AMENDED AND RESTATED SEPARATION AGREEMENT
This AMENDED AND RESTATED SEPARATION AGREEMENT (this "Amendment Agreement")
is made and entered into this 30th day of December 2005, by and among Terex
Corporation and Terex Financial Services, Inc. ( collectively, the "Company")
and Xxxxxx Xxxxxx ("Executive").
WHEREAS, the Company and the Executive entered into a Separation Agreement
on August 31, 2005 (the "Separation Agreement") and Executive has been receiving
benefits pursuant to the Separation Agreement;
WHEREAS, since that time, Proposed Treasury Regulations under Section 409A
("Section 409A") of the Internal Revenue Code of 1986, as amended (the "Code")
were issued which may have an additional tax impact on Executive;
WHEREAS, the Executive has requested, and the Company has agreed, to amend
and restate the Separation Agreement to avoid triggering this additional tax
impact by suspending certain payments (except those excludable under Section
409A) for six months following the Termination Date (as defined below) in
consideration of the Executive refunding to the Company all payments heretofore
made to him, or on his behalf, pursuant to the Separation Agreement;
WHEREAS, on December 29, 2005, the Company received a check, dated December
31, 2005, from the Executive for Sixty Seven Thousand Seven Hundred and Sixty
Eight Dollars and Thirty-Seven Cents ($67,768.37). This amount represents
severance payments of One Hundred Thousand Eighteen Thousand Eight Hundred and
Forty-One Dollars and seventy-two cents ($118,841.72), less deductions required
by law, and payment of expenses of Five Thousand Six Hundred and Seventy-Five
Dollars and Forty-Seven Cents ($5,675.47) made to or on behalf of Executive, for
a total of One Hundred and Twenty-Four Thousand Five Hundred Seventeen Dollars
and Nineteen Cents ($124,517.19.) (the "Accrued Severance Amount") by the
Company pursuant to the Separation Agreement since the Termination Date, other
than those referred to in paragraphs (b) and (h) of Section 2;
WHEREAS, the Company and the Executive acknowledge that the Company has not
provided Executive with legal advice with respect to Section 409A and Executive
has not received, let alone relied on, any advice from the Company with respect
to Section 409A;
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree to amend and
restate the Separation Agreement (the Separation Agreement, as amended by this
Amendment Agreement, the "Agreement") in its entirety as follows:
1. Resignation from Employment. Executive resigns from his employment as
of the end of the business day on August 31, 2005 (the "Termination
Date").
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2. Termination Payment and Benefits. Executive hereby agrees to accept,
as full and final consideration for Executive's promises, obligations
and release set forth herein, and in settlement of any and all claims
as particularly set forth below, the following:
(a) Severance Payments -- The Company shall pay Executive Severance
equal to seventy-eight (78) week(s) (the "Severance Period")
salary. The Severance shall be calculated on Executive's current
base salary and shall be paid in regular installments in
accordance with the normal payroll processing. Company shall
continue to withhold for income and other applicable taxes, or
other amounts.
(b) Medical Benefits - Medical, Dental, and Vision benefits cease as
of the end of the month of separation. All other benefits will
end on the Termination Date. If Executive is currently enrolled
in Medical, Dental, or Vision benefits and enrolls in COBRA for
Medical, Dental, and/or Vision benefits, the Company agrees to
contribute an amount equal to the Employer's current contribution
toward COBRA on behalf of Executive for the duration of the
Severance Period (the "Company's Cobra Continuation").
(c) Vacation Pay - Executive shall be paid a lump-sum amount for
unused and accrued vacation time to which Executive is entitled.
(d) Automobile - During the Severance Period, Employee may continue
to use the 2003 Cadillac Seville, VIN 0X0XX00000X000000, which is
the automobile leased by the Company for and provided to him as
an employee. The Company shall continue to pay for insurance
premiums on the automobile and the cost of maintenance. The
Company shall give Executive 30 days notice in the event of any
change in level of insurance coverage. The Company shall not pay
mileage, gas, moving or other violations or any other incidental
expenses, unless such expenses are incurred in the course of
performing services requested by the Company. The Employee
represents that he will maintain the vehicle in good repair,
shall use it only for its intended purpose and will not operate
it negligently or recklessly. The Employee shall be responsible
for any damage to the automobile that is not regular wear and
tear. The Employee shall also indemnify and hold the Company
harmless for any damages or injuries caused as a result of the
negligent or reckless operation of this automobile during the
Severance Period, including but not limited to out of pocket
expenses and attorneys fees and cost. Effective from the
Termination Date, the Executive agrees that all mileage on the
vehicle is for personal usage. On the Termination Date, Executive
will report to Xxxxxx Xxxxxxx the odometer reading, the number of
miles driven between November 1, 2004 and the Termination Date
and of those miles, how many were driven for personal use.
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(e) Club Memberships - During the Severance Period, the Company shall
continue to pay (i) Executive's dues to Rolling Hills Country
Club and (ii) Executive's monthly membership fees to the New York
Sports Club or reimburse Executive for the monthly membership
fees (but not initiation fees) to a successor health club of up
to $80.00 a month, inclusive of sales tax. To receive
reimbursement for the monthly membership fees to a successor
health club, Executive shall submit to Xxxxxx Xxxxxx-Xxxxx a
receipt from the successor health club evidencing payment by
Executive. Executive shall be responsible for all assessments or
other charges as a result of his country club membership.
Effective from the Termination Date, Executive agrees that the
use of the country club membership shall be treated as personal
use for tax purposes and confirms that the use of the New York
Sports Club membership is for personal use.
(f) Legal Fees - The Company shall reimburse Executive for up to
$9000.00 in legal fees incurred by him in connection with the
review and execution of this Agreement.
(g) Other Expenses - Upon submission of invoices, the Company shall
reimburse Executive for his monthly usage costs for his mobile
telephone and blackberry.
(h) Outplacement Services - During the Severance Period, Executive
shall receive Executive level outplacement services from either
Right Management Consultants or Xxx Xxxxx Xxxxxxxx to assist with
his transition.
(i) Executive expressly agrees that Executive shall not be entitled
to and shall not receive any other payments or benefits of any
kind from the Company, including without limitation any bonus
payments or any right to participate in the Company's 401(k)
Plan, other than the benefits expressly provided for in this
Paragraph 2 (collectively, "Termination Payments"). Executive
further agrees that Executive would not receive the moneys and/or
benefits specified in this Agreement except for Executive's
execution of this Agreement and Executive's fulfillment of the
promises and obligations contained herein.
(j) Other Employment - On or about the 1st of each month during the
Severance Period, Executive or his counsel, will notify Xxxxxx
Xxxxxx-Xxxxx via e-mail or telephone if he has been employed,
including self employment, or retained as a contractor or
consultant in the preceding month, including the income that he
has earned and whether he has any plans in the current month to
continue or begin employment, including self-employment, or to
act as a consultant or contractor including that income that he
anticipates earning. The Company may require additional
documentation from Executive to confirm employment or engagement
as a contractor, including income earned. The Company will
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suspend Termination Payments in any month in which notification
is not made (or the requested documentation is not received) and
will not reinstate Termination Payments until notification and/or
documentation has been provided to Xxxxxx Xxxxxx-Xxxxx.
(k) Adjustment to Termination Payments - If Executive is employed on
a full-time basis, including self employment, or re-employed by
the Company, or is retained as a contractor or consultant,
Executive agrees that Executive's Termination Payments will be
affected as follows:
(i) The Company's obligation to provide outplacement services
will terminate;
(ii) The Company's Cobra Continuation payments will end on the
first day that Executive becomes eligible to participate in
medical benefits;
(iii) Severance Payments will be reduced by the income earned by
Executive ("Reduced Severance"). Reduced Severance will be
effective on the first day of Executive's employment or
engagement and will be made on a going forward basis only.
Reduced Severance shall be calculated by subtracting
Executive's projected annualized income/78 from Severance/78
multiplied by the number of weeks remaining in the Severance
Period. Where the income earned by Executive varies during
the Severance Period, Reduced Severance may be adjusted by
the Company.
(iv) Executive will return the automobile to the Company;
(v) The Company's obligation to pay club membership dues and
reimburse Executive for his monthly mobile phone and
blackberry costs will terminate;
(vi) Under the circumstance where Reduced Severance is $0.00 as a
result of the projected annualized income to be earned by
Executive, the Severance Period shall end and the Company
shall have no further obligation to Executive under this
Agreement.
(vii) All Termination Payments provided to Executive will be
deemed adequate consideration for this Agreement, including
but not limited to adequate consideration for the Waiver and
Release of Claims, Cooperation with Company, and Protection
of Confidential Information, Return of Company Property,
Non-Disparagement, Non-solicitation and Non-compete
covenants set forth in Paragraphs 3, 4, 5 and 7 below. The
elimination or reduction of Termination Payments shall not
affect the adequacy of consideration for this Agreement.
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(l) Suspension of Payments - The Company acknowledges that it has
received a check, dated December 31, 2005, from Executive
repaying the Accrued Severance Amount to the Company, which
amount represents all Termination Payments made by the Company to
Executive or on his behalf from the Termination Date to December
31, 2005 (other than payments made to Executive pursuant to
Paragraphs b and h of Section 2). The Company and Executive
acknowledge and agree that (i) all Termination Payments to which
Executive would otherwise be entitled during the period from
January 1, 2006 to March 1, 2006 will be suspended (collectively,
the "Suspended Payments"), (ii) the Company will pay in a lump
sum to Executive on March 1, 2006, the Accrued Severance Amount,
and subject, to the extent applicable, to the Company's receipt
of appropriate evidence required pursuant to this Section 2, the
aggregate amount of the Suspended Payments to the date of such
payment and (iii) on an after Xxxxx 0, 0000, Xxxxxxxxxxx Payments
will be made as and when due in accordance with this Section 2.
The Company and Executive acknowledge and agree that adjustments
to Termination Payments made in accordance with paragraphs (j)
and (k) of this Section 2 will not affect in any way Executive's
right to receive in full the Accrued Severance Amount on March 1,
2006.
3. Cooperation.
(a) In consideration for the Termination Payments, Executive agrees
to fully cooperate with the Company in ensuring a smooth
transition following Executive's departure. Executive expressly
agrees to cooperate with and make self available to the Company,
as the Company may reasonably request under the totality of the
circumstances, to assist it in any matter, including but not
limited to meeting with Company Executives or agents, promptly
and fully responding to inquiries from the Company and giving
truthful testimony in any litigation or investigation or
potential litigation or investigation, over which Executive may
have knowledge, information, or expertise. Executive's obligation
to fully cooperate with the Company survives the termination of
the Severance Period.
(b) To the extent that Executive is an Executive Officer or Director
for the Company, its parent company, subsidiaries or affiliates,
Executive resigns from those positions effective as of the
Termination Date.
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(c) It is the intent of the parties that, to the extent applicable,
the provisions of this Agreement comply with Section 409A of the
Internal Revenue Code and related regulations and Treasury
pronouncements ("Section 409A"). If, based on subsequent
interpretation or guidance, the parties determine that any
provision provided herein would result in the imposition of an
excise tax under the provisions of Section 409A, the Executive
and the Company agree that each will use good faith efforts to
reform any such provision to avoid imposition of any such excise
tax in the manner that the Executive and the Company mutually
determine are appropriate to comply with Section 409A
4. Waiver and Release of Claims
(a) Executive Understanding of Laws -- Executive understands that
there are various state, federal, and local laws that prohibit
employment discrimination on the basis of age, sex, race, color,
national origin, religion, handicap, veteran status, and other
protected categories and that these laws are enforced through the
Equal Employment Opportunity Commission, the U. S. Department of
Labor, and other agencies.
(b) Executive's Release of Company -- In consideration for the
Termination Payments, Executive hereby irrevocably,
unconditionally and generally releases, and agrees not to
commence in any forum, any action or proceeding against the
Company and its parent, subsidiaries, affiliates, successors and
assigns for damages, judgments, or any liability, claims or
demands, known or unknown and of any nature whatsoever and
whenever, arising directly or indirectly out of Executive's
employment with the Company or the termination of such employment
or services. Without in any way limiting the generality of the
foregoing, Executive hereby waives and releases any rights,
claims or causes of action that Executive may have for salary,
bonus, severance pay, pay or distributions pursuant to any
Company Long Term Incentive Plan or Supplemental Executive
Retirement Plan or any other benefit plan (excluding 401k),
vacation pay, any rights, claims or causes of action arising
under the Age Discrimination in Employment Act of 1967 (the
"ADEA"), as amended, the Civil Rights Act of 1964, as amended,
the Civil Rights Act of 1991, as amended, the Civil Rights Act of
1866, the Americans with Disabilities Act of 1990, the National
Labor Relations Act, the Employee Retirement Income Security Act
of 1974, the Fair Labor Standards Act, the Occupational Safety
and Health Act, the Consolidated Omnibus Budget Reconciliation
Act of 1985, the Federal Family and Medical Leave Act, the
Workers Adjustment and Retraining Notification Act, the
Connecticut Fair Employment Practices Act, and any rights, claims
or causes of action in tort or in contract or pursuant to any
other applicable state or local laws.
6 12.30.05
Executive intends to waive and release any rights Executive has
under these and other laws of contract or tort, but Executive
does not intend to and does not waive any rights or claims that
Executive may have after September 2, 2005. Executive
acknowledges that Executive does not have any current action,
proceeding, charge or complaint against the Company pending
regarding Executive's employment. Nothing in this Agreement may
affect the rights and responsibilities of the Equal Employment
Opportunity Commission (the "Commission) to enforce the ADEA, or
used to justify interfering with the protected right of Executive
to file a charge or participate in an investigation or proceeding
conducted by the Commission under the ADEA. However, Executive
agrees not to accept any relief or recovery from any charge or
complaint filed against the Company with any federal, state, or
local administrative agency or court with regard to claims
arising from Executive's employment.
Nothing contained herein waives or expands any rights that
Executive may have to indemnification or the advancement of legal
fees pursuant to any applicable Directors and Officers Insurance
Policy or the Amended and Restated Bylaws of Terex Corporation,
dated as of March 9, 1998 (the "Bylaws"), or as otherwise amended
to comply with applicable law, for any actions or investigations,
or claims, issues or matters associated with any action or
investigation. Any right or limitations to indemnification of
Executive are derived only from the Bylaws and/or any applicable
Directors and Officers Insurance Policy.
5. Protection of Confidential Information; Return of Company Property;
Non-Disparagement. In consideration for the Termination Payments:
(a) No Use of Company Confidential Information -- Executive
acknowledges that:
(i) As a result of Executive's employment with the Company,
Executive has obtained secret and confidential information
concerning the business of the Company, including, without
limitation, the operations and finances, the identity of
customers and sources of supply, their needs and
requirements, the nature and extent of contracts with them,
and related costs, price, and sales information
("Confidential Information").
(ii) Executive agrees that Executive will not at any time divulge
to any person, firm, or corporation, or use for Executive's
own benefit, any Confidential Information obtained or
learned by Executive during the course of Executive's
employment with the Company, except (i) with the Company's
express written consent; (ii) to the extent that any such
information is in or becomes part of the public domain other
than as a result of Executive's breach of any of Executive's
obligations hereunder; or, (iii) where required to be
7 12.30.05
disclosed by court order, subpoena, or other government or
legal process by law, in which event Executive shall
promptly notify the Company.
(iii) Except as otherwise required by law, the existence and
terms of this Agreement are Confidential Information. Except
to his spouse and legal and financial advisors, Executive
agrees not to disclose, either directly or indirectly, any
information whatsoever regarding the existence or substance
of this Agreement, including specifically any of the details
of Executive's Termination Payments.
(b) Executive to Return Company Property -- Except as provided
herein, within 5 business days from the Termination Date,
Executive shall deliver to the Company all memoranda, notes,
software, records, reports, manuals, drawings, blueprints, and
other documents (in any format and all copies thereof) and other
tools provided to Executive by Company in Executive's possession
relating to the business of the Company and all property
associated therewith which Executive may possess or have under
Executive's control. Executive shall have the right to retain all
of Executive's personal property.
(c) Non-disparagement -- Executive agrees to conduct self in a
professional manner and not to make any disparaging, negative, or
false statements regarding the Company, its parents,
subsidiaries, affiliates, directors, officers, or Executives
which could in any way have an adverse effect on the business or
affairs of the Company. Employee shall direct all employment
references only to the Company's Vice President, Human Resources.
The Company agrees that Xxx XxXxx, the Chairman and CEO of Terex
Corporation, and his direct reports as of the Termination Date,
will not make any disparaging statements regarding Employee's
character.
6. Consultation with Attorney and Review of Agreement and Release. By
executing this Agreement, Executive acknowledges that (i) Executive
has been advised in writing by the Company to consult with an attorney
before executing this Agreement; (ii) Executive had adequate time to
review this Agreement and to consider whether to sign this Agreement;
(iii) Executive understands each and every term of this Agreement and
the full effect of signing this Agreement, including Executive's
obligations to the Company and Executive's release and waiver of any
and all claims; (iv) Executive has been provided a period of at least
twenty-one (21) days within which to consider this Agreement and
consult with counsel; and (v) for a period of seven (7) days following
execution of this Agreement, Executive may revoke this Agreement. In
the event Executive revokes in accordance with this provision,
Executive shall return to the Company all consideration received under
this Agreement, if any.
8 12.30.05
7. Non-solicitation and Non-compete. In consideration for the Termination
Payments, Executive hereby agrees that for the period commencing
September 2, 2005 and continuing for one (1) year thereafter
("Non-solicitation Period"), Executive will not without Company's
prior written consent, directly or indirectly (i) solicit or encourage
any of the Executives of Company to leave the employ of Company or to
terminate or alter their contractual relationships, if any, in a way
that is adverse to Company's best business interests; (ii) solicit,
divert or take away, or attempt to solicit, divert or take away, any
customers, business, or suppliers of Company upon whom Executive
called, serviced, or solicited during Executive's employment with
Company or with whom Executive became acquainted as a result of
employment with Company; or (iii) be involved in any business or
enterprise, whether as any owner, member of a partnership, trustee,
principal shareholder (stock ownership in a public or private company
in excess of 5%), officer or director of a corporation, or as an
Executive, agent, associate, consultant or otherwise, which competes
with any of the financial products and services offered by the
Company, its subsidiaries or affiliates to assist with in the
acquisition of construction equipment.
8. Third Party Agreements. Executive hereby warrants and represents that
Executive has not entered into any third party agreements in Company's
name or on Company's behalf of which Company has not been previously
advised in writing. Executive further warrants and represents that
during the period of Executive's employment with Company, Executive
has not knowingly or intentionally engaged in any conduct or activity
related to the Company, which constitutes a violation of law,
misconduct, or a material violation of Company's policies.
9. No Admission by the Company. This Agreement and/or any payments made
hereunder are not intended to be an admission or concession by the
Company of any wrongdoing or illegal or actionable acts or omissions
and the Company affirmatively states that it has not engaged in any
such acts or omissions. In consideration for the Termination Payments,
Executive shall not directly or indirectly make any written or oral
statements, suggestions, or representations that the Company has made
or implied any such admission or concession.
10. Breach of this Agreement. In the event Executive materially breaches
any of the provisions of this Agreement, Company's obligation
hereunder to provide Executive any further Termination Payments and/or
benefits shall immediately cease. As of the date of execution of this
Agreement, the Company is not aware of any breach of the Separation
Agreement that will affect Executive's rights to the Accrued Severance
Amount under Section 2(l) (ii) of this Agreement.
11. Miscellaneous. Except for Non-Disclosure Agreement dated October 9,
1995, this Agreement contains all the understandings and agreements
with respect to the matters set forth herein, and there are no others
made either contemporaneously herewith, or otherwise. This Agreement
shall be governed by the laws of the state of Connecticut applicable
to contracts made and wholly performed therein, without reference to
conflicts of law principles. This Agreement may not be modified,
altered, or changed except upon express written consent of both
parties wherein specific reference is made to this Agreement. The
construction and interpretation of this Agreement shall not be
strictly construed against the drafter. The invalidity or
9 12.30.05
unenforceability of any provision of this Agreement shall not affect
the validity or enforceability of any other provisions of this
Agreement, all of which shall remain in full force and effect. The
headings in this Agreement are for reference only, and shall not
affect the interpretation of this Agreement.
12. Voluntary Signing. Executive acknowledges that this Agreement and all
the terms hereof are fair, reasonable, and are not the result of any
fraud, duress, coercion, pressure, or undue influence exercised by the
Company and that Executive has approved and/or entered into this
Agreement and all of the terms hereof, knowingly, freely and
voluntarily.
IN WITNESS WHEREOF, the undersigned have executed this Amended and Restated
Separation Agreement as of the date first above written.
/s/ Xxxxxx Xxxxxx
--------------------------------------------------
Xxxxxx Xxxxxx
Dated: 12/30/05
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TEREX CORPORATION
By: /s/ Xxxxxx Xxxxxx-Xxxxx
-------------------------------------------------
Dated: 12/30/05
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TEREX FINANCIAL SERVICES, INC.
By: /s/ Xxxx Xxxxx
--------------------------------------------------
Dated: 12/30/05
-------------------
10 12.30.05
