Contract of Employment
Dated as of September 1, 1999
between
1. Terex Corporation
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
- hereinafter also called "the Company" -
2. Xxxxx Xxxxxxx
- hereinafter called "the Executive" -
Contents
Sec. 1 Appointment and Duties
Sec. 2 Powers of Representation of the Company
Sec. 3 Confidentiality
Sec. 4 Remuneration, Car, Expenses
Sec. 5 Holidays
Sec. 6 Continuation of Salary in Case of Illness, Death or Disability
Sec. 7 Health Insurance
Sec. 8 Pension
Sec. 9 Consulting Arrangement
Sec. 10 Terms of Retainer
Sec. 11 Termination or Modification of the Contract
Sec. 12 Concluding Provisions
Sec. 1 Appointment and Duties
1. Effective September 1, 1999, the Executive will continue his
employment with the Company under this contract.
In this function it is his responsibility to run the Company's
lifting business with the due care of a diligent businessman.
Also, the Executive may be requested to take on additional
special assignments for the Company, which responsibilities will
be agreed upon separately.
2. The Executive shall devote his entire working energy to the
Company. He shall not undertake any incidental employment or work
of any kind which could affect his performance for the Company.
3. For five years until August 31, 2004, the Executive shall not,
whether as an independent business man or otherwise, whether for
his own or third party's account, whether directly or indirectly,
undertake any commercial activity in sectors or territories which
wholly or partially overlap with the business of the Company
other than the purchase of up to 5% of securities normally dealt
on the stock exchange of a competitive business.
Sec. 2 Representation of the Company
1. The Executive is granted shared power to represent the Company in
areas he is directly responsible for together with the
Chairman/CEO of the Company. This power of representation can be
modified by resolution of the Chairman/CEO and Board of
Directors.
2. The Executive shall not undertake any of the following legal or
business actions without prior permission of his superiors:
(a) open or close branch offices,
(b) purchase or sell a company (or business) or shareholdings in
same, or exercise voting rights from a shareholding in
matters falling outside the normal course of that company.
(c) agrees to follow Company policy on modification and
termination of contracts and annual remuneration of anyone
earning $125,000 and above,
(d) perform any legal or business act falling outside the
Company's normal scope of business.
Sec. 3 Confidentiality
The Executive will preserve unconditional secrecy regarding all confidential
business matters and events, in particular regarding business and bank
relationships, balance-sheets, sales, cost/price breakdown, important
correspondence, lists of customers, prices and business methods. This duty of
secrecy continues after termination of the contract of employment.
Sec. 4 Remuneration, Car, Expenses
1. Remuneration:
(a) The Executive shall receive an annual salary of $360,000
(before deductions), payable bi-weekly. This salary shall be
reviewed annually and adjusted with Board of Directors'
approval.
(b) The Executive will continue to be entitled to receive stock
option grants and restricted stock awards as other employees
of the Company.
(c) Participation in a bonus scheme with a target of
seventy-five percent (75%) of base compensation based on
performance.
(d) The award of 60,000 units in the 1999 Long-Term Incentive
Plan (LTIP) continues to be valid as previously issued.
(e) The Executive shall be entitled to the change-in-control
provisions as stated in the stock option plans and the LTIP.
2. Car: An appropriate car (BMW 740i Series or equivalent) will be
provided for the Executive's use, which can be also used
privately. The costs of the private use will be borne in the
United States or Europe, except for the income tax thereon.
3. Expenses: The Executive will be reimbursed by expense allowance
or against receipts of expenses incurred in the course of his
duties. This means that hotel and air travel (business class)
costs will be reimbursed against receipts, and that other
expenses will be covered by a daily expense allowance oriented to
the tax authorities' guideline figures. Spousal travel with
Executive is authorized, and Executive will be entitled to
reimbursement against receipt of expenses incurred.
4. Country Club membership dues as approved by the Chairman/CEO.
5. The Executive shall be entitled to one transfer of his household
goods as per Company policy and may reside in the location which
he chooses.
6. The Executive shall be entitled, with the approval of the
Chairman/CEO, to a housing allowance or the provision of suitable
housing as his assignments require.
Sec. 5 Holidays
The Executive has annual recuperation holiday entitlement of twenty working
days.
Sec. 6 Continuation of Salary in Case of Illness, Death or Disability
If the Executive is incapacitated for work due to illness or accident, then the
remuneration of Sec. 4 will be continued for six months. After this period, he
is covered by Voluntary LTD and Executive LTD wrap programs.
Death and disability, see separate insurance agreement.
Sec. 7 Health Insurance
The Executive is entitled to health insurance which covers him and his
dependents outside the United States as a regular employee or as a consultant as
outlined in Section 10.
Sec. 8 Pension
During the term of this contact, the Company will:
1. Contribute annually to the Terex 401(k) Retirement Plan a Company
match the maximum amount in accordance with the terms of the
plan.
2. Contribute to the PPM SA Retirement Plan on behalf of the
Executive in the amount of $30,000 per year each January.
3. Contribute annually to the Terex Corporation Deferred
Compensation Plan $75,000 in Terex Corporation common stock.
Sec. 9 Consulting Arrangement
Unless Executive's employment with the Company is terminated pursuant to Section
11(1), Executive may elect to continue as a consultant by giving the Company
thirty days' notice (except termination for cause) on the terms set for in
Section 10 below.
Sec. 10 Terms of Retainer
The terms upon which Executive shall be retained by the Company as a consultant
shall be as follows:
1. For thirty-six (36) months following the date of notice to
Company, the Executive shall provide services substantially
similar to those provided by him immediately prior, for a total
of twenty-six (26) weeks in each calendar year and governed by
Section 1.3.
2. In consideration of the Executive's consulting services, the
Company shall pay him an amount equal to sixty percent (60%) of
his Base Salary immediately prior. As a consultant, the
Executive shall be entitled to receive and contribute to
benefits that he currently participates in with the Company.
Sec. 11 Termination or Modification of the Contract
1. This contract shall commence as of September 1, 1999 and shall
continue for a five-year period of time (August 31, 2004). This
contract may be terminated by either the Executive or the
Company with a notice period of two years to the end of the
year. This contract may also be terminated by the Company
immediately upon notice for cause.
2. The Executive may assign the contract to an entity that he
controls as long as such assignment does not increase the cost
of this agreement to the Company, provided (i) Executive shall
continue perform the services and duties hereunder on behalf of
the entity, and (ii) Executive shall continue to be personally
obligated and bound by the terms of this contract.
Sec. 12 Concluding Provisions
If any provision or provisions of this contract are or become legally
ineffective, then the parties undertake to agree a legally effective replacement
provision or provisions which most nearly meet the business intention of the
ineffective provision or provisions.
/s/ Xxxxxx X. XxXxx /s/ Xxxxx Xxxxxxx
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Xxxxxx X. XxXxx Xxxxx Xxxxxxx
Chairman/CEO
Westport, CT
