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EXHIBIT 10.22
EMPLOYMENT AND SEVERANCE AGREEMENT
This Employment and Severance Agreement (the "Agreement") is entered into this
18th day of November 1996, by and between AGCO CORPORATION, a Delaware
corporation (the "Company"), and Xxxx-Xxxx Xxxxxxx (the "Executive"),
WITNESSETH:
In consideration of the mutual covenants and agreements hereinafter set forth,
the Company and the Executive do hereby agree as follows:
1. EMPLOYMENT.
(a) Agreement of Employment. The Company hereby employs the Executive
and the Executive hereby agrees to serve the Company on the terms and conditions
set forth herein, and further agrees that this contract supersedes all previous
agreements between the parties.
(b) Term. The employment shall commence on November 18, 1996 and shall
be for a period of five (5) years, unless amended in writing by both parties or
unless otherwise terminated earlier in accordance with Section 6 or any other
provision of this Agreement. Each year, at the end of the first year of service
and on the anniversary date of the end of the first year of service under the
Agreement, the Agreement shall be automatically extended for an additional year,
unless the Company notifies the Executive prior to the anniversary date, in
writing, that it desires to terminate the Agreement or unless otherwise
terminated earlier in accordance with Section 6 or any other provision of the
Agreement. The Company may terminate the Agreement in this manner without cause.
If the Executive is notified of the termination of the Agreement, the Executive
will continue similar service to the Company as directed, and the Company shall
pay the Executive his Base Salary (as defined in Section 3(a) of the Agreement)
then in effect and will continue the Executive's group health and life insurance
for the balance of the four (4) year period remaining on the Agreement. If the
Executive fails to perform similar duties as directed by the Company or
voluntarily terminates the availability of services to accept other employment,
the company may cease payment of the Base Salary and insurance coverage upon
thirty (30) days written notice. If the Executive is terminated for cause and
obtains other employment, the Company may adjust the compensation and insurance
coverage for the period remaining on the contract so that the total compensation
and coverage provided to the Executive by his new employer and the Company does
not exceed the provisions of this Agreement. In the event of notice of
termination without cause, the Company will reasonably cooperate with the
Executive and not be unreasonable in providing the use of facilities or free
time for outplacement.
2. POSITION AND DUTIES
The Executive shall serve as a Director and as an President and Chief Executive
Officer of the Company with such duties and responsibilities as may from time to
time be prescribed by the Company's Board of Directors (the "Board"), provided
that such duties and responsibilities are consistent with the Executive's
position. The Executive shall perform and discharge faithfully,
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diligently and to the best of his ability such duties and responsibilities and
shall devote all of his working time and efforts to the business and affairs of
the Company and its affiliates.
3. COMPENSATION.
(a) Base Salary. The Company shall pay to the Executive an annual
base salary ("Base Salary") of Five Hundred Thousand Dollars ($500,000.00),
payable upon request, subject to applicable tax and payroll deductions.
(b) Incentive Compensation. Provided Executive has duly performed his
obligations pursuant to this agreement, the Executive shall be entitled to
participation or receive benefits under any Long Term Incentive Stock Plan
(LTIP) implemented by the Company and offered to senior management or directors.
(c) The Executive will also participate in the annual Incentive
Compensation Plan, with the maximum potential bonus equal to 100% of salary and
based on the goals established by the Compensation Committee.
(d) Fringe Benefits. During the term of this Agreement, the Executive
shall be entitled to participate in fringe and employee benefit plans and
arrangements which are available to senior executive officers of the Company,
including, without limitation, group health and life insurance disability
coverage, pension and savings plans, current deferred compensation plans, and
the Senior Management Employment Policy.
(e) Other Benefits.
(i) The Company shall pay or reimburse the Executive for all
reasonable and necessary expenses incurred by him in connection with
his duties hereunder, upon submission by Executive to the Company of
such written evidence of such expense as the Company may require.
(ii) Throughout the term of this Agreement, the Company will provide
Executive with the use of a vehicle of the Cadillac class and a
multi-purpose vehicle or equivalent value in a car of executive choice
for purposes within the scope of his employment and shall pay all
expenses for fuel, maintenance and insurance in connection with such
use of the automobiles.
(iii) The Company will also pay all fees for membership by Executive in
two (2) country clubs, together with the dues therefor for use by the
Executive for conferences, meetings and entertainment in the scope of
this employment.
(iv) The Company further agrees that Executive shall be entitled to
four (4) weeks of vacation time in any year of the term of employment
hereunder.
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(v) The Company shall provide full access to the use of the Company
leased or chartered aircraft for the purpose of conducting company
business and as stipulated in the Corporate Aircraft Policy for
executives.
(vi) The Company shall provide a suitable office for the Executive's
position and necessary support services, including total access to all
Company facilities, records, information and personnel. In addition,
the Company shall provide computer tools and a fax machine for use in
the personal residence.
(vii) The Company shall provide reimbursement for membership in
associations, industry, organizations and civic organizations wherein
the merits of the Company can be promoted.
(viii) The Company shall provide the Executive liability insurance in
an amount not less than $5 million and shall defend the Executive at
Company expense for any litigation related to his position or
responsibilities on behalf of the Company in the past or future.
(ix) Nothing paid to the Executive under any such Company plans or
arrangements shall be deemed to be in lieu of compensation to the
Executive hereunder.
(f) Split-Dollar Arrangement.
(i) The Executive shall be eligible to participate in a Split-Dollar
Plan whereby the said Executive can be provided with life insurance
coverage during employment and the option of supplementary retirement
income in lieu of the life insurance policy at retirement. The
supplementary retirement income option can be exercised at age sixty
(60). In either option, the Company shall be repaid an amount equal to
the Company's share of the premiums paid less any indebtedness on the
policy. This plan will allow for the conversion option of coverage to a
"last to die" policy which includes the spouse or the transfer of the
policy to a trust or entity of lineal ownership at anytime prior to
exercising any distribution of benefits from the plan, so long as the
company maintains collateral assignment for the repayment of premiums.
This plan will vest after ten (10) years of service from the initial
date of this Agreement and the policy will be portable after that
period so long as the investment by the company, plus accrued interest,
is repaid by the Executive.
(ii) The Company's annual share of the policy premium shall be equal
to the Executive's annual salary on the initial date of this Agreement
and shall be paid by the Company for a period of four (4) years from
the origin date of this Agreement.
(iii) In the event of a termination of this Agreement under Sections 5
and 6 of this Agreement, any collateral assignment agreement on the
Split-Dollar Insurance Policy shall provide that the Executive or his
trust shall have the right to repay the Company at anytime within the
term of this Agreement an amount equal to the Company's share of the
premiums paid less any indebtedness on the policy.
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(iv) Notwithstanding anything else in the Agreement to the contrary,
the Company's obiligation to share in the payment of the policy premium
described in (iii) above will survive termination of this Agreement for
any reason other than a termination pursuant to Section 6 (c).
4. NON-DISCLOSURE, NON-COMPETITION AND NON-SOLICITATION COVENANTS.
(a) Acknowledgments. The Executive acknowledges that as a Director
and Officer of the Company:
(i) he frequently will be exposed to certain "Trade Secrets" and
"Confidential Information" of the Company (as those terms are defined
in Subsection 4(b),
(ii) his responsibilities on behalf of the Company will extend to all
geographical areas where the Company is doing business, and
(iii) any competitive activity on his part during the term of his
employment and for a reasonable period thereafter would necessarily
involve his use of the Company's Trade Secrets and Confidential
Information and, therefore, would unfairly threaten the Company's
legitimate business interests, including its substantial investment in
the proprietary aspects of its business and the goodwill associated
with its customer base.
Moreover, the Executive acknowledges that, in the event of the
termination of his employment with the Company, he would have sufficient skills
to find alternative, commensurate work in his field of expertise that would not
involve a violation of any of the provisions of this Section 4. Therefore, the
Executive acknowledges and agrees that it is reasonable for the Company to
require him to abide by the covenants set forth in this Section 4. The parties
acknowledge and agree that if the nature of the Executive's responsibilities for
or on behalf of the Company and the geographical areas in which the Executive
must fulfill them materially change, the parties will execute appropriate
amendments to the scope of the covenants in this Section 4.
(b) Definitions. For purposes of this Section 4, the following terms
shall have the following meanings:
(i) "Competitive Position" shall mean (A) the Executive's direct or
indirect equity ownership (excluding equity ownership of less than one
percent (1%) or control of all or any portion of a Competitor, or (B)
any employment, consulting, partnership, advisory, directorship,
agency, promotional or independent Contractor arrangement between the
Executive and any Competitor whereby the Executive is required to
perform executive level services substantially similar to those that he
will perform for the Company as its Chairman, President and Chief
Executive Officer.
(ii) "Competitor" of the Company shall refer to any person or entity
engaged, wholly or partly, in the business of manufacturing and
distributing farm equipment machinery and replacement parts.
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(iii) "Confidential Information" shall mean the proprietary and
confidential data or information of the Company, other than "Trade
Secrets" (as defined below), which is of tangible or intangible value
to the Company and is not public information or is not generally known
or available to the Company's competitors.
(iv) "Trade Secrets" shall mean information of the Company, including,
but not limited to, technical or non-technical data, formulas,
patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, products plans,
or lists of actual or potential customers or suppliers, which: (A)
derives economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure or use; and
(B) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
(v) "Work Product" shall mean all work product, property, data,
documentation, "know-how", concepts or plans, inventions, improvements,
techniques, processes, or information of any kind, relating to the
Company and its business prepared, conceived, discovered, developed or
created by the Executive for the Company or any of the Company's
customers.
(c) Nondisclosure: Ownership of Proprietary Property.
(i) The Executive hereby covenants and agrees that: (A) with regard
to information constituting a Trade Secret, at all times during the
Executive's employment with the Company and all times thereafter during
which such information continues to constitute a Trade Secret; and (B)
with regard to any Confidential Information, at all times during the
Executive's employment with the Company and for three (3) years after
the termination of the Executive's employment with the Company, the
Executive shall regard and treat all information constituting a Trade
Secret or Confidential Information as strictly confidential and wholly
owned by the Company and will not, for any reason in any fashion,
either directly or indirectly, use, sell, lend, lease, distribute,
License, give, transfer, assign, show, disclose, disseminate,
reproduce, copy, appropriate or otherwise communicate any such
information to any party for any purpose other than strictly in
accordance with the express terms of this Agreement and other than as
may be required by law.
(ii) To the greatest extent possible, any Work Product shall be deemed
to be "work made for hire" (as defined in the Copyright Act, 17
U.S.C.A, ss. 101 et seq., as amended) and owned exclusively by the
Company. The Executive hereby unconditionally and irrevocably transfers
and assigns to the Company all rights, title and interest the Executive
may currently have or in the future may have by operation of law or
otherwise in or to any Work Product, including, without limitation, all
patents, copyrights, trademarks, service marks and other intellectual
property rights. The Executive agrees to execute and deliver to the
Company any transfers, assignments, documents or other instruments
which the Company may deem necessary or appropriate to vest complete
title and ownership of any Work Product, and all rights therein,
exclusively in the Company.
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(iii) The Executive shall immediately notify the Company of any
intended or unintended, unauthorized disclosure or use of any Trade
Secrets or Confidential Information by the Executive or any other
person of which the Executive becomes aware. In addition to complying
with the provisions of section 4(c) (i) and 4 (c) (ii), the Executive
shall exercise his best efforts to assist the Company, to the extent
the Company deems reasonably necessary, in the procurement of any
protection of the Company's rights to or in any of the Trade Secrets or
Confidential Information.
(iv) Immediately upon termination of the Executive's employment with
the Company, or at any point prior to or after that time upon the
specific request of the Company the Executive shall return to the
Company all written or descriptive materials of any kind in the
Executive's possession or to which the Executive has access that
constitute or contain any Confidential Information or Trade Secrets,
and the confidentiality obligations of this Agreement shall continue
until their expiration under the terms of this Agreement.
(d) Non-competition. The Executive agrees that during the term of
his employment, he will not, either directly or indirectly, alone or in
conjunction with any other party:
(i) accept or enter into a Competitive Position with a Competitor of
the Company or
(ii) take any action in furtherance of or in conjunction with a
Competitive Position with a Competitor of the Company.
The Executive agrees that for two (2) years after any termination of
his employment with the Company, he will not, either directly or indirectly,
alone or in conjunction with any other party:
(i) accept or enter into a Competitive Position with a Competitor of
the Company, or
(ii) take any action in furtherance of or in conjunction with a
Competitive Position with a Competitor of the Company.
(e) Non-solicitation of Customers. The Executive agrees that during
the term of his employment, he will not, either directly or indirectly, alone
or in conjunction with any other party, solicit, divert or appropriate or
attempt to solicit, divert or appropriate any customer or actively sought
prospective customer of the Company for or on behalf of any Competitor of the
Company. The Executive agrees that for two (2) years after any termination of
his employment with the Company, he will not either directly or indirectly,
alone or in conjunction with any other party, for or on behalf of a Competitor
of the Company, solicit, divert or appropriate or attempt to solicit, divert or
appropriate any customer or actively sought prospective customer of the Company
with whom he had substantial contact during a period of time of up to, but no
longer than, eighteen (18) months prior to any termination of his employment
with the Company.
(f) Non-solicitation of Company Personnel. The Executive agrees
that, except to the extent that he is required to do so in connection with his
express employment responsibilities on behalf of the Company, during the term
of his employment he will not, either directly or indirectly, alone or in
conjunction with any other party, solicit or attempt to solicit any employee,
consultant, contractor
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or other personnel of the Company to terminate, alter or lessen that party's
affiliation with the Company or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or other person and
the Company. The Executive agrees that for two (2) years after any termination
of his employment with the Company, he will not, either directly or indirectly,
alone or in conjunction with any other party, solicit or attempt to solicit any
"material" or "key" (as those terms are defined in the next sentence) employee,
consultant, contractor or other personnel of the Company to terminate, alter or
lessen that party's affiliation with the Company or to violate the terms of any
agreement or understanding between such employee, consultant, contractor or
other person and the Company. For purposes of the preceding sentence, "material"
or "key" employees, consultants, contractors or other personnel of the Company
are those who have access to the Company's Trade Secrets and Confidential
Information and whose position or affiliation with the Company is significant.
(g) Remedies. Executive agrees that damages at law for the Executive's
violation of any of the covenants in this Section 4 would not be an adequate or
proper remedy and that should the Executive violate or threaten to violate any
of the provisions of such covenants, the Company or its successors or assigns
shall be entitled to obtain a temporary or permanent injunction against
Executive in any court having jurisdiction prohibiting any further violation of
any such covenants, in addition to any award or damages, compensatory, exemplary
or otherwise, for such violation, if any.
(h) Partial Enforcement. The Company has attempted to limit the rights
of the Executive to compete only to the extent necessary to protect the Company
from unfair competition. The Company, however, agrees that, if the scope of
enforceability of these restrictive covenants is in any way disputed at any
time, a court or other trier of fact may modify and enforce the covenant to the
extent that it believes to be reasonable under the circumstances existing at the
time.
5. SEVERANCE.
(a) Change in Control. In order to induce the Executive to remain in
the employ of the Company, the Executive is provided the severance benefits set
forth in this Section 5, in the event the Executive's employment with the
Company is terminated subsequent to a change in control under the circumstances
described below. In exchange for the severance benefits the Executive agrees
that in the event of a Change In Control (as defined in Subsection (f) below),
the Executive will not voluntarily terminate his employment with the Company
until at least ninety (90) days after the Change in Control.
(b) Severance Benefits. No benefits shall be payable under this Section
5 unless there shall have been a Change in Control. In the event a Change in
Control occurs, the Executive is entitled to the following benefits upon any
subsequent termination of the Executive's employment within four (4) years from
the date of such Change in Control, unless such termination is because of the
death or Incapacity (as defined in Section 6(b) below) of the Executive, by the
Company for Cause (as defined in Subsection (f) below), by the Executive other
than for Good Reason (as defined in Subsection (f) below), or upon the
Executive's voluntary retirement.
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(i) The Company shall pay the Executive within thirty (30) days of
the date of termination (subject to Subsection (ii below) an amount in
cash equal to three times the Executive's Annual Base Compensation (as
defined in Subsection (f) below; provided that in no event shall the
amount payable pursuant to this Section 5, when added to any other
payments which are deemed to be "parachute payments" as defined in
Section 280G of the Internal Revenue Code, as amended (the "Code"),
equal or exceed three (3) times the Executive's "base amount" as
determined pursuant to Section 280G of the Code for purposes of any
excise tax under Section 4999 of the Code. The foregoing shall be
calculated and determined by Xxxxxx Xxxxxxxx & Co. or such other
nationally recognized Independent accounting firm as may be mutually
acceptable to the Company and the Executive hereafter. In all events
and notwithstanding anything herein to the contrary, any amounts
payable under this Section 5, when taken together with the present
value of all other payments in the nature of compensation to the
Executive which are contingent on a Change in Control shall be reduced
by the smallest amount necessary to reduce the aggregate amount of all
such payments to an amount equal to three (3) times such base amount
less One Dollar ($1.00).
(ii) The Executive may elect by written notice given to the Company
prior to a Change in Control to receive all or any portion of the
payments to which the Executive is entitled to receive as described
above in one or more installment payments at such time or times as the
Executive shall specify in the written notice, together with interest
thereon calculated at a rate of interest equal to the prime rate of
Chemical Bank - NYC as in effect from time to time from the date of
termination.
(iii) The Company shall continue to cover the Executive under, or
provide the Executive with insurance coverage no less favorable than,
the life, disability and health benefit plans which are provided to the
Executive, including payment of the split dollar insurance premiums
under the collateral assignment agreement as defined in Xxxxxxx 0,
xxxxxxxxx (x), (xx), for a period equal to the term of this Agreement
or until the Executive is provided benefits by another employer
substantially comparable to the benefits provided by the Company.
(iv) In the event of a change in control, the Company will require any
successor to fulfill the terms and conditions of the Long Term
Incentive Plan and any Stock Option Plans previously provided to the
Executive in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place.
However, effective with the change in control, the Executive will be
immediately vested for all shares earned under the LTIP program and for
those shares awarded under any Stock Option Plan.
(v) In the event of the Executive's death subsequent to termination,
all payments or benefits to which the Executive is entitled under this
Section 5 shall be paid to the Executive's designated beneficiary or
beneficiaries or, if none are designated, to the Executive's estate.
(vi) All payments and benefits to which the Executive is entitled
under this Section 5 shall be made and provided without offset,
deduction or mitigation on account of income the Executive may
receive from otheer employment or otherwise.
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(vii) All payments and benefits due or required to be made or provided
in the future to the Executive under this Section 5 shall become
immediately due and payable without further notice or demand, upon the
occurrence of any event of Acceleration.
The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
of the Company, by agreement satisfactory to the Executive, to expressly assume
and agree to perform the terms of this Section 5 in the same manner and to the
same extent that the Company would be required to perform if no such succession
had taken place. The provisions of this Section 5 shall continue to apply to
each subsequent successor.
(c) Payment of Costs and Expenses. The Company shall pay all of the
costs and expenses, including all attorneys' fees and disbursements, at least
monthly, in connection with any disputes, legal proceedings, arbitration or
other conflicts, whether or not instituted by the Company or the Executive
relating to the interpretation or enforcement of any provision of this Section.
(d) Effect. This Section 5 is not intended and shall not be deemed to
guarantee the Executive of any term of employment with the Company but only to
designate the severance benefits the Executive is entitled to under the
circumstances set forth in this Section 5. Moreover, this Section 5 is not
intended to and shall not effect, limit or terminate any other agreement or
arrangement between the Executive and the Company presently in effect or entered
into hereafter.
(e) Relief from Other Obligations. The Executive and the Company
acknowledge and agree that in the event the Executive receives compensation
under this Section 5, the Company shall be relieved of any and all other
obligations under this Agreement except for full compliance with the terms of
this Section 5. By way of illustration and not limitation, if the Executive's
employment is terminated in connection with a Change in Control, the Company
would pay the Executive severance benefits pursuant to the terms of this Section
5 and would not be obligated to the Executive for continuation of the
Executive's employment pursuant to Section 2 or payment under Section 6(e)
below.
(f) Definitions. As used in this Section 5, the following capitalized
terms have the meaning indicated below:
(i) "Annual Base Compensation" shall mean the Executive's annualized
includable compensation for the base period as defined, discussed and
illustrated in Section 280G of the Code and the duly promulgated
Treasury Regulations thereunder.
(ii) "Cause" shall be defined as set forth in Section 6(c) below.
(iii) "Change in Control" shall mean changes in the ownership of a
corporation, changes in the effective control of a corporation and
changes in ownership of a substantial portion of a corporation's assets
all as defined, discussed and illustrated in Section 280G of the Code
and the duly promulgated Treasury Regulations thereunder and
specifically Q-27, Q-28 and Q-29 respectively of proposed Treasury
Regulation Section 1.28OG-1. Without limiting the foregoing and by way
of example:
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(A) A change in the ownership of a corporation occurs on the
date that any one person, or more than one person acting as a
group, acquires ownership of stock of that corporation that,
together with stock held by such person or group, possess more
than fifty percent (50%) of the total fair market value or
total voting power of the stock of such corporation. However,
if any one person, or more than one person acting as a group,
is considered to own more than fifty percent (50%) of the
total fair market value or total voting power of the stock of
a corporation, the acquisition of additional stock by the same
person or persons is not considered to cause a change in the
ownership of the corporation. An increase in the percentage of
stock owned by any one person, or persons acting as a group,
as a result of a transaction in which the corporation acquires
its stock in exchange for property will be treated as an
acquisition of stock.
(B) A change in the effective control of a corporation is
presumed (which presumption may be rebutted) to occur on the
date that either: any one person, or more than one person
acting as a group, acquires (or has acquired during the twelve
(12)-month period ending on the date of the most recent
acquisition by such person or persons) ownership of stock of
the corporation possessing twenty percent (20%) or more of the
total voting power of the stock of such corporation; or a
majority of members of the Corporation's board of directors is
replaced during any twenty four (24)-month period by directors
whose appointment or election is not endorsed by a majority of
the members of the corporation's board of directors prior to
the date of the appointment or election of such new directors.
(C) A change in the ownership of a substantial portion of a
corporation's assets occurs on the date that any one person,
or more than one person acting as a group, acquires (or has
acquired during the twelve (12) month period ending on the
date of the most recent acquisition by such person or persons)
assets from the corporation that have a total fair market
value equal to or more than one-third of the total fair market
value of all of the assets of the corporation immediately
prior to such acquisition or acquisitions. The transfer of
assets by a corporation is not treated as a change in the
ownership of such assets if the assets are transferred to: a
shareholder of the corporation (immediately before the asset
transfer) in exchange for or with respect to its stock; an
entity, fifty percent (50%) or more of the total value or
voting power of which is owned, directly or indirectly by the
corporation; a person, or more than one person acting as a
group, that owns, directly or indirectly, fifty percent (50%)
or more of the total value or voting power of all of the
outstanding stock of the corporation; or an entity, at least
fifty percent (50%) of the total value or voting power is
owned, directly or indirectly, by a person, or more than one
person acting as a group, that owns directly or indirectly,
fifty percent (50%) or more of the total value of voting power
of all of the outstanding stock of the corporation.
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(iv) "Event of Acceleration" shall mean:
(A) The failure of the Company to make any payment or provide
any benefit to which the Executive is entitled under this
Agreement when due or as accelerated which failure continues
thirty (30) days after the due date thereof; or
(B) The failure by the Company to obtain the assumption of the
agreement to perform this Agreement by any successor as
contemplated herein; or
(C) A decrease by more than forty percent (40%) within any two
(2) year period of the book value of the net assets of the
Company and its subsidiaries, taken as a whole; or
(D) The filing of a petition by or against the Company for
adjudication as a bankrupt under the Federal Bankruptcy Act,
or for reorganization, or the filing of any petitions for
similarly relief; the commencement of any action or proceeding
for the appointment of a receiver or a trustee of all or
substantially all of the property of the Company; the taking
or possession of any property of the Company by any
governmental or judicial officer or agency pursuant to
statutory authority for the dissolution, rehabilitation,
reorganization, or liquidation of the Company; the dissolution
or commencement of any action or proceeding, whether voluntary
or involuntary, for the dissolution or liquidation of the
Company; or the making by the Company of an assignment for the
benefit of creditors; provided that the Company shall have
ninety (90) days within which to affect the dismissal of any
involuntary proceedings of a type referred to above that is
commenced against it.
(v) "Good Reason" shall mean, without the written consent of the
Executive:
(A) A reduction in the Executive's base salary or a reduction
in the Executive's benefits received from the Company other
than in connection with an across the board reduction in
salaries and/or benefits for similarly situated employees of
the Company or pursuant to the Company's standard retirement
policy; or
(B) The relocation of the Executive's full time office to a
location greater than fifty (50) miles from the Company's
current corporate office; or
(C) A reduction in the Executive's corporate title or duties;
or
(D) A material breach by the Company of this Agreement.
(vi) "Normal Retirement Date" shall mean the first day of the month
coincident with or next following the Executive's sixty-fifth (65th)
birthday.
(g) Long Term Incentive and Other Stock Plans. In the event of a
Change In Control (as defined in Subsection (f) above), the Company will require
any successor to fulfill the terms and conditions of the Long Term Incentive
Plans and any Stock Option Plans previously provided to the
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Executive in the same manner and to the same extent that the company would be
required to perform if no succession had taken place. However, effective with
the Change in Control, the Executive will be immediately vested for all shares
earned under the Long Term Incentive Plans and for those shares awarded under
any Stock Option Plan.
6. TERMINATION.
(a) Death. The Executive's employment hereunder shall terminate upon
the death of the Executive, provided, however, that for purposes of the payment
of compensation and benefits to the Executive under this Agreement the death of
the Executive shall be deemed to have occurred ninety (90) days from the last
day of the month in which the death of the Executive shall have occurred.
(b) Incapacity. The Company may terminate the Executive's employment
hereunder at the end of any calendar month by giving written Notice of
Termination to the Executive in the event of the Executive's incapacity due to
physical or mental illness which prevents the proper performance of the duties
of the Executive set forth herein or established pursuant hereto for a
substantial portion of any six (6) month period of the Executive's term of
employment hereunder. Any question as to the existence, extent or potentiality
of illness or incapacity of Executive upon which Company and Executive cannot
agree shall be determined by a qualified independent physician selected by the
Company and approved by Executive (or, if Executive is unable to give such
approval, by any adult member of the immediate family or the duty appointed
guardian of the Executive). The determination of such physician certified in
writing to the Company and to Executive shall be final and conclusive for all
purposes of this Agreement.
(c) Cause. The Company may terminate the Executive's employment
hereunder for Cause by giving written Notice of Termination to the Executive.
For the purposes of this Agreement, the Company shall have "Cause" to terminate
the Executive's employment hereunder upon the Executive's (i) habitual
drunkenness or willful failure materially to perform and discharge the duties
and responsibilities of the Executive hereunder or any breach of the Executive
of the provisions of Section 4 hereof, or (ii) misconduct that is materially
injurious to the Company or (iii) conviction of a felony involving the personal
dishonesty of the Executive or moral turpitude.
(d) Notice of Termination. Any termination by the Company pursuant to
the Subsections (b) or (c) above shall be communicated by written Notice of
Termination to the Executive. For purposes of this Agreement, a Notice of
Termination" shall mean a notice which shall indicate the specific termination
provision of this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for such termination. A
date of termination specified in Notice of Termination shall not be dated
earlier than ninety (90) days from the date such Notice is delivered or mailed
to the Executive.
(e) Obligation to Pay. Except upon voluntary termination by the
Executive or termination of the Executive's employment in connection with a
Change in Control (In which case Section 5 shall govern) and subject to Section
7 below, the Company shall pay the compensation specified in this Agreement to
the Executive for the remainder of the term set forth in Section 1(b) or for the
period specified in this Subsection 6 (e), whichever period is the lesser. The
Company also will continue insurance benefits during the remainder of the term
set forth in Section 1(b). If the Executive's
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employment shall be terminated by reason of death, the estate of the Executive
shall be paid all sums otherwise payable to the Executive through the end of the
third month after the month in which the death of the Executive occurred and all
bonus or other incentive benefits accrued or accruable to the Executive through
the end of the month in which the death of the Executive occurred and the
Company shall have no further obligations to the Executive under this Agreement.
If the Executive's employment is terminated by reason of incapacity, the
Executive or the person charged with legal responsibility for the Executive's
estate shall be paid all sums otherwise payable to the Executive, including the
bonus and other benefits accrued or accruable to the Executive, through the date
of termination specified in the Notice of Termination, and the Company shall
have no further obligations to the Executive under this Agreement. If the
Executive's employment shall be terminated for Cause, the Company shall pay the
Executive his Base Salary through the date of termination specified in the
Notice of Termination and the Company shall have no further obligations to the
Executive under this Agreement.
7. EFFECT OF RE-EMPLOYMENT/OTHER COMPENSATION.
(a) Re-Employment. If at any time after the termination of the
Executive's employment, the Company is continuing to pay benefits to the
Executive pursuant to Section 6(e) above, and the Executive enters into new
employment with a party other than the Company ("Re-Employment"), the Executive
shall immediately notify the Company in writing of the Executive's monthly
compensation to be received from such Re-Employment and any insurance coverage
provided pursuant thereto, and the following provisions shall apply:
(i) If the Executive's monthly compensation from Re-Employment is equal
to or in excess of the compensation being paid by the Company, the
Company shall promptly pay the Executive, in full satisfaction of all
obligations to compensate the Executive under Section 6(e), an amount
equal to fifty percent (50%) of Company's remaining compensation
obligation. Notwithstanding anything herein to the contrary and except
for the obligations in Subsection (b) below, upon payment by the
Company of the amounts Set forth in this Section 7(a)(i), the Company
shall cease to have any obligation under Section 6(c) of this
Agreement.
(ii) If the Executive's monthly compensation from Re-Employment is less
than the compensation being paid by the Company, compensation payable
to the Executive shall automatically be reduced by the amount of the
Executive's monthly compensation from Re-Employment; provided, however,
that at the end of the Company's obligations to pay under Section 6(e)
it shall pay the Executive an amount equal to 100 percent (100%) of the
remainder of: (A) total compensation obligations of the Company under
Section 6(e) less (b) the actual compensation paid the Executive during
the period. Notwithstanding termination period. Notwithstanding
anything herein to the contrary and except for the obligations in
Subsection (b) below, upon payment of the final payment the Company
shall cease to have any obligations under this Agreement. The Executive
shall immediately notify the Company of any change in the level of
compensation received from Re-Employment and, if such compensation
increases to a level equal to or in excess of the compensation being
paid by the Company the provisions of Section 7(a)(i) shall then
apply.
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(b) Termination of Insurance Coverage. Provided COBRA requirements have
been met, the Company's obligation to provide insurance coverage to the
Executive under Section 3(c) or Section 5(b)(iii) hereof shall terminate as to
any specific coverage if and when comparable coverage is made available to the
Executive in connection with Re-Employment.
8. NOTICES.
For the purpose of this Agreement, notices and all other communications
to either party hereunder provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered in person or mailed by
certified first-class mail, postage prepaid, addressed in the case of the
Company to:
AGCO Corporation
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
in the case of the Executive to:
or to such other address as either party shall designate by giving written
notice of such change to the other party.
9. ARBITRATION.
Any claim, controversy, or dispute arising between the parties with
respect to this Agreement, to the maximum extent allowed by applicable law,
shall be submitted to and resolved by binding arbitration. The arbitration shall
be conducted pursuant to the terms of the Federal Arbitration Act and (except as
otherwise specified herein) the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time the arbitration is commenced. The
venue for the arbitration shall be the Atlanta, Georgia offices of the American
Arbitration Association. Either party may notify the other party at any time of
the existence of an arbitrable controversy by delivery in person or by certified
mail of a Notice of Arbitrable Controversy. Upon receipt of such a Notice, the
parties shall attempt in good faith to resolve their differences within fifteen
(15) days after the receipt of such Notice. Notice to the Company and the
Executive shall be sent to the addresses specified in Section 8 above. If the
dispute cannot be resolved within the fifteen (15) day period, either party may
file a written Demand for Arbitration with the American Arbitration
Association's Atlanta, Georgia Regional Office, and shall send a copy of the
Demand for Arbitration to the other party. The arbitration shall be conducted
before a panel of three (3) arbitrators. The arbitrators shall be selected as
follows: (a) The party filing the Demand for Arbitration shall simultaneously
specify his or its arbitrator, giving the name, address and telephone number of
said arbitrator; (b) The party receiving such notice shall notify the party
demanding the arbitration of his or its arbitrator, giving the name, address and
telephone number of the arbitrator within five (5) days of the receipt of such
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Demand for Arbitration; (c) A neutral person shall he selected through the
American Arbitration Association's arbitrator selection procedures to serve as
the third arbitrator.
The arbitrator designated by any party need not be neutral. In the event that
any person fails or refuses timely to name his arbitrator within the time
specified in this Section 9, the American Arbitration Association shall
(immediately upon notice from the other party) appoint an arbitrator. The
arbitrators thus constituted shall promptly meet, select a chairperson, fix the
time, date(s), and place of the hearing, and notify the parties. To the extent
practical the arbitrators shall schedule the hearing to commence within sixty
(60) days after the arbitrators have been impaneled. A majority of the panel
shall render an award within ten (10) days of the completion of the hearing
which award may include an award of interest, legal fees and costs of
arbitration. The panel of arbitrators shall promptly transmit an executed copy
of the award to the respective parties. The award of the arbitrators shall be
final binding and conclusive upon the parties hereto. Each party shall have the
right to have the award enforced by any court of competent jurisdiction.
Executive initials: /s/ JPR Company initials: /s/ RJR
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10. NO WAIVER
No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is approved by the Board and
agreed to in a writing signed by the Executive and such officer as may be
specifically authorized by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of any other provisions or conditions of this Agreement
at the same or at any prior or subsequent time.
11. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Company under this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of the
Company and the Executive's rights under this Agreement shall inure to the
benefit of and be binding upon his heirs and executors. Neither this Agreement
or any rights or obligations of the Executive herein shall be transferable or
assignable by the Executive.
12. VALIDITY.
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect. The
parties intend for each of the covenants contained in Section 4 to be severable
from one another.
13. SURVIVAL.
The provisions of Section 4 hereof shall survive the termination of
Executive's employment and shall be binding upon the Executive's personal or
legal representative, executors, administrators,
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successors, heirs, distributees, devisees and legatees and the provisions of
Sections 5 and 6 hereof relating to payments and termination of the Executive's
employment hereunder shall survive such termination and shall be binding upon
the Company.
14. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instruments
15. ENTIRE AGREEMENT.
This Agreement constitutes the full agreement and understanding of the
parties hereto with respect to the subject matter hereof and all prior or
contemporaneous agreements or understandings are merged herein, except for the
collateral assignment agreement that shall be executed under Section 3(e) of
this Agreement. The parties to this Agreement each acknowledge that both of them
and their respective agents and advisors were active in the negotiation and
drafting of the terms of this Agreement.
16. GOVERNING LAW.
The validity, construction and enforcement of this Agreement, and the
determination of the rights and duties of the parties hereto, shall be governed
by the laws of the State of Georgia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
AGCO CORPORATION AGCO CORPORATION
By /s/ X.X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxx
---------------------------- -------------------------------
Name: X.X. Xxxxxxx Name: Xxxxxxx X. Xxxxx
-------------------------- -----------------------------
Title: Chairman Title: VP
------------------------- ----------------------------
/s/ X.X. Xxxxxxx
--------------------------------
Executive
11/18/96
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Date
