CHANGE IN CONTROL AND SEVERANCE AGREEMENT
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THIS AGREEMENT dated as of __________, ____, is made by and between Terex
Corporation, a Delaware corporation (the "Company"), and ____________ (the
"Executive").
WHEREAS the Company considers it essential to the best interests of its
stockholders to xxxxxx the continued employment of key management personnel; and
WHEREAS the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly-held corporations, the possibility of a
Change in Control (as defined in the Section 18 below) exists and that such
possibility, and the uncertainty which it may raise among management, may result
in the departure or distraction of management personnel to the detriment of the
Company and its stockholders; and
WHEREAS the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
Agreement are provided above and in Section 18 hereof.
2. Term of Agreement.
2.1. (a) This Agreement shall be effective immediately upon its
execution by the parties hereto and shall remain in effect until the
earliest of (i) the termination of the Executive's employment with the
Company prior to a Change in Control (other than a termination of
Executive's employment in anticipation of a Change in Control) for any of
the following: by the Company for Cause, by Executive for any reason other
than Good Reason or by reason of Executive's death or Permanent Disability;
(ii) the termination of Executive's employment with the Company following a
Change in Control by reason of death or Permanent Disability, by the
Company for Cause or by the Executive for any reason other than for a Good
Reason; or (iii) three (3) years after the date of a Change in Control.
(b) Notwithstanding Section 2.1(a) to the contrary, this
Agreement shall terminate _______, ____ if the Executive is still
in the employ of the Company and a Change in Control has not
occurred and is not reasonably expected to occur within the six
(6) month period thereafter.
(c) All obligations of the Company and/or the Executive
outstanding on the date of termination of this Agreement or
resulting from the Executive's employment termination during the
term of this Agreement shall survive the termination of this
Agreement. All right and obligations of the Company and/or the
Executive in this Section 2(c) or in Sections 4, 9 or 12 of this
Agreement shall also survive the termination of this Agreement.
3. Change in Control. If the Executive's employment shall be terminated
within twenty-four (24) months following a Change in Control or concurrent with,
or in contemplation of, a Change in Control, unless such termination is (i) by
the Company for Cause, (ii) by reason of Executive's death or Permanent
Disability, or (iii) by the Executive without Good Reason, the Company shall pay
to the Executive an amount equal to the sum of (a) a lump sum equal to two (2)
times Executive's annual salary in effect at the time written notice of
termination is given; (b) two (2) times Executive's last paid annual bonus for a
calendar year preceding the calendar year in which the Date of Termination
occurs, provided that if Executive has been employed by the Company for less
than one year on the Date of Termination and has not yet received a bonus for
the prior calendar year, then Executive will be entitled to two (2) times
Executive's target bonus; and (c) any accrued vacation pay, in each case to the
extent not theretofore paid (the sum of the amounts described in clauses (a),
(b) and (c) shall be hereinafter referred to as the "Severance"). The Company
shall pay to the Executive the Severance in a cash lump sum payment
simultaneously with the termination of Executive's employment as described in
this Section 3. In addition, simultaneously with the termination of Executive's
employment as described in this Section 3, (x) all unvested stock options and
stock grants previously awarded to Executive shall immediately and
unconditionally vest and Executive shall have the right to exercise any stock
options held by him in accordance with their terms but in no event shall
Executive have less than six (6) months following the Date of Termination to
exercise said options; (y) all units granted to Executive pursuant to the
Company's 1999 Long Term Incentive Compensation Plan shall immediately and
unconditionally vest for their maximum cumulative value and be paid to Executive
simultaneously with the termination of employment as described in this Section
3; and (z) the Company shall provide Executive with continuing coverage under
the life, disability, accident and health insurance programs for employees of
the Company generally and under any supplemental programs covering executives of
the Company, as from time to time in effect, for the twenty four (24) month
period from such termination or until Executive becomes eligible for
substantially similar coverage under the employee welfare plans of a new
employer, whichever occurs earlier, provided that Executive's right to elect
continued medical coverage after termination of employment under Part 6 of Title
I of the Employee Retirement Income Security Act of 1974, as amended, shall be
deemed satisfied by the coverage provided in this clause (z). Executive shall
also be entitled to a continuation of all other benefits in effect at the time
of termination (including, without limitation, automobile, country club,
vacation and pension benefits, if applicable) for the twenty four (24) month
period following such termination or until Executive becomes eligible for
substantially similar benefits from a new employer.
4. Excise Tax Gross-Up.
4.1. Notwithstanding anything in this Agreement to the contrary and
except as set forth below, in the event it shall be determined that any
payment or distribution by the Company or its affiliates to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 4) (a "Payment") would be subject to the excise tax imposed by
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Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to
such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding
the foregoing, if it shall be determined that the Executive is entitled to
a Gross-Up Payment, but that the Payments do not exceed 105% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive
such that the receipt of Payments would not give rise to any Excise Tax,
then no Gross-Up Payment shall be made to the Executive and the Payments,
in the aggregate, shall be reduced to the Reduced Amount.
4.2. Subject to the provisions of Section 4.3, all determinations
required to be made under this Section 4, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by PricewaterhouseCoopers LLP or such other nationally recognized
certified public accounting firm as may be designated by the Executive (the
"Accounting Firm") which shall provide detailed supporting calculations
both to the Company and the Executive simultaneously with any event giving
rise to a Gross-Up Payment. All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 4, shall be paid by the Company to the Executive
simultaneously with any event giving rise to a Gross-Up Payment. Any
determination by the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 4.3 and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
4.3. The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment
by the Company of the Gross-Up Payment or the Underpayment. Such
notification shall be given as soon as practicable but no later than ten
(10) business days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the thirty (30) day period following the
date on which it gives such notice to the Company (or such shorter period
ending on the date that any payment of taxes with respect to such claim is
due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the
Executive shall:
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(1) provide the Company any information reasonably requested by
the Company relating to such claim,
(2) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Company,
(3) cooperate with the Company in good faith in order effectively
to contest such claim, and
(4) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including attorney's fees and additional interest and
penalties) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including attorney's fees and interest and penalties with
respect thereto) imposed, including, but not limited to, those imposed as a
result of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 4.3, the Company
shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Executive to
pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to
pay such claim and xxx for a refund, the Company shall pay the amount of
such payment to the Executive, along with an additional Gross-Up Payment,
and shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax (including reasonable attorney's fees,
interest or penalties with respect thereto) imposed, including, but not
limited to, those imposed with respect to such payment or with respect to
any imputed income with respect to such payment; and further provided that
any extension of the statute of limitations relating to payment of taxes
for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder
and the Executive shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
4.4. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 4.3, the Executive receives any
refund with respect to such claim, the Executive shall (subject to the Company's
complying with the requirements of Section 4.3) promptly pay to the Company the
amount of such refund (together with any interest paid or credited thereon after
taxes applicable thereto).
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5. Termination without Cause or For Good Reason. In the event the
Executive's employment with the Company is terminated by the Company without
Cause or by the Executive for Good Reason, at any time, and, provided no Change
in Control shall have occurred, the Company shall pay the Executive, in cash,
aggregate severance payments equal to his then base salary for up to twelve
months (12) months from the Date of Termination or the date upon which Executive
obtains alternative employment, whichever is earlier. The Company shall pay to
the Executive such severance payments due hereunder in twelve (12) equal monthly
payments on the first day of each month following such termination. If the
Company fails to make any such payment due, and such failure continues for
thirty (30) days following notice of nonpayment by the Executive, the Executive
may accelerate the payment of all of the remaining payments. In addition, (a)
Executive shall have the right to exercise any stock options, long-term
incentive awards or other similar awards held by him in accordance with the
relevant plan documents or grant letter; provided, however, in no event shall
Executive have less than six (6) months following the Date of Termination to
exercise such options or awards; and (b) the Company shall provide Executive
with continuing coverage under the life, disability, accident and health
insurance programs for employees of the Company generally and under any
supplemental programs covering executives of the Company (including, without
limitation, participation in the Company's 401(K) retirement plan), as from time
to time in effect, for the twelve (12) month period from such termination or
until Executive becomes eligible for substantially similar coverage under the
employee plans of a new employer, whichever occurs earlier, provided that
Executive's right to elect continued medical coverage after termination of
employment under Part 6 of Title I of the Employee Retirement Income Security
Act of 1974, as amended, shall be deemed satisfied by the coverage provided in
this clause (b). Executive shall also be entitled to a continuation of all other
benefits in effect at the time of termination (including, without limitation,
automobile, country club, vacation and pension benefits, if applicable) for the
twelve (12) month period following such termination or until Executive becomes
eligible for substantially similar benefits from a new employer.
6. Payment for Past Service. Notwithstanding any other provisions of this
Agreement, if the Executive's employment is terminated at any time, the Company
shall pay the Executive, in cash, an aggregate amount not less than the sum of
(a) Executive's annual bonus for the most recently completed fiscal year to the
extent such bonus has not been paid to Executive, which bonus shall not be less
than the annual bonus paid to Executive during the fiscal year immediately
preceding it, if any; (b) the product of (i) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (ii) the annual bonus for
the fiscal year preceding the Date of Termination that has most recently been
paid to the Executive; (c) any accrued vacation pay, to the extent not
theretofore paid to Executive; and (d) any other amounts earned by Executive
prior to the Date of Termination but not previously paid.
7. Noncompete and Confidentiality.
7.1. In consideration of the agreements and payments of the Company
herein, the Executive agrees that for a period of twelve (12) months from
the Date of Termination, unless the Date of Termination is within
twenty-four (24) months following a Change in Control, in which event the
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Executive agrees that for a period of twenty-four (24) months from the Date
of Termination, he will not, without the prior written permission of the
Company, directly or indirectly, (i) enter into the employ of or render any
services to any person, firm, or corporation engaged in the manufacture or
sale of products currently manufactured or distributed by the Company, or
if Executive does not have Company wide responsibility, the divisions and
subsidiaries for which Executive has management responsibility, which
directly or indirectly compete with the business of the Company or such
divisions and subsidiaries, as the case may be (a "Competitive Business")
(unless such person, firm or corporation conducts at least some business
which does not constitute a Competitive Business and Executive is solely
employed by, or renders services to business(es) that is (are) not a
Competitive Business); (ii) engage in any Competitive Business for his own
account; (iii) become associated with or interested in any Competitive
Business as an individual, partner, shareholder, creditor, director,
officer, principal, agent, employee, trustee, consultant, advisor or in any
other relationship or capacity (unless such business, person or company
conducts at least some business which does not constitute a Competitive
Business and Executive is solely associated with or interested in
business(es) which is (are) not a Competitive Business); or (iv) solicit,
induce or entice, or cause any other person or entity to solicit, induce or
entice to leave the employ of the Company any person who was employed or
retained by the Company on the Date of Termination. However, nothing in
this Agreement shall preclude Executive from investing his personal assets
in the securities of any corporation or other business entity which is
engaged in a business competitive with that of the Company if such
securities are traded on a national stock exchange or in the
over-the-counter market and if such investment does not result in his
beneficially owning, at any time, more than five percent (5%) of the
publicly-traded equity securities of such competitor. Nothing in this
Agreement shall preclude Executive from retaining his position or
membership in trade associations and professional organizations. The
restrictions imposed on Executive pursuant to this Section 7.1 shall
terminate and be of no further force and effect in the event of a breach by
the Company of its obligations to make or provide benefits to Executive.
7.2. In consideration of the agreements and payments of the Company
herein, the Executive shall keep confidential and not disclose to any
person any information relating to the Company's business and/or finances,
which information was obtained during and/or as incident to or in
connection with the Executive's employment with the Company and which
otherwise is not public information or as required by law. The Executive
agrees he will conduct himself in a professional manner and not make any
disparaging, negative or other statements regarding the Company, its
affiliates or any of the officers, directors or employees of the Company or
its affiliates which could in any way have an adverse affect on the
business or affairs of the Company or its affiliates or otherwise be
injurious to or not be in the best interests of the Company, its affiliates
or any such other persons.
7.3 The Executive agrees that this non-competition and
non-solicitation covenant is reasonable under the circumstances, and the
Executive further agrees that his services for and on behalf of the Company
are unique and irreplaceable. The Executive further agrees that any breach
of the covenants contained in Section 7.1 and 7.2 above would irreparably
injure the Company and/or its affiliates or subsidiaries. Accordingly, the
Executive agrees that the Company may, in addition to pursuing any other
remedies it may have at law or in equity, obtain an injunction against the
Executive from any court having jurisdiction over the matter restraining
any further violation of the covenants contained in Section 7.1 and 7.2
above.
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7.4. Upon termination of Executive's employment with the Company, the
Company shall have the right to designate a reasonable amount of the
Severance to be allocated to this covenant not to compete and
confidentiality.
8. Outplacement Services. In the event of the termination of the
Executive's employment after a Change in Control or without Cause or for Good
Reason at any time as provided for in Sections 3 or 5 hereof, the Company
agrees, at its sole cost and expense, to provide the Executive with outplacement
services for a period of at least twelve (12) months following the Date of
Termination. The Company and the Executive shall use their good faith efforts to
locate a provider providing outplacement services, which provider is reasonably
acceptable to both parties taking into account the status of the Executive as a
senior executive officer.
9. Legal Expenses. The Company agrees to pay the reasonable out-of pocket
legal expenses actually incurred by the Executive in connection with the
negotiation and execution of this Agreement. The Company agrees to pay all
reasonable out-of-pocket costs and expenses, including all reasonable attorneys'
fees and disbursements, actually incurred by the Executive in collecting or
enforcing payments to which he is successfully determined to be entitled
(whether by agreement among the parties, court order or otherwise) pursuant to
this Agreement in accordance with its terms.
10. Notice of Termination. Any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
notice from one party hereto to the other party hereto in accordance with
Section 13 hereof. For purposes of this Agreement, a notice of termination shall
set forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment.
11. No Other Compensation; Employee at Will. Except as provided in Sections
2, 3, 4, 5, 6, 8, 9 and 14 hereof, no amount or benefit shall be payable to the
Executive under this Agreement or otherwise except as required by law. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive is and shall remain "an employee at will" and shall
not have any right to be retained in the employ of the Company.
12. Successors; Binding Agreement.
12.1. In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to
compensation from the Company in the same amount and on the same terms as
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the Executive would be entitled to hereunder if the Executive were to
terminate the Executive's employment for Good Reason after a Change in
Control, except that, for purposes of implementing the foregoing, the date
on which any such succession becomes effective shall be deemed the Date of
Termination.
12.2 This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
the Executive shall die while any amount would still be payable to the
Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.
13. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
To the Company: Terex Corporation
000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: General Counsel
To the Executive: _________________
14. Miscellaneous. No provision of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated 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 similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Connecticut. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law and
any additional withholding to which the Executive has agreed.
15. Partial Validity. The invalidity or unenforceability or any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect, and,
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specifically, the invalidity or unenforceability of any of the provisions of
Paragraph 7 shall not affect, alter or otherwise abrogate any of the Company's
payment obligations pursuant to this Agreement.
16. Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
17. Mitigation. The Company agrees that if Executive's employment with the
Company terminates Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to him due under this
Agreement. Further, the amount of any payment shall not be reduced by any
compensation earned by Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by Executive to the Company, or otherwise.
18. Definitions. For purposes of this Agreement, the following terms shall
have the meanings indicated below:
(a) "Beneficial Owner" shall have the meaning defined in Rule 13d-3
under the Exchange Act.
(b) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the continued failure by the Executive to
substantially perform the Executive's duties with the Company (other than
any such failure resulting from the Executive's incapacity due to physical
or mental illness) in a manner reasonably satisfactory to the Chief
Executive Officer of the Company after written notice detailing the reasons
for such failure, (ii) the willful engaging by the Executive in conduct
which is demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise after written notice to Executive
detailing such conduct and injury, or (iii) the entry by a court of
competent jurisdiction of an order, or the entering into by the Executive
of a consent decree, barring the Executive from serving as an officer or
director of a public company. For purposes of clauses (i) and (ii) of this
definition, no act, or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that the Executive's act, or
failure to act, was in the best interest of the Company.
(c) A "Change in Control" shall be deemed to have occurred if the
conditions set forth in any one of the following paragraphs shall have been
satisfied:
(i) any person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such person any securities acquired
directly from the Company) representing 35% or more of the combined
voting power of the Company's then outstanding securities, excluding
any person who becomes such a Beneficial Owner in connection with
transactions described in clauses (x), (y) or (z) of paragraph (iii)
below; or
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(ii) there is a change in the composition of the Board of
Directors of the Company occurring within a rolling two-year period,
as a result of which fewer than a majority of the directors are
Incumbent Directors ("Incumbent Directors" shall mean directors who
either (x) are members of the Board as of the date of this Agreement
or (y) are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the directors who are
members of the Board on the date of this Agreement or elected, or
nominated for election, with the affirmative votes of at least a
majority of the directors who are members of the Board on the date of
this Agreement, but shall not include an individual not otherwise an
Incumbent Director whose election or nomination is in connection with
an actual or threatened proxy contest, including but not limited to a
consent solicitation, relating to the election of directors to the
Board); or
(iii) there is consummated, in any transaction or series of
transactions, of a complete liquidation or dissolution of the Company
or a merger, consolidation or sale of all or substantially all of the
Company's assets (collectively, a "Business Combination") other than a
Business Combination after which (x) the stockholders of the Company
own more than 50 percent of the common stock or combined voting power
of the voting securities of the Company resulting from the Business
Combination, (y) at least a majority of the board of directors of the
resulting corporation were Incumbent Directors and (z) no individual,
entity or group (excluding any corporation resulting from the Business
Combination or any employee benefit plan of such corporation or of the
Company) becomes the Beneficial Owner of 35 percent or more of the
combined voting power of the securities of the resulting corporation,
who did not own such securities immediately before the Business
Combination; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated a
sale or disposition by the Company of all or substantially all the
Company's assets.
(d) "Date of Termination," with respect to any purported termination
of the Executive's employment shall mean the later of (i) date specified in
the notice or (ii) thirty (30) days from the date of the notice unless such
notice is for a termination of Executive for Cause.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(f) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express
written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure
to act as described below, such act or failure to act is corrected prior to
the Date of Termination specified in the notice of termination given in
respect thereof:
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(i) the assignment to the Executive of any duties inconsistent
with the Executive's status as a senior executive officer of the
Company or a substantial adverse alteration in the nature of
Executive's authority, duties or responsibilities, or any other action
by the Company which results in a diminution in such status,
authority, duties or responsibilities (it being understood that a mere
change in authority, duties or responsibilities, or any other action
by the Company will not constitute Good Reason in and of itself unless
it results in a substantial adverse alteration or diminution of
Executive's authority, duties or responsibilities), excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(ii) a reduction by the Company in Executive's base salary and/or
annual bonus as in effect on the date hereof or as the same may be
increased from time to time, except for across-the-board reductions
similarly affecting (i.e., all by the same percentage or Executive by
a lesser percentage than each of the rest) all senior executives of
the Company or reductions for Cause, provided, however, that such
reductions are not made as a result of, or in contemplation of, a
Change in Control;
(iii) the failure by the Company to pay to Executive any portion
of Executive's then current compensation except pursuant to an
across-the-board compensation deferral similarly affecting (i.e., all
by the same percentage or Executive by a lesser percentage than each
of the rest) all senior executives of the Company, provided, however,
that such across-the-board compensation deferrals are not made as a
result of, or in contemplation of, a Change in Control;
(iv) the failure by the Company to continue in effect any
compensation plan or other benefit in which Executive participates
which is material to Executive's total compensation, except pursuant
to an across-the-board compensation or benefit deferral or reduction
similarly affecting (i.e., all by the same percentage or Executive by
a lesser percentage than each of the rest) all senior executives of
the Company or a deferral or reduction of compensation or benefit for
Cause, provided, however, that such compensation or benefit deferrals
and reductions are not made as a result of, or in contemplation of, a
Change in Control;
(v) the failure by the Company to continue to provide Executive
with benefits substantially similar to those enjoyed by the Executive
under any of the Company's pension, life insurance, medical, health
and accident, disability plans or other benefits (including, without
limitation, automobile, country club, vacation, and pension benefits)
in which Executive was participating at the time, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material
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fringe benefit enjoyed by Executive at the time, (including, without
limitation, automobile, country club, vacation and pension benefits),
or the failure by the Company to provide Executive with the number of
paid vacation days to which Executive he is then entitled, except for
a deferral or reduction of benefits similarly affecting all senior
executives of the Company or a deferral or reduction of benefits for
Cause, provided, however, that such benefit deferrals and reductions
are not made as a result of, or in contemplation of, a Change in
Control; or
(vi) the relocation of the Company's principal executive offices
to a location more than 50 miles from the location of such offices on
the date of this Agreement or a requirement that the Executive be
based anywhere other than at the Company's principal executive offices
except for necessary travel on the Company's business to an extent
substantially consistent with the Executive's business travel
obligations on the date of this Agreement.
(g) "Permanent Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if, as a result of
the Executive's incapacity due to physical or mental illness, the Executive
shall have been absent from the full-time performance of the Executive's
duties with the Company for a period of six (6) consecutive months or nine
(9) months out of any twelve (12) month period, the Company shall have
given the Executive a notice of termination for disability, and, within
thirty (30) days after such notice of termination is given, the Executive
shall not have returned to the full-time performance of the Executive's
duties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
TEREX CORPORATION
By:__________________________
Name: Xxxxxx X. XxXxx
Title: Chairman, Chief Executive Officer,
President and Chief Operating Officer
_____________________________
[Executive]
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