RETENTION AGREEMENT
Exhibit
6
Execution
Version
This
Retention Agreement (the “Agreement”), dated
as
of January 13, 2008 is made and entered into by and between Xxxxxxx X. Xxxxxx
(the “Employee”), Terex
Corporation, a Delaware corporation (the “Parent”) and A.S.V.,
Inc., a Minnesota corporation (the “Company”).
WHEREAS,
by reason of the consummation
of the transactions contemplated by the Agreement and Plan of Merger (the “Merger Agreement”),
dated as of January 13, 2008, by and between the Parent, the Company and Terex
Minnesota, Inc., a Minnesota corporation and a wholly owned subsidiary of the
Parent, the Parent will own all of the outstanding shares of common stock of
the
Company;
WHEREAS,
the Employee is currently
employed by the Company;
WHEREAS,
the Parent wishes to ensure
that the Employee’s services are retained following the closing of the Merger,
under the terms and conditions set forth in this Agreement, and the Employee
wishes to obtain the benefits of those terms and conditions and remain employed
by the Company following the Effective Time;
WHEREAS,
in the event that the Merger
Agreement is terminated prior to the Effective Time, this Agreement shall be
void ab
initio
and of
no force and effect; and
WHEREAS,
all capitalized terms used but not defined herein shall have the meaning set
forth in the Merger Agreement.
NOW,
THEREFORE, in consideration of the
promises and covenants hereinafter set forth, the continued employment by the
Company of the Employee, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the Employee, the parties
agree as follows.
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1.
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Retention
Bonus.
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1.1.
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The
Employee is eligible to receive a retention bonus (the “Retention
Bonus”) equal to $118,125, which shall be payable upon
the terms and conditions set forth in Section 1.2 and as otherwise
provided herein.
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1.2.
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The
Retention Bonus shall be paid to the Employee, as soon as practicable
after the Closing Date, in restricted shares of common stock, par
value
$.01 per share, of the Parent (the “Common
Stock”)
(the “Restricted
Stock Award”), provided
that
the
Employee (a) is employed by the Company on the Closing Date, and (b) executes
(i) on
the Closing Date, the release attached hereto as Exhibit A and (ii)
on the
date of grant, a restricted stock agreement and/or any other documents
required pursuant to the Parent plan under which the Restricted Stock
Award is made. The Restricted Stock Award shall
vest in equal installments on each of the first four anniversaries
of the
Closing Date (each such date, a “Vesting
Date”),
provided that the
Employee is employed by the Company on the Vesting Date. The
number of shares of the Common Stock subject to the Restricted Stock
Award
shall be based on the closing price of a share of the Common Stock
on the
Closing Date. In the event that (a) the Company terminates the
Employee’s employment with the Company without Cause (as defined below) or
(b) the Employee terminates the Employee’s employment with the Company for
Good Reason (as defined below), then an additional
number of shares of the Common Stock subject to the Restricted Stock
Award
(such additional shares, the “Fractional
Vesting
Number”) shall vest, and no additional shares shall vest following
termination. The Fractional Vesting Number shall be an amount,
rounded up or down to the nearest whole number, that is equal to
(a) the
total number of shares of the Common Stock subject to the Restricted
Stock
Award, multiplied by (b) a fraction, the numerator of which is the
total
number of days which have elapsed between the immediately prior Vesting
Date and the date of termination, and the denominator of which is
1460.
The Employee understands and agrees that the Retention Bonus does
not
constitute eligible compensation under any pension or savings plan
of the
Parent or any of its subsidiaries or affiliates, including the
Company.
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1.3.
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For
purposes of this Agreement, “Cause”
means
(i) the willful and continued failure by the Employee to substantially
perform the Employee’s duties with the Company (other than any such
failure resulting from the Employee’s temporary incapacity due to
disability or physical or mental illness); (ii) willful and substantial
misconduct on the part of the Employee in connection with the performance
of such duties; (iii) the Employee’s
conviction of a felony, or a misdemeanor involving moral turpitude;
or
(iv) the Employee engaging in conduct which is materially injurious
to the
Company or its affiliates including, without limitation, violating
or
breaching the Company’s code of ethics and
conduct.
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1.4.
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For
purposes of this Agreement, “Good Reason”
means a reduction of the Employee’s base salary by twenty-five percent
(25%) or more, unless in connection with a similar reduction for
similarly
situated employees of the Company.
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1.5.
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If
the payments under this Agreement would be subject to tax pursuant
to
Section 409A of the Internal Revenue Code of 1986, as amended, the
parties
shall make reasonable efforts to restructure the payments to avoid
imposition of such tax.
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2.
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Covenants.
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2.1.
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Unauthorized
Disclosure. The Employee agrees and understands that in
the Employee’s position with the Company, the Employee has been and will
be exposed to and has and will receive non-public information relating
to
the confidential affairs of the Company, the
Parent, and their respective subsidiaries and affiliates (collectively,
the “Entities”),
including, without limitation, technical information, intellectual
property, business and marketing
plans, strategies, customer information, software, other information
concerning the products, promotions, development, financing, expansion
plans, business policies and practices of the Entities and other
non-public forms of information considered by the Entities to be
confidential and in the nature of trade secrets (including, without
limitation, ideas, research and development, know-how, technical
data,
customer and
supplier lists, pricing and cost information and business and marketing
plans and proposals) (collectively, the “Confidential
Information”). The Employee agrees that at all times
during the Employee’s employment with the Company, except as may be
required for the Employee to discharge the Employee’s duties, and
thereafter, the Employee shall not disclose Confidential Information,
either directly or indirectly, to any individual, corporation,
partnership, limited liability company, association, trust or other
entity
or organization, including a government or political subdivision
or an
agency or instrumentality thereof (each, a “Person”)
without the prior written consent of the Company and shall not use
or
attempt to use any such information in any manner other than in connection
with the Employee’s employment with the Company, unless required by law to
disclose such information, in which case the Employee shall provide
the
Company with written notice of such requirement as far in advance
of such
anticipated disclosure as possible. This confidentiality
covenant has no temporal or geographical restriction. Upon
termination of the Employee’s employment with the Company, the Employee
shall promptly supply to the Company (or destroy, at the Company’s option)
all property, keys, notes, memoranda, writings, lists, files, reports,
customer lists, correspondence, tapes, disks, cards, surveys, maps,
logs,
machines, technical data and any other tangible product or document
which
has been produced by, received by or otherwise submitted to the Employee
during or prior to the Employee’s employment with the Company, and any
copies thereof in the Employee’s (or capable of being reduced to the
Employee’s)
possession.
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2.2.
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Non-Competition. By
and in consideration of the Company’s entering into this Agreement and the
Merger Agreement, and the payments to be made by the Company hereunder,
and in further consideration of the Employee’s exposure to the
Confidential Information of the Entities, the Employee agrees that
the
Employee shall not, during the Employee’s
employment with the Company and thereafter during the Restriction
Period
(as defined below), directly or indirectly, own, manage, operate,
join,
control, be employed by, or participate in the ownership, management,
operation or control of, or be connected in any manner with, including,
without limitation, holding any position as a stockholder, director,
officer, consultant, independent contractor, executive, partner,
or
investor in, any Restricted Enterprise (as defined below); provided, that in
no
event shall ownership of three percent (3%) or less of the outstanding
securities of any class of any issuer whose securities are registered
under the Securities Exchange Act of 1934, as amended, standing alone,
be
prohibited by this Section 2.2 so long as the Employee does not have,
or
exercise, any rights to manage or operate the business of such issuer
other than rights as a stockholder thereof. For purposes of
this Section 2.2, “Restricted
Enterprise” shall mean any Person that is engaged, in any
geographic area in which the Parent,
the Company or any of its or their subsidiaries (the “Company
Group”)
operates or markets, in any business which is in competition with
the
business of the Company Group (i) conducted during the preceding
twelve
(12) months (or following the Employee’s termination of employment, the
twelve (12) months preceding the date of termination of the Employee’s
employment with the Company) or (ii) proposed to be conducted
by any member of the Company Group in its business plan as in effect
at
that time (or following the Employee’s termination of employment, the
business plan as in effect as of the date of termination of the Employee’s
employment with the Company). During the Restriction Period,
upon request of the Company, the Employee shall notify the Company
of the
Employee’s then-current employment status. For purposes of this
Section 2.2, “Restriction
Period” shall mean the period during the Employee’s term of
employment with the Company, as well as a period of months following
the
Employee’s termination of employment with the Company determined as
follows: (a) if the Employee’s termination occurs during the first twelve
(12) months following the Closing Date, there shall be no Restriction
Period; (b) if the Employee’s termination occurs during the second twelve
(12) months following the Closing Date, the Restriction Period shall
be
six (6) months; (c) if the Employee’s termination occurs during the third
twelve (12) months following the Closing Date, the Restriction Period
shall be twelve
(12) months; (d) if the Employee’s termination occurs during the fourth
twelve (12) months following the Closing Date, the Restriction Period
shall be eighteen (18) months; and (e) if the Employee’s termination
occurs forty-eight (48) or more months after the Closing Date, the
Restriction Period shall be twenty-four (24)
months.
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2.3.
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Non-Solicitation
of
Employees. During the Employee’s employment with the
Company and for twenty-four (24) months thereafter, the Employee
shall not
directly or indirectly hire, contact, induce or solicit (or assist
any
Person to hire, contact, induce or solicit) for employment any person
who
is, or within six (6) months prior to the date of such solicitation
was,
an employee of any Entity.
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2.4.
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Interference
with
Business Relationships. During the Employee’s employment
with the Company and for twenty-four (24) months thereafter, the
Employee
shall not directly or indirectly contact, induce or solicit (or assist
any
Person to contact, induce or solicit) any customer or client of any
Entity
to terminate its relationship or otherwise cease doing business in
whole
or in part with the Entity, or directly or indirectly interfere with
(or
assist any Person to interfere with) any material relationship between
the
Entities and any of its customers or
clients.
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2.5.
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Extension
of
Restriction Period. The Restriction Period shall be
tolled for any period during which the Employee is in breach of any
of
Section 2.2, 2.3 or 2.4 hereof.
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2.6.
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Remedies. The
Employee agrees that any breach of the terms of this Section 2 would
result in irreparable injury and damage to the Company Group for
which the
Company Group would have no adequate remedy at law; the Employee
therefore
also agrees that in
the event of said breach or any threat of breach, any member of the
Company Group shall be entitled to an immediate injunction and restraining
order, from any court with jurisdiction over the Employee and the
matter,
to prevent such breach and/or threatened breach and/or continued
breach by
the Employee and/or any and all Persons acting for and/or with the
Employee, without having to prove damages, in addition to any other
remedies to which the member of the Company Group may be entitled
at law
or in equity. The terms of this Section 2.6 shall not prevent
any member of the Company Group
from pursuing any other available remedies for any breach or threatened
breach hereof, including, without limitation, the recovery of damages
from
the Employee. The Employee further agree that the provisions of
the covenants contained in this Section 2 are reasonable and necessary
to
protect the businesses of the Entities because of the Employee’s
access to Confidential Information and the Employee’s material
participation in the operation of such
businesses.
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2.7.
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Acknowledgment. The
Employee acknowledges that the Parent and the Company would not have
entered into the Merger Agreement unless the Employee entered into
this
Agreement.
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3.
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Non-Disparagement. From
and after the Effective Time and following termination of the Employee’s
employment with the Company, the Employee shall not make any statement
that criticizes, ridicules, disparages, or is otherwise derogatory
of any
member of the Company Group or any of its employees, officers, directors,
or stockholders.
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4.
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Enforceability
of
Covenants. The Company’s obligation to make any or all
of the payments provided for under this Agreement shall cease and
terminate in the event of a material breach by the Employee of
any of the
covenants contained herein. The Employee acknowledges that such
payments are full and adequate consideration for the Employee’s covenants
with the Company.
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5.
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Stock
Options. By executing this Agreement, the Employee
consents to the treatment of the Options held by the Employee that
is
described in Section 3.6 of the Merger
Agreement.
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6.
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Severability. Whenever
possible, each provision or portion of any provision of this Agreement,
including those contained in Section 2 hereof, will be interpreted
in such
manner as to be effective and valid under applicable law. The
invalidity or unenforceability of any provision or portion of any
provision of this Agreement in any jurisdiction shall not affect
the validity
or enforceability of the remainder of this Agreement in that jurisdiction
or the validity or enforceability of this Agreement, including that
provision or portion of any provision, in any other
jurisdiction. In addition, should a court or arbitrator
determine that any provision or portion of any provision of this
Agreement, including those contained in Section
2 hereof, is not reasonable or valid, either in period of time,
geographical area, or otherwise,
the parties agree that such provision should be interpreted and enforced
to the maximum extent which such court or arbitrator deems reasonable
or
valid.
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7.
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Assignments,
etc. The Employee shall not transfer, assign,
anticipate, mortgage, or otherwise encumber in advance any of the
benefits
payable hereunder. The Employee agrees that the Company may assign
this
Agreement to the Parent or any of its subsidiaries, and this Agreement
shall be binding upon the parties hereto, their heirs, executors,
administrators, successors or
assigns.
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8.
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Amendments. This
Agreement may be amended or revoked at any time only by mutual written
agreement of the parties.
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9.
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Entire
Agreement. This Agreement represents the complete
agreement and understanding between the Employee and the Company
pertaining to the Employee’s eligibility for a retention bonus and
supersedes all prior agreements or understandings, written or oral,
between the parties with respect to such subject matters. In
the event that the Merger Agreement is terminated prior to the Effective
Time, this Agreement shall be void ab initio
and of
no force and effect.
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10.
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Governing
Law. The validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the
State
of New York without giving effect to the conflicts of laws principles
thereof.
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[signature
page follows]
IN
WITNESS WHEREOF, the parties have
exercised this Agreement as of the date first set forth above.
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TEREX
CORPORATION
By: /s/
Xxxx X
Xxxxx
Name:
Xxxx X Xxxxx
Title:
Senior Vice President
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A.S.V.,
INC.
By: /s/
Xxxxxxx X.
Xxxxxx
Name:
Title:
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XXXXXXX
X. XXXXXX
By: /s/ Xxxxxxx
X.
Xxxxxx
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Exhibit
A
RELEASE
OF CLAIMS
This
RELEASE OF CLAIMS, dated as of _______________ is made and entered into by
and
between A.S.V., Inc., a Minnesota corporation (the “Company”), Terex
Corporation, a Delaware Corporation (the “Parent”) and Xxxxxxx
X. Xxxxxx (the “Employee”) (the
“Release”).
WHEREAS,
the Company and the Employee
are parties to that certain Retention Agreement, dated as of January 13, 2008
(the “Retention
Agreement”); and
WHEREAS,
the Company’s obligations to
make the payments described in Section 1 of the Retention Agreement are
conditioned upon the Employee’s execution, delivery, and non-revocation of a
valid and enforceable general release of claims.
NOW
THEREFORE, in consideration of the
mutual covenants contained herein and in the Retention Agreement and other
valid
consideration, the sufficiency of which is acknowledged, the parties hereto
agree as follows:
1. General
Release of
Claims.
1.1 Release. In
consideration of the payments and benefits to be made to the Employee pursuant
to the Retention Agreement, the Employee, with the intention of binding the
Employee and the Employee’s heirs, executors, administrators and assigns, does
hereby release, remise, acquit and forever discharge the Parent, the Company
and
each of its and their subsidiaries and affiliates (the “Company Affiliated
Group”), their present and former officers, directors, executives,
agents, shareholders, attorneys, employees and employee benefits plans (and
the
fiduciaries thereof), and the successors, predecessors and assigns of each
of
the foregoing (collectively, the “Company Released
Parties”), of and from any and all claims, actions, causes of action,
complaints, charges, demands, rights, damages, debts, sums of money, accounts,
financial obligations, suits, expenses, attorneys’ fees and liabilities of
whatever kind or nature in law, equity or otherwise, whether accrued, absolute,
contingent, unliquidated or otherwise and whether now known, unknown, suspected
or unsuspected which the Employee, individually or as a member of a class,
now
has, owns or holds, or has at any time heretofore had, owned or held, against
any Company Released Party (an “Action”) arising
on
or prior to the date hereof out of or in connection with the Employee’s service
as an employee, officer, shareholder and/or director to any member of the
Company Affiliated Group (or the predecessors thereof), including for breach
of
contract, impairment of economic opportunity, defamation, intentional infliction
of emotional harm or other tort and for any violation of applicable state and
local labor and employment laws (including, without limitation, all laws
concerning harassment, discrimination, retaliation and other unlawful or unfair
labor and employment practices), any and all Actions based on the Employee
Retirement Income Security Act of 1974 (“ERISA”), and any
and
all Actions arising under the civil rights laws of any federal, state or local
jurisdiction, including, without limitation, Title VII of the Civil Rights
Act
of 1964 (“Title
VII”), the Americans with Disabilities Act (“ADA”),
Sections 503
and 504 of the Rehabilitation Act, the Family and Medical Leave Act and the
Age
Discrimination in Employment Act (“ADEA”), excepting
only:
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i.
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any
Action by the Employee to enforce the Employee’s rights under the
Retention Agreement;
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ii.
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rights
to indemnification the Employee may have (A) under applicable corporate
law, (B) under the by-laws or certificate of incorporation of any
Company
Released Party or (C) as an insured under any director’s and officer’s
liability insurance policy now or previously in
force;
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iii.
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claims
(A) for benefits under any health, disability, retirement, deferred
compensation, life insurance or other, similar employee benefit plan
or
arrangement of any member of the Company Affiliated Group and (B)
for
earned but unpaid base salary through the date hereof;
and
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iv.
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claims
for the reimbursement of unreimbursed business expenses incurred
prior to
the date hereof.
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(b)
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No
Admissions,
Complaints or Other Claims. The Employee acknowledges
and agrees that the release of claims set forth herein is not to
be
construed in any way as an admission of any liability whatsoever
by any
Company Released Party, any such liability being expressly
denied. The Employee also acknowledges and agrees that the
Employee has not, with respect to any transaction or state of facts
existing prior to the date hereof, filed any Actions against any
Company
Released Party with any governmental agency, court or
tribunal.
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(c)
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Application
to all
Forms of Relief. This Release applies to any relief no
matter how called, including, without limitation, wages, back pay,
front
pay, compensatory damages, liquidated damages, punitive damages for
pain
or suffering, costs and attorney’s fees and
expenses.
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(d)
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Specific
Waiver. The Employee specifically acknowledges that the
Employee’s acceptance of the terms of this Release, is, among other
things, a specific waiver of any and all Actions under Title VII,
ADEA,
ADA and any state or local law or regulation in respect of discrimination
of any kind; provided, however,
that
nothing herein shall be deemed, nor does anything herein purport,
to be a
waiver of any right or Action which by law the Employee is not permitted
to waive.
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2.
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Voluntariness. The
Employee acknowledges and agrees that the Employee is relying solely
upon
the Employee’s own judgment in deciding whether to execute this Release;
that the Employee is over eighteen years of age and is legally competent
to sign this Release; that the Employee is signing this Release of
the
Employee’s own free will; that the Employee has read and understood this
Release before signing it; and that the Employee is signing this
Release
in exchange for consideration that the Employee believes is satisfactory
and adequate. The Employee also acknowledges and agrees that
the Employee has been informed of the right to consult with legal
counsel
and has been encouraged to do so.
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3.
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Severability. If
any provision or portion of this Release or the application of any
provision or portion of this Release shall be determined to be invalid
or
unenforceable to any extent or for any reason, all other provisions
and
portions of this Release shall remain in full force and shall continue
to
be enforceable to the fullest and greatest extent permitted by
law.
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4.
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Governing
Law. Except for matters hereunder as to which federal
law is applicable, this Release shall be construed and enforced in
accordance with, and the rights and obligations of the parties hereto
shall be governed by, the laws of the State of New York, without
giving
effect to the conflicts of law principles
thereof.
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[signature
page follows]
IN
WITNESS WHEREOF, the parties have executed this Release as of the date
first
set
forth above.
