SERVICE AGREEMENT FOR
MEMBERS OF THE BOARD OF MANAGEMENT
between
CELANESE XX
Xxxxxxxxxxx Xxxxxxx 000
00000 Xxxxxxxx i. Ts.
represented by the Chairman of the Supervisory Board of Celanese AG,
Xx. Xxxxx Xxxxxxxx
- hereinafter referred to as "CELANESE AG" or the "COMPANY" -
and
Xx. Xxxxxxx Xxxxxxxx
- hereinafter Xx. Xxxxxxxx and the Company together referred to as the "PARTIES"
or each of them individually referred to as the
"PARTY" -
Xx. Xxxxxxxx has been appointed Chairman of the Board of Management of Celanese
AG by a resolution of the Supervisory Board of Celanese AG on November 1, 2004.
In its meeting on December 6, 2004, the Supervisory Board extended his term as a
member of the Board of Management to October 31, 2007. With effect as of
November 1, 2004, the following service agreement (hereinafter referred to as
the "SERVICE AGREEMENT" or the "AGREEMENT") shall be agreed between the Company
and Xx. Xxxxxxxx by replacing at the same time all earlier agreements.
Service Agreement of Xx. Xxxxxxxx 2
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I. DUTIES OF THE MEMBER OF THE BOARD OF MANAGEMENT
1. Xx. Xxxxxxxx will perform his activity as Chairman of the Board of
Management in accordance with the provisions of the law, the Articles of
Association of the Company and the Rules of Procedure for the Board of
Management. Xx. Xxxxxxxx will devote his professional energies - with the
exception of his duties for Celanese Corporation and other Companies of the
Celanese Group or Celanese Corporation -exclusively to the Company. The
following provisions of this Section of this Agreement do not affect
legally justified restrictions of other activities Xx. Xxxxxxxx may
perform.
2. The performance of other duties within the Celanese Corporation or Group
including those of Executive Officers, Chief Administrative Officer and
Secretary of Celanese Corporation or as a managing director of Celanese
Europe Holding GmbHc Co. KG has expressively been approved by Supervisory
Board according to ss. 88 Para. 1 AktG. Acceptance of any activity outside
the private area (privater Bereich) - irrespective of whether it is paid or
pro xxxx - requires the prior approval of the Chairman of the Supervisory
Board which may be withdrawn at anytime. This applies in particular to the
acceptance of mandates in other supervisory boards, managing director
activities (Geschaftsfuhrungstatigkeiten) and similar positions, as well as
regarding expert reports, publications and lectures to the extent that the
Company's interests may be affected.
3. Should the Supervisory Board wish so, Xx. Xxxxxxxx will accept supervisory
board mandates and other positions without remuneration in companies of
Celanese Group or Celanese Corporation, as well as any activity in
associations and similar bodies to which Celanese belongs owing to the
nature of its business activity. Xx. Xxxxxxxx undertakes, that on the
termination of this Service Agreement or, in case the Supervisory Board
wishes at an earlier time, Xx. Xxxxxxxx will retire from aforementioned
mandates that he has accepted in the interest of the Company.
4. During the appointment Xx. Xxxxxxxx will not participate in any company
that competes with Celanese AG or which maintains essential business
relations with Celanese AG. A shareholding which allows no influence
regarding the executive bodies of the relevant company is not considered as
participation within the meaning of this clause. A possibility to influence
listed companies shall be understood for purposes of this Agreement when
having reached 5 % of the voting rights.
Service Agreement of Xx. Xxxxxxxx 3
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5. Xx. Xxxxxxxx is obliged not to use any knowledge he obtains as a result of
his Board of Management activity for stock exchange or other speculative
transactions.
6. Xx. Xxxxxxxx is further obliged to assign to the Company the entire results
of his work as the exclusive property of the Company without special
remuneration.
7. The confidentiality obligation of ss. 93 of the German Stock Corporation
Act (Aktiengesetz) applies after the end of Xx. Xxxxxxxx'x service term.
8. Xx. Xxxxxxxx will treat all documentation relating to the Company, as well
as all business memoranda including electronic data as the Company's
property. Xx. Xxxxxxxx will preserve them carefully and at the termination
of his service term Xx. Xxxxxxxx will hand them over to the Chairman of the
Supervisory Board or his appointee or delete them without being specially
requested to do so. In reasonable cases the Supervisory Board may release
Xx. Xxxxxxxx from this obligation, e.g. in case he needs such documentation
as regards governmental or other regulatory inquiries.
II. COMPENSATION
1. The compensation of Xx. Xxxxxxxx is determined by his Employment Agreement
with Celanese Corporation entered into on February 23, 2005. A portion of
the compensation of Xx. Xxxxxxxx will be attributed to his duties performed
under this Service Agreement.
2. Should Xx. Xxxxxxxx die during the term of this Service Agreement, his
widow and his unmarried legitimate children, if and as long as they have
not reached the age of 21 or if and as long as they are in education and
have not reached the age of 27, have a right as joint and several creditors
to an unreduced granting of monthly installments of the annual compensation
according to Section II. 1. of this Agreement for the three months
following the month in which the death occurred, however, at the latest
until the planned end of the Service Agreement; and in addition a pro rata
amount of the annual bonus
III. DURATION OF THE CONTRACT
1. The Service Agreement becomes effective on November 1, 2004 and shall
terminate on October 31, 2007 provided that the Agreement will
automatically be terminated upon the termination of the agreement with
Celanese Corporation without any further action of either party.
IV. SEVERANCE
Upon termination of the Service Agreement Xx. Xxxxxxxx cannot claim any
severance or other payments of Celanese AG other than benefits accrued under the
pension arrangement stipulated in Sec. VII of the Service Agreement
Service Agreement of Xx. Xxxxxxxx 4
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V. INVENTIONS / UNDERTAKING TO REFRAIN FROM COMPETITIVE ACTIVITY
1. Xx. Xxxxxxxx will report to and offer to the Company his inventions
attributable to work following his appointment to the Board of Management
as long as he is receiving a salary or benefits (Versorgungsleistungen)
from the Company. The inventions will be treated by the Company in
accordance with the regulations of the law on employee inventions.
2. The Company reserves the right to agree with Xx. Xxxxxxxx a
post-contractual competition ban (nachvertragliches Wettbewerbsverbot).
VI. PENSION
Xx. Xxxxxxxx shall continue participation in Celanese AG<180's current
defined pension arrangement for members of its board of management in
accordance with the terms described in this section VII. Unless agreed by
the Parties, all regulations of this section VII. and all accrued and
future rights and entitlements of Xx. Xxxxxxxx under this section VII.
shall remain valid and in full effect and will not be changed, amended or
superseded by the Employment Agreement between Celanese Corporation and Xx.
Xxxxxxxx. All matters regarding Xx. Xxxxxxxx'x rights under this section
VII. shall be governed and construed in accordance with German law.
1. If Xx. Xxxxxxxx contributes to a pension plan using those components of his
compensation paid to him in the U.S., the portions financed by the Company,
including corresponding portions of a 401k contribution, will be applied to
his board of management pension.
2. The promised company pension (Firmenpension) is paid in full after the
Member of the Board of Management leaves the Board and reaches the age of
60.
3. The amount of the company pension is calculated as the product of the
escalation factor of 1.8 %, the number of qualifying years of service and
the pensionable income. In this calculation the number of qualifying years
of service is limited to 30. Consequently, the maximum figure is 54 % of
the pensionable income.
Qualifying years of service are all complete years of service spent in the
Company, in Celanese Corporation and its subsidiaries, in Hoechst
Aktiengesellschaft and its subsidiaries.
The pensionable income is calculated as the sum of
- the average basic annual salary of the last three calendar years prior
to retirement and
- the average annual bonus of the last three calendar years prior to
retirement
insofar as these shall be qualifying years of service. For the purpose of
this pension agreement Xx. Xxxxxxxx'x pensionable income is defined as a
total of his base salary and his annual bonus paid by Celanese AG and
Celanese Corporation.
4. The following are offset against this company pension:
a.) social security pensions acquired during qualified years of service at
a rate of 50 % while in case the beneficiary was exempt from social
security pension insurance (Rentenversicherung), the claims for social
security insurance regarding missing years of contribution within the
qualifying years of service shall be projected for the time of
Service Agreement of Xx. Xxxxxxxx 5
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beginning of the pension payments according to the then applicable
approaching proceedings;
b.) all claims which have been gained during the service years regarding
the company pension scheme (betriebliche Altersvorsorge) which has
been financed by the Company;
c.) equivalent annuities (Altersrenten) for capital payments from company
or supra-company savings schemes or pension schemes to the extent that
they are financed by the Company and are in respect of qualifying
years of service. Capital payments deferring from the start of pension
payments are adjusted upwards until the beginning of pension payments
by applying an appropriate rate of interest geared to the capital
market.
5. In the event of an early disability, which must be confirmed by a medical
practitioner nominated by the Supervisory Board of the Company, the company
pension is paid as from the occurrence of disability and for as long as it
continues. From the age of 60 onwards, the payment is continued at the same
level as an old-age pension in case the disability persists.
The amount of the benefit is calculated by the same formula as for the
company pension (see Section VII. 2.). However, the time remaining until
the completion of the age of 60 shall be added to the qualifying years of
service. All other Company-financed benefits granted in this instance - not
only the benefits mentioned in Point 3 but also in particular insurance
benefits in the form of pension or capital - are offset against this
company pension.
6. In the event of death, survivors' pensions are paid to the spouse and
unmarried children entitled to maintenance, provided that the latter have
not yet reached the age of 21 or as long as they are undergoing education
and have not yet reached the age of 27.
In the event of death of a pensioned Member of the Board of Management the
spouse's pension is 60%, the pension for half-orphans is 15% and the
pension for orphans (those with neither parent still living) is 30% of the
company pension last paid, subject to the provision that the sum of the
spouse's pension and the orphans' pension shall not exceed 80% of the full
company pension. In case the pension payments jointly amount to a larger
sum, they shall be proportionally reduced. When any of these pensions
ceases during the period of payment the remaining pensions are increased
again to the maximum sum.
Service Agreement of Xx. Xxxxxxxx 6
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The spouse is not entitled to a pension if the marriage takes place only
after the beneficiary's retirement or only after the beneficiary reaches
the age of 60 and
- if the marriage existed for less than five years or
- if the spouse is more than 20 years younger than the beneficiary.
No claim for a spouse's pension shall exist in case it can be concluded
from the circumstances that the marriage was entered into solely in order
to procure a pension for the survivor.
In the event of a remarriage of the surviving spouse the claim to a
spouse's pension ceases at the end of the month in which remarriage takes
place.
In the event of death of the Member of the Board of Management during
Service Agreement, survivors' pensions are provided according to the same
principles as those applying on the death of a pensioned Member of the
Board of Management. The starting basis for calculating the survivors'
pensions, however, is the company pension which would have been paid if the
beneficiary had suffered disability at the time of death (see Section IV.
4.).
All other Company-financed benefits granted in this case - in addition to
the benefits stated under Section IV. 3. and, in particular, insurance
benefits in the form of pension or capital sum - are offset against this
survivors' pension.
7. The pension payments are paid in monthly installments in arrears, starting
at the end of the time for which the salary has been paid or the
transitional payment under Section II. 2 has been made.
The pension is adjusted annually, the adjustment being based on the
cost-of-living index in the country from which the pension payment is made.
The annual adjustment rate is the change in the cost-of-living index,
maximum 5 % per annum. The basis taken for the cost-of-living index in
Germany is the index for a household of four persons on a medium income; in
the US the Consumer Price Index - All Urban Consumers.
8. A vested right to a pension is granted in the case of premature termination
of employment according to ss. 1 of the Law for Improving Company Old-Age
Benefits (Gesetz zur Verbesserung der betrieblichen Altersversorgung) but
no longer than 10 countable service years. The level of the acquired right
is determined in accordance with the terms and conditions of ss. 2 of the
Law for Improving Company Old-Age Benefits.
Service Agreement of Xx. Xxxxxxxx 7
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The vested benefits are due to be paid as an old age pension after the
beneficiary reaches the age of 60, as a disability pension
(Sozialversicherungstrager) if the requirements of the social security
disability pension are met or as survivor pension at the death of the
beneficiary according to Section VII.5. of this Agreement .
9. If Xx. Xxxxxxxx leaves the Company on his own and prior to reaching age 60
and without due cause for immediate dismissal or if no offer has been made
to extend the Agreement is made, the pension becomes payable upon reaching
age 55 instead of 60. The company pension, however, will be reduced
linearly by 0.5% for each month which is at the beginning of the pension
payments prior to the date at which the age 60 has been fulfilled or the
requirements of the "85-points-rule" are met. The lower shortening shall be
applicable. The conditions of "85-points rule" are met when
- the 55th birthday is reached and at the same time
- the person's age in years plus the number of years' service totals at
least 85 (when calculated precisely in terms of months).
IX. MISCELLANEOUS
1. The Company concludes for the Members of the Board of Management a
Directors & Officers Insurance and bears the costs of this insurance. This
insurance covers the activity of Xx. Xxxxxxxx as Member of the Board of
Management of Celanese AG as well as further activities, which Xx. Xxxxxxxx
performs in the interest of the Company. Such activities of Xx. Xxxxxxxx
could be e.g. board memberships in companies of the group or activities in
other companies in the meaning of Section I. 3., in associations or a
service in an honorary capacity (ehrenamtliche Tatigkeit). In compliance
with the recommendation of the German Corporate Governance Code the
Directors & Officers Insurance shall include a certain deductible
(Selbstbehalt) that would be the liability of Xx. Xxxxxxxx.
2. For the duration of the Service Agreement the Company will conclude an
accident insurance for Xx. Xxxxxxxx with the following insured sums:
(euro) 1.022.583,76 for death
(euro) 1.022.583,76 for invalidity
(euro) 10.225,84 for medical treatment costs
Service Agreement of Xx. Xxxxxxxx 8
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X. CONCLUDING PROVISIONS
1. If any provision of this Agreement should be partly or wholly invalid or
subsequently loose its legal validity, this shall not affect the validity
of the remaining provisions. The invalid provision shall, as far as legally
permissible, be replaced by another, appropriate, provision whose economic
effect comes closest to what the Parties wished or would have wished if
they had taken into consideration the invalidity of the original provision.
2. Amendments and additions to this Agreement need to be in writing. This
requirement cannot be replaced by oral agreements. The German version of
this Agreement shall be authoritative for interpreting this Agreement.
3. This Agreement shall be governed by German law.
4. The place of fulfillment for all performances deriving out of this
Agreement is the seat of the Company. The seat of the Company under ss. 38
Subsec. 3 No. 2 of the German Civil Procedure Code (Zivilprozessordnung)
shall be agreed as the place of jurisdiction.
Kronberg i. Ts., February 25, 2005
Celanese AG
/s/ Xx. Xxxxx Xxxxxxxx /s/ Xx. Xxxxxxx Xxxxxxxx
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Xx. Xxxxx Xxxxxxxx Xx. Xxxxxxx Xxxxxxxx
(Chairman of the Supervisory Board)
Service Agreement of Xx. Xxxxxxxx 9
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The Registrant hereby represents that the above English translation is a fair
and accurate English translation of the Articles of Association of Celanese AG.
Celanese AG
/s/ Joachim Kaffanke
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Xx. Xxxxxxx Kaffanke
