THIS EMPLOYMENT AND COMPENSATION AGREEMENT (this "Agreement"), made and
entered into as of January 1, 1999, between Terex Corporation, a Delaware
corporation, with its principal office located at 000 Xxxx Xxxx Xxxx, Xxxxx 000,
Xxxxxxxx, XX (together with its successors and assigns permitted under this
Agreement) ("Terex"), and Xxxxxx X. XxXxx ("XxXxx"), whose address is 0 Xxxxxxx
Xxxx Xxxx, Xxxxxxxx, XX 00000.
W I T N E S S E T H:
WHEREAS, Terex has determined that it is in the best interests of Terex
and its stockholders to enter into this Agreement setting forth the obligations
and duties of both Terex and XxXxx; and
WHEREAS, Terex wishes to assure itself of the services of XxXxx for the
period hereinafter provided, and XxXxx is willing to be employed by Terex for
said period, upon the terms and conditions provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, Terex and XxXxx (individually a "Party" and
together the "Parties") agree as follows:
1. DEFINITIONS.
(a) "Affiliate" shall mean an entity
(i) that is directly or indirectly controlled by or under common
control with Terex, or
(ii) that controls Terex.
(b) "Base Salary" shall mean the annual salary provided for in
Section 3 below, as adjusted from time to time by the Board.
(c) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(d) "Beneficiary" shall mean the person or persons named by XxXxx
pursuant to Section 21 below or, in the event that no such person
is named and survives XxXxx, his estate.
(e) "Board" shall mean the Board of Directors of Terex.
(f) "Cause" shall mean:
(i) XxXxx'x conviction in a court of law of, or guilty plea or
no contest plea to, a felony charge or a misdemeanor charge
involving moral turpitude,
(ii) willful, substantial and continued failure by XxXxx to
perform his duties under this Agreement, (iii) willful
engagement by XxXxx in conduct that is demonstrably and
materially injurious to Terex, (iv) entry by a court or
quasi-judicial governmental agency of the United States or a
political subdivision thereof of an order barring XxXxx from
serving as an officer or director of a public company, (v)
gross negligence resulting in material economic harm to
Terex, or (vi) a breach by XxXxx of Section 10 or Section 11
below. For the purposes of clauses, (ii), (iii) and (v) of
this definition, no act or failure to act on the part of
XxXxx shall be deemed "willful" or "gross negligence" (x) if
caused by a Disability or (y) unless done, or omitted to be
done, by him not in good faith or without reasonable belief
that his act or omission was in the best interest of Terex.
(g) "Change in Control" shall mean
(i) any Person becoming the Beneficial Owner of 40 percent or
more of the combined voting power of the Company's then
outstanding securities;
(ii) a change in the composition of the Board occurring within a
rolling two-year period, as a result of which fewer than a
majority of the directors are Incumbent Directors
("Incumbent Directors" shall mean directors who either (x)
are members of the Board as of the date of this Agreement or
(y) are elected, or nominated for election, to the Board
with the affirmative votes of at least a majority of the
Incumbent Directors at the time of such election or
nomination, but shall not include an individual not
otherwise an Incumbent Director whose election or nomination
is in connection with an actual or threatened proxy contest,
including but not limited to a consent solicitation,
relating to the election of directors to the Board); or
(iii)consummation, in any transaction or series of transactions,
of a complete liquidation or dissolution of the Company or a
merger, consolidation or sale of all or substantially all of
the Company's assets (collectively, a "Business
Combination") other than a Business Combination after which
(x) the stockholders of the Company own more than 80 percent
of the combined voting power of the voting securities of the
company resulting from the Business Combination, (y) at
least a majority of the board of directors of the resulting
corporation were Incumbent Directors or (z) no individual,
entity or group (excluding any corporation resulting from
the Business Combination or any employee benefit plan of
such corporation or of the Company) becomes the Beneficial
Owner of 30 percent or more of the combined voting power of
the securities of the resulting corporation, who did not own
such securities immediately before the Business Combination.
(h) "Code" shall mean the Internal Revenue Code of 1986, as from time
to time amended.
(i) "Committee" shall mean the Compensation Committee of the Board.
(j) "Covenant Period" shall mean the period beginning with
commencement of the Term and ending as provided in Section 11(b)
and, as applicable, Section 12(b).
(k) "Date of Termination" shall mean, with respect to any purported
termination of XxXxx'x employment during the Term, (i) if XxXxx'x
employment terminates due to Disability, 30 days after a
good-faith determination of Disability by Terex (provided that
XxXxx shall not have returned to full-time performance of his
duties during such 30-day period), and (ii) if XxXxx'x employment
terminates for any other reason, the date specified in the Notice
of Termination (which shall be not less than 30 days, and, in the
case of Voluntary Termination by XxXxx, not more than 60 days,
after the date of such Notice of Termination).
(l) "Disability" shall mean XxXxx'x inability to perform the
essential duties set forth in this Agreement by reason of a
physical or mental disability or infirmity that has continued for
more than six consecutive months or for such shorter periods as
aggregate more than 24 weeks in any 24-month period.
(m) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
from time to time amended. (n) "Good Reason" shall mean the
occurrence (without XxXxx'x express written consent) of any one
of the following acts or omissions by Terex unless, in the case
of any act or omission described in paragraph (i), (v) or (vi) of
this Section 1(n) or Section 9(j) below, such act or omission is
corrected prior to the Date of Termination specified in the
Notice of Termination in respect thereof:
(i) assignment to XxXxx of any duties inconsistent with his
status as a senior executive officer of Terex, failure to
maintain him in the position of Chief Executive Officer and
reporting relationship set forth in Section 2(c)(i) below or
a substantial adverse alteration in the nature of his
authority or responsibilities under this Agreement;
(ii) reduction by Terex in XxXxx'x Base Salary, in effect on the
date of this Agreement or as the same may be increased from
time to time, except for across-the-board salary reductions
similarly affecting all senior executives of Terex or of any
Person in control of Terex;
(iii)relocation of Terex's principal executive offices to a
location more than 50 miles from the location of such
offices on the date of this Agreement or a requirement that
XxXxx be based anywhere other than at Terex's principal
executive offices except for necessary travel on Terex's
business to an extent substantially consistent with XxXxx'x
business travel obligations on the date of this Agreement;
(iv) failure by Terex to pay to XxXxx any portion of his then
current compensation or provide any material benefit except
pursuant to an across-the-board compensation or benefit
deferral or reduction similarly affecting all senior
executives of Terex or of any Person in control of Terex, or
to pay XxXxx any portion of an installment of deferred
compensation under any deferred compensation program of
Terex within seven days after the date when such
compensation is due;
(v) failure by Terex to continue in effect any compensation or
benefit plan or fringe benefit in which XxXxx participates
that is material to his total compensation, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan,
or failure by Terex to continue XxXxx'x participation
therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the
amount of benefits provided and the level of his
participation relative to any other participant, than
existed immediately prior to any such failure;
(vi) failure by Terex to continue to provide XxXxx with benefits
substantially similar to those enjoyed by him under any of
the plans described in Section 8 below in which he was a
participant at the time of any such failure.
(o) "Notice of Termination" shall mean delivery of written notice by
one Party and receipt thereof by the other Party in accordance
with Section 25 below, which notice shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of XxXxx'x employment hereunder.
(p) "Person" shall have the meaning defined in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof; provided, however, that a Person shall not include:
(i) Terex or any subsidiary or affiliate (as such term is
defined in Rule 12b-2 promulgated under the Exchange Act),
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of Terex or any Subsidiary or
Affiliate,
(iii)an underwriter temporarily holding securities pursuant to
an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of Terex in
substantially the same proportion as their ownership of
stock of Terex.
(q) "Spouse" shall mean, during the Term of Employment, the woman who
as of any relevant date is legally married to XxXxx.
(r) "Subsidiary" shall mean a corporation of which Terex owns
directly or indirectly more than 50 percent of its outstanding
securities representing the right, other than as affected by
events of default, to vote for the election of directors.
(s) "Term of Employment" or "Term" shall mean the period specified in
Section 2(b) below during which XxXxx is employed by Terex or any
of its Affiliates.
2. TERM OF EMPLOYMENT, POSITIONS AND DUTIES.
(a) Employment of XxXxx. Terex hereby employs XxXxx, and XxXxx hereby
accepts employment with Terex, in the position and with the duties and
responsibilities set forth below and upon such other terms and conditions as are
hereinafter stated.
(b) Term of Employment. The Term of Employment shall commence on the date
of this Agreement and shall terminate on December 31, 2001, unless it is sooner
terminated as provided in Section 9 below or extended by agreement of the
Parties; provided, however, that, if a Change in Control shall occur on or prior
to December 31, 2001, the Term of Employment shall continue in effect until the
later of (x) 12 months after the month in which such Change in Control occurs or
(y) December 31, 2001.
(c) Title, Duties and Authorities.
(i) Until termination of his employment hereunder, XxXxx shall be
employed as Chief Executive Officer of Terex, reporting to the Board, with
all the authorities and responsibilities that normally accrue to the
position of chief executive officer, and shall hold such other titles as
the Board may grant, including but not limited to President and Chief
Operating Officer of Terex.
(ii) Consistent with its obligations to stockholders, Terex agrees to
use its best efforts to procure the election of XxXxx as a member of and
Chairman of the Board and to ensure XxXxx'x re-election to that position
during the Term.
(d) Time and Effort.
(i) XxXxx agrees to devote his best efforts and abilities and his full
business time and attention to the affairs of Terex in order to carry out
his duties and responsibilities under this Agreement.
(ii) Notwithstanding the foregoing, nothing shall preclude XxXxx
from
(A) serving on the boards of (x) a reasonable number of
trade associations and charitable organizations, (y) United
Rentals, Inc. and (z) with the prior consent of the Board, any
other business not in competition with Terex,
(B) engaging in charitable activities and community affairs,
and
(C) managing his personal investments and affairs; provided,
however, that any such activities do not materially interfere
with the proper performance of his duties and responsibilities
specified in Section 2(c) above.
3. BASE SALARY.
XxXxx shall receive from Terex an initial Base Salary, payable in
accordance with the regular payroll practices of Terex, of $600,000. During
the Term, the Board shall review the Base Salary for increase no less often
than annually as of the beginning of each calendar year after 1999.
4. ANNUAL BONUS.
(a) Entitlement. XxXxx shall receive an annual bonus in
respect of each calendar year during the Term of Employment in accordance with
any annual incentive plan or plans established by Terex either for XxXxx alone
or for members of Terex's senior management generally.
(b) Payment. The annual bonus shall be payable as soon as
reasonably practicable after the completion of Terex's audited financial
statements for such calendar year, prepared in accordance with generally
accepted accounting principles, but in no event later than 120 days after the
end of the calendar year.
5. LONG-TERM INCENTIVE COMPENSATION.
During the Term XxXxx shall participate in any long-term incentive plan or
plans established by Terex either for XxXxx alone or for members of Terex's
senior management generally.
6. EQUITY OPPORTUNITY.
During the Term XxXxx shall be eligible to receive grants of options to
purchase shares of Terex's stock and awards of shares of Terex's stock, either
or both as determined by the Committee, under and in accordance with the terms
of applicable plans of Terex and related option and award agreements. XxXxx
shall also be entitled to participate in any equity programs of Subsidiaries or
Affiliates upon such terms and conditions as may be established by the
Committee.
7. EXPENSE REIMBURSEMENT.
XxXxx shall be entitled to prompt reimbursement by Terex for all reasonable
out-of-pocket expenses incurred by him during the Term in performing services
under this Agreement, upon his submission of such accounts and records as may be
reasonably required by Terex.
8. EMPLOYEE BENEFIT PLANS.
During the Term XxXxx shall be entitled to participate in all life
insurance, short-term and long-term disability, accident, health insurance and
savings/retirement plans that are applicable to Terex employees generally or to
the senior executives of Terex. XxXxx shall be entitled to the number of paid
vacation days per year determined by Terex, which, however, shall not be less
than four weeks in any calendar year. XxXxx shall also be entitled to all paid
holidays given by Terex to its employees generally.
9. TERMINATION OF EMPLOYMENT.
(a) General. Notwithstanding anything to the contrary herein, in the event
of termination of XxXxx'x employment under this Agreement for any reason
whatsoever, he, his dependents or his Beneficiary, as may be the case, shall be
entitled to receive (in addition to payments and benefits under, and except as
specifically provided in, subsections (b) through (i) below as applicable):
(i) his Base Salary through the Date of Termination;
(ii) payment in lieu of any unused vacation, in accordance with
Terex's vacation policy and applicable laws:
(iii) any annual bonus earned but not yet paid to him for any calendar
year prior to the year in which his termination occurs;
(iv) any deferred compensation under any incentive compensation plan
of Terex or any deferred compensation agreement then in effect;
(v) any other compensation or benefits, including without limitation
long-term incentive compensation described in Section 5 above, benefits
under equity grants and awards described in Section 6 above and employee
benefits under plans described in Section 8 above, that have vested through
the Date of Termination or to which he may then be entitled in accordance
with the applicable terms of each grant, award or plan; and
(vi) reimbursement in accordance with Section 7 above of any business
expenses incurred by XxXxx through the Date of Termination but not yet paid
to him.
(b) Termination due to Death. In the event that XxXxx'x employment
terminates due to his death, his Beneficiary shall be entitled, in addition to
the compensation and benefits specified in Section 9(a), to:
(i) his Base Salary, at the rate in effect on the date of his death,
through the end of the month in which his death occurs, and
(ii) an annual bonus under Terex's Annual Incentive Compensation Plan
prorated to the date of death, plus any discretionary payment that may be
awarded, for the year in which his death occurs.
(c) Termination due to Disability. In the event that XxXxx'x employment
terminates due to Disability, as determined by Terex based on competent medical
advice, he or his Beneficiary, as the case may be, shall be entitled, in
addition to the compensation and benefits specified in Section 9(a), to an
annual bonus under Terex's Annual Incentive Compensation Plan prorated to the
Date of Termination, plus any discretionary payment that may be awarded, for the
year in which his termination due to Disability occurs.
(d) Termination by Terex for Cause. In the event that XxXxx'x employment is
terminated by Terex for Cause, he shall be entitled only to the compensation and
benefits specified in Section 9(a). Notwithstanding the foregoing, termination
for Cause may not occur pursuant to clauses (ii), (iii), (iv), (v) or (vi) of
Section 1(f) above unless and until, with the Board's prior approval, Terex has
delivered to XxXxx Notice of Termination, which shall contain in reasonable
detail the facts purporting to constitute such nonperformance, act, omission or
breach, and afforded him 30 days thereafter to cure the same and/or to respond
in writing to the Board setting forth his position that his termination for
Cause should not occur and requesting reconsideration by the Board, in which
event (x) the effective date of termination of employment shall be deferred
until the Board has had the opportunity to consider whether such nonperformance,
act, omission or breach has been cured and to consider any request by XxXxx for
reconsideration, and (y) the Board shall thereafter cause a written notice to be
delivered on its behalf to XxXxx stating either that it has rescinded its
determination that his employment is to be terminated for Cause or that affirms
its determination that his employment is to be terminated for Cause and that
contains an effective date of termination of employment, which shall be not
earlier than 15 days after such notice is given. Section 1(n)(i) to the contrary
notwithstanding, upon delivery to XxXxx of Notice of Termination under this
Section 9(d), XxXxx shall be suspended from all duties and responsibilities
unless and until the Board rescinds its determination that his employment is to
be terminated for Cause.
(e) Termination by Terex Without Cause or by XxXxx for Good Reason.
(i) Terex shall provide XxXxx 30 days' Notice of Termination of his
employment without Cause, and XxXxx shall provide 30 days' Notice of
Termination of his employment for Good Reason.
(ii) In the event of termination by Terex of XxXxx'x employment
without Cause or of termination by XxXxx of his employment for Good Reason,
he shall be entitled, in addition to the compensation and benefits
specified in Section 9(a), to:
(A) two times his Base Salary, at the rate in effect immediately
before such termination,
(B) two times the average of his annual earned bonuses for the
two calendar years in the Term preceding the year in which the Term
ends,
(C) continuing coverage under the life, disability, accident and
health insurance programs for Terex employees generally and under any
supplemental programs covering Terex executives, as from time to time
in effect, for the two-year period from such termination or until
XxXxx becomes eligible for substantially similar coverage under the
employee welfare plans of a new employer, whichever occurs earlier,
provided that XxXxx'x right to elect continued medical coverage after
termination of employment under Part 6 of Title I of the Employee
Retirement Income Security Act of 1974, as amended, shall be deemed
satisfied by the coverage provided in this clause (C), and
(D) immediate and unconditional vesting of the unvested stock
options and stock grants previously awarded to XxXxx and, for the
one-year period following either such termination, the right to
exercise any stock options held by him; provided, however, that any
unvested "performance" stock options, stock grants, long-term
incentive awards or other similar awards shall not vest unless their
specified performance objectives are achieved prior to the Date of
Termination and otherwise as provided in the relevant plan documents.
(iii) The payments specified in Section 9(e)(ii)(A) and (B) shall be
made by Terex to XxXxx as follows:
(A) 50 percent of the amounts due shall be paid ratably in cash
over the 12 months following the Date of Termination, and
(B) the remaining 50 percent of these amounts shall be paid in a
cash lump sum at the beginning of the 13th month following the Date of
Termination.
(iv) XxXxx'x right to terminate his employment for Good Reason shall
not be affected by his incapacity due to physical or mental illness.
XxXxx'x continued employment shall not constitute consent to, or a waiver
of rights with respect to, any act or omission constituting Good Reason.
(f) Voluntary Termination by XxXxx. XxXxx shall have the right voluntarily
to terminate his employment in accordance with Section 1(k) above. If he does
so, he shall be entitled only to the compensation and benefits specified in
Section 9(a).
(g) Termination by Terex Without Cause or by XxXxx for Good Reason
Following a Change in Control. In the event of termination of XxXxx'x employment
within one year following a Change in Control (i) by Terex without Cause or (ii)
by XxXxx for Good Reason, he shall be entitled, in addition to the compensation
and benefits specified in Section 9(a), to the amounts specified in Section
9(e)(ii) (A) and (B), payable to him in a cash lump sum not later than five days
after the Date of Termination, and to the additional rights specified in Section
9(e)(ii)(C) and (D).
(h) Terex's Election Not to Extend the Agreement. In the event that Terex
does not extend this Agreement or enter into a new employment and compensation
agreement, commencing at the end of the Term, on terms at least as favorable as
those set forth in this Agreement, XxXxx shall be entitled, in addition to the
compensation and benefits specified in Section 9(a), to the amounts specified in
Section 9(e)(ii)(A) and (B), payable to him as provided in Section 9(e)(iii),
and to the additional rights specified in Section 9(e)(ii)(C) and (D).
(i) XxXxx'x Election Not to Extend the Agreement. In the event that XxXxx
does not accept an offer by Terex to extend this Agreement or enter into a new
employment and compensation agreement on terms at least as favorable as those
set forth in this Agreement commencing at the end of the Term, he shall be
deemed to have terminated his employment voluntarily as of the end of the Term
and shall be entitled only to the compensation and benefits specified in Section
9(a).
(j) Determination of Amounts of Payments. If Terex's independent auditors
determine that the amount due XxXxx under Section 9(g) will exceed the amount
permissible under Code Section 280G without imposition of the excise tax imposed
by Code Section 4999, the independent auditors shall then determine (i) the
after-tax amount and (ii) the maximum amount that may be paid under Code Section
280G without imposition of any tax, and Terex shall then pay the greater amount
to XxXxx.
(k) Cessation of Payments. If, during or after the Term, XxXxx commits a
breach of Section 10 or Section 11 below, Terex shall have no further obligation
to make payments to him under this Agreement except as may be required in
accordance with Section 9(a).
(l) Notice Requirements. Any purported termination of XxXxx'x employment
that is not effected pursuant to Notice of Termination satisfying the
requirements of Sections 1(k) and 1(o) and Section 25 shall not be effective for
purposes of this Agreement.
10. CONFIDENTIAL INFORMATION.
(a) Acknowledgments. XxXxx acknowledges that:
(i) As a result of his employment with Terex, XxXxx has obtained and
will obtain secret and confidential information concerning the business of
Terex and its Affiliates, including, without limitation, the identity of
customers and sources of supply, their needs and requirements, the nature
and extent of contracts with them, and related cost, price and sales
information.
(ii) Terex and its Affiliates will suffer damage that will be
difficult to compute if, during the Term or thereafter, XxXxx should
divulge secret and confidential information relating to the business of
Terex heretofore or hereafter acquired by him in the course of his
employment with Terex or any of its Affiliates.
(iii) The provisions of this Section 10 are reasonable and necessary
for the protection of the business of Terex and its Affiliates.
(b) Confidential Information. XxXxx agrees that he will not at any time,
either during the Term of Employment or thereafter, divulge to any person, firm
or corporation any information obtained or learned by him during the course of
his employment with Terex or any of its Affiliates, with regard to the
operational, financial, business or other affairs of Terex or its Affiliates,
their officers and directors, including, without limitation, trade "know how,"
secrets, customer lists, sources of supply, pricing policies, operational
methods or technical processes, except
(i) in the course of performing his duties hereunder,
(ii) with Terex's express written consent,
(iii) to the extent that any such information is in the public domain,
is ascertainable from public or published information or is known to any
person who is not subject to a contractual or fiduciary obligation owed to
Terex not to disclose such information, in each case other than as a result
of XxXxx'x breach of any of his obligations hereunder, or
(iv) when required to be disclosed by court order, subpoena or other
government process. In the event that XxXxx shall be required to make
disclosure pursuant to the provisions of clause (iv) of the preceding
sentence, he shall promptly, but in no event more than 48 hours after
learning of such court order, subpoena, or other government process, notify
Terex, by personal delivery or by facsimile, confirmed by mail. Further, at
Terex's written request and expense, XxXxx shall
(i) take all reasonably necessary steps requested by Terex to defend
against the enforcement of such court order, subpoena or other government
process, and;
(ii) permit Terex to intervene and participate with counsel of its
choice in any proceeding relating to the enforcement thereof.
(c) Return of Documents and Property. Upon termination of his employment
with Terex, or at any time Terex may so request, XxXxx will promptly deliver to
Terex all files, memoranda, notes, records, reports, manuals, data, drawings,
blueprints and other documents and information (and all copies thereof) relating
to the business of Terex and/or its Affiliates, and all property associated
therewith, that are then in his possession or under his control.
(d) Remedies and Sanctions. In the event that XxXxx is found to be in
violation of Section 10(b) or (c), Terex shall be entitled to relief as provided
in Section 12 below.
11. NONCOMPETITION/NONSOLICITATION.
(a) Acknowledgments. XxXxx acknowledges that:
(i) Terex and its Affiliates will suffer damage that will be difficult
to compute if, during the Term or thereafter, XxXxx should enter a
competitive business.
(ii) The provisions of this Section 11 are reasonable and necessary
for the protection of the business of Terex and its Affiliates.
(b) Noncompetition and Nonsolicitation. During the Covenant Period (which
shall extend for 12 months after the Term) XxXxx, without the prior written
permission of Terex, shall not, directly or indirectly:
(i) enter into the employ of or render any services to any person,
firm or corporation engaged in any business that derives more than 5
percent of its gross sales from products that are interchangeable with or
substitutable for a product sold by one or more of the businesses conducted
by Terex or any of its Affiliates when the Term ends (a "Competitive
Business"),
(ii) engage in any Competitive Business for his own account,
(iii) become associated with or interested in any Competitive Business
as an individual, partner, shareholder, creditor, director, officer,
principal, agent, employee, trustee, consultant, advisor or in any other
relationship or capacity,
(iv) employ or retain, or have or cause any other person or entity to
employ or retain, any person who was employed or retained by Terex or any
of its Affiliates while XxXxx was employed by Terex, or
(v) solicit, endeavor to entice away from or knowingly interfere with
Terex or any of its Affiliates, any of its or their customers or sources of
supply. Notwithstanding, the foregoing, nothing in this Agreement shall
preclude XxXxx from investing his personal assets in the securities of any
corporation or other business entity that is engaged in a Competitive
Business if such securities are traded on a national stock exchange or in
the over-the-counter market and if such investment does not result in his
beneficially owning, at any time, more than 3 percent of the
publicly-traded equity securities of such competitor.
(c) Remedies and Sanctions. In the event that XxXxx is found to be in
violation of Section 11(b), Terex shall be entitled to relief as provided in
Section 12 below.
12. INJUNCTIVE RELIEF.
(a) If XxXxx commits a breach, or threatens to commit a breach, of any of
the provisions of Section 10 or 11 above, Terex shall have the right and remedy
to seek to have the provisions of this Agreement specifically enforced by any
court having equity jurisdiction, it being acknowledged and agreed by XxXxx that
the services being rendered hereunder to Terex are of a special, unique and
extraordinary character and that any such breach or threatened breach will cause
irreparable injury to Terex and that monetary damages will not provide an
adequate remedy to Terex. The rights and remedies enumerated in this Section
12(a) shall be independent of the other and shall be severally enforceable, and
such rights and remedies shall be in addition to, and not in lieu of, any other
damages, rights and remedies available to Terex under law or equity.
(b) If XxXxx shall violate any covenant contained in this Section 12, the
Covenant Period shall automatically extend for 12 months from the date on which
XxXxx permanently ceases such violation or, if later, from the date of entry by
a court of competent jurisdiction of a final order or judgment enforcing such
covenant.
(c) If any provision of this Section 12 is held to be unenforceable because
of the scope, duration or area of its applicability, the tribunal making such
determination shall have the power to modify such scope, duration, or area, or
all of them, and any such provision shall then be applicable in such modified
form.
13. WITHHOLDING TAXES. All payments to XxXxx or his Beneficiary shall be
subject to withholding on account of federal, state and local taxes as required
by law. If any payment under this Agreement is insufficient to provide the
amount of such taxes required to be withheld, Terex may withhold such taxes from
any subsequent payment due XxXxx or his Beneficiary. In the event that all
payments due are insufficient to provide the required amount of such withholding
taxes, XxXxx or his Beneficiary, within five days after written notice from
Terex, shall pay to Terex the amount of such withholding taxes in excess of the
payments due.
14. INDEMNIFICATION AND LIABILITY INSURANCE. Nothing herein is intended to
limit Terex's indemnification of XxXxx, and Terex shall indemnify him to the
fullest extent permitted by applicable law consistent with Terex's Certificate
of Incorporation and By-Laws as in effect on the date of this Agreement, with
respect to any action or failure to act on his part while he is (x) an officer,
director or employee of Terex or any Subsidiary or Affiliate or (y) a director
or officer of any trade association or business enterprise that is not a
subsidiary or Affiliate and in which capacity his service is at Terex's request.
To the extent that directors' and officers' liability insurance is obtainable on
commercially economic terms, Terex shall cause XxXxx to be covered, during the
Term and after the Term in respect of claims arising from any such service
during the Term, by such insurance on terms no less favorable than the
directors' and officers' liability insurance maintained by Terex as in effect on
the date of this Agreement in terms of coverage, limits and reimbursement of
defense costs. In any period during which such insurance coverage is not
obtainable on commercially economic terms, Terex shall cause XxXxx to be covered
by as much of such insurance as may be obtained for the largest premium paid by
Terex for such an insurance policy in effect during the Term.
15. ASSIGNABILITY, SUCCESSORS, BINDING AGREEMENT.
(a) In addition to any obligations imposed by law upon any successor to
Terex, Terex will use its best efforts to persuade any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Terex to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
Terex would be required to perform it if no such succession had taken place.
Failure of Terex to use its best efforts to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle XxXxx to compensation from Terex in the same amount
and on the same terms as XxXxx would be entitled to hereunder if he were to
terminate his employment for Good Reason after a Change in Control, except that,
for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination.
(b) This Agreement shall inure to the benefit of and be enforceable by
XxXxx'x personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If XxXxx shall die while
any amount would still be payable to him hereunder (other than amounts which, by
their terms, terminate upon his death) if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of XxXxx'x estate.
16. REPRESENTATIONS.
The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance
of its or his obligations, as the case may be, under this Agreement will not
violate any agreement between such Party and any other person, firm or
organization. Terex represents and warrants that this Agreement has been duly
authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms.
17. ENTIRE AGREEMENT.
Except to the extent otherwise provided herein, this Agreement contains the
entire understanding and agreement between the Parties concerning the subject
matter hereof and supersedes any prior agreements, whether written or oral,
between the Parties concerning the subject matter hereof. In the event of a
conflict between this Agreement and terms of any benefit plan, grant or award,
the provisions of this Agreement shall govern the determination of XxXxx'x
rights. Notwithstanding the previous sentence, to the extent that the provisions
of any benefit plan, grant or award are more favorable to XxXxx than the
provisions of this Agreement, the provisions of such benefit plan, grant or
award shall govern the determination of XxXxx'x rights.
18. AMENDMENT OR WAIVER.
No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both XxXxx and an authorized officer of
Terex. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party to be charged with the waiver.
19. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be valid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
20. SURVIVAL.
The respective rights and obligations of the Parties under this Agreement
shall survive any termination of XxXxx'x employment with Terex.
21. BENEFICIARIES/REFERENCES.
XxXxx shall be entitled to select (and change, to the extent permitted
under any applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable under this Agreement following XxXxx'x death by
giving Terex written notice thereof. In the event of XxXxx'x death or of a
judicial determination of his incompetence, reference in this Agreement to XxXxx
shall be deemed to refer, as appropriate, to his beneficiary, estate or other
legal representative.
22. MITIGATION.
Terex agrees that, if XxXxx'x employment by Terex terminates during the
Term, XxXxx is not required to seek other employment or to attempt in any way to
reduce any amounts payable to him due under this Agreement. Further, the amount
of any payment shall not be reduced by any compensation earned by XxXxx as the
result of employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by XxXxx to Terex, or otherwise.
23. GOVERNING LAW.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Connecticut, without reference to
principles of conflict of laws.
24. RESOLUTION OF DISPUTES.
(a) Arbitration. Except as provided in Section 24(b), any disputes arising
under or in connection with this Agreement shall be resolved by arbitration, to
be held in Stamford, Connecticut, in accordance with the commercial rules and
procedures of the American Arbitration Association.
(b) Litigation. Notwithstanding the foregoing, XxXxx shall have the right
to waive his rights under Section 24(a) and have any dispute resolved by a court
of competent jurisdiction.
(c) Costs. Except as provided in Section 10(b), each Party shall bear its
or his respective costs, fees (including attorneys' fees) and expenses of any
arbitration or litigation in connection with this Agreement.
(d) Continuation of Payments. Pending the outcome or resolution of any
dispute between the Parties, Terex shall continue to pay to XxXxx all amounts,
and provide on his behalf all benefits, due him under this Agreement.
25. NOTICES.
Any notice given to either Party shall be in writing and shall be deemed to
have been given when delivered either personally, by fax, by overnight delivery
service (such as Federal Express) or sent by certified or registered mail,
postage prepaid, return receipt requested, duly addressed to the Party concerned
at the address indicated below or to such changed address as the Party may
subsequently give notice of.
If to Terex:
Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
If to XxXxx:
Xxxxxx X. XxXxx
0 Xxxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
26. HEADINGS.
The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
27. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument. IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first written above.
Terex Corporation
Attest:/s/ Xxxx Xxxxxxxxxx By: /s/ Xxxx X Xxxxx
Name: Xxxx X Xxxxx
Title: Senior Vice President
Witness: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. XxXxx
