EMPLOYMENT AGREEMENT
EXHIBIT 10.3
This EMPLOYMENT AGREEMENT (the “Agreement”) is made on the 19th day of February
2009 by and between LINDSAY CORPORATION, a Delaware corporation (the “Company” or “Lindsay”) and
Xxx X. Xxxxxx (the “Executive”).
WITNESSETH:
WHEREAS, the Executive has been employed by the Company, and the Company and Executive desire
to obtain assurances of continued employment of Executive for the period provided in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises and agreements
hereinafter set forth, the Company and the Executive agree as follows:
ARTICLE I
EMPLOYMENT AND DUTIES
EMPLOYMENT AND DUTIES
SECTION 1.1. Position and Responsibilities. The Company hereby employs the Executive
to render full-time exclusive services (as defined in Section 1.3 hereof) to the Company during the
Term (as hereinafter defined), subject to the direction of the President of Lindsay (the
“President”) or such other person as the President or the Board of Directors of Lindsay (the
“Board”) may designate from time to time (the President or such other person so designated, the
“Supervisor”). In such capacity and subject to such direction, the Executive shall (i) devote his
full professional time and attention, best efforts, energy and skills to the services required of
him as an employee of the Company, except for paid time off taken in accordance with the Company’s
policies and practices, and subject to the Company’s policies pertaining to reasonable periods of
absence due to sickness, personal injury or other disability; (ii) use his best efforts to promote
the interests of the Company; (iii) comply with all applicable governmental laws, rules and
regulations and with all of the Company’s policies, rules and/or regulations applicable to the
employees of the Company, including, without limitation, the Code of Business Conduct and Ethics of
the Company as amended from time to time; and (iv) discharge his responsibilities in a diligent and
faithful manner, consistent with sound business practices and in accordance with the Supervisor’s
directives. As of the date of this Agreement, the Executive is serving as the Vice President and
Chief Accounting Officer of the Company.
SECTION 1.2. Acceptance. The Executive hereby accepts such employment and agrees to
render the services described above in the manner described above.
SECTION 1.3. Exclusive Service. It is understood and agreed that the Executive may
not engage in other business activities during the Term, whether or not for profit or other
pecuniary advantage; provided, however, that the Executive may make financial investments which do
not involve his active participation and may engage in other activities such as participation in
charitable, educational, religious, civic and similar type organizations and similar types of
activities and, with the consent of the President, may serve as an outside director on the board of
directors of other corporations which are not affiliates or competitors of the Company or any of
its affiliates, all to the extent that such activities do not hinder or interfere with the
performance of his duties under this Agreement or conflict with the policies of Lindsay concerning
conflicts of interest or with the businesses of Lindsay or any of its affiliates in any material
way.
ARTICLE II
TERM
TERM
SECTION 2.1. Term. Beginning on the date of this Agreement, the Executive will be
employed by the Company for a period of twelve (12) months, unless his employment is terminated at
an earlier date in accordance with ARTICLE IV (the “Term”), provided that on each date thereafter
the Term shall automatically be extended for an additional day, unless the Company notifies
Executive in writing that it does not wish to further extend the Term. Accordingly, this Agreement
shall have a remaining Term of twelve (12) months from the date when the Company notifies the
Executive in writing that it does not wish to further extend the Term. Those obligations which by
their terms survive the termination of this Agreement shall not be extinguished by the expiration
of the Term or the termination of this Agreement.
ARTICLE III
COMPENSATION
COMPENSATION
SECTION 3.1. Basic Salary. As of the date of this Agreement, the Executive’s annual
base salary (“Salary”) is $175,000. Executive’s Salary may be increased from time to time based on
merit or such other considerations as the Compensation Committee of the Board (“Compensation
Committee”) may deem appropriate, and prior to a Change in Control (as defined in Section 4.8
herein) may be reduced as part of a general across the board Salary reduction that is applicable to
all senior executives with comparable responsibility, title or stature. The Salary shall be
payable in periodic installments in accordance with the Company’s regular payroll practices as in
effect from time to time.
SECTION 3.2. Bonus; Equity Incentives. In addition to the Salary:
(a) The Executive shall be eligible to receive an annual bonus (“Bonus”), in the discretion of
the Compensation Committee, based on the performance of the Company relative to financial
objectives and the performance of the Executive relative to personal objectives, in each case as
such objectives are set forth in the Company’s annual management incentive plan. The Executive’s
target Bonus shall be 35% of his Salary, subject to change in the discretion of the Compensation
Committee prior to a Change in Control.
(b) The Executive shall be eligible to receive annual performance stock units, restricted
stock units and/or other equity or long-term incentives, in the discretion of the Compensation
Committee.
SECTION 3.3. Pro-ration and Payment of Taxes. All required employment taxes,
withholding and deductions shall be deducted from the Salary and the Bonus. If the Executive does
not work any full year or this Agreement has been terminated before the end of any year, the Salary
shall be pro-rated for the period actually worked.
SECTION 3.4. Benefits. The Executive shall be eligible to participate in and receive
the benefits under any deferred compensation plan, health, life, accident and disability insurance
plans or programs and any other employee benefit or fringe benefit plans or arrangements that the
Company makes available generally to other senior executives of the Company, pursuant to the
provisions of such plans or arrangements as in effect from time to time.
SECTION 3.5. Vacations. The Executive will be entitled to vacation and sick days in
accordance with the policies of the Company for its employees generally, as in effect from time to
time. Vacation must be taken by the Executive at such time or times as reasonably approved by the
President.
SECTION 3.6. Expenses. The Company shall pay or reimburse the Executive for all
reasonable, ordinary and necessary business expenses incurred or paid by the Executive during the
Term in the performance of the Executive’s services under this Agreement in accordance with the
applicable policies and procedures of the Company as in effect from time to time, upon the
presentation of proper expense statements or such other supporting documentation as the Company may
reasonably require.
ARTICLE IV
TERMINATION OF EMPLOYMENT
TERMINATION OF EMPLOYMENT
SECTION 4.1. General. The Executive’s employment may be terminated by the Company
during the Term as provided in this ARTICLE IV. Upon termination of employment, the Term shall end
and the Executive shall be paid the pro-rated portion of the Salary accrued but unpaid to the date
of his termination. The Executive’s rights under the Company’s employee benefit plans shall be
determined under the provisions of such plans and/or applicable law and any payments due under such
plans shall be distributed pursuant to the provisions thereof.
SECTION 4.2. Death or Disability. The Executive’s employment hereunder shall
terminate automatically as of the date of his death, and the Company may at any time at its option,
exercised by notice to the Executive, terminate his employment for “disability” (as hereinafter
defined). In the event of termination for death or disability, the Company, subject to the
provisions of Section 4.1, shall have no further obligations or liabilities to the Executive
hereunder. For purposes of this Agreement, the term “disability” means any physical or mental
illness, disability or incapacity which, in the good faith determination of the Board, prevents the
Executive from performing the essential functions of his position hereunder for a period of not
less than ninety consecutive days (or for shorter periods totaling not less than one hundred and
twenty days) during any period of twelve consecutive months.
SECTION 4.3. Cause. The Company may, at any time, at its option, exercised by notice
to the Executive, terminate his employment for cause when cause exists. In the event of
termination for cause, the Company, subject to the provisions of Section 4.1, shall have no further
obligations or liabilities to the Executive hereunder. For purposes of this Agreement, the term
“cause” means (i) any conviction of the Executive for a felony or misdemeanor (other than for minor
motor vehicle offenses or other minor offenses); (ii) any material breach by the Executive of this
Agreement or the willful failure of the Executive to comply with any lawful directive of the
Supervisor, the President or the Board or any lawful policy of the Company; or (iii) dishonesty or
gross negligence by the Executive in the performance of his duties hereunder.
SECTION 4.4. Other Than For Cause. The Company may, at any time, at its option,
terminate the employment of the Executive other than for cause, death or disability, in which event
the Company shall pay to Executive in a lump sum, within ninety (90) days of such termination, an
amount equal to one-half (1/2) times Executive’s Salary (or Executive’s Salary plus target Bonus in
the event of termination other than for cause, death or disability within one year following a
Change in Control), at the rate in effect on the date of his termination, subject to execution of
the release referred to in Section 4.6 below and the expiration of all revocation periods under
applicable law with respect to such release (and subject to continued compliance
by the Executive
with ARTICLE V). This amount shall be in lieu of and shall be reduced by any termination or
severance pay representing Salary or Bonus which is payable to Executive under any Proprietary
Matters Agreement, offer of employment letter or other agreement with the Company or any of its
affiliates.
In the event the Executive voluntarily terminates his employment with the Company for Good
Reason (as defined below) at any time within one year after a Change in Control, such event shall
be considered equivalent to a termination without cause, and the Executive shall be entitled to
receive the same payment provided in the previous paragraph for termination without cause within
one year after a Change in Control. “Good Reason” will exist if: (a) Executive’s Salary, target
Bonus or total compensation opportunity (including Salary, target Bonus and long-term incentive
compensation opportunity) is reduced below the level in effect immediately prior to the Change in
Control, (b) Executive’s title, duties or responsibilities with the Company are significantly
reduced from those in effect immediately prior to the Change in Control, or (c) Executive is
required to relocate his principal office to a location more than fifty (50) miles from its
location immediately prior to the Change in Control, provided that the Executive must furnish
written notice to the Company setting forth the reasons for Executive’s intention to terminate
employment for Good Reason under this paragraph, and the Company shall have an opportunity to cure
the actions or omissions forming the basis for such intended termination, if possible, within
thirty (30) days after receipt of such written notice.
SECTION 4.5. Extension. Any extension of the Term (other than automatic extensions
under Section 2.1) must be agreed upon in writing by both parties hereto.
SECTION 4.6. Satisfaction of Liabilities. No amounts shall be payable by the Company
to the Executive under this ARTICLE IV until the Executive executes a general release in a form
reasonably acceptable to the Company. Upon the delivery of such executed general release to the
Company and subject to the Company’s compliance with Section 4.4, the Company shall have no further
liability of any kind or nature whatsoever to the Executive under this Agreement.
SECTION 4.7. Assistance to Company. The Executive agrees that in the event any
administrative or legal proceeding is instituted against the Company or any of its affiliates in
connection with any action taken while the Executive was in the Company’s employ, the Executive
will assist and cooperate in defense of such action or proceeding.
SECTION 4.8. Change in Control. For purposes of this Agreement, “Change in Control”
shall mean any of the following events: (a) a dissolution or liquidation of the Company, (b) a
sale of substantially all of the assets of the Company, (c) a merger or combination involving the
Company after which the owners of Common Stock of the Company immediately prior to the merger or
combination own less than 50% of the outstanding shares of common stock of the surviving
corporation, or (d) the acquisition of more than 50% of the outstanding shares of Common Stock of
the Company, whether by tender offer or otherwise, by any “person” (as such term is used in Section
13(d) and 14(d) of the Securities Exchange Act of 1934) other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company.
ARTICLE V
COVENANTS AND REPRESENTATIONS
COVENANTS AND REPRESENTATIONS
SECTION 5.1. Proprietary Matters Agreement. The Executive acknowledges that he has
previously entered into a Proprietary Matters Agreement with the Company and agrees to
comply with
and be bound by all of the provisions of the Proprietary Matters Agreement that apply to him, and
Executive agrees that the payments provided for under this Agreement shall be in lieu of and shall
be reduced by any amounts which are payable to Executive under the Proprietary Matters Agreement.
SECTION 5.2. Enforcement. If the Executive commits a material breach of any of the
provisions of the Proprietary Matters Agreement referred to in Section 5.1, the Executive shall
forfeit all rights to receive any amounts of any nature whatsoever from the Company under this
Agreement or otherwise, and the Company will be entitled to the remedies provided under the
Proprietary Matters Agreement and any other rights and remedies the Company may have pursuant to
applicable laws.
SECTION 5.3. Representation. The Executive represents and warrants to the Company
that he has full power to enter into this Agreement and perform his duties hereunder and that his
execution and delivery of this Agreement and his performance of his duties hereunder shall not
result in a breach of or constitute a default under any agreement or understanding, oral or
written, to which he is a party or by which he may be bound.
ARTICLE VI
MISCELLANEOUS
MISCELLANEOUS
SECTION 6.1. Voluntary Nature. The Executive represents, warrants and acknowledges
that he is voluntarily agreeing to the provisions of this Agreement. The Executive has been urged
to, and hereby represents, warrants and acknowledges that he has had the opportunity to, obtain the
advice of his own attorney unrelated to the Company or any of its affiliates prior to executing and
delivering this Agreement.
SECTION 6.2. Notice. Any notice required or permitted to be given under this
Agreement shall be sufficient if it is in writing and is delivered in person or sent by certified
mail, return receipt to (i) his current residence, in the case of the Executive, or (ii) the
President at Lindsay’s principal corporate office, in the case of the Company. Notice shall be
deemed effective upon receipt if made by personal delivery or upon deposit in the United States
mail.
SECTION 6.3. Non-Assignability. Neither of the parties hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the prior written consent of
the other party; provided, however, that the Company may assign this Agreement without the prior
written consent of the Executive to any purchaser of the Company or of all or substantially all of
the Company’s assets, or to the surviving entity upon any merger or consolidation of the Company
with or into another entity.
SECTION 6.4. Applicable Law. This Agreement and the relationship of the parties in
connection with the subject matter of this Agreement shall be construed and enforced according to
the laws of the state of Nebraska without giving effect to the conflict of law rules thereof.
SECTION 6.5. Effect of Prior Agreements. This Agreement (together with the
Proprietary Matters Agreement) contains the full and complete agreement of the parties relating to
the employment of the Executive hereunder. This Agreement may not be amended, modified or
supplemented and no provision or requirement may be waived except by written instrument signed by
the party to be charged.
SECTION 6.6. Severability. Wherever possible, each provision of this Agreement will
be interpreted in a manner to be effective and valid, but if any provision is held invalid or
unenforceable by any court of competent jurisdiction, then such provision will be ineffective only
to the extent of such invalidity or unenforceability, without invalidating or affecting in any
manner the remainder of such provision or the other provisions of this Agreement.
SECTION 6.7. Absence of Waiver. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other party of any of the
provisions hereof shall in no way be construed to be a waiver of such provisions or to affect
either the validity of this Agreement or any part hereof or the right of either party thereafter to
enforce each and every provision in accordance with the terms of this Agreement.
SECTION 6.8. Arbitration. Any dispute, disagreement or other question arising under
this Agreement or the interpretation thereof shall be settled by final and binding arbitration
before a single arbitrator under the arbitration provisions of the Employment Dispute Resolution
Rules of the American Arbitration Association then in effect, and judgment upon the award may be
entered in any court having jurisdiction thereof.
SECTION 6.9. I.R.C. §409A. Exhibit A which is attached to this Agreement modifies and
clarifies certain terms and condition of this Agreement in order to comply with Section 409A of the
Internal Revenue Code. It is hereby incorporated by reference as part of this Agreement as if set
forth herein.
SECTION 6.10. Counterparts. This Agreement may be executed in counterparts, each of
which shall constitute one and the same instrument.
[Remainder of Page Left Blank Intentionally]
IN WITNESS WHEREOF, the parties have executed and delivered this agreement as of the date first
above written.
| Company: | LINDSAY CORPORATION | |||||
| By: | /s/ Xxxxxxx X. Xxxxx
|
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| Title: President and CEO | ||||||
Executive:
|
/s/ Xxx X. Xxxxxx
|
|||||
This Exhibit A to the Lindsay Corporation Employment Agreement (“Agreement”) modifies and
clarifies certain terms and conditions of the Employment Agreement between Lindsay Corporation
(“Company”) and the Executive (herein referred to as “Employee”). The purpose of this Exhibit A is
to comply with Section 409A of the Internal Revenue Code (“Section 409A”)
1. Termination of Employment. To the extent that the Agreement provides for any
termination payments to be made or provided to Employee as a result of involuntary termination of
employment without cause or by Employee for Good Reason, Employee will be considered to have
experienced a termination of employment when Employee has a “separation from service” within the
meaning of Section 409A.
In general, Employee will have a “separation from service” within the meaning of Section 409
as of the date that the level of bona fide services that Employee is expected to perform
permanently decreases to no more than 20% of the average level of bona fide services that Employee
performed over the immediately preceding 36-month period (or the full period of services if
Employee has been providing services less than 36 months).
For these purposes, “services” include services that Employee provides as an employee or as an
independent contractor. In addition, in determining whether Employee has experienced a “separation
from service,” the Company is obligated to take into account services Employee provides both for it
and for any other corporation that is a member of the same “controlled group” of corporations as
the Company under Section 414(b) of the Internal Revenue Code or any other trade or business (such
as a partnership) which is under common control with the Company as determined under Section 414(c)
of the Internal Revenue Code, in each case as modified by Section 409A. In general, this means
that the Company will consider services Employee provides to any corporation or other entity in
which Lindsay Corporation, directly or indirectly, possesses at least 50% of the total voting power
or at least 50% of the total value of the equity interests.
2. Release and Timing of Termination Payments. The Release which Employee is required
to deliver to the Company in order to receive termination payments under the Agreement shall be
delivered to Company not later than 30 days following Employee’s “separation from service.” Except
as provided in Paragraph 3 below, Employee’s lump sum termination payment shall be paid in full on
the first regular payday following Employee’s “separation from service” after Employee’s right to
revoke the Release pursuant to applicable law has lapsed, but in no event later than ninety (90)
days following Employee’s “separation from service.”
3. Required Delay in Payment for “Specified Employees". Each of the payments under
this Agreement shall be considered a separate payment for purposes of Section 409A.
Notwithstanding any provision to the contrary in this Agreement, if (a) Employee is a “specified
employee” within the meaning of Section 409A for the period in which any payment or benefit under
this Agreement would otherwise commence or be made, and (b) such payment or benefit under this
Agreement would otherwise subject Employee to any tax, interest or penalty imposed under Section
409A if the payment or benefit were to commence or be made within six months of Employee’s
termination of employment with the Company, then all such payments or benefits
that would otherwise
be paid during the first six months after Employee’s “separation from service” within the meaning
of Section 409A shall be accumulated and shall be paid on the earlier of (1) the first day which is
at least six months after Employee’s “separation from service” within the meaning of Section 409A
or (2) the date of Employee’s death.
4. Reimbursements. If Employee is entitled to receive during or following termination
of employment any reimbursements that constitute deferred compensation for purposes of Section
409A, (a) any such reimbursements shall be paid no later than the last day of the calendar year
following the calendar year in which the related expense was incurred; (b) the amounts eligible for
reimbursement in any calendar year shall not affect the amounts eligible for reimbursement in any
other calendar year, and (c) the right to reimbursement is not subject to liquidation in exchange
for any other payment or benefit.
5. No Liability of Company. Lindsay Corporation shall not be liable to Employee for
any taxes, interest or penalties which may be imposed on Employee under Section 409A or
corresponding provisions of state laws.
