AMENDED AND RESTATED
CHANGE IN CONTROL AND SEVERANCE AGREEMENT
THIS AGREEMENT dated as of April 1, 2002, is made by and between Terex
Corporation, a Delaware corporation (the "Company"), and ______________ (the
"Executive").
WHEREAS, the Company and the Executive entered into that certain Change
in Control and Severance Agreement dated as of _______________ (the " Original
Agreement); and
WHEREAS, the Original Agreement expires on March 31, 2002;
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.
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The definitions of capitalized terms used in this
Agreement are provided above and in Section 18 hereof.
2. Term of Agreement.
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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 April 1, 2004 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.
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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.
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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 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:
(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).
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 the
Severance. The Company shall pay to the Executive such severance payments due
hereunder in twenty four (24) 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 twenty four (24) 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 twenty four (24) month period following such
termination or until Executive becomes eligible for substantially similar
benefits from a new employer. Notwithstanding anything to the contrary, the
Company agrees that for purposes of the Company's 1994, 1996 and 2000 Incentive
Plans, Executive's termination date shall be twenty-four (24) months following
the Date of Termination.
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 eighteen (18) 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
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.
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.
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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 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.
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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: [address]
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,
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.
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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
(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:
(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 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
__________________________________
[name]
