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EXHIBIT 10.10
EMPLOYMENT AND SEVERANCE AGREEMENT
This Employment and Severance Agreement (the "Agreement") entered into
this 1st day of September 1999 by and between AGCO CORPORATION, a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx (the "Executive"),
WITNESSETH:
In consideration of the mutual covenants and agreements hereinafter
set forth, the Company and the Executive do hereby agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive and the
Executive hereby agrees to serve the Company on the terms and conditions set
forth herein.
(b) The employment term shall commence on September 1,
1999 and shall continue in effect until terminated in accordance with Section 5
or any other provision of the Agreement.
2. POSITION AND DUTIES.
The Executive shall serve as an Executive Officer of the Company and
shall perform such duties and responsibilities as may from time to time be
prescribed by the Company's board of directors (the "Board"), provided that
such duties and responsibilities are consistent with the Executive's position.
The Executive shall perform and discharge faithfully, diligently and to the
best of his/her ability such duties and responsibilities and shall devote all
of his/her working time and efforts to the business and affairs of the Company
and its affiliates.
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay to the Executive
an annual base salary ("Base Salary") of Two Hundred Seventy-Two Thousand, Six
Hundred Seven Dollars and Fifty Cents ($272,607.50), payable in equal
semi-monthly installments throughout the term of such employment subject to
Section 5 hereof and subject to applicable tax and payroll deductions. The
Company shall consider increases in the Executive's Base Salary annually, and
any such increase in salary implemented by the Company shall become the
Executive's Base Salary for purposes of this Agreement.
(b) INCENTIVE COMPENSATION. Provided Executive has duly
performed his/her obligations pursuant to this Agreement, the Executive shall
be entitled to participate in or receive benefits under the Management
Incentive Compensation Plan implemented by the Company.
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(c) OTHER BENEFITS. During the term of this Agreement,
the Executive shall be entitled to participate in the long term incentive plan
implemented by the Company and any employee benefit plans and arrangements
which are available to senior executive officers of the Company, including,
without limitation, group health and life insurance, pension and savings and
the Senior Management Employment Policy.
(d) FRINGE BENEFITS. The Company shall pay or reimburse
Executive for all reasonable and necessary expenses incurred by him/her in
connection with his/her duties hereunder, upon submission by Executive to the
Company of such written evidence of such expense as the Company may require.
Throughout the term of this Agreement, the Company will provide Executive with
the use of a vehicle for purposes within the scope of his/her employment and
shall pay all expenses for fuel, maintenance and insurance in connection with
such use of the automobile. The Company further agrees that Executive shall be
entitled to four (4) weeks of vacation in any year of the term of employment
hereunder. Nothing paid to the Executive under any such Company plans or
arrangements shall be deemed to be in lieu of compensation to the Executive
hereunder.
4. NON-DISCLOSURE, NON-COMPETITION AND NON-SOLICITATION
COVENANTS.
(a) ACKNOWLEDGEMENTS. The Executive acknowledges that as
an Executive Officer of the Company (i) he/she frequently will be exposed to
certain "Trade Secrets" and "Confidential Information" of the Company (as those
terms are defined in Subsection 4(b)), (ii) his/her responsibilities on behalf
of the Company will extend to all geographical areas where the Company is doing
business, and (iii) any competitive activity on his/her part during the term of
his employment and for a reasonable period thereafter would necessarily involve
his/her use of the Company's Trade Secrets and Confidential Information and,
therefore, would unfairly threaten the Company's legitimate business interests,
including its substantial investment in the proprietary aspects of its business
and the goodwill associated with its customer base. Moreover, the Executive
acknowledges that, in the event of the termination of his/her employment with
the Company, he/she would have sufficient skills to find alternative,
commensurate work in his/her field of expertise that would not involve a
violation of any of the provisions of this Section 4. Therefore, the Executive
acknowledges and agrees that it is reasonable for the Company to require
him/her to abide by the covenants set forth in this Section 4. The parties
acknowledge and agree that if the nature of the Executive's responsibilities
for or on behalf of the Company and the geographical areas in which the
Executive must fulfill them materially change, the parties will execute
appropriate amendments to the scope of the covenants in this Section 4.
(b) DEFINITIONS. For purposes of this Section 4, the
following terms shall have the following meanings:
(i) "COMPETITIVE POSITION" shall mean (i) the
Executive's direct or indirect equity ownership (excluding equity ownership of
less than one percent (1%) or control of all or any portion of a Competitor, or
(ii) any employment, consulting, partnership,
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advisory, directorship, agency, promotional or independent contractor
arrangement between the Executive and any Competitor whereby the Executive is
required to perform executive level services substantially similar to those
that he will perform for the Company as an Executive Officer.
(ii) "COMPETITOR" of the Company shall refer to
any person or entity engaged, wholly or partly, in the business of
manufacturing and distributing farm equipment machinery and replacement parts.
(iii) "CONFIDENTIAL INFORMATION" shall mean the
proprietary and confidential data or information of the Company, other than
"Trade Secrets" (as defined below), which is of tangible or intangible value to
the Company and is not public information or is not generally known or
available to the Company's competitors.
(iv) "TRADE SECRETS" shall mean information of
the Company, including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, products plans, or lists
of actual or potential customers or suppliers, which: (a) derives economic
value, actual or potential, from not being generally known to, and not being
readily ascertainable by proper means by, other persons who can obtain economic
value from its disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
(v) "WORK PRODUCT" shall mean all work product,
property, data, documentation, "know-how", concepts or plans, inventions,
improvements, techniques, processes or information of any kind, relating to the
Company and its business prepared, conceived, discovered, developed or created
by the Executive for the Company or any of the Company's customers.
(c) NONDISCLOSURE; OWNERSHIP OF PROPRIETARY PROPERTY.
(i) The Executive hereby covenants and agrees
that: (i) with regard to information constituting a Trade Secret, at all times
during the Executive's employment with the Company and all times thereafter
during which such information continues to constitute a Trade Secret; and (ii)
with regard to any Confidential Information, at all times during the
Executive's employment with the Company and for three (3) years after the
termination of the Executive's employment with the Company, the Executive shall
regard and treat all information constituting a Trade Secret or Confidential
Information as strictly confidential and wholly owned by the Company and will
not, for any reason in any fashion, either directly or indirectly, use, sell,
lend, lease, distribute, license, give, transfer, assign, show, disclose,
disseminate, reproduce, copy, appropriate or otherwise communicate any such
information to any party for any purpose other than strictly in accordance with
the express terms of this Agreement and other than as may be required by law.
(ii) To the greatest extent possible, any Work
Product shall be deemed to be "work made for hire" (as defined in the Copyright
Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned exclusively by the
Company. The Executive hereby unconditionally and
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irrevocably transfers and assigns to the Company all rights, title and interest
the Executive may currently have or in the future may have by operation of law
or otherwise in or to any Work Product, including, without limitation, all
patents, copyrights, trademarks, service marks and other intellectual property
rights. The Executive agrees to execute and deliver to the Company any
transfers, assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership of any Work
Product, and all rights therein, exclusively in the Company.
(iii) The Executive shall immediately notify the
Company of any intended or unintended, unauthorized disclosure or use of any
Trade Secrets or Confidential Information by the Executive or any other person
of which the Executive becomes aware. In addition to complying with the
provisions of Section 4(c)(i) and 4(c)(ii), the Executive shall exercise his
best efforts to assist the Company, to the extent the Company deems reasonably
necessary, in the procurement of any protection of the Company's rights to or
in any of the Trade Secrets or Confidential Information.
(iv) Immediately upon termination of the
Executive's employment with the Company, or at any point prior to or after that
time upon the specific request of the Company, the Executive shall return to
the Company all written or descriptive materials of any kind in the Executive's
possession or to which the Executive has access that constitute or contain any
Confidential Information or Trade Secrets, and the confidentiality obligations
of this Agreement shall continue until their expiration under the terms of this
Agreement.
(d) NON-COMPETITION. The Executive agrees that during
his/her employment, he/she will not, either directly or indirectly, alone or in
conjunction with any other party, (i) accept or enter into a Competitive
Position with a Competitor of the Company, or (ii) take any action in
furtherance of or in conjunction with a Competitive Position with a Competitor
of the Company. The Executive agrees that for two (2) years after any
termination of his employment with the Company, he/she will not, in the
"Restricted Territory" (as defined in the next sentence), either directly or
indirectly, alone or in conjunction with any other party, (A) accept or enter
into a Competitive Position with a Competitor of the Company, or (B) take any
action in furtherance of or in conjunction with a Competitive Position with a
Competitor of the Company. For purposes of this Section 4, "Restricted
Territory" shall refer to all geographical areas comprised within the fifty
United States of America, Western Europe, Brazil and Canada. The Executive and
the Company each acknowledge that the scope of the Restricted Territory is
reasonable because (1) the Company is conducting substantial business in all
fifty states (as well as several foreign countries), (2) the Executive occupies
one of the top executive positions with the Company, and (3) the Executive will
be carrying out his employment responsibilities in all locations where the
Company is doing business.
(e) NON-SOLICITATION OF CUSTOMERS. The Executive agrees
that during the term of his/her employment, he/she will not, either directly or
indirectly, along or in conjunction with any other party, solicit, divert or
appropriate or attempt to solicit, divert or appropriate any customer or
actively sought prospective customer of the Company for or on behalf of any
Competitor of the Company. The Executive agrees that for two (2) years after
any termination of his employment with the Company, he/she will not, in the
Restricted Territory,
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either directly or indirectly, alone or in conjunction with any other party,
for or on behalf of a Competitor of the Company, solicit, divert or appropriate
or attempt to solicit, divert or appropriate any customer or actively sought
prospective customer of the Company with whom he had substantial contact during
a period of time of up to, but no longer than, eighteen (18) months prior to
any termination of his/her employment with the Company.
(f) NON-SOLICITATION OF COMPANY PERSONNEL. The Executive
agrees that, except to the extent that he/she is required to do so in
connection with his/her express employment responsibilities on behalf of the
Company, during the term of his/her employment he/she will not, either directly
or indirectly, alone or in conjunction with any other party, solicit or attempt
to solicit any employee, consultant, contractor or other personnel of the
Company to terminate, alter or lessen that party's affiliation with the Company
or to violate the terms of any agreement or understanding between such
employee, consultant, contractor or other person and the Company. The Executive
agrees that for two (2) years after any termination of his/her employment with
the Company, and in the Restricted Territory, he/she will not, either directly
or indirectly, alone or in conjunction with any other party, solicit or attempt
to solicit any "material" or "key" (as those terms are defined in the next
sentence) employee, consultant, contractor or other personnel of the Company to
terminate, alter or lessen that party's affiliation with the Company or to
violate the terms of any agreement or understanding between such employee,
consultant, contractor or other person and the Company. For purposes of the
preceding sentence, "material" or "key" employees, consultants, contractors or
other personnel of the Company are those who have access to the Company's Trade
Secrets and Confidential Information and whose position or affiliation with the
Company is significant.
(g) REMEDIES. Executive agrees that damages at law for
the Executive's violation of any of the covenants in this Section 4 would not
be an adequate or proper remedy and that should the Executive violate or
threaten to violate any of the provisions of such covenants, the Company or its
successors or assigns shall be entitled to obtain a temporary or permanent
injunction against Executive in any court having jurisdiction prohibiting any
further violation of any such covenants, in addition to any award or damages,
compensatory, exemplary or otherwise, for such violation, if any.
(h) PARTIAL ENFORCEMENT. The Company has attempted to
limit the rights of the Executive to compete only to the extent necessary to
protect the Company from unfair competition. The Company, however, agrees that,
if the scope of enforceability of these restrictive covenants is in any way
disputed at any time, a court or other trier of fact may modify and enforce the
covenant to the extent that it believes to be reasonable under the
circumstances existing at the time.
5. TERMINATION.
(a) DEATH. The Executive's employment hereunder shall
terminate upon the death of the Executive, provided, however, that for purposes
of the payment of compensation and benefits to the Executive under this
Agreement the death of the Executive shall be deemed to have occurred ninety
(90) days from the last day of the month in which the death of the Executive
shall have occurred.
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(b) INCAPACITY. The Company may terminate the
Executive's employment hereunder at the end of any calendar month by giving
written Notice of Termination to the Executive in the event of the Executive's
incapacity due to physical or mental illness which prevents the proper
performance of the duties of the Executive set forth herein or established
pursuant hereto for a substantial portion of any six (6) month period of the
Executive's term of employment hereunder. Any question as to the existence,
extent or potentiality of illness or incapacity of Executive upon which Company
and Executive cannot agree shall be determined by a qualified independent
physician selected by the Company and approved by Executive (or, if Executive
is unable to give such approval, by any adult member of the immediate family or
the duly appointed guardian of the Executive). The determination of such
physician shall be certified in writing to the Company and to the Executive and
shall be final and conclusive for all purposes of this Agreement.
(c) CAUSE. The Company may terminate the Executive's
employment hereunder for Cause by giving written Notice of Termination to the
Executive. For the purposes of this Agreement, the Company shall have "Cause"
to terminate the Executive's employment hereunder upon: (i) the Executive's
habitual drunkenness or chronic substance abuse; (ii) a willful failure by the
Executive to materially perform and discharge the duties and responsibilities
of the Executive hereunder; (iii) any breach by the Executive of the provisions
of Section 4 hereof; (iv) any misconduct by the Executive that is materially
injurious to the Company; or (v) a conviction of a felony involving the
personal dishonesty or moral turpitude of the Executive.
(d) WITHOUT CAUSE; GOOD REASON.
(i) The Company may terminate the Executive's
employment hereunder without Cause, by giving written Notice of termination to
the Executive.
(ii) The Executive may terminate his employment
hereunder, by giving written Notice of Termination to the Company. For the
purposes of this Agreement, the Executive shall have "Good Reason" to terminate
his employment hereunder upon (and without the written consent of the
Executive) (a) a reduction in the Executive's base salary or benefits received
from the Company, other than in connection with an across-the-board reduction
in salaries and/or benefits for similarly situated employees of the Company or
pursuant to the Company's standard retirement policy; or (b) the relocation of
the Executive's full-time office to a location greater than fifty (50) miles
from the Company's current corporate office; or (c) a material breach by the
Company of this Agreement.
(e) NOTICE OF TERMINATION. Any termination by the
Company pursuant to the Subsections (b), (c) or (d)(i) above or by the
Executive pursuant to Subsection (d)(ii) above, shall be communicated by
written Notice of Termination from the party issuing such notice to the other
party hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision of this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination. A date of
termination specified in the Notice of Termination shall
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not be dated earlier than ninety (90) days from the date such Notice is
delivered or mailed to the applicable party.
(f) OBLIGATION TO PAY. Except upon voluntary termination
by the Executive without Good Reason and subject to Section 6 below, the
Company shall pay the compensation specified in this Subsection 5(f) to the
Executive for the period specified in this Subsection 5(f). The Company also
will continue insurance benefits during the remainder of the applicable period,
including the Severance Period set forth in this Subsection 5(f). If the
Executive's employment shall be terminated by reason of death, the estate of
the Executive shall be paid all sums otherwise payable to the Executive through
the end of the third month after the month in which the death of the Executive
occurred and all bonus or other incentive benefits accrued or accruable to the
Executive through the end of the month in which the death of the Executive
occurred and the Company shall have no further obligations to the Executive
under this Agreement. If the Executive's employment is terminated by reason of
incapacity, the Executive or the person charged with legal responsibility for
the Executive's estate shall be paid all sums otherwise payable to the
Executive, including the bonus and other benefits accrued or accruable to the
Executive, through the date of termination specified in the Notice of
Termination, and the Company shall have no further obligations to the Executive
under this Agreement. If the Executive's employment shall be terminated for
Cause, the Company shall pay the Executive his Base Salary through the date of
termination specified in the Notice of Termination and the Company shall have
no further obligations to the Executive under this Agreement. If the
Executive's employment shall be terminated by the Company, without cause, or by
the Executive for Good Reason, the Company shall (x) continue to pay the
Executive the Base Salary (at the rate in effect on the date of such
termination) for a period of two (2) years beginning as of the date of such
termination (such two (2) year period being referred to hereinafter as the
"Severance Period") at such intervals as the same would have been paid had the
Executive remained in the active service of the Company, and (y) pay the
Executive a pro rata portion of the bonus or other incentive benefits to which
the Executive would have been entitled for the year of termination, had the
Executive remained employed for the entire year, which incentive compensation
shall be payable at the time incentive compensation is payable generally under
the applicable incentive plans. The executive shall have no further right to
receive any other compensation benefits or perquisites after the date of
termination of employment except as determined under the terms of the employee
benefit plans or programs of the Company or under applicable law.
6. CONDITIONS APPLICABLE TO SEVERANCE PERIOD; MITIGATION OF
DAMAGES
(a) If during the Severance Period, the Executive
breaches his obligations under Section 4 above, the Company may, upon written
notice to the Executive, terminate the Severance Period and cease to make any
further payments or provide any benefits described in Subsection 5(f).
(b) Although the Executive shall not be required to
mitigate the amount of any payment provided for in Subsection 5(f) by seeking
other employment, any such payments shall be reduced by any amounts which the
Executive receives or is entitled to receive from another
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employer with respect to the Severance Period. The Executive shall promptly
notify the Company in writing in the event that other employment is obtained
during the Severance Period.
7. NOTICES. For the purpose of this Agreement, notices and all
other communications to either party hereunder provided for in the Agreement
shall be in writing and shall be deemed to have been duly given when delivered
in person or mailed by certified first-class mail, postage prepaid, addressed:
in the case of the Company to:
AGCO Corporation
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: X. X. Xxxxxxx
in the case of the Executive to:
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or to such other address as either party shall designate by giving written
notice of such change to the other party.
8. ARBITRATION. Any claim, controversy, or dispute arising
between the parties with respect to this Agreement, to the maximum extent
allowed by applicable law, shall be submitted to and resolved by binding
arbitration. The arbitration shall be conducted pursuant to the terms of the
Federal Arbitration Act and (except as otherwise specified herein) the
Commercial Arbitration Rules of the American Arbitration Association in effect
at the time the arbitration is commenced. The venue for the arbitration shall
be the Atlanta, Georgia offices of the American Arbitration Association. Either
party may notify the other party at any time of the existence of an arbitrable
controversy by delivery in person or by certified mail of a Notice of
Arbitrable Controversy. Upon receipt of such a Notice, the parties shall
attempt in good faith to resolve their differences within fifteen (15) days
after the receipt of such Notice. Notice to the Company and the Executive shall
be sent to the addresses specified in Section 7 above. If the dispute cannot be
resolved within the fifteen (15) day period, either party may file a written
Demand for Arbitration with the American Arbitration Association's Atlanta,
Georgia Regional Office, and shall send a copy of the Demand for Arbitration to
the other party. The arbitration shall be conducted before a panel of three (3)
arbitrators. The arbitrators shall be selected as follows: (a) The party filing
the Demand for Arbitration shall simultaneously specify his or its arbitrator,
giving the name, address and telephone number of said arbitrator; (b) The party
receiving such notice shall notify the party demanding the arbitration of his
or its arbitrator, giving the name, address and telephone number of the
arbitrator within five (5) days of the receipt of such Demand for Arbitration;
(c) A neutral person shall be selected through the American Arbitration
Association's arbitrator selection procedures to serve as the third arbitrator.
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The arbitrator designated by any party need not be neutral. In the event that
any person fails or refuses timely to name his arbitrator within the time
specified in this Section 8, the American Arbitration Association shall
(immediately upon notice from the other party) appoint an arbitrator. The
arbitrators thus constituted shall promptly meet, select a chairperson, fix the
time, date(s), and place of the hearing, and notify the parties. To the extent
practical, the arbitrators shall schedule the hearing to commence within sixty
(60) days after the arbitrators have been impaneled. A majority of the panel
shall render an award within ten (10) days of the completion of the hearing,
which award may include an award of interest, legal fees and costs of
arbitration. The panel of arbitrators shall promptly transmit an executed copy
of the award to the respective parties. The award of the arbitrators shall be
final, binding and conclusive upon the parties hereto. Each party shall have
the right to have the award enforced by any court of competent jurisdiction.
Executive initials:_________ Company initials:___________
9. NO WAIVER. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is approved
by the Board and agreed to in a writing signed by the Executive and such
officer as may be specifically authorized by the Board. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of any other provisions or
conditions of this Agreement at the same or at any prior or subsequent time.
10. SUCCESSORS AND ASSIGNS. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and be binding upon
the successors and assigns of the Company and the Executive's rights under this
Agreement shall inure to the benefit of and be binding upon his heirs and
executors. Neither this Agreement or any rights or obligations of the Executive
herein shall be transferable or assignable by the Executive.
11. VALIDITY. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement, which shall remain in full force and
effect. The parties intend for each of the covenants contained in Section 4 to
be severable from one another.
12. SURVIVAL. The provisions of Section 4 hereof shall survive
the termination of Executive's employment and shall be binding upon the
Executive's personal or legal representative, executors, administrators,
successors, heirs, distributee, devisees and legatees and the provisions of
Section 5 hereof relating to payments and termination of the Executive's
employment hereunder shall survive such termination and shall be binding upon
the Company.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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14. ENTIRE AGREEMENT. This Agreement constitutes the full
agreement and understanding of the parties hereto with respect to the subject
matter hereof and all prior or contemporaneous agreements or understandings are
merged herein. The parties to this Agreement each acknowledge that both of them
and their respective agents and advisors were active in the negotiation and
drafting of the terms of this Agreement.
15. GOVERNING LAW. The validity, construction and enforcement of
this Agreement, and the determination of the rights and duties of the parties
hereto, shall be governed by the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement.
AGCO CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Chairman
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EXECUTIVE OFFICER
/s/ Xxxxxx X. Xxxxxxx
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