manager shall take due
account of Company business, such business taking precedence in any
specific case.
6.3 In the event the General Manager may not be in a position to totally or
partially go on vacation due to the requirements of the Company the
Parties will negotiate in good faith about a transfer of the vacation
into the next calendar year.
7. INSURANCE
7.1 The Company insures the General Manager appropriately at its own
expense against the risk of industrial accidents, especially while
travelling or during business travels - including on the way between
home and Company'>s office - also against death, invalidity, personal
injury and material damage as well as against loss of earnings.
7.2 The claims resulting out of the insurance are immediately due to the
General Manager or to the person stated in the insurance policy after
death of the General Manager, respectively.
8. SECRECY
The General Manager undertakes at all times during the term of this
Service Agreement and thereafter to hold in strictest confidence any
trade secrets of the Company or its associated companies.
9. NON-COMPETITION COVENANT
For the duration of this Agreement, the General Manager shall refrain
from acting - in a self-employed, employed, or any other capacity
whatsoever - for any other firm or company irrespective of its legal
form, or to form or purchase any such firm or company, or any interest
therein, in direct or indirect competition with the Company.
10. SIDE-LINE ACTIVITIES
10.1 The General Manager shall dedicate his entire working capacity and all
his technical know-how and experience at the Company's exclusive
disposal.
10.2 During the continuance of this Service Agreement, the General Manager
shall refrain from performing any side-line activities, whether paid or
unpaid, for himself or any third party. Exemt herefrom are his
activities as managing director of Xxxxxx Rietschle Verwaltungs GmbH as
well as honorary positions in the political, cultural and social field
are permitted insofar as they can be performed without affecting the
duties of the General Manager under this contract.
10.3 Any publications and papers relating to activities of the Company, or
its affiliates, as well as the acceptance of functions on the boards of
other companies as well as honorary positions on behalf of any
organization shall be subject to the Company's prior written consent.
Any such consent may be revoked at any time.
11. SURRENDER OF DOCUMENTS
Upon termination of this Agreement or in the event of dismissal, the
General Manager shall immediately return any objects and documents
including all notes and copies as well as the car to the Company, and
certify the completeness, correctness and proper function of any object
so surrendered. Any right of retention shall be expressly excluded.
12. MODIFICATION AND
AMENDMENTS
Any amendments or modifications to this Service Agreement shall only be
valid in writing. This shall also apply to any modification of this
Clause.
13. FINAL PROVISIONS
13.1 This Service Agreement shall only be subject to German Law.
13.2 The Parties shall sign this Agreement in a German an an
English-language version. It is understood and agreed between the
Parties that in the event of any discrepancies between the two versions
the German version shall prevail.
13.3 Should any provision of this Agreement be or become ineffective wholly
or in part, or should any loophole requiring amendment appear, the
remaining provisions of this Agreement shall continue in full force and
effect. The Parties agree to replace any such provision so found
ineffective by such other provision as comes nearest to the legal and
economic intent of said provision found ineffective. In the same
manner, the Parties shall close any loophole requiring amendment that
might be encountered.
Munchen, den 20.9.02
/s/ Dieter Rietschle
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