Exhibit 10.1
EMPLOYMENT AND SEVERANCE AGREEMENT
This Employment and Severance Agreement (the "Agreement") is entered into
this 5th day of August, 2005, by and between AGCO CORPORATION, a Delaware
corporation (the "Company"), and Xxxxxxxx Xxxxxxxxxx (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) The Company hereby employs the Executive, and the Executive
hereby agrees to serve the Company, upon the terms and conditions set forth in
this Agreement.
(b) The employment term shall commence on September 1, 2005, and
shall continue in effect until terminated in accordance with Section 5 or any
other provision of the Agreement.
2. POSITION AND DUTIES.
The Executive shall serve as an Executive Officer of the Company and
shall perform 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, 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 468,000 Swiss Francs (EUR 300,000 converted to
Swiss Francs using the exchange rate on the date this contract is signed. No
adjustments will be made in future for any movement in exchange rates) subject
to Section 5 hereof and subject to applicable tax and payroll deductions. The
Company shall consider increases in the Executive's Base Salary annually, and
any such increase in salary implemented by the Company shall become the
Executive's Base Salary for purposes of this Agreement. The Base Salary and
annual bonus will be paid through a Swiss payroll provider in Swiss francs.
(b) INCENTIVE COMPENSATION. Provided Executive has duly performed
his obligations pursuant to this Agreement, the Executive shall be entitled to
an annual bonus to
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be paid upon the Executive achieving pre-agreed targets which will be annually
reviewed and participate in the Long-Term Incentive Plan that is implemented by
the Company.
(c) PENSION. The Company will contribute 50 percent of the cost of
providing retirement benefits in Switzerland. Pension contributions will be
calculated on base salary only, not other remuneration, e.g., Incentive
Compensation. Full details of the scheme will be forwarded when arrangements are
completed with the insurance broker. The Company will make the required
contributions to the Swiss social security system. You will be responsible for
the employee portion.
(d) HEALTH INSURANCE. The Company will provide a health insurance
package of benefits similar to those provided by your previous employer.
(e) OTHER BENEFITS. The Company will pay for sickness and accident
insurance in Switzerland. Full details will be forwarded to you when they have
been arranged by the insurance broker.
(f) FRINGE BENEFITS. 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 the Executive to the
Company of such written evidence of such expenses as the Company may reasonably
require. Throughout the term of this Agreement, the Company will provide the
Executive with the use of a vehicle 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 automobile. Executive shall also be entitled to
use the vehicle for private purposes. The Company further agrees that the
Executive shall be entitled to four (4) weeks of vacation in any year of the
term of employment hereunder, subject to the terms of the Company's vacation
policy.
4. RESTRICTIVE COVENANTS
(a) ACKNOWLEDGMENTS. The Executive acknowledges that as an Executive
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
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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) DEFINTIONS.
(i) "Business of Company" means designing, manufacturing,
marketing, and distributing agricultural equipment.
(ii) "Material Contact" as used in the non-solicitation provision
below means personal contact or the supervision of the efforts of
those who have personal contact with an existing or potential
Customer or Vendor in an effort to further or create a business
relationship between the Company and such existing or potential
Customer or Vendor.
(iii) "Confidential Information" means information about the
Company, its Executives, and Customers which is not generally known
outside of the Company, which the Executive learns of in connection
with the Executive's employment with the Company, and which would be
useful to competitors of the Company or potentially harmful to the
Company's reputation. Except where generally known outside the
Company Confidential Information includes, but is not limited to:
(1) business and employment policies, marketing methods and the
targets of those methods, finances, business plans, promotional
materials and price lists used by the Company; (2) the terms upon
which the Company hires employees and provides services to its
Customers; (3) the nature, origin, composition and development of
the Company's products and services; and (4) the manner in which the
Company provides products and services to its Customers.
(iv) "Trade Secrets" means Confidential Information which meets the
additional requirements of the Georgia Trade Secrets Act.
(v) "Territory" means those countries and areas as more
particularly set forth on Exhibit A attached hereto.
(c) COVENANT OF CONFIDENTIALITY. During the term of this
Agreement, the Executive agrees only to use and disclose Confidential
Information in connection with his duties hereunder and to otherwise maintain
the secrecy of the same. The Executive agrees that for a period of five years
following the cessation of his employment for any reason, he shall not directly
or indirectly divulge or make use of any Confidential Information or Trade
Secrets of the Company without prior written consent of the Company. The
Executive further agrees that if he is questioned about information subject to
this Agreement by anyone not authorized to receive such information, he will
promptly notify the Chairman of the Board. This Agreement does not limit the
remedies available under common or statutory law, which may impose longer duties
of non-disclosure. The Executive will immediately notify the Chairman of the
Board if he receives any subpoenas which could require the disclosure of
Confidential
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Information, so that the Company may take whatever actions it deems necessary to
protect its interests.
(d) COVENANT OF NON-COMPETITION. The Executive agrees that while
employed by the Company and for a period of twelve (12) months following the
cessation of his employment for any reason, he will not compete with the
Business of Company by performing services of the same or similar type as those
he performed for the Company as an employee, contractor, consultant, officer,
director or agent for any person or entity engaged in the Business of Company.
Likewise, the Executive will not perform activities of the type which in the
ordinary course of business would involve the utilization of Confidential
Information or Trade Secrets protected from disclosure by Section 4 (c) of this
Agreement. This paragraph restricts competition only within the Territory.
(e) COVENANT OF NON-SOLICITATION. The Executive agrees that while
employed by the Company and for a period of twelve (12) months following the
cessation of his employment for any reason, he will not directly or indirectly
solicit or attempt to solicit any business in competition with the Business of
Company from any of the Customers with whom the Executive had Material Contact
within the last 18 months of his employment with the Company. The Executive
further agrees that for a period of twelve (12) months following the cessation
of his employment, he will not directly or indirectly solicit or attempt to
solicit any Vendors of the Company with whom he had Material Contact during the
last 18 months of his employment with the Company to provide services to any
person or entity which competes with the Business of Company.
(f) COVENANT OF NON-RECRUITMENT. The Executive agrees that while
employed by the Company and for a period of twelve (12) months following the
cessation of his employment for any reason, he will not directly or indirectly
solicit or attempt to solicit any other employee of the Company for the purpose
of encouraging, enticing, or causing said employee to voluntarily terminate
employment with the Company.
(g) COVENANT TO RETURN PROPERTY AND INFORMATION. The Executive
agrees to return all of the Company's property within seven (7) days following
the cessation of his employment for any reason. Such property includes, but is
not limited to, the original and any copy (regardless of the manner in which it
is recorded) of all information provided by the Company to the Executive, or
which the Executive has developed or collected in the scope of his employment
with the Company, as well as all Company-issued equipment, supplies,
accessories, vehicles, keys, instruments, tools, devices, computers, cell
phones, pagers, materials, documents, plans, records, notebooks, drawings, or
papers.
(h) ASSIGNMENT OF WORK PRODUCT AND INVENTIONS. The Executive hereby
assigns and grants to the Company (and will upon request take any actions needed
to formally assign and grant to the Company and/or obtain patents, trademark
registrations or copyrights belonging to the Company) the sole and exclusive
ownership of any and all inventions, information, reports, computer software or
programs, writings, technical information or work product collected or developed
by the Executive, alone or with others,
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during the term of the Executive's employment. This duty applies whether or not
the forgoing inventions or information are made or prepared in the course of
employment with the Company, so long as such inventions or information relate to
the Business of Company and have been developed in whole or in part during the
term of the Executive's employment. The Executive agrees to advise the Company
in writing of each invention that Executive, alone or with others, makes or
conceives during the term of Executive's employment. Inventions which the
Executive developed before the Executive came to work for the Company, if any,
are as follows:
________________________________________________________________.
(i) REMEDIES FOR VIOLATION OF RESTRICTIVE COVENANTS. The Executive
acknowledges that the Company would suffer irreparable harm if the Executive
fails to comply with the foregoing, and that the Company would be entitled to
any appropriate relief, including money damages, injunctive and other equitable
relief and attorneys' fees. The Executive agrees that the pendency of any claim
whatsoever against the Company shall not constitute a defense to the enforcement
of this Noncompetition Agreement by the Company.
(j) SEVERABILITY. In the event that any one or more of the
provisions of these restrictive covenants shall be held to be invalid, illegal
or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. Moreover, if
any one or more of the provisions contained in these restrictive covenants shall
be held to be excessively broad as to duration, activity or subject, the parties
authorize the Court in which such action is pending to modify said covenants and
enforce them to the extent that the Court deems reasonable.
5. TERMINATION.
(a) DEATH. This Agreement shall terminate upon the death of the
Executive, provided, however, that for purposes of the payment of Base Salary to
the Executive, 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) DISABILITY. Executive's employment and all obligations of the
Company hereunder shall terminate upon a finding that the Executive is disabled
under the Company's group long term disability plan.
(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: (i) the conviction of Executive of,
or the entry of a plea of guilty, first offender probation before judgment, or
nolo contendere by Executive to, any felony; (ii) fraud, misappropriation or
embezzlement by Executive; (iii) Executive's willful failure or gross negligence
in the performance of his assigned duties for the Company, which failure or
negligence continues for more than or was not remedied within thirty (30)
calendar days following Executive's receipt of written notice of such willful
failure or gross negligence; (iv) Executive's failure to follow reasonable and
lawful directives of the Board or his breach of his
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fiduciary duty to the Company, which failure is not remedied within thirty (30)
calendar days following Executive's receipt of written notice of such failure;
(v) any act or omission of Executive that has a demonstrated and material
adverse impact on the Company's business or reputation for honesty and fair
dealing, other than an act or failure to act by Executive in good faith and
without reason to believe that such act or failure to act would adversely impact
on the Company's business or reputation for honesty and fair dealing; or (vi)
the breach by Executive of any material term of this Agreement, which breach
continues for more than or was not remedied within thirty (30) calendar days
following Executive's receipt of written notice of such breach.
(d) WITHOUT CAUSE; GOOD REASON.
(i) The Company may terminate the Executive's employment
hereunder without Cause, by giving written Notice of
Termination (as defined in Section 5(e)) to the
Executive.
(ii) The Executive may terminate his employment hereunder, by
giving written Notice of Termination to the Company. For
the purposes of this Agreement, the Executive shall have
"Good Reason" to terminate his employment hereunder upon
(a) a substantial reduction in the Executive's aggregate
Base Salary and annual incentive compensation taken as a
whole, excluding any reductions caused by the
performance of the Company or the Executive, including
but not limited to, the failure by the Executive to
achieve performance targets established from time to
time by the Board and/or under the Long Term Incentive
Plan or from below budget performance by the Company, or
(b) the Company's failure to make payments of
compensation as set out in Section 3(a)(j), but only
upon notice of such failure given by the Executive and
the subsequent failure of the Company to cure the
non-payment within thirty (30) days of such notice.
(e) NOTICE OF TERMINATION. Any termination by the Company pursuant
to the Subsections (b), (c) or (d)(i) above or by the Executive pursuant to
Subsection (d)(ii) above, shall be communicated by written Notice of Termination
from the party issuing such notice to the other party hereto. 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 the
Notice of Termination shall not be dated earlier than ninety (90) days from the
date such Notice is delivered or mailed to the applicable party.
(f) OBLIGATION TO PAY. Except upon termination for Cause and
voluntary termination by the Executive without Good Reason, and further subject
to Section 6 below, the Company shall pay the compensation specified in this
Subsection 5(f) to the Executive for the period specified in this Subsection
5(f), continue life insurance benefits during the remainder of the applicable
period, including the Severance Period set forth in this
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Subsection 5(f). If the Executive's 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, including 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 disability as determined under the Company's long
term disability plan, 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 disability, 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. If the Executive's employment shall be
terminated by the Company without Cause or by the Executive for Good Reason, the
Company shall (x) continue to pay the Executive the Base Salary (at the rate in
effect on the date of such termination) for a period of one (1) year beginning
as of the date of such termination (such one (1) year period being referred to
hereinafter as the "Severance Period") at such intervals as the same would have
been paid had the Executive remained in the active service of the Company, and
(y) pay the Executive a pro rata portion of the bonus or other incentive
benefits to which the Executive would have been entitled for the year of
termination had the Executive remained employed for the entire year, which
incentive compensation shall be payable at the time incentive compensation is
payable generally under the applicable incentive plans; provided, however, that
notwithstanding the foregoing, the Executive shall not be entitled to any
severance payments upon and after reaching age 65 . The Executive shall have no
further right to receive any other compensation, benefits or perquisites after
the date of termination of employment except as determined under the terms of
the employee benefit plans or programs of the Company or under applicable law.
6. CONDITIONS APPLICABLE TO SEVERANCE PERIOD; MITIGATION OF DAMAGES
(a) If during the Severance Period, the Executive breaches his
obligations under Section 4 above, the Company may, upon written notice to the
Executive, terminate the Severance Period and cease to make any further payments
or provide any benefits described in Subsection 5(f).
(b) Although the Executive shall not be required to mitigate the
amount of any payment provided for in Subsection 5(f) by seeking other
employment, any such payments shall be reduced by any amounts which the
Executive receives or is entitled to receive from another employer with respect
to the Severance Period. The Executive shall promptly notify the Company in
writing in the event that other employment is obtained during the Severance
Period.
7. 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
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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 Xxxxxx
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.
8. 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 7 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
Demand for Arbitration; (c) A neutral person shall be 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
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refuses timely to name his arbitrator within the time specified in this Section
8, 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/ HMM Company initials: /s/ NLB
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9. 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.
10. 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.
11. 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.
12. 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, successors, heirs,
distributees, devisees and legatees and the provisions of Section 5 hereof
relating to payments and termination of the Executive's employment hereunder
shall survive such termination and shall be binding upon the Company.
13. 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 instrument.
14. 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
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contemporaneous agreements or understandings are merged herein. 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.
15. 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
By: /s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
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Title: Senior Vice President, Human Resources
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EXECUTIVE
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxxx X. Xxxxxxxxxx
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Date: August 5, 2005
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