Exhibit 10.1
EMPLOYMENT AND
SEVERANCE AGREEMENT
This Employment and Severance
Agreement (the “Agreement”) is entered into this 1st
day of January, 2006, by and between AGCO CORPORATION, a Delaware
corporation (the “Company”), and Robert B. Crain (the
“Executive”).
WITNESSETH:
In consideration of the mutual
covenants and agreements hereinafter set forth, the Company and the
Executive do hereby agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs
the Executive, and the Executive hereby agrees to serve the
Company, upon the terms and conditions set forth in this
Agreement.
(b) The employment term shall
commence on January 1, 2006, and shall continue in effect
until terminated in accordance with Section 5 or any other
provision of the Agreement.
2. POSITION AND DUTIES.
The Executive shall serve as an
Executive Officer of the Company and shall perform such duties and
responsibilities as may from time to time be prescribed by the
Company’s board of directors (the “Board”),
provided that such duties and responsibilities are consistent with
the Executive’s position. The Executive shall perform and
discharge faithfully, diligently and to the best of his ability
such duties and responsibilities and shall devote all of his
working time and efforts to the business and affairs of the Company
and its affiliates.
3. COMPENSATION.
(a) BASE SALARY. The Company
shall pay to the Executive an annual base salary (“Base
Salary”) of $250,000 (two hundred fifty thousand dollars)
payable in equal semi-monthly installments throughout the term of
such employment subject to Section 5 hereof (except that the
first and last semi-monthly installments may be prorated, if
necessary) and subject to applicable tax and payroll deductions.
The Company shall consider increases in the Executive’s Base
Salary annually, and any such increase in salary implemented by the
Company shall become the Executive’s Base Salary for purposes
of this Agreement.
(b) INCENTIVE COMPENSATION.
Provided Executive has duly performed his obligations pursuant to
this Agreement, the Executive shall be entitled to participate in
the Management Incentive Compensation Plan and the Long-Term
Incentive Plan that is implemented by the Company.
(c) SUPPLEMENTAL EMPLOYEE
RETIREMENT PROGRAM. During
the term of this Agreement, the Executive shall be entitled to
participate in the AGCO Corporation Supplemental Executive
Retirement Plan (“SERP”).
(d) OTHER BENEFITS. During the
term of this Agreement, the Executive shall be entitled to
participate in the employee benefit plans and arrangements which
are available to senior executive officers of the Company,
including, without limitation, group health and life insurance,
pension and savings, and the Senior Management Employment
Policy.
(e) FRINGE BENEFITS. The
Company shall pay or reimburse the Executive for all reasonable and
necessary expenses incurred by him in connection with his duties
hereunder, upon submission by the Executive to the Company of such
written evidence of such expenses as the Company may require.
Throughout the term of this Agreement, the Company will provide the
Executive with the use of a vehicle for purposes within the scope
of his employment and shall pay all expenses for fuel, maintenance
and insurance in connection with such use of the automobile. The
Company further agrees that the Executive shall be entitled to four
(4) weeks of vacation in any year of the term of employment
hereunder, subject to the terms of the Company’s vacation
policy.
4. RESTRICTIVE COVENANTS
(a) ACKNOWLEDGMENTS. The
Executive acknowledges that as an Executive Officer of the Company
(i) he frequently will be exposed to certain “Trade
Secrets” and “Confidential Information” of the
Company (as those terms are defined in Subsection 4(b)),
(ii) his responsibilities on behalf of the Company will extend
to all geographical areas where the Company is doing business, and
(iii) any competitive activity on his part during the term of
his employment and for a reasonable period thereafter would
necessarily involve his use of the Company’s Trade Secrets
and Confidential Information and, therefore, would unfairly
threaten the Company’s legitimate business interests,
including its substantial investment in the proprietary aspects of
its business and the goodwill associated with its customer base.
Moreover, the Executive acknowledges that, in the event of the
termination of his employment with the Company, he would have
sufficient skills to find alternative, commensurate work in his
field of expertise that would not involve a violation of any of the
provisions of this Section 4. Therefore, the Executive
acknowledges and agrees that it is reasonable for the Company to
require him to abide by the covenants set forth in this
Section 4. The parties acknowledge and agree that if the
nature of the Executive’s responsibilities for or on behalf
of the Company and the geographical areas in which the Executive
must fulfill them materially change, the parties will execute
appropriate amendments to the scope of the covenants in this
Section 4.
(b) DEFINTIONS.
(i) “Business of Company”
means designing, manufacturing, marketing, and distributing
agricultural equipment.
(ii) “Material Contact”
as used in the non-solicitation provision below means personal
contact or the supervision of the efforts of those who have
personal contact with an existing or potential Customer or Vendor
in an effort to further or create a business relationship between
the Company and such existing or potential Customer or Vendor.
(iii) “Confidential
Information” means information about the Company, its
Executives, and Customers which is not generally known outside of
the Company, which the Executive learns of in connection with the
Executive’s employment with the Company, and which would be
useful to competitors of the Company or potentially harmful to the
Company’s reputation. Confidential Information includes, but
is not limited to: (1) business and employment policies,
marketing methods and the targets of those methods, finances,
business plans, promotional materials and price lists; (2) the
terms upon which the Company hires employees and provides services
to its Customers; (3) the nature, origin, composition and
development of the Company’s products and services; and
(4) the manner in which the Company provides products and
services to its Customers.
(iv) “Trade Secrets”
means Confidential Information which meets the additional
requirements of the Georgia Trade Secrets Act.
(v) “Territory” means
those countries and areas as more particularly set forth on
Exhibit A attached hereto.
(c) COVENANT OF
CONFIDENTIALITY. During the term of this Agreement, the Executive
agrees only to use and disclose Confidential Information in
connection with his duties hereunder and to otherwise maintain the
secrecy of the same. The Executive agrees that for a period of five
years following the cessation of his employment for any reason, he
shall not directly or indirectly divulge or make use of any
Confidential Information or Trade Secrets of the Company without
prior written consent of the Company. The Executive further agrees
that if he is questioned about information subject to this
Agreement by anyone not authorized to receive such information, he
will promptly notify the Chairman of the Board. This Agreement does
not limit the remedies available under common or statutory law,
which may impose longer duties of non-disclosure. The Executive
will immediately notify the Chairman of the Board if he receives
any subpoenas which could require the disclosure of Confidential
Information, so that the Company may take whatever actions it deems
necessary to protect its interests.
(d) COVENANT OF
NON-COMPETITION. The Executive agrees that while employed by the
Company and for a period of twenty-four (24) months following
the cessation of his employment for any reason, he will not compete
with the Business of Company by performing services of the same or
similar type as those he performed for the Company as an employee,
contractor, consultant, officer, director or agent for any person
or entity engaged in the Business of Company. Likewise, the
Executive will not perform activities of the type which in the
ordinary course of business would involve the utilization of
Confidential Information or Trade Secrets protected from disclosure
by Section 4 (c) of this Agreement. This paragraph restricts
competition only within the Territory.
(e) COVENANT OF
NON-SOLICITATION. The Executive agrees that while employed by the
Company and for a period of twenty-four (24) months following
the cessation of his employment for any reason, he will not
directly or indirectly solicit or attempt to solicit any business
in competition with the Business of Company from any of the
Customers with whom the Executive had Material Contact within the
last 18 months of his employment with the Company. The
Executive further agrees that for a period of twenty-four
(24) months following the cessation of his employment, he will
not directly or indirectly solicit or attempt to solicit any
Vendors of the Company with whom he had Material Contact during the
last 18 months of his employment with the Company to provide
services to any person or entity which competes with the Business
of Company.
(f) COVENANT OF
NON-RECRUITMENT. The Executive agrees that while employed by the
Company and for a period of twenty-four (24) months following
the cessation of his employment for any reason, he will not
directly or indirectly solicit or attempt to solicit any other
employee of the Company for the purpose of encouraging, enticing,
or causing said employee to voluntarily terminate employment with
the Company.
(g) COVENANT TO RETURN PROPERTY
AND INFORMATION. The Executive agrees to return all of the
Company’s property within seven (7) days following the
cessation of his employment for any reason. Such property includes,
but is not limited to, the original and any copy (regardless of the
manner in which it is recorded) of all information provided by the
Company to the Executive, or which the Executive has developed or
collected in the scope of his employment with the Company, as well
as all Company-issued equipment, supplies, accessories, vehicles,
keys, instruments, tools, devices, computers, cell phones, pagers,
materials, documents, plans, records, notebooks, drawings, or
papers.
(h) ASSIGNMENT OF WORK PRODUCT
AND INVENTIONS. The Executive hereby assigns and grants to the
Company (and will upon request take any actions needed to formally
assign and grant to the Company and/or obtain patents, trademark
registrations or copyrights belonging to the Company) the sole and
exclusive ownership of any and all inventions, information,
reports, computer software or p
