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Managing Director`s Employment Agreement

by and between

____________________, represented by its shareholder ___________________
(hereinafter called “Company”)

and

Ms. / Mr. ____________________
(hereinafter called "Managing Director")

 

Preamble

Effective on date the shareholder of the Company, has appointed Ms. / Mr. ________ as Managing Director (“Geschäftsführer”). The Managing Director`s Employment Agreement will be arranged as follows:

§ 1 Duties and Obligations

(1) As the Managing Director, Ms. / Mr. _________ represents the company pursuant to the specifications of the laws, the partnership agreement and any rules of internal procedure. He manages the company on his own responsibility in the framework of regular business activities. The Managing Director can report to the shareholders about specific transactions and actions and propose that the shareholders make them dependent upon their approval.

(2) The following transactions and actions require the prior approval of the shareholders:

a. acquiring, debiting and disposing of participating interests in other companies and conceding option rights to said participating interests;

b. concluding, amending and suspending inter-company agreements as defined by Section 291 ff. of Aktiengesetz (German Companies Act),

c. acquiring, selling and leasing companies or operating units,

d. actions pursuant to the Umwandlungsgesetz (German Transformation Act) with a participating interest of subsidiaries or associated companies,

e. liquidating subsidiaries and associated companies,

f. establishing and dissolving subsidiaries and branch offices,

g. entering into, amending and suspending dormant equity relationships,

h. taking on guaranties or other liabilities for third parties,

i. concluding forward exchange transactions or other speculative transactions,

j. acquiring pieces of real estate and disposals of real estate and rights equivalent to real property as well as the corresponding obligatory contracts,

k. concluding, substantially amending and suspending tenancies, lease agreements or miscellaneous continuous obligations with a minimum term of more than one year or a financial debit to the company in excess of ___ euros (net) per anno in each individual case; this does not apply to customer contracts and marketing agreements in normal business activities,

l. taking and granting credit of more than ___ euros in each individual case with the exception of granting credit in the framework of conventional business activities,

m. issuing or withdrawing general commercial powers of attorney,

n. concluding contracts of employment with earnings for the entire year in excess of ___ euros (excluding social security benefits) or with a minimum contractual term or minimum notice period of one year (excluding trainees) and any amendment to/termination of said contracts as well as contracts with consultants with a total fee in excess of ___ euros net p.a.,

o. initiating (bringing action) or ending (abandoning action, debt composition proceedings, acknowledgment of debt and waiving action) on legal disputes with a value of the matter in excess of ___ euros.

(3) However, it does not require approval to the extent that these legal transactions are specifically listed in an approved annual budget. Furthermore, prior approval is not necessary to the extent that it would be to the substantial and obvious detriment of the company to wait for the quick decision of the shareholders. In a case such as this, the Managing Director has to notify the shareholders without delay and obtain their permission.

(4) The Managing Director is obliged to perform any task arising during the course of his work using his best efforts to safeguard the interests of the Company. The Company shall be entitled to assign other tasks of equal or higher grade to the Managing Director, according to his abilities. The assignment of an equal grade task shall have no influence on the remuneration agreed upon.

§ 2 Additional occupation

(1) The Managing Director has to dedicate his entire professional interests, and his expertise and knowledge exclusively to the Company. The assumption of subsidiary activities with or without remuneration, honorary duties as well as board memberships, memberships on advisory boards or similar offices require written authorization from the shareholders.

(2) Every form of additional employment is in principle forbidden. The Company may give its written approval in exceptional cases if such a case is sufficiently substantiated. Furthermore any participation in any other company or the running of his own business requires the prior written approval of the Company.

§ 3 Work place; means of work; expenses

(1) The work place is the registered seat of the Company, _____________ .

(2) The Company puts at the disposition of the Managing Director the necessary means of work such as mobile phone, access to intranet, laptop and a company credit card.

(3) Regular and reasonable travel expenses or other expenses incurred in the performance of the Managing Director’s job will be reimbursed on the presentation of receipts. However, any work trip or expenses that may entail higher cost, will be subject to previous acceptance by the Managing Director.

§ 4 Remuneration

(1) The Managing Director receives a remuneration of EUR _________ gross per year due and payable in 12 equal instalments at the end of each month (base salary). Additionally, the Managing Director will be included in the variable remuneration, Management by Objectives system (MBO) with a bonus of 20 % of the base salary.

(2) Furthermore, the Managing Director receives subsidy to the voluntary health insurance and old age pension insurance.

(3) The payment of the above remuneration will be made to the bank account specified by the Managing Director.

§ 5 Company Car

(1) The Company shall make available to the Managing Director a company car, BMW 320d or equivalent. (The car price up to 40.000 Euros)

(2) The company car may also be used for private purposes. The Managing Director shall pay the taxes due on the taxable benefit of such private use.

(3) The Managing Director shall treat the company car with care, undertake all due TÜV testings, regular services, and necessary repairs.

(4) All costs for the operation (including fuel up to 200 Euros monthly, tax, comprehensive insurance and third-party liability insurance), maintenance and repair of the company car shall be paid by the Company. The costs of fuel of travelling during holidays shall not be included.

(5) Upon termination of the Employment Agreement, the Managing Director shall return the company car with all accessories and fittings to the Company at the Company’s seat.

(6) The Company may at any time set up a company car policy which contains further regulations.

§ 6 Reserve for voluntary payments

The payment of any possible extra payment in addition to the remuneration stated under § 4 above would be an extra payment granted by the Company on a purely voluntary basis. Even if such payment were repeatedly granted without express indication of its voluntary nature, no legal claim would be constituted by this for the future.

§ 7 Prevention from Work

The Managing Director shall inform the Shareholder of any prevention from work and its presumable duration as well as the grounds of the prevention from work.

§ 8 Continuation of Remuneration Payments upon Sickness or Accident

(1) The Managing Director shall receive continued payment of remuneration for the period of 2 months when he is prevented from working due to inability to work resulting from illness, unless he has caused the inability to work willfully, by gross negligence or during a non-approved additional occupation.

(2) The Managing Director shall moreover receive ordinary insurance coverage against accident which shall be paid by the Company.

§ 9 Holiday

The Managing Director shall have 30 working days (Monday to Friday) of vacation with continued payment of remuneration in each calendar year. Vacation shall be taken during the current calendar year. Vacation time shall only be transferable to the next calendar year if significant business or personal reasons justify such transfer. In case of such transfer vacation must be taken during the first three months of the following year.

§ 10 Duty to keep secret; working documents; contractual penalty

(1) During the period covered by this Employment Agreement and after its termination or expiration, the Managing Director agrees to keep secret all business and operational secrets and other information on the Company that is evidently confidential or which has been specified to the Managing Director as confidential by the company, and in particular, not to disclose such knowledge to Third Parties.

(2) All documents (including data) concerning the Company shall be deemed to be the property of the Company. The Managing Director shall store such documents safely, so that the documents cannot be accessed by third parties.

(3) If the Managing Director violates these provisions, he shall pay for each instance of violation a contractual penalty in the amount of EUR 7.000 to the Company. The Company’s right to ask for compensation of the exceeding damage shall remain unaffected.

§ 11 Return of Documents and means of work

Upon the termination of his employment or in the event of the release of the Managing Director from his duties, the Managing Director shall return all means of work and documents, papers, electronic files, drawings, notes, drafts, copies, carbon copies of the same to the Company, without the necessity of the Company giving notice to the Managing Director. The Managing Director shall have no right to withhold any papers as security for any claims against the Company.

§ 12 Post-contractual Competition Prohibition

(1) For a period of one year 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 an enterprise which competes with the Company or with any of its affiliates.

(2) The geographical restriction covers Germany.

(3) As compensation for the imposed restrictions the Company shall pay to the Managing Director during the agreed period an amount of 50% of the remuneration last received by him.

(4) 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 EUR 7,000. The assertion of further damages by the Company remains unaffected.

(5) Unless otherwise provided for in this Agreement, Sec. 74 et seq. of the German Commercial Code shall in other respects is applicable mutatis mutandis.

§ 13 Duration of the Managing Director's Employment Agreement

(1) This Agreement shall be effective as of 1st January 2012.

(2) This agreement may be terminated by either side by giving three months written notice by the end of the month, unless a longer period of notice is required by law. The right of termination without notice and immediate effect for good cause remains unaffected. Any termination must be in writing to be effective.

(3) Notwithstanding any claims for compensation, the appointment as Managing Director may be withdrawn at any time by a shareholders´ resolution. Withdrawal shall be construed as notice of termination effective as at the next possible date.

(4) Should the shareholder or the Managing Director terminate this Employment Agreement, the Company shall be entitled to release the Managing Director from his obligation to work during the notice period or parts thereof. Any remuneration from third parties that the Managing Director receives during such release (or refrains from receiving in bad faith) will be set-off against the claim for continued remuneration. The same applies for periods of release from work in case of a cancellation contract or a settlement contract.

(5) The term of employment ends in any case at the end of the month in which the Managing Director reaches the statutory pension age.

§ 14 Limitation Period for claims

(1) Any and all claims out of or in relation with the employment relationship have to be asserted in writing by the respective party within a cut-off period of three months (reception of assertion by the other party). If the other party rejects the claim, the asserting party must file the claim by legal action within a cut-off period of further three months (reception of writ of summons by court). In case the claimant party does not receive a written answer to its claims asserted in writing within two weeks from the other party, this will be deemed a written rejection. Claims that are not asserted within the aforementioned cut-off periods are forfeited.

(2) The above § 14 (1) is not applicable with respect to claims for payment of the Managing Director that become due and payable during a lawsuit for dismissal, and which are dependent from its result. Concerning these claims, the foreclosure period begins to run with the legally binding closure of the lawsuit.

§ 15 Final Provisions

(1) Collateral clauses and changes to this contract require written form for their legal effectiveness. This applies also to the change of this provision of written form.

(2) Should any provision of this contract be ineffective, this will not concern the effectiveness of the remaining contract. The parties bind themselves to agree instead of the ineffective clause a provision that meets at best the economic sense of the void provision.

 

__________, ___ . ___ . 20___                           ___________, ___ . ___ . 20___

 

__________________________                            __________________________
Company                                                                        
Managing Director

 

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