Exhibit 10.7
EMPLOYMENT AND SEVERANCE AGREEMENT
AS AMENDED AND RESTATED
     This Employment and Severance Agreement (the “Agreement”), originally
effective as of the 5th day of August, 2005, is amended and restated this by and
between AGCO CORPORATION, a Delaware corporation (the “Company”), and Hubertus
Mühlhäuser (the “Executive”). This Agreement amends, restates and supersedes the
Employment and Severance Agreement between the Company and the Executive
effective as of the 5th day of August, 2005 and any subsequent amendments or
restatements thereto.
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 commenced on September 1, 2005, 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 a Senior Vice President 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.
During the two (2) years following a Change in Control (as defined herein), the
Executive’s position (including offices, titles and reporting requirements),
duties, and responsibilities shall not be reduced, and the Executive shall not
be required to work at a location other than the location at which the Executive
was based at the time of the Change in Control.
 3.  COMPENSATION.
     (a) BASE SALARY. The Company shall pay to the Executive an annual base
salary (“Base Salary”) of Five Hundred and Eleven Thousand Four Hundred Swiss
Francs (CHF 511,400) (no adjustments will be made in the future for any movement
in exchange rates) 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. The
Base Salary and annual bonus will be paid through a Swiss payroll provider in
Swiss francs.

 

--------------------------------------------------------------------------------

 

     (b) INCENTIVE COMPENSATION. Provided Executive has duly performed his
obligations pursuant to this Agreement, the Executive shall be entitled to an
annual bonus to be paid upon the Executive achieving pre-agreed targets that
will be annually reviewed and participate in the Long-Term Incentive Plan that
is implemented by the Company.
     (c) PENSION. The Company will contribute 50 percent of the cost of
providing retirement benefits in Switzerland. Pension contributions will be
calculated on Base Salary only, not other remuneration, e.g., incentive
compensation. The Company will make the required contributions, if any, to the
Swiss social security system. The Executive is responsible for the employee
portion of both pension contributions and the social securities system.
     (d) HEALTH INSURANCE. The Company will provide a health insurance and
related benefits consistent generally with current practices, subject to
adjustment to the extent that similar benefits for similarly situated executives
are adjusted. .
     (e) OTHER BENEFITS. The Company will pay for sickness and accident
insurance in Switzerland consistent generally with current practices, subject to
adjustment to the extent that similar benefits for similarly situated executives
are adjusted.
     (f) FRINGE BENEFITS. The Company shall pay or reimburse the Executive
promptly 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 reasonably 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, or reimburse the Executive for, all expenses for fuel, maintenance
and insurance in connection with such use of the automobile. Executive shall
also be entitled to use the vehicle for private purposes. In no event will any
such reimbursements or payments under this Subsection 3(f) 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 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.
     (g) MODIFICATION OF BENEFITS. Without by implication limiting the
foregoing, during the two (2) years following a Change in Control, the
Executive’s compensation, including Base Salary, incentive compensation
opportunity, pension, benefits and fringe benefits shall not be reduced.
Notwithstanding the foregoing, the Company shall be entitled to modify the group
health benefits provided such modifications are applicable to all similarly
situated management employees. To the extent that the Company is not able to
continue life, group health or similar benefits as a result of the terms of the
applicable plans or insurance policies, the Company shall pay the Executive the
cost, no less frequently than monthly, that the Executive must incur to obtain
such benefits privately.
 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)),

2

--------------------------------------------------------------------------------

 

(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) DEFINITIONS.
     (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. Except where generally known
outside the Company, 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 used by
the Company; (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

3

--------------------------------------------------------------------------------

 

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 twelve (12) 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 twelve (12) 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 twelve (12) 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 twelve (12) 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

4

--------------------------------------------------------------------------------

 

and all inventions, information, reports, computer software or programs,
writings, technical information or work product collected or developed by the
Executive, alone or with others, during the term of the Executive’s employment.
This duty applies whether or not the forgoing inventions or information are made
or prepared in the course of employment with the Company, so long as such
inventions or information relate to the Business of Company and have been
developed in whole or in part during the term of the Executive’s employment. The
Executive agrees to advise the Company in writing of each invention that
Executive, alone or with others, makes or conceives during the term of
Executive’s employment. Inventions which the Executive developed before the
Executive came to work for the Company, if any, are as follows:
     (i) REMEDIES FOR VIOLATION OF RESTRICTIVE COVENANTS. The Executive
acknowledges that the Company would suffer irreparable harm if the Executive
fails to comply with the foregoing, and that the Company would be entitled to
any appropriate relief, including money damages, injunctive and other equitable
relief and attorneys’ fees. The Executive agrees that the pendency of any claim
whatsoever against the Company shall not constitute a defense to the enforcement
of this Noncompetition Agreement by the Company.
     (j) SEVERABILITY. In the event that any one or more of the provisions of
these restrictive covenants shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby. Moreover, if
any one or more of the provisions contained in these restrictive covenants shall
be held to be excessively broad as to duration, activity or subject, the parties
authorize the Court in which such action is pending to modify said covenants and
enforce them to the extent that the Court deems reasonable.
 5.  TERMINATION.
     (a) DEATH. This Agreement shall terminate upon the death of the Executive,
provided, however, that for purposes of the payment of Base Salary to the
Executive, the death of the Executive shall be deemed to have occurred ninety
(90) days from the last day of the month in which the death of the Executive
shall have occurred.
     (b) DISABILITY. Executive’s employment and all obligations of the Company
hereunder shall terminate upon a finding that the Executive is disabled under
the Company’s group long term disability plan.
     (c) CAUSE. The Company may terminate the Executive’s employment hereunder
for Cause by giving written Notice of Termination to the Executive. For the
purposes of this Agreement, the Company shall have “Cause” to terminate the
Executive’s employment hereunder upon: (i) the conviction of Executive of, or
the entry of a plea of guilty, first offender probation before judgment, or nolo
contendere by Executive to, any felony; (ii) fraud, misappropriation or
embezzlement by Executive; (iii) Executive’s willful failure or gross negligence
in the performance of his assigned duties for the Company, which failure or
negligence continues for more than or was not remedied within thirty
(30)calendar days following Executive’s receipt of written notice of such
willful failure or gross negligence; (iv) Executive’s failure to follow
reasonable and lawful directives of the Board or his breach of his fiduciary
duty to the Company, which failure is not remedied within thirty (30)calendar
days following Executive’s receipt of written notice of such failure; (v) any
act or omission of Executive that has a demonstrated and material adverse impact
on the Company’s business or

5

--------------------------------------------------------------------------------

 

reputation for honesty and fair dealing, other than an act or failure to act by
Executive in good faith and without reason to believe that such act or failure
to act would adversely impact on the Company’s business or reputation for
honesty and fair dealing; or (vi) the breach by Executive of any material term
of this Agreement, which breach continues for more than or was not remedied
within thirty (30) calendar days following Executive’s receipt of written notice
of such breach.
     (d) WITHOUT CAUSE; GOOD REASON.
     (i) The Company may terminate the Executive’s employment hereunder without
Cause, by giving written Notice of Termination (as defined in Section 5(e)) to
the Executive.
     (ii) The Executive may terminate his employment hereunder, by giving
written Notice of Termination to the Company. For the purposes of this
Agreement, the Executive shall have “Good Reason” to terminate his employment
hereunder upon (a) a substantial reduction in the Executive’s aggregate Base
Salary and annual incentive compensation taken as a whole, excluding any
reductions caused by the performance of the Company or the Executive, including
but not limited to, the failure by the Executive to achieve performance targets
established from time to time by the Board and/or under the Management Incentive
Plan or Long Term Incentive Plan or from below budget performance by the
Company, or (b) the Company’s failure to make payments of Base Pay and incentive
compensation, but only upon notice of such failure given by the Executive within
ninety (90) days of the initial existence of the failure and the subsequent
failure of the Company to cure the non-payment within thirty (30) days of such
notice.
     (e) NOTICE OF TERMINATION. Any termination by the Company or by the
Executive shall be communicated by written Notice of Termination from the party
issuing such notice to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision of this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
such termination. A date of termination specified in the Notice of Termination
shall not be dated earlier than ninety (90) days from the date such Notice is
delivered or mailed to the applicable party and not later than two (2) years
after the initial existence of the failure.
     (f) OBLIGATION TO PAY. Except upon voluntary termination by the Executive
without Good Reason, termination by the Company for Cause, or termination as a
result of death or disability and subject to Sections 6 and 16 below, the
Company shall (i) pay the compensation specified in this Subsection 5(f) to the
Executive for the period specified in this Subsection 5(f), (ii) continue to
provide, no less frequently than monthly, life insurance benefits during the
remainder of the applicable period, including the Severance Period set forth in
this Subsection 5(f), and (iii) if and to the extent the Executive timely elects
COBRA continuation coverage, pay the Executive on a monthly basis the cost of
COBRA premiums for a period of 18 months or such lesser period as the Executive
continues to have COBRA continuation coverage.
     If the Executive’s employment shall be terminated by reason of death, the
estate of the Executive shall be paid all Base Salary and reimbursements and
payments otherwise payable to the Executive through the end of the third month
after the month in which the death of the Executive occurred, including all
bonus or other incentive benefits accrued or accruable to the Executive through
the end of the month in which the death of the Executive occurred, on the

6

--------------------------------------------------------------------------------

 

same basis as if the Executive had continued employment through such times, and
the Company shall have no further obligations to the Executive under this
Agreement.
     If the Executive’s employment is terminated by reason of disability as
determined under the Company’s long term disability plan, the Executive or the
person charged with legal responsibility for the Executive’s estate shall be
paid all Base Salary and reimbursements and payments otherwise payable to the
Executive, including the bonus and other benefits accrued or accruable to the
Executive, through the date of disability, and the Company shall have no further
obligations to the Executive under this Agreement. If the Executive’s employment
shall be terminated for Cause, the Company shall pay the Executive his Base
Salary through the date of termination specified in the Notice of Termination
and reimbursements otherwise payable to the Executive, and the Company shall
have no further obligations to the Executive under this Agreement.
     Unless such termination occurs within two (2) years following a Change in
Control, if the Executive’s employment shall be terminated by the Company
without Cause or by the Executive for Good Reason, the Executive shall be paid
all Base Salary and reimbursements and payments otherwise payable to the
Executive, including the bonus and other benefits accrued or accruable to the
Executive through the date of termination specified in the Notice of
Termination, and the Company shall (x) continue to pay the Executive the Base
Salary (at the rate in effect on the date of such termination) for a period of
one (1) year beginning from the date of such termination (such one (1) year
period being referred to hereinafter as the “Severance Period”) on the same
basis as if Executive had continued employment during the Severance Period and
(y) pay the Executive a pro rata portion of the bonus or other incentive
benefits to which the Executive would have been entitled for the year of
termination had the Executive remained employed for the entire year which
incentive compensation shall be payable at the time incentive compensation is
payable generally under the applicable incentive plans; provided, however, that
notwithstanding the foregoing, the Executive shall not be entitled to any
severance payments under clauses (x) or (y) of this sentence upon and after
reaching age 65. The Executive shall have no further right to receive any other
compensation, benefits or perquisites after the date of termination of
employment except as determined under the terms of this Agreement or any
applicable employee benefit plans or programs of the Company or under applicable
law.
     If within two (2) years following a Change in Control the Executive’s
employment shall be terminated by the Company without Cause or by the Executive
for Good Reason (a “Change in Control Termination”), the Company shall
immediately, and in all events within thirty (30) days after the date of
termination, pay the Executive the sum of (x) two (2) times the Base Salary (at
the rate in effect on the date of such termination), (y) a pro rata portion of
the bonus or other incentive benefits to which the Executive would have been
entitled for the year of termination had the Executive remained employed for the
entire year, plus (z) a bonus in an amount equal to the three (3) year average
of the awards received by the participant during the prior two (2) completed
years and the current year’s trend (based upon results through the month most
recently complete prior to the termination, extrapolated for the complete year)
multiplied by two (2) times. Any payment due to the Executive with respect to
clause (y) and (z) that is calculated based upon the Company’s Management
Incentive Plan shall be reduced by any similar amounts received by the Executive
under such plan. Also, notwithstanding the foregoing, in the event of a Change
in Control Termination, the Company shall continue the Executive’s life and
group health coverage for a period of two (2) years, subject to the same
payments by the Executive that

7

--------------------------------------------------------------------------------

 

the Executive was required to make prior to termination. Notwithstanding the
foregoing, the Company shall be entitled to modify the group health benefits
provided such modifications are applicable to all similarly situated management
employees. To the extent that the Company is not able to continue life or group
health benefits as a result of the terms of the applicable plans or insurance
policies, the Company shall pay the Executive the cost, no less frequently than
monthly, that the Executive must incur to obtain such benefits privately.
     For the purposes of this Agreement, the term “Change in Control” shall mean
change in the ownership of the Company, change in the effective control of the
Company or change in ownership of a substantial portion of the Company’s assets,
as described in Section 280G of the Code, including each of the following: (i) a
change in the ownership of the Company occurs on the date that any one person,
or more than one person acting as a group, acquires ownership of stock of the
Company that, together with stock held by such person or group, possess more
than fifty percent (50%) of the total fair market value or total voting power of
the stock of the Company (unless any one person, or more than one person acting
as a group, who is considered to own more than fifty percent (50%) of the total
fair market value or total voting power of the stock of the Company, acquires
additional stock); (ii) change in the effective control of the Company is
presumed (which presumption may be rebutted by the Compensation Committee of the
Board) to occur on the date that either: any one person, or more than one person
acting as a group, acquires (or has acquired during the twelve (12)-month period
ending on the date of the most recent acquisition by such person or persons)
ownership of stock of the Company possessing thirty percent (30%) or more of the
total voting power of the stock of such Company; (iii) a majority of members of
the Company’s Board is replaced during any twelve (12)-month period by directors
whose appointment or election is not endorsed by a majority of the members of
the Company’s Board prior to the date of the appointment or election of such new
directors; or (iv) a change in the ownership of a substantial portion of the
Company’s assets occurs on the date that any one person, or more than one person
acting as a group, acquires (or has acquired during the twelve (12)-month period
ending on the date of the most recent acquisition by such person or persons)
assets from the Company that have a total fair market value equal to forty
percent (40%) or more of the total fair market value of all of the assets of the
Company immediately prior to such acquisition or acquisitions unless the assets
are transferred to: a stockholder of the Company (immediately before the asset
transfer) in exchange for or with respect to its stock; an entity, fifty percent
(50%) or more of the total value or voting power of which is owned, directly or
indirectly by the Company; a person, or more than one person acting as a group,
that owns, directly or indirectly, fifty percent (50%) or more of the total
value or voting power of all of the outstanding stock of the Company; or an
entity, at least fifty percent (50%) of the total value or voting power is
owned, directly or indirectly, by a person, or more than one person acting as a
group, that owns directly or indirectly, fifty percent (50%) or more of the
total value of voting power of all of the outstanding stock of the Company.
     (g) TAXES. In the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Executive in the event
of a Change in Control, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, (a “Change in Control
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

8

--------------------------------------------------------------------------------

 

“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 Change in Control Payments. The Company
shall pay all such Gross-Up Payments before such excise taxes are required to be
remitted.
 6.  CONDITIONS APPLICABLE TO SEVERANCE PERIOD; MITIGATION OF DAMAGES
     (a) If during the Severance Period, the Executive breaches his obligations
under Section 4 above, the Company may, upon written notice to the Executive,
terminate the Severance Period and cease to make any further payments or provide
any benefits described in Subsection 5(f).
     (b) Although the Executive shall not be required to mitigate the amount of
any payment provided for in Subsection 5(f) by seeking other employment, except
in the case of a Change in Control Termination, any such payments shall be
reduced by any amounts which the Executive receives or is entitled to receive
from another employer with respect to the Severance Period. The Executive shall
promptly notify the Company in writing in the event that other employment is
obtained during the Severance Period.
 7.   NOTICES. For the purpose of this Agreement, notices and all other
communications to either party hereunder provided for in the Agreement shall be
in writing and shall be deemed to have been duly given when delivered in person
or mailed by certified first-class mail, postage prepaid, addressed:
in the case of the Company to:
AGCO Corporation
4205 River Green Parkway
Duluth, Georgia 30096
Attention: Debra Kuper
in the case of the Executive to:
____________________

____________________

____________________

____________________

9

--------------------------------------------------------------------------------

 

or to such other address as either party shall designate by giving written
notice of such change to the other party.
     8. ARBITRATION. Any claim, controversy, or dispute arising between the
parties with respect to this Agreement, to the maximum extent allowed by
applicable law, shall be submitted to and resolved by binding arbitration. The
arbitration shall be conducted pursuant to the terms of the Federal Arbitration
Act and (except as otherwise specified herein) the Commercial Arbitration Rules
of the American Arbitration Association in effect at the time the arbitration is
commenced. The venue for the arbitration shall be the Atlanta, Georgia offices
of the American Arbitration Association. Either party may notify the other party
at any time of the existence of an arbitrable controversy by delivery in person
or by certified mail of a Notice of Arbitrable Controversy. Upon receipt of such
a Notice, the parties shall attempt in good faith to resolve their differences
within fifteen (15) days after the receipt of such Notice. Notice to the Company
and the Executive shall be sent to the addresses specified in Section 7 above.
If the dispute cannot be resolved within the fifteen (15) day period, either
party may file a written Demand for Arbitration with the American Arbitration
Association’s Atlanta, Georgia Regional Office, and shall send a copy of the
Demand for Arbitration to the other party. The arbitration shall be conducted
before a panel of three (3) arbitrators. The arbitrators shall be selected as
follows: (a) The party filing the Demand for Arbitration shall simultaneously
specify his or its arbitrator, giving the name, address and telephone number of
said arbitrator; (b) The party receiving such notice shall notify the party
demanding the arbitration of his or its arbitrator, giving the name, address and
telephone number of the arbitrator within five (5) days of the receipt of such
Demand for Arbitration; (c) A neutral person shall be selected through the
American Arbitration Association’s arbitrator selection procedures to serve as
the third arbitrator. The arbitrator designated by any party need not be
neutral. In the event that any person fails or refuses timely to name his
arbitrator within the time specified in this Section 8, the American Arbitration
Association shall (immediately upon notice from the other party) appoint an
arbitrator. The arbitrators thus constituted shall promptly meet, select a
chairperson, fix the time, date(s), and place of the hearing, and notify the
parties. To the extent practical, the arbitrators shall schedule the hearing to
commence within sixty (60) days after the arbitrators have been impaneled. A
majority of the panel shall render an award within ten (10) days of the
completion of the hearing, which award may include an award of interest, legal
fees and costs of arbitration. The panel of arbitrators shall promptly transmit
an executed copy of the award to the respective parties. The award of the
arbitrators shall be final, binding and conclusive upon the parties hereto. Each
party shall have the right to have the award enforced by any court of competent
jurisdiction.
Executive initials:                                Company initials:           
     9. NO WAIVER. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is approved by the
Board and agreed to in a writing signed by the Executive and such officer as
maybe specifically authorized by the Board. No waiver by either party hereto at
anytime 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 any other provisions or conditions of this Agreement
at the same or at any prior or subsequent time.

10

--------------------------------------------------------------------------------

 

     10. SUCCESSORS AND ASSIGNS. The rights and obligations of the Company under
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Company and the Executive’s rights under this Agreement shall
inure to the benefit of and be binding upon his heirs and executors. Neither
this Agreement or any rights or obligations of the Executive herein shall be
transferable or assignable by the Executive.
     11. VALIDITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect. The parties intend for each of the covenants contained in Section 4 to
be severable from one another.
     12. SURVIVAL. The provisions of Section 4 hereof shall survive the
termination of Executive’s employment and shall be binding upon the Executive’s
personal or legal representative, executors, administrators, successors, heirs,
distributees, devisees and legatees and the provisions of Section 5 hereof
relating to payments and termination of the Executive’s employment hereunder
shall survive such termination and shall be binding upon the Company.
     13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
     14. ENTIRE AGREEMENT. This Agreement constitutes the full agreement and
understanding of the parties hereto with respect to the subject matter hereof
and all prior or contemporaneous agreements or understandings are merged herein.
The parties to this Agreement each acknowledge that both of them and their
respective agents and advisors were active in the negotiation and drafting of
the terms of this Agreement.
     15. GOVERNING LAW. The validity, construction and enforcement of this
Agreement, and the determination of the rights and duties of the parties hereto,
shall be governed by the laws of the State of Georgia.
     16. DEFERRED COMPENSATION PLAN OMNIBUS PROVISIONS. Notwithstanding any
other provision of this Agreement, it is intended that any payment or benefit
which is provided pursuant to or in connection with this Agreement which is
considered to be deferred compensation subject to Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”) shall be provided and paid in a
manner, and at such time, including without limitation payment and provision of
benefits only in connection with a permissible payment event contained in
Section 409A (e.g., death or separation from service from the Company and its
affiliates as defined for purposes of Section 409A of the Code), and in such
form, as complies with the applicable requirements of Section 409A of the Code,
to avoid the unfavorable tax consequences provided therein for non-compliance.
For purposes of this Agreement, all rights to payments and benefits hereunder
shall be treated as rights to receive a series of separate payments and benefits
to the fullest extent allowed by Section 409A of the Code. If Executive is a
“specified employee” (as defined in Section 409A of the Code) and any of the
Company’s stock is publicly traded on an established securities market or
otherwise, then payment of any amount or provision of any benefit under this
Agreement which is considered to be deferred compensation subject to
Section 409A of the Code shall be deferred for six (6) months as required by
Section 409A(a)(2)(B)(i) of the Code (the “409A Deferral Period”). In the event
such payments are otherwise due to be made in installments or periodically
during the 409A Deferral Period, the payments which would otherwise have been
made in the 409A

11

--------------------------------------------------------------------------------

 

Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A
Deferral Period ends, and the balance of the payments shall be made as otherwise
scheduled. In the event benefits are required to be deferred, any such benefit
may be provided during the 409A Deferral Period at Executive’s expense, with
Executive having a right to reimbursement from the Company once the 409A
Deferral Period ends, and the balance of the benefits shall be provided as
otherwise scheduled. For purposes of this Agreement, any termination of
employment will be read to mean a “separation from service” within the meaning
of Section 409A of the Code where it is reasonably anticipated that no further
services would be performed after such date or that the level of bona fide
services Executive would perform after that date (whether as an employee or
independent contractor) would permanently decrease to less than fifty percent
(50%) of the average level of bona fide services performed over the immediately
preceding thirty-six (36)-month period.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

            AGCO CORPORATION
      By:         Name:         Title:        

            EXECUTIVE
      By:         Name:         Date:        

12