SEPARATION AGREEMENT
This SEPARATION AGREEMENT is made and entered into this 31st day of August 2005,
by and among Terex Corporation and Terex Financial Services, Inc. (collectively,
the "Company") and Xxxxxx Xxxxxx (Executive").
1. Resignation from Employment
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Executive resigns from his employment as of the end of the business day on
August 31, 2005 (the "Termination Date").
2. Termination Payment and Benefits
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Executive hereby agrees to accept, as full and final consideration for
Executive's promises, obligations and release set forth herein, and in
settlement of any and all claims as particularly set forth below, the
following:
(a) Severance Payments -- The Company shall pay Executive Severance equal
to seventy-eight (78) week(s) (the "Severance Period") salary. The
Severance shall be calculated on Executive's current base salary and
shall be paid in regular installments in accordance with the normal
payroll processing. Company shall continue to withhold for income and
other applicable taxes, or other amounts.
(b) Medical Benefits - Medical, Dental, and Vision benefits cease as of
the end of the month of separation. All other benefits will end on the
Termination Date. If Executive is currently enrolled in Medical,
Dental, or Vision benefits and enrolls in COBRA for Medical, Dental,
and/or Vision benefits, the Company agrees to contribute an amount
equal to the Employer's current contribution toward COBRA on behalf of
Executive for the duration of the Severance Period (the "Company's
Cobra Continuation").
(c) Vacation Pay - Executive shall be paid a lump-sum amount for unused
and accrued vacation time to which Executive is entitled.
(d) Automobile - During the Severance Period, Employee may continue to use
the 2003 Cadillac Seville, VIN 0X0XX00000X000000, which is the
automobile leased by the Company for and provided to him as an
employee. The Company shall continue to pay for insurance premiums on
the automobile and the cost of maintenance. The Company shall give
Executive 30 days notice in the event of any change in level of
insurance coverage. The Company shall not pay mileage, gas, moving or
other violations or any other incidental expenses, unless such
expenses are incurred in the course of performing services requested
by the Company. The Employee represents that he will maintain the
vehicle in good repair, shall use it only for its intended purpose and
will not operate it negligently or recklessly. The Employee shall be
responsible for any damage to the automobile that is not regular wear
and tear. The Employee shall also indemnify and hold the Company
harmless for any damages or injuries caused as a result of the
negligent or reckless operation of this automobile during the
Severance Period, including but not limited to out of pocket expenses
and attorneys fees and cost. Effective from the Termination Date, the
Executive agrees that all mileage on the vehicle is for personal
usage. On the Termination Date, Executive will report to Xxxxxx
Xxxxxxx the odometer reading, the number of miles driven between
November 1, 2004 and the Termination Date and of those miles, how many
were driven for personal use.
(e) Club Memberships - During the Severance Period, the Company shall
continue to pay (i) Executive's dues to Rolling Hills Country Club and
(ii) Executive's monthly membership fees to the New York Sports Club
or reimburse Executive for the monthly membership fees (but not
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initiation fees) to a successor health club of up to $80.00 a month,
inclusive of sales tax. To receive reimbursement for the monthly
membership fees to a successor health club, Executive shall submit to
Xxxxxx Xxxxxx-Xxxxx a receipt from the successor health club
evidencing payment by Executive. Executive shall be responsible for
all assessments or other charges as a result of his country club
membership. Effective from the termination date, Executive agrees that
the use of the country club membership shall be treated as personal
use for tax purposes and confirms that the use of the New York Sports
Club membership is for personal use.
(f) Legal Fees - The Company shall reimburse Executive for up to $9000.00
in legal fees incurred by him in connection with the review and
execution of this Agreement
(g) Other Expenses - Upon submission of invoices, the Company shall
reimburse Executive for his monthly usage costs for his mobile
telephone and blackberry.
(h) Outplacement Services - During the Severance Period, Executive shall
receive Executive level outplacement services from either Right
Management Consultants or Xxx Xxxxx Xxxxxxxx to assist with his
transition.
(i) Executive expressly agrees that Executive shall not be entitled to and
shall not receive any other payments or benefits of any kind from the
Company, including without limitation any bonus payments or any right
to participate in the Company's 401(k) Plan, other than the benefits
expressly provided for in this Paragraph 2 (collectively, "Termination
Payments"). Executive further agrees that Executive would not receive
the moneys and/or benefits specified in this Agreement except for
Executive's execution of this Agreement and Executive's fulfillment of
the promises and obligations contained herein.
(j) Other Employment -On or about the 1st of each month during the
Severance Period, Executive or his counsel, will notify Xxxxxx
Xxxxxx-Xxxxx via e-mail or telephone if he has been employed,
including self employment, or retained as a contractor or consultant
in the preceding month, including the income that he has earned and
whether he has any plans in the current month to continue or begin
employment, including self-employment, or to act as a consultant or
contractor including that income that he anticipates earning. The
Company may require additional documentation from Executive to confirm
employment or engagement as a contractor, including income earned. The
Company will suspend Termination Payments in any month in which
notification is not made (or the requested documentation is not
received) and will not reinstate Termination Payments until
notification and/or documentation has been provided to Xxxxxx
Xxxxxx-Xxxxx.
(k) If Executive is employed on a full-time basis, including self
employment, or re-employed by the Company, or is retained as a
contractor or consultant, Executive agrees that Executive's
Termination Payments will be affected as follows:
(i) The Company's obligation to provide outplacement services will
terminate;
(ii) The Company's Cobra Continuation payments will end on the first
day that Executive becomes eligible to participate in medical
benefits;
(iii) Severance Payments will be reduced by the income earned by
Executive ("Reduced Severance"). Reduced Severance will be
effective on the first day of Executive's employment or
engagement and will be made on a going forward basis only.
Reduced Severance shall be calculated by subtracting Executive's
projected annualized income/78 from Severance/78 multiplied by
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the number of weeks remaining in the Severance Period. Where the
income earned by Executive varies during the Severance Period,
Reduced Severance may be adjusted by the Company.
(iv) Executive will return the automobile to the Company;
(v) The Company's obligation to pay club membership dues and
reimburse Executive for his monthly mobile phone and blackberry
costs will terminate;
(vi) Under the circumstance where Reduced Severance is $0.00 as a
result of the projected annualized income to be earned by
Executive, the Severance Period shall end and the Company shall
have no further obligation to Executive under this Agreement.
(vii) All Termination Payments provided to Executive will be deemed
adequate consideration for this Agreement, including but not
limited to adequate consideration for the Waiver and Release of
Claims, Cooperation with Company, and Protection of Confidential
Information, Return of Company Property, Non-Disparagement,
Non-solicitation and Non-compete covenants set forth in
Paragraphs 3, 4, 5 and 7 below. The elimination or reduction of
Termination Payments shall not affect the adequacy of
consideration for this Agreement.
3. Cooperation with Company
------------------------
(a) In consideration for the Termination Payments, Executive agrees to
fully cooperate with the Company in ensuring a smooth transition
following Executive's departure. Executive expressly agrees to
cooperate with and make self available to the Company, as the Company
may reasonably request under the totality of the circumstances, to
assist it in any matter, including but not limited to meeting with
Company Executives or agents, promptly and fully responding to
inquiries from the Company and giving truthful testimony in any
litigation or investigation or potential litigation or investigation,
over which Executive may have knowledge, information, or expertise.
Executive's obligation to fully cooperate with the Company survives
the termination of the Severance Period.
(b) To the extent that Executive is an Executive Officer or Director for
the Company, its parent company, subsidiaries or affiliates, Executive
resigns from those positions effective as of the Termination Date.
4. Waiver and Release of Claims
----------------------------
(a) Executive Understanding of Laws -- Executive understands that there
are various state, federal, and local laws that prohibit employment
discrimination on the basis of age, sex, race, color, national origin,
religion, handicap, veteran status, and other protected categories and
that these laws are enforced through the Equal Employment Opportunity
Commission, the U. S. Department of Labor, and other agencies.
(b) Executive's Release of Company -- In consideration for the Termination
Payments, Executive hereby irrevocably, unconditionally and generally
releases, and agrees not to commence in any forum, any action or
proceeding against the Company and its parent, subsidiaries,
affiliates, successors and assigns for damages, judgments, or any
liability, claims or demands, known or unknown and of any nature
whatsoever and whenever, arising directly or indirectly out of
Executive's employment with the Company or the termination of such
employment or services. Without in any way limiting the generality of
the foregoing, Executive hereby waives and releases any rights, claims
or causes of action that Executive may have for salary, bonus,
severance pay, pay or distributions pursuant to any Company Long Term
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Incentive Plan or Supplemental Executive Retirement Plan or any other
benefit plan (excluding 401k), vacation pay, any rights, claims or
causes of action arising under the Age Discrimination in Employment
Act of 1967 (the "ADEA"), as amended, the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, as amended, the Civil Rights
Act of 1866, the Americans with Disabilities Act of 1990, the National
Labor Relations Act, the Employee Retirement Income Security Act of
1974, the Fair Labor Standards Act, the Occupational Safety and Health
Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, the
Federal Family and Medical Leave Act, the Workers Adjustment and
Retraining Notification Act, the Connecticut Fair Employment Practices
Act, and any rights, claims or causes of action in tort or in contract
or pursuant to any other applicable state or local laws.
Executive intends to waive and release any rights Executive has under
these and other laws of contract or tort, but Executive does not
intend to and does not waive any rights or claims that Executive may
have after the date Executive signs this Agreement. Executive
acknowledges that Executive does not have any current action,
proceeding, charge or complaint against the Company pending regarding
Executive's employment. Nothing in this Agreement may affect the
rights and responsibilities of the Equal Employment Opportunity
Commission (the "Commission) to enforce the ADEA, or used to justify
interfering with the protected right of Executive to file a charge or
participate in an investigation or proceeding conducted by the
Commission under the ADEA. However, Executive agrees not to accept any
relief or recovery from any charge or complaint filed against the
Company with any federal, state, or local administrative agency or
court with regard to claims arising from Executive's employment.
Nothing contained herein waives or expands any rights that Executive
may have to indemnification or the advancement of legal fees pursuant
to any applicable Directors and Officers Insurance Policy or the
Amended and Restated Bylaws of Terex Corporation, dated as of March 9,
1998 (the "Bylaws"), or as otherwise amended to comply with applicable
law, for any actions or investigations, or claims, issues or matters
associated with any action or investigation. Any right or limitations
to indemnification of Executive are derived only from the Bylaws
and/or any applicable Directors and Officers Insurance Policy.
5. Protection of Confidential Information; Return of Company Property;
---------------------------------------------------------------------------
Non-Disparagement
----------------
In consideration for the Termination Payments:
(a) No Use of Company Confidential Information -- Executive acknowledges
that:
(i) As a result of Executive's employment with the Company, Executive
has obtained secret and confidential information concerning the
business of the Company, including, without limitation, the
operations and finances, the identity of customers and sources of
supply, their needs and requirements, the nature and extent of
contracts with them, and related costs, price, and sales
information ("Confidential Information").
(ii) Executive agrees that Executive will not at any time divulge to
any person, firm, or corporation, or use for Executive's own
benefit, any Confidential Information obtained or learned by
Executive during the course of Executive's employment with the
Company, except (i) with the Company's express written consent;
(ii) to the extent that any such information is in or becomes
part of the public domain other than as a result of Executive's
breach of any of Executive's obligations hereunder; or, (iii)
where required to be disclosed by court order, subpoena, or other
government or legal process by law, in which event Executive
shall promptly notify the Company.
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(iii) The existence and terms of this Agreement are Confidential
Information. Except to his spouse and legal and financial
advisors, Executive agrees not to disclose, either directly or
indirectly, any information whatsoever regarding the existence or
substance of this Agreement, including specifically any of the
details of Executive's Termination Payments.
(b) Executive to Return Company Property -- Except as provided herein,
within 5 business days from the Termination Date, Executive shall
deliver to the Company all memoranda, notes, software, records,
reports, manuals, drawings, blueprints, and other documents (in any
format and all copies thereof) and other tools provided to Executive
by Company in Executive's possession relating to the business of the
Company and all property associated therewith which Executive may
possess or have under Executive's control. Executive shall have the
right to retain all of Executive's personal property.
(c) Non-disparagement -- Executive agrees to conduct self in a
professional manner and not to make any disparaging, negative, or
false statements regarding the Company, its parents, subsidiaries,
affiliates, directors, officers, or Executives which could in any way
have an adverse effect on the business or affairs of the Company.
Employee shall direct all employment references only to the Company's
Vice President, Human Resources. The Company agrees that Xxx XxXxx,
the Chairman and CEO of Terex Corporation, and his direct reports as
of the Termination Date, will not make any disparaging statements
regarding Employee's character.
6. Consultation with Attorney and Review of Agreement and Release
--------------------------------------------------------------
By executing this Agreement, Executive acknowledges that (i) Executive has
been advised in writing by the Company to consult with an attorney before
executing this Agreement; (ii) Executive had adequate time to review this
Agreement and to consider whether to sign this Agreement; (iii) Executive
understands each and every term of this Agreement and the full effect of
signing this Agreement, including Executive's obligations to the Company
and Executive's release and waiver of any and all claims; (iv) Executive
has been provided a period of at least twenty-one (21) days within which to
consider this Agreement and consult with counsel; and (v) for a period of
seven (7) days following execution of this Agreement, Executive may revoke
this Agreement and this Agreement will not be effective until the
revocation period expires. In the event Executive revokes in accordance
with this provision, Executive shall return to the Company all
consideration received under this Agreement, if any.
7. Non-solicitation and Non-compete
--------------------------------
In consideration for the Termination Payments, Executive hereby agrees that
for the period commencing on the date of the signing of this Agreement and
continuing for one (1) year thereafter ("Non-solicitation Period"),
Executive will not without Company's prior written consent, directly or
indirectly (i) solicit or encourage any of the Executives of Company to
leave the employ of Company or to terminate or alter their contractual
relationships, if any, in a way that is adverse to Company's best business
interests; (ii) solicit, divert or take away, or attempt to solicit, divert
or take away, any customers, business, or suppliers of Company upon whom
Executive called, serviced, or solicited during Executive's employment with
Company or with whom Executive became acquainted as a result of employment
with Company; or (iii) be involved in any business or enterprise, whether
as any owner, member of a partnership, trustee, principal shareholder
(stock ownership in a public or private company in excess of 5%), officer
or director of a corporation, or as an Executive, agent, associate,
consultant or otherwise, which competes with any of the financial products
and services offered by the Company, its subsidiaries or affiliates to
assist with in the acquisition of construction equipment.
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8. Third Party Agreements
----------------------
Executive hereby warrants and represents that Executive has not entered
into any third party agreements in Company's name or on Company's behalf of
which Company has not been previously advised in writing. Executive further
warrants and represents that during the period of Executive's employment
with Company, Executive has not knowingly or intentionally engaged in any
conduct or activity related to the Company, which constitutes a violation
of law, misconduct, or a material violation of Company's policies.
9. No Admission by the Company
---------------------------
This Agreement and/or any payments made hereunder are not intended to be an
admission or concession by the Company of any wrongdoing or illegal or
actionable acts or omissions and the Company affirmatively states that it
has not engaged in any such acts or omissions. In consideration for the
Termination Payments, Executive shall not directly or indirectly make any
written or oral statements, suggestions, or representations that the
Company has made or implied any such admission or concession.
10. Breach of this Agreement
------------------------
In the event Executive materially breaches any of the provisions of this
Agreement, Company's obligation hereunder to provide Executive any further
Termination Payments and/or benefits shall immediately cease.
11. Miscellaneous
-------------
Except for Non-Disclosure Agreement dated October 9, 1995, this Agreement
contains all the understandings and agreements with respect to the matters
set forth herein, and there are no others made either contemporaneously
herewith, or otherwise. This Agreement shall be governed by the laws of the
state of Connecticut applicable to contracts made and wholly performed
therein, without reference to conflicts of law principles. This Agreement
may not be modified, altered, or changed except upon express written
consent of both parties wherein specific reference is made to this
Agreement. The construction and interpretation of this Agreement shall not
be strictly construed against the drafter. The invalidity or
unenforceability of any provision of this Agreement shall not affect the
validity or enforceability of any other provisions of this Agreement, all
of which shall remain in full force and effect. The headings in this
Agreement are for reference only, and shall not affect the interpretation
of this Agreement.
12. Voluntary Signing
- -----------------
Executive acknowledges that this Agreement and all the terms hereof are
fair, reasonable, and are not the
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result of any fraud, duress, coercion, pressure, or undue influence
exercised by the Company and that Executive has approved and/or entered
into this Agreement and all of the terms hereof, knowingly, freely and
voluntarily.
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Dated: September 2, 2005
TEREX CORPORATION
By: /s/ Xxxxxx X. XxXxx
Dated: September 7, 2005
TEREX FINANCIAL SERVICES, INC.
By: /s/ Xxxx X Xxxxx
Xxxx X Xxxxx
Vice President
Dated: September 7, 2005
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