Exhibit 10.5
EMPLOYMENT AND SEVERANCE AGREEMENT
AS AMENDED AND RESTATED
This Employment and Severance
Agreement (the “Agreement”), originally effective as of
the 20th day of October 2003, is amended and restated this
5 day of December, 2007, to be effective as of January 1,
2008, by AGCO CORPORATION, a Delaware corporation (the
“Company”), and David L. Caplan (the
“Executive”). This Agreement amends, restates and
supersedes the Employment and Severance Agreement between the
Company and the Executive effective as of the 20 th day of October
2003.
WITNESSETH:
In consideration of the mutual
covenants and agreements hereinafter set forth, the Company and the
Executive do hereby agree as follows:
I. EMPLOYMENT.
(a) The
Company hereby employs the Executive and the Executive hereby
agrees to serve the Company on the terms and conditions set forth
herein.
(b) The
employment term commenced on October 20, 2003 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 Two Hundred and Eighty
Thousand Dollars ($280,000.00), payable in equal semi-monthly
installments throughout the term of such employment subject to
Section 5 hereof 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 or receive benefits under the Management Incentive
Compensation Plan implemented by the Company.
(c) OTHER
BENEFITS. During the term of this Agreement, the Executive shall be
entitled to participate in the long term incentive plan implemented
by the Company and any 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.
(d) FRINGE
BENEFITS. The Company shall pay or reimburse Executive promptly for
all reasonable and necessary expenses incurred by him/her in
connection with his duties hereunder, upon submission by Executive
to the Company of such written evidence of such expense as the
Company may require. Throughout the term of this Agreement, the
Company will provide Executive with the use of a vehicle for
purposes within the scope of his employment and shall pay, or
reimburse the Executive for, all expenses for fuel, maintenance and
insurance in connection with such use of the automobile. In no
event will any such reimbursements or payments under this
Subsection 3(d) be made, if at all, later than the last day of the
Executive’s taxable year next following the Executive’s
taxable year in which the Executive incurs the expense. The Company
further agrees that Executive shall be entitled to four
(4) weeks of vacation in any year of the term of employment
hereunder. Nothing paid to the Executive under any such Company
plans or arrangements shall be deemed to be in lieu of compensation
to the Executive hereunder.
4. NON-DISCLOSURE,
NON-COMPETITION AND NON-SOLICITATION COVENANTS.
(a) ACKNOWLEDGEMENTS.
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/her 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) DEFINITIONS.
For purposes of this Section 4, the following terms shall have
the following meanings:
(i) “COMPETITIVE
POSITION” shall mean (i) the Executive’s direct or
indirect equity ownership (excluding equity ownership of less than
one percent (1%) or control of all or any portion of a Competitor,
or (ii) any employment, consulting, partnership, advisory,
directorship, agency, promotional or independent contractor
arrangement between the Executive and any Competitor whereby the
Executive is required to perform executive level services
substantially similar to those that he will perform for the Company
as an Executive Officer.
(ii) “COMPETITOR”
of the Company shall refer to any person or entity engaged, wholly
or partly, in the business of manufacturing and distributing farm
equipment machinery and replacement parts.
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(iii) “CONFIDENTIAL
INFORMATION” shall mean the proprietary and confidential data
or information of the Company, other than “Trade
Secrets” (as defined below), which is of tangible or
intangible value to the Company and is not public information or is
not generally known or available to the Company’s
competitors.
(iv) “TRADE
SECRETS” shall mean information of the Company, including,
but not limited to, technical or non-technical data, formulas,
patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, products
plans, or lists of actual or potential customers or suppliers,
which: (a) derives economic value, actual or potential, from
not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value
from its disclosure or use; and (b) is the subject of efforts
that are reasonable under the circumstances to maintain its
secrecy.
(v) “WORK
PRODUCT” shall mean all work product, property, data,
documentation, “know-how”, concepts or plans,
inventions, improvements, techniques, processes or information of
any kind, relating to the Company and its business prepared,
conceived, discovered, developed or created by the Executive for
the Company or any of the Company’s customers.
(c) NONDISCLOSURE;
OWNERSHIP OF PROPRIETARY PROPERTY.
(i) The
Executive hereby covenants and agrees that: (i) with regard to
information constituting a Trade Secret, at all times during the
Executive’s employment with the Company and all times
thereafter during which such information continues to constitute a
Trade Secret; and (ii) with regard to any Confidential Information,
at all times during the Executive’s employment with the
Company and for three (3) years after the termination of the
Executive’s employment with the Company, the Executive shall
regard and treat all information constituting a Trade Secret or
Confidential Information as strictly confidential and wholly owned
by the Company and will not, for any reason in any fashion, either
directly or indirectly, use, sell, lend, lease, distribute,
license, give, transfer, assign, show, disclose, disseminate,
reproduce, copy, appropriate or otherwise communicate any such
information to any party for any purpose other than strictly in
accordance with the express terms of this Agreement and other than
as may be required by law.
(ii) To
the greatest extent possible, any Work Product shall be deemed to
be “work made for hire” (as defined in the Copyright
Act, 17 U.S.C.A. ss. 101 et seq., as amended) and owned exclusively
by the Company. The Executive hereby unconditionally and
irrevocably transfers and assigns to the Company all rights, title
and interest the Executive may currently have or in the future may
have by operation of law or otherwise in or to any Work Product,
including, without limitation, all patents, copyrights, trademarks,
service marks and other intellectual property rights. The Executive
agrees to execute and deliver to the Company any transfers,
assignments, documents or other instruments which the Company may
deem necessary or appropriate to vest complete title and ownership
of any Work Product, and all rights therein, exclusively in the
Company.
(iii) The
Executive shall immediately notify the Company of any intended or
unintended, unauthorized disclosure or use of any Trade Secrets or
Confidential Information by the Executive or any other person of
which the Executive becomes aware. In addition to complying with
the provisions of Section 4(c)(i) and 4(c)(ii), the Executive
shall
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exercise
his best efforts to assist the Company, to the extent the Company
deems reasonably necessary, in the procurement of any protection of
the Company’s rights to or in any of the Trade Secrets or
Confidential Information.
(iv) Immediately
upon termination of the Executive’s employment with the
Company, or at any point prior to or after that time upon the
specific request of the Company, the Executive shall return to the
Company all written or descriptive materials of any kind in the
Executive’s possession or to which the Executive has access
that constitute or contain any Confidential Information or Trade
Secrets, and the confidentiality obligations of this Agreement
shall continue until theft expiration under the terms of this
Agreement.
(d) NON-COMPETITION.
The Executive agrees that during his employment, he will not,
either directly or indirectly, alone or in conjunction with any
other party, (i) accept or enter into a Competitive Position
with a Competitor of the Company, or (ii) take any action in
furtherance of or in conjunction with a Competitive Position with a
Competitor of the Company. The Executive agrees that for two
(2) years after any termination of his employment with the
Company, he will not, in the “Restricted Territory” (as
defined in the next sentence), either directly or indirectly, alone
or in conjunction with any other party, (A) accept or enter
into a Competitive Position with a Competitor of the Company, or
(B) take any action in furtherance of or in conjunction with a
Competitive Position with a Competitor of the Company. For purposes
of this Section 4, “Restricted Territory” shall
refer to all geographical areas comprised within the fifty United
States of America, Western Europe, Brazil and Canada. The Executive
and the Company each acknowledge that the scope of the Restricted
Territory is reasonable because (1) the Company is conducting
substantial business in all fifty states (as well as several
foreign countries), (2) the Executive occupies one of the top
executive positions with the Company, and (3) the Executive
will be carrying out his employment responsibilities in all
locations where the Company is doing business.
(e) NON-SOLICITATION
OF CUSTOMERS. The Executive agrees that during the term of his
employment, he will not, either directly or indirectly, along or in
conjunction with any other party, solicit, divert or appropriate or
attempt to solicit, divert or appropriate any customer or actively
sought prospective customer of the Company for or on behalf of any
Competitor of the Company. The Executive agrees that for two
(2) years after any termination of his employment with the
Company, he will not, in the Restricted Territory, either directly
or indirectly, alone or in conjunction with any other party, for or
on behalf of a Competitor of the Company, solicit, divert or
appropriate or attempt to solicit, divert or appropriate any
customer or actively sought prospective Customer of the Company
with whom he had substantial contact during a period of time of up
to, but no longer than, eighteen (18) months prior to any
termination of his employment with the Company.
(f) NON-SOLICITATION
OF COMPANY PERSONNEL. The Executive agrees that, except to the
extent that he is required to do so in connection w
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