Collins & Aikman Corp. Contracts
Sample Business Contracts
Service Contract - Collins & Aikman Products GmbH and Brian Batey
Employment Forms
- Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
- Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
- Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
- Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
- Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
- More Employment Agreements
SERVICE CONTRACT
between
[COLLINS & AIKMAN PRODUCTS GmbH]
(hereinafter referred to as the "COMPANY")
and
MR. BRIAN BATEY
(hereinafter referred to as the "MANAGING DIRECTOR")
By a resolution of the shareholders meeting dated [...............], Mr. Brian
Batey has been appointed as managing director of the Company.
1
<PAGE> 2
1. MANAGEMENT AND REPRESENTATION
The rights and duties of the Managing Director are governed by the law,
the articles of association of the Company, this service contract and
[the rules of procedure, which may be adopted by the Company at any
time]. The Company may modify or limit the Managing Director's power of
representation at any time.
2. TRANSACTIONS REQUIRING APPROVAL
The scope of the power of representation and signing authority of the
Managing Director are governed by the articles of association, [the
rules of procedure] and relevant shareholders resolutions.
3. DUTIES AND ACCOUNTABILITY
3.1 During the term of this Agreement, the Managing Director shall provide
services as Geschafisfuhrer of the Company in the position of President
European Automotive Interior Systems. The Managing Director shall be in
a position to fulfil his statutory obligations and to continue to
perform his duties as Managing Director of the Company at any time.
3.2 The Managing Director shall carry out the business of the Company with
the care of a prudent businessman and conscientiously fulfill the
obligations laid down by statute, the articles of association, the
rules of procedure, and this service contract. Notwithstanding his
claims for remuneration under clause 4, the Company may release the
Managing Director from the performance of his duties at any time in
whole or in part.
3.3 The Managing Director shall observe the rights and obligations of an
employer within the meaning of the employment and social security
regulations.
3.4 The Managing Director shall inform the Company on a regular basis of
all facts and circumstances known to him which materially concern the
business or profitability of the Company.
3.5 The Managing Director is currently also acting, with the Company's
consent, for the following companies: [...........................].
4. BASE SALARY
4.1 The Company shall pay to Managing Director base salary at an annual
rate of not less than GBP 200,000 during the term of his employment
hereunder. Such amount shall be reviewed annually by the shareholders
of the Company and may be increased in the sole discretion of the
shareholders.
4.2 Each time the exchange rate of British Pounds to Euros has increased or
decreased by five percent (%5) or more from 1 Euro equals 0.6 pound
sterling as of the date hereof or the exchange rate as of any
adjustment date under this clause (as the case may be), Managing
Director's base salary and automobile allowance shall automatically be
adjusted so that following such adjustment Managing Director shall be
receiving the substantially equivalent base salary and automobile
allowance expressed in Euros.
2
<PAGE> 3
5. BONUS/STOCK OPTIONS
The Company does not grant a Bonus. During the term of Managing
Director's services hereunder, Managing Director shall however be
eligible to participate in the Collins & Aikman Products CO. annual
Executive Incentive Compensation Plan (the "EIC Plan") in accordance
with the applicable provisions of the EIC Plan. Bonus details are
attached (APPENDIX A) for information purposes. For the avoidance of
doubt the Company itself is not the contractual partner of the Managing
Director with regard to the EIC Plan and is not a guarantor for any
Bonus.
The Company does not grant stock options to the Managing Director.
Managing Director shall, however, be eligible to participate in the
Collins & Aikman Corporation Employee Stock Option Plans (collectively,
the "Option Plan") (APPENDIX B) which is attached for information
purposes. The vesting of stock options granted to Managing Director
under the Option Plan upon termination prior to the expiration of the
term of the Agreement and other terms in connection with stock options
are stipulated in the Option Plan and its additional documents which
are governed by the laws of Delaware.
If a German court might apply German law under principles of conflicts
of laws and if any clause regarding the vesting or compensation of
options is nevertheless deemed contrary to public policy (sittenwidrig
i.S.d ss. 138 BGB) by the German court in the context of German law,
the following shall apply: the legal consequence shall be that the
relevant clause is not deemed to be completely void. Instead of full
compensation for the assignment of his interests or the lapse of any
options, the Managing Director shall be compensated only up to the
amount which would - in a legal sense - be necessary that the clause
complies with public policy and is therefore still good in law
(Anpassung an das noch zulassige Ma(beta))].
5.2 The Managing Director undertakes, to disclose to the local social or
tax authorities any remuneration he receives form the Company or a
Group Company, if he is requested to do so by local authorities or if
he is legally obliged to do so in the context of his own income tax
return.
6. BENEFITS AND PERQUISITES
6.1 General.
Managing Director shall be entitled to such fringe benefits and
perquisites, and to participate in such benefit plans as are generally
made available by COLLINS AIKMAN Products CO. to it executives during
the term. These Benefits include Pension scheme, BUPA coverage, life
insurance and appropriate annual holidays. Any supplemental retirement
benefit or pension promise (Pensionszusage) by COLLINS AIKMAN Products
CO., however, are not granted by the Company.
6.2 Remuneration in the event of incapacity to work and death
In the event of sickness or other incapacity to work of the Managing
Director through no fault of his own, the remuneration as per Clause 4
[Base Salary] shall continue to be paid to the Managing Director for a
period of six months, however, for a maximum of 130 working
3
<PAGE> 4
days within any one period of 12 months. The Managing Director shall
comply with the Company's rules on notification and evidence of absence
due to illness or injury, as amended.
6.3 Company Automobile
The Company shall furnish to Managing Director a monthly automobile
allowance of GBP 1,000 (grossed up for applicable taxes) and shall
reimburse Managing Director for normal gasoline and maintenance charges
for the operation thereof, subject to proper allocation of personal use
for income tax purposes.
6.4 Reimbursement of Expenses
The Company shall reimburse Managing Director for all reasonable
travel, entertainment and other reasonable business expenses reasonably
incurred by Managing Director in connection with the performance of his
duties hereunder, provided that Managing Director furnishes to the
Company adequate records or other evidence respecting such
expenditures.
7. BUSINESS SECRETS
7.1 The Managing Director undertakes, both during the term of this service
contract and after its termination, not to use or disclose to others,
directly or indirectly, any business secrets, unless the Managing
Director is under a legal obligation to disclose specific information,
or the Company has given its prior written consent to such use or
disclosure. This restriction shall not apply to information which may
have come into the public domain other than through unauthorised
disclosure by the Managing Director.
7.2 "Business secrets" are all operational or business matters and other
confidential information of a Group company or third party for which a
Group company is responsible, or in respect of which a Group company
has an obligation not to disclose information which it may have
obtained in the course of the customer relationship.
7.3 The Managing Director may not, outside the ordinary course of business,
copy or reproduce in another manner any documents, floppy discs,
cassettes or other data carriers of any kind.
8. TERM AND TERMINATION
8.1 The Company hereby agrees to employ the Managing Director, and the
Managing Director hereby accepts employment commencing August 1, 2000.
The agreement runs for an undefined period and may be terminated at any
time by either party by giving (3) three months notice. In this case
three months after notice of termination the service agreement expires
(expiration of agreement). Either party may at any time terminate this
Agreement for important cause without notice (Kundigung ous wichtigem
Grund).
8.2 Any removal from office of the Managing Director by means of a
shareholders resolution (Abberufung) shall also constitute a
termination of this service contract by the Company with effect as on
the earliest possible date.
8.3 Notwithstanding clause 8.1, this service contract will automatically
expire on the day on which the Managing Director reaches the age of 65.
4
<PAGE> 5
8.4 Any notice of termination must be in writing.
8.5 If either party gives notice of termination, the Company may revoke the
appointment of the Managing Director with immediate effect. In the
event of a termination by the Company, the Managing Director may, at
the Company's sole discretion, be put on leave (Suspendierung) until
the expiry of the notice period, any outstanding claim to vacation
being set off. The contractual remuneration will continue to be paid
during such period. During the period of leave and the term of this
service contract, any other activity for remuneration, such as being a
member of advisory or advisory boards, is subject to the express prior
written consent of the Company and the shareholders. The Company may
require that during the leave, the Managing Director works in a leading
position, whether this position entails more or less responsibility
and/or authority than that determined for him.
8.6 Termination for good cause by the Company which is deemed invalid by a
court shall be deemed a termination with notice (ordentliche
Kundigung).
8.7 In the event this agreement is terminated by the Company, except where
terminated by the Company for important cause, the Managing Director
shall be entitled to a compensation payment equal to the aggregate
amount of his last monthly fix salary granted herein multiplied by 15
plus a pro-rate target bonus payment according to Appendix A. The
compensation payment shall be paid as a lump sum on the date of
expiration of the prohibition of competition period. The amount of the
compensation payment can however, be reduced by the Company by any
amount claimed by the Managing Director in addition to the expected
aggregate amount to be paid following notice of termination [i.e. the
non-compete compensation according to clause 10.4 plus monthly fix
salary payment during the (3 months) notice period plus monthly fix
salary multiplied by 15].
9. PROHIBITION TO ENTICE AWAY
The Managing Director undertakes, for a period of 1 year from the date
of termination of this service contract, not to employ, offer to
employ, or solicit the employment, of any person who immediately prior
to the date of termination was a managing director, executive employee,
employee or adviser of a Group company and with whom the Managing
Director worked together in the twelve months prior to the date of
termination (whether or not such person would commit any breach of
their employment agreement by leaving the service of the Company).
10. PROHIBITION OF COMPETITION
10.1 Contractual prohibition of competition
During the term of this service contract, the Managing Director shall
refrain from competing with the Company or its subsidiaries in any way
whatsoever within Europe or the United States. The Managing Director
may perform collateral work (Nebentatigkeiten), which might impair the
Company's interest, only with the approval of the Company.
10.2 Post-contractual prohibition of competition
5
<PAGE> 6
(a) The Managing Director undertakes, for a period of
..............[one year] following expiration of his service
relationship, not to become active for another business
enterprise, individual or in respect of a merger of business
enterprises competing with the Company in the area of
activities of the Company. The "area of activities" of the
Company and its Group companies is [the manufacture and sale
of car parts for vehicle interiors and supply...............]
No dependent or independent competitive activities shall be
permitted. The Managing Director may not become active for the
business enterprises to which the prohibition of competition
applies, be it directly or indirectly, as a free-lance, or
under a service or employment relationship. The Managing
Director may further not establish or acquire, or have a
capital interest in, a business enterprise competing with the
Company.
(b) The area of applicability of the restrictions set out under
(a) above is as follows:
(i) The prohibition of competition applies to the entire
Group [ Definition of the Group....................],
provided that it applies only to competition with
such Group companies in respect of which the Managing
Director has, or has had, the actual opportunity to
inspect data relevant in terms of competition, or
actual access to information and knowledge relevant
in terms of competition or, as the case my be,
competitors of Group companies, for which the
Managing Director, subject to the aforementioned
opportunities to inspect and use, has obviously acted
exclusively in an area not relevant in terms of
competition. Any doubts in that respect shall be
dispelled by the Managing Director.
(ii) Independently and notwithstanding the above, the
prohibition of competition applies in any event to
the following competing enterprises: Pelzer, Borgers,
Reiter, Lear, Magna, Textron, Sommer Allibert, JCI,
Dr. Schneider, Rutgers, (CWW Gherko) provided that it
shall only apply to the extent that such enterprises
or groups of enterprises, during his service or
thereafter, are resident in those countries in which
the Managing Director is, or has been, active for the
Company or a Group company, or are competing in such
countries in another manner.
(iii) Independently and notwithstanding the above, the
prohibition of competition currently applies in any
event to the following competing enterprises: Pelzer,
Reiter, Rutgers (CWW Gherko), Borgers, Sommer
Allibert.
10.3 If doubts shall arise as to the exact scope of the prohibition of
competition, or, as the case may be, in order to substantiate the
restrictions set out above, the parties agree as follows:
(a) The parties acknowledge that the Managing Director will obtain
knowledge of sensitive information of the Company and Group
companies in many areas and has the opportunity to have access
to sensible information for furthering his own purposes. The
parties acknowledge further that the Company will normally
have no insight into the actual structure and control of the
Managing Director's access to information and his actual
selection of the same, and that, in particular, transparency
6
<PAGE> 7
as to what information relevant in terms of competition the
Managing Director will actually obtain, cannot be established
by the Company alone, in particular due to practical relating
to data protection in the scope of his employment. The parties
acknowledge further that one consequence of the situation
described above is the fact that an exact definition of the
scope of limitation of the prohibition of competition is made
more difficult, whilst, on the other, any Group company which
may be jeopardised by reason of the Managing Director's actual
insights and access to information, or his activities in
general, has to be protected by a prohibition of competition
within the scope legally admissible.
(b) Given the above, and with the aim to be in a position to
ascertain and keep transparent the actual scope of the
prohibition of competition at any time, the parties expressly
agree to establish mutual transparency in respect of facts on
which the actual scope of the prohibition of competition may
be used. By such arrangement, the parties are seeking to
safeguard the justified interests of the Company, which will
often not have an insight into the actual possibilities of
obtaining, and further use of, the knowledge obtained from the
Company.
10.4 Compensation
The Company shall pay to the Managing Director for the term of the
prohibition of competition a monthly compensation in the amount of 50
per cent of the contractual remuneration (vertragliche
Vergutungsbestandteilie) per month. For the avoidance of doubt it is
expressly state that the aggregate compensation to which the Managing
Director shall be entitled pursuant to the foregoing sentence shall in
no event fall short of 50% of the average annual contractual
remuneration which the Managing Director received under this Agreement
during the three year period to the expiration of his services with the
Company. Unemployment benefits which the Managing Director receives
during the duration of the non-compete shall be set off against the
compensation claim, if the relevant authority (Burdesanstalt fur
Arbeit) seeks recovery from the Company.
10.5 Contractual penalty
(a) For each case of breach of the prohibition of competition, the
Managing Director undertakes to pay the Company a penalty in
the amount of 1/1 of his average annual earnings, as
determined in accordance with clause 10.4, received by him
during the last three full financial years prior to his
leaving the Company. In the case of a continuing breach, the
penalty shall be re-forfeited at the start of each month. Any
additional claims of the Company in relation to say breach of
the prohibition of competition shall remain unaffected. The
Managing Director's entitlement to compensation and to pension
payments shall cease for the duration of the breach.
(b) The assertion of higher claims for damages by the Company
shall not be excluded by the promise to pay a penalty.
(c) The Managing Director undertakes, during the notice period and
for the term of the prohibition of competition, to notify the
Company without undue delay and without being asked, and
furnish the evidence, if requested to do so by the Company,
of:
7
<PAGE> 8
(i) any future new employer, the area of activity of such
employer, any intended free-lance activities or the
planned future area and place of work;
(ii) any change of his domicile, his future employer or
other contracting party, his professional activities
and place of work;
(iii) any changes of his earnings;
(iv) any employment relationship with a Group company.
Should the Managing Director fail to comply, or not comply in
full, with his duty to furnish information, the Company shall
have a right of retention in respect of the compensation until
the information is furnished.
10.6 Termination of service relationship
(a) If this service contract is terminated by either party for
important cause (aus wichtigem Grund), the terminating party
may release itself from the agreement restricting competition
by renouncing on the prohibition of competition in writing
prior to the expiry of one month from receipt of the notice of
termination.
(b) The Company may before the end of the this service contract
waive observance of the post-contractual prohibition of
competition by written declaration with the effect that the
Company shall on expiry of twelve months from the declaration
coming into force be freed from the obligation to pay
compensation. In the event of a dismissal from important cause
(aus wichtigem Grund), the terminating party shall be entitled
to set aside the prohibition of competition within one month
of receipt of the notice of summary dismissal.
10.7 Supplementary provisions
(a) Should any of the provisions of the prohibition of competition
be ineffective in whole or in part, this shall not affect the
validity of the remaining provisions of the prohibition of
competition or, in particular, the scope of the prohibition of
competition (inhaltlicher und raumlicher Umfang) as laid down
in clause 10.2 above and the amount of compensation in clause
10.5. Any such ineffective provision or, as the case may be,
ineffective scope of limitations, shall be replaced by such
effective scope or provision. This applies in particular,
where the ineffective scope or provision. This applies in
particular, where the ineffectiveness of a limitation relates
to the scope of the limitation. In that respect, reference is
made in addition to Sections 74 et seq. Of the German
Commercial Code.
(b) The Managing Director acknowledges receipt of the deed
referred to in this service contract, signed by the Company.
(c) There are no collateral agreements. Any amendments and
supplements to this service contract must be in writing to be
effective.
11. VACATION
8
<PAGE> 9
11.1 The Managing Director shall be entitled to an annual vacation of [30]
working days. Any decision as to the time at which such vacation is
taken shall take due consideration of the business interests of the
Company [shall be taken in consultation with the other managing
directors].
11.2 If the vacation cannot be taken by the Managing Director for business
or for personal reasons during the financial year, the remaining
entitlement may be taken by the Managing Director up to 30 June of the
following financial year. If vacation cannot, in whole or in part, be
taken for business reason up to that date, the Managing Director shall
be compensated for the outstanding time.
11.3 Should the vacation not have been taken or fully taken, due to the
termination of the Managing Director's service relationship, the
Managing Director shall be compensated for the outstanding time.
11.4 If the Managing Director is entitled to annual vacation from another
Group company, such vacation shall be set off (angerechnet) against any
vacation claimed against the company.
12. INVENTIONS
12.1 The Managing Director is obliged to inform the Company immediately in
writing of any inventions in accordance with the Employee Invention Act
(Gesetz uber Arbeitnehmererfindungen). The Company may declare, within
a period of four months following notification by the Managing
Director, whether and in what way it will adopt the invention. In the
event of the adoption of the invention by the Company, the Managing
Director shall be entitled to remuneration in accordance with the
provisions under the above Act and the guidelines issued in relation
thereto.
12.2 The Company shall become the owner of all patenable work results not
covered by Clause 12.1 above. The Managing Director shall inform the
Company of any such patentable work results without undue delay. The
Company shall be free to decide whether or not to file applications for
design patens.
12.3 The Managing Director shall transfer to the Company free of charge any
rights of exploitation and use of copyrights accruing from work
results.
13. RETURNING OF DOCUMENTS
13.1 Upon termination of this service contract, all loans or advance
payments granted to the Managing Director by a Group company shall be
due for repayment.
13.2 The Managing Director is required at any time, on the Company's request
and upon termination of this service contract at the latest, to return
to the Company all objects, goods and all documents given to him by the
Company which arose in connection with his services to the Company or
were placed at his disposal or were left with him by the Company. These
documents include, among others, business papers, hardware and software
including CD's and floppy disks, all saved data concerning any of the
Group companies, including drafts, letters, minutes of meetings,
hand-written notes, photos, literature, etc., as well as photocopies
and copies of such documents.
9
<PAGE> 10
13.3 Any right of retention shall be excluded.
14. MISCELLANEOUS
14.1 Unless agreed otherwise, herein, this Service Contract is subject to
German law. The place of jurisdiction is Wiesbaden. Any disputes
arising out this Agreement shall not be submitted to the Labour Courts
but to the Civil Courts.
14.2 Any amendments or supplements to this service contract must be in
writing to be effective. This shall also apply to a waiver of this
written form requirement.
14.3 This service contract comprises the entire arrangements concerning the
Managing Director's services as managing director of the Company and
supersedes any prior agreements, letters of intent, understandings,
representations, warranties and other undertakings, whether written or
oral, by the Company, their officers, employees, agents, or other
representatives.
14.4 The assignment and pledging of claims under this service contract
requires the express prior written approval by the Company.
14.5 The Managing Director shall inform the Company without undue delay of
any changes of his private address.
14.6 If any provision of this service contract is or becomes invalid in
whole or in part, or if the parties have omitted a provision of this
service contract by mistake, or if there is a gap (Regelungslucke) in
this service contract, then the validity of the remaining provisions
shall not be affected thereby. In lieu of such invalid provision, a
valid provision that most closely meets the spirit and purpose of the
invalid provision will be deemed to be part of this Service Contractor.
Where a provision has been omitted by mistake, then the provision the
parties intended by omitted by mistake will be deemed to be part of
this service contract. This also applies to any other gaps in this
service contract and in the event that the invalidity of a provision is
the result of a measure of performance or time laid down in this
service contract, in which case such measure or time will be replaced
by a legally permissible measure or time which comes as close as
possible to the one originally agreed.
/s/ Brian J . Batey
--------------------------------------------
Managing Director
/s/ Thomas E. Evans
--------------------------------------------
For the Company (Authorised Representative of the shareholders)
10
<PAGE> 11
APPENDIX A
BONUS
During the term of Managing Director's services for COLLINS & AIKMAN PRODUCTS
GmbH in Wiesbaden Managing Director shall be eligible to participate in the
Collins & Aikman Products Co. annual Executive Incentive Compensation Plan (the
"EIC Plan") in accordance with the applicable provisions of the EIC Plan. The
Target bonus for Managing Director under the EIC Plan shall be fifty percent
(50%) of Managing Director's base salary. Managing Director shall be entitled to
receive a full bonus under the EIC Plan for the 2000 fiscal year notwithstanding
Managing Director's commencement of services on or before August 1, 2000 and
Managing Director's bonus for the 2000 fiscal year shall in no event be less
than (pound)100,000.
Consideration will be given regarding the payment of a sign-on bonus during a
three year period in the event the Managing Director does not collect severance
payments or amounts under the change of control agreement currently in place
with Cooper Standard.
For the avoidance of doubt the Company itself is not the contractual partner of
the Managing Director with regard to the Bonus and is not the guarantor for any
Bonus.
<PAGE> 12
APPENDIX B
STOCK OPTIONS
The Managing Director shall be eligible to participate in the Collins & Aikman
Employee Stock Option Plans (collectively, the "Option Plan") and shall be
granted the option to purchase up to 100,000 shares of the Common Stock of
Collins & Aikman Corporation, in accordance with the applicable terms and
conditions of the Option Plan and an Option Agreement between Collins & Aikman
Corporation and Managing Director to be entered into, dated and effective as of
the date Managing Director's employment under this Agreement commences. The
option price for all such shares shall be the closing price of Collins & Aikman
Corporation shares on the New York Stock Exchange on the date where approval is
obtained on the Collins & Aikman Corporation Committee. Subject to the terms and
conditions the Option Plan and the Option Agreement, the option of Managing
Director to purchase up to the 100,000 shares shall vest as follows:
--------------------------------------------------------------------------------
Total Number of
Vesting Date Shares Vested Percentage Vested
--------------------------------------------------------------------------------
One year from date of grant 33,334 33 1/3%
--------------------------------------------------------------------------------
Two years from date of grant 66,667 66 2/3%
--------------------------------------------------------------------------------
Three years from date of grant 100,000 100%
--------------------------------------------------------------------------------
The vesting of outstanding stock options granted to Managing Director under the
Option Plan upon termination prior to the expiration of the term of Mr. Batey's
Service Agreement and other terms in connection with stock options are
stipulated in the Option Plan and its additional documents which are governed by
the laws of Delaware.
1