Exhibit 10.3

 

Peter Christianson
c/o Titan Machinery Inc.

644 East Beaton Drive

West Fargo, ND 58078-2648

 

Dear Peter:

 

This letter agreement amends and restates the letter agreement dated October 1,
2010, confirming our discussions regarding your continuing as President and
Chief Operating Officer of Titan Machinery Inc. (the “Company”), and sets out
the terms and conditions of your employment with the Company, as follows:

 

Title:

 

You will serve as the Company’s President and Chief Operating Officer.

 

 

 

Term:

 

Unless terminated by either party as provided in this letter agreement, the term
of your employment as President and Chief Operating Officer of the Company under
this letter agreement shall be for a rolling three-year period (the “Term”) as
follows: the initial term shall commence on February 1, 2013 (“Effective Date”)
and end on January 31, 2016, which end date shall be automatically extended by
one year on each anniversary of the Effective Date. Thus, for example, on
February 1, 2014, the end date shall be extended to January 31, 2017, and on
February 1, 2015, the end date shall be extended to January 31, 2018. Such
automatic extensions shall continue unless either party provides the other with
written notice terminating the automatic extensions prior to August 1 of any
year.

 

 

 

Responsibilities:

 

During your employment with the Company as President and Chief Operating
Officer, you will report to the Board of Directors of the Company (the “Board”)
and will be responsible for the overall operations and direction and financial
matters of the Company. You agree to serve the Company faithfully and to the
best of your ability, and to devote your full working time, attention and
efforts to the business of the Company. You further agree to make yourself
available as needed, in a timely manner, to address business issues that may
arise. You may, to a reasonable extent, participate in charitable activities,
personal investment activities and outside businesses that are not competitive
with the business of the Company and serve on boards of directors, so long as
such activities and directorships do not interfere with the performance of your
duties and responsibilities to the Company; provided, that you shall report on
all such activities and directorships to the Board at least annually.

 

 

 

Representations:

 

By signing below, you represent and confirm that you are under no contractual or
legal commitments that would prevent you from fulfilling your duties and
responsibilities to the Company as President and Chief Operating Officer.

 

 

 

Initial Base Salary:

 

You will be paid a base salary at the rate of $500,000 per year for services
performed, in accordance with the regular payroll practices of the Company with
annual review by the Compensation Committee of the Board (the “Committee”). Your
performance and base salary will be reviewed by the Committee annually and may
be adjusted upward from time to time in the discretion of the Committee, but
will not be reduced during the Term.

 

 

 

Incentive Bonus:

 

For each full fiscal year of the Company that you are employed during the Term,
you will be eligible for an incentive award opportunity payable from 0% to 200%
of your base salary at the rate in effect at the end of such fiscal year,
pursuant to the terms and conditions established by the Committee from time to
time, based upon a target equal to 100% of your annual base salary at the rate
in effect at such time. Objectives will be established during each fiscal year.
Any annual incentive bonus earned for a fiscal year will be paid to you within
two and one-half (2½) months after the end of such fiscal year.

 

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Long-Term Equity Incentive:

 

Upon execution of this letter agreement and on each anniversary thereafter, you
will be entitled to receive a restricted stock award. Each award shall be
granted in accordance with the terms of the Company’s Equity Grant Policy. The
number of shares under each award shall be determined by dividing your annual
base salary in effect on the date of grant by the closing sale price of the
Company’s stock on the date of grant. The risks of forfeiture to which the
restricted stock under each such award will be subject shall be as determined by
the Company’s Compensation Committee from time to time.

 

 

 

Benefits:

 

During your employment with the Company, you will be eligible to participate in
the employee benefit plans and programs generally available to other executive
officers of the Company, and in such other employee benefit plans and programs
to the extent that you meet the eligibility requirements for each individual
plan or program and subject to the provisions, rules and regulations applicable
to each such plan or program as in effect from time to time. The plans and
programs of the Company may be modified or terminated by the Company in its
discretion.

 

 

 

Vacation:

 

During your employment with the Company, you will receive vacation time off in
accordance with the policies and practices of the Company, except that your
annual accrual rate shall be not less than four weeks paid vacation off per
year. Vacation time shall be taken at such times so as not to unduly disrupt the
operations of the Company. While away from the office during vacation time or
otherwise, you agree that business issues may arise that require your attention,
whether remotely or in person.

 

 

 

Office Location:

 

Your employment will be based at the Company’s headquarters in Fargo, North
Dakota. Of course, regular travel will be required in the course of performing
your duties and responsibilities as President and Chief Operating Officer.
Pursuant to the Company’s applicable policies, this travel may include use of
aircraft in which the Company has an ownership interest.

 

 

 

Confidential Information:

 

You have had and will continue to have access to and familiarity with the
confidential and proprietary information of the Company. You agree that all
Confidential Information, whether or not in writing, concerning the Company is
and shall be the exclusive property of the Company. For purposes of this
paragraph, the term “Confidential Information” means information that is not
generally known and that is proprietary to the Company or that has been made
available to the Company in a manner reasonably understood to require
confidential treatment, including, without limitation, trade secret information
about the Company and its products; information relating to the business of the
Company or anticipated to be conducted by the Company; any of the Company’s
past, current or anticipated products; information about the Company’s research,
development, manufacturing, purchasing, accounting, engineering, marketing,
selling, leasing, servicing, discoveries, improvements, inventions, designs,
graphs, drawings, methods, techniques, plans, strategies, customer lists,
licensee lists, marketing plans, pricing and other policies, forecasts, budgets,
customer information, financial data, personnel data; and any other material
relating to Confidential Information, however documented. All information that
you have a reasonable basis to consider Confidential Information or that is
treated by the Company as being Confidential Information shall be presumed to be
Confidential Information, without regard to the manner in which you obtain
access to such information.

 

During the time you are employed with the Company and for a period of ten
(10) years following the date your employment with the Company ends for any
reason (except with respect to trade secrets, which you agree to keep
confidential for so long as such information remains a trade secret), and except
(i) in the ordinary course of performing your employment duties for the Company,
(ii) as expressly authorized in writing by the Board, or (iii) as compelled to
disclose Confidential Information by judicial or governmental authority, you
agree not to disclose any Confidential Information to persons or entities
outside the Company, or to use any Confidential Information for any other
purpose, either during or after your employment, unless and until such
Confidential Information has become public

 

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knowledge without fault by you. You also agree to deliver all written,
electronic, magnetic, computer or other recorded or tangible material and copies
thereof containing Confidential Information to the Company upon the earlier of a
request by the Company or the date your employment with the Company ends. You
further agree to treat all confidential information and know-how of any
affiliate, employee, customer, contractor, vendor, or supplier of the Company,
as applicable, in the same manner as the Confidential Information.

 

 

 

Noncompetition:

 

In consideration of you and the Company entering into this letter agreement, and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, and to protect the reasonable business interests of the
Company, you agree that while you are an employee of the Company, and for a
period of 24 months after termination of your employment for any reason, you
will not directly or indirectly, whether on your own behalf or that of a third
party (other than the Company), engage in the business (whether as an owner of,
or as employee, director or officer of or consultant to any business, other than
the Company, that is engaged in the business), of owning or operating
agricultural or construction equipment stores in any state in which the Company
or its subsidiaries owns or operates any agricultural or construction equipment
stores during the term of your employment. You agree that the Company will be
entitled to equitable relief without the requirement of posting a bond to
enforce the terms of such noncompetition restriction, in addition to any other
rights or remedies that the Company may have. In the event that any provision of
this noncompetition clause (or any other provision contained in this letter
agreement) shall be determined by any court of competent jurisdiction to be
unenforceable, such provision shall be interpreted to extend only over the
maximum period of time for which it may be enforceable and/or over the maximum
geographical area as to which it may be enforceable and/or to the maximum extent
in all other respects as to which they may be enforceable, all as determined by
such court in such action so as to be enforceable to the extent consistent with
then applicable law. This noncompetition clause shall survive the termination of
your employment, and shall apply whether the termination of your employment is
voluntary or involuntary and regardless of the reason for such termination.

 

 

 

Non-Solicitation of Employees:

 

You agree that for a period of three (3) years following your employment with
the Company, you will, not directly or indirectly, either for yourself or any
other person or entity solicit, induce, or attempt to induce any employee of the
Company to leave the employ of the Company.

 

 

 

Termination:

 

You may terminate the employment relationship during the Term with at least 60
days’ written notice. The Company may terminate the employment relationship
during the Term for Cause at any time with written notice or without Cause with
at least 60 days’ written notice. Upon termination of your employment by either
party for any reason, you will promptly resign any and all positions you then
hold as officer or director of the Company or any of its affiliates.

 

 

 

Severance:

 

In case of involuntary termination of your employment by the Company without
Cause prior to the expiration of the Term or in the case of voluntary
resignation of your employment for Good Reason prior to the expiration of the
Term (each a “Qualifying Termination”), the Company will pay you as severance
pay an amount equal to two (2) times the sum of (a) your annual base salary at
the rate in effect on your last day of employment plus (b) the annual incentive
bonus last paid to you preceding the Qualifying Termination. In addition, upon a
Qualifying Termination the Company will, for a period of 24 months following the
effective date of termination of your employment, allow you to continue to
participate in the Company’s group medical and dental plans at the Company’s
expense (with premiums payable on a monthly basis), to the extent you were a
participant as of your last day of employment; however, if your participation in
any such plan is barred or not permitted under the terms thereof, the Company
will arrange to provide you with substantially similar coverage at its expense
up to the expense. Benefits provided by the Company may be reduced if you become
eligible for comparable benefits from another employer or third party.

 

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Payment by the Company of any severance pay or premium reimbursements under this
paragraph will be conditioned upon you (1) signing and not revoking a full
release of all claims against the Company, its affiliates, officers, directors,
employees, agents and assigns, substantially in the form attached to this letter
agreement as Exhibit A, (2) complying with your obligations under the
Noncompetition Agreement or any other agreement between you and the Company then
in effect, (3) cooperating with the Company in the transition of your duties,
and (4) agreeing not to disparage or defame the Company, its affiliates,
officers, directors, employees, agents, assigns, products or services.

 

 

 

 

 

Any severance payable will be paid to you over 24 months in accordance with the
Company’s normal payroll practices commencing on the first day of the month
following the Qualifying Termination, but not earlier than expiration of any
rescission periods. All payments under this severance clause are subject to
applicable withholding for income and FICA taxes and any other proper
deductions. Notwithstanding the foregoing, if any of the payments described in
this severance clause are subject to the requirements of Section 409A of the
Internal Revenue Code, as amended (the “Code”), and the Company determines that
you are a “specified employee” as defined in Section 409A of the Code, such
payments shall not commence earlier than the first day of the seventh month
following your “separation from service” as determined under Section 409A of the
Code.

 

 

 

 

 

For purposes of this letter agreement, “Cause” and “Good Reason” have the
following definitions:

 

 

 

 

 

“Cause” means a determination in good faith by the Board of the existence of one
or more of the following: (i) commission by you of any act constituting a
felony; (ii) any intentional and/or willful act of fraud or material dishonesty
by you related to, connected with or otherwise affecting your employment with
the Company, or otherwise likely to cause material harm to the Company or its
reputation; (iii) the willful and/or continued failure, neglect, or refusal by
you to perform in all material respects your duties with the Company as an
employee, officer or director, or to fulfill your fiduciary responsibilities to
the Company, which failure, neglect or refusal has not been cured within fifteen
(15) days after written notice thereof to you from the Company; or (iv) a
material breach by you of the Company’s material policies or codes of conduct or
of your material obligations under and other agreement between you and the
Company.

 

 

 

 

 

“Good Reason” means any one or more of the following occur without your consent:
(i) the assignment to you of material duties inconsistent with your status or
position as President and Chief Operating Officer, or other action that results
in a substantial diminution in your status or position, which has not been cured
by the Company within fifteen (15) days after written notice thereof to the
Company from you; (ii) the relocation of your principal office for Company
business to a location more than forty (40) miles from the Company’s current
headquarters; or (iii) material breach by the Company of any terms or conditions
of this letter agreement, which breach has not been caused by you and which has
not been cured by the Company within fifteen (15) days after written notice
thereof to the Company from you.

 

 

 

 

 

In the event of termination of your employment by the Company for Cause,
resignation by you other than for Good Reason, or termination due to your death
or any disability for which you are qualified for benefits under the Company’s
group long-term disability program, the Company’s only obligation hereunder
shall be to pay such compensation and provide such benefits as are earned by you
through the date of termination of employment.

 

 

 

Indemnification:

 

The Company will indemnify you in connection with your duties and
responsibilities for the Company in accordance with the Company’s bylaws and as
set forth in any indemnification agreement between you and the Company from time
to time.

 

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Taxes:

 

The Company may withhold from any compensation payable to you in connection with
your employment such federal, state and local income and employment taxes as the
Company shall determine are required to be withheld pursuant to any applicable
law or regulation.

 

 

 

Remedies:

 

You acknowledge that your covenants and obligations hereunder are of special,
unique, and intellectual character, which gives them a peculiar value, the
actual or threatened breach of which may result in substantial injuries and
damages, for which monetary relief may fail to provide an adequate remedy at
law. Accordingly, if the Company institutes any action or proceeding to enforce
the provisions hereof, seeking injunctive relief or specific performance, you
hereby waive the claim or defense that the Company has an adequate remedy at
law, and you will not urge in any such action or proceeding the claim or defense
that the Company has an adequate remedy at law. Nothing in this provision limits
the parties’ rights to seek any and all remedies available under North Dakota
law, including equitable and legal relief, either separately or cumulatively,
for breach or threatened breach of contract.

 

 

 

Applicable Law:

 

This letter agreement shall be interpreted and construed in accordance with the
laws of the State of Delaware.

 

 

 

Construction:

 

Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement.

 

 

 

Entire Agreement:

 

This letter agreement and the documents referenced herein constitute the entire
agreement between the parties, and supersedes all prior discussions, agreements,
including but not limited to the letter agreement dated October 1, 2010, and
negotiations between us. No amendment or modification of this letter agreement
will be effective unless made in writing and signed by you and an authorized
director of the Company.

 

[signature page follows]

 

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Sincerely,

 

 

 

TITAN MACHINERY INC.

 

 

 

 

 

By:

/s/ Stanley Dardis

 

 

Stanley Dardis,

 

 

Chair of the Compensation Committee

 

 

I accept and agree to the terms and conditions of employment with Titan
Machinery Inc. as set forth above.

 

 

/s/ Peter Christianson

 

3/6/13

Peter Christianson

 

Dated

 

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Exhibit A

 

FORM OF RELEASE BY PETER CHRISTIANSON

 

Definitions. I intend all words used in this Release to have their plain
meanings in ordinary English. Specific terms that I use in this Release have the
following meanings:

 

A.                           I, me, and my include both me (Peter Christianson)
and anyone who has or obtains any legal rights or claims through me.

 

B.                           Titan means Titan Machinery Inc., any company
related to Titan Machinery Inc. in the present or past (including without
limitation, its predecessors, parents, subsidiaries, affiliates, joint venture
partners, and divisions), and any successors of Titan Machinery Inc.

 

C.                           Company means Titan; the present and past officers,
directors, committees, shareholders, and employees of Titan; any company
providing insurance to Titan in the present or past; the present and past
fiduciaries of any employee benefit plan sponsored or maintained by Titan (other
than multiemployer plans); the attorneys for Titan; and anyone who acted on
behalf of Titan or on instructions from Titan.

 

D.                           Agreement means the letter agreement between me and
Titan dated February 1, 2013, including all of the documents attached to such
agreement.

 

E.                            My Claims mean all of my rights that I now have to
any relief of any kind from the Company, whether I now know about such rights or
not, including without limitation:

 

1.         all claims arising out of or relating to my employment with Titan or
the termination of that employment;

 

2.         all claims arising out of or relating to the statements, actions, or
omissions of the Company;

 

3.                            all claims for any alleged unlawful
discrimination, harassment, retaliation or reprisal, or other alleged unlawful
practices arising under any federal, state, or local statute, ordinance, or
regulation, including without limitation, claims under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with
Disabilities Act, 42 U.S.C. § 1981, the Employee Retirement Income Security Act,
the Equal Pay Act, the Worker Adjustment and Retraining Notification Act, the
Sarbanes-Oxley Act, the Family and Medical Leave Act, the Fair Credit Reporting
Act, the North Dakota Human Rights Act, N.D. Stat. § 14.02-4-01 et seq., the
North Dakota Equal Pay Act, N.D. Stat. § 34-06.1-01 et seq., the North Dakota
Age Discrimination Act, N.D. Stat. § 34-01-17, and workers’ compensation
non-interference or non-retaliation statutes;

 

4.                            all claims for alleged wrongful discharge; breach
of contract; breach of implied contract; failure to keep any promise; breach of
a covenant of good faith and fair dealing; breach of fiduciary duty; estoppel;
my activities, if any, as a “whistleblower”; defamation; infliction of emotional
distress; fraud; misrepresentation; negligence; harassment; retaliation or
reprisal; constructive discharge; assault; battery; false imprisonment; invasion
of privacy; interference with contractual or business relationships; any other
wrongful employment practices; and violation of any other principle of common
law;

 

5.                            all claims for compensation of any kind, including
without limitation, bonuses, commissions, stock-based compensation or stock
options, vacation pay and paid time off, perquisites, and expense
reimbursements;

 

6.                            all claims for back pay, front pay, reinstatement,
other equitable relief, compensatory damages, damages for alleged personal
injury, liquidated damages, and punitive damages; and

 

7.                            all claims for attorneys’ fees, costs, and
interest.

 

However, My Claims do not include any claims that the law does not allow to be
waived; any claims that may arise after the date on which I sign this Release;
any rights I may have to indemnification from Titan as a current or former
officer, director or employee of Titan; any claims for payment of severance
benefits under the Agreement; any rights I have to severance pay or benefits
under the Agreement; or any claims I may have for earned and accrued benefits
under any employee benefit plan sponsored by the Company in which I am a
participant as of the date of termination of my employment with Titan.

 

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Consideration. I am entering into this Release in consideration of Titan’s
obligations to provide me certain severance benefits as specified in the
Agreement. I will receive consideration from Titan as set forth in the Agreement
if I sign and do not rescind this Release as provided below. I understand and
acknowledge that I would not be entitled to the consideration under the
Agreement if I did not sign this Release. The consideration is in addition to
anything of value that I would be entitled to receive from Titan if I did not
sign this Release or if I rescinded this Release. I acknowledge and represent
that I have received all payments and benefits that I am entitled to receive (as
of the date of this Release) by virtue of any employment by the Company.

 

Agreement to Release My Claims. In exchange for the consideration described in
the Agreement, I give up and release all of My Claims. I will not make any
demands or claims against the Company for compensation or damages relating to My
Claims. The consideration that I am receiving is a fair compromise for the
release of My Claims.

 

Cooperation. Upon the reasonable request of the Company, I agree that I will
(i) timely execute and deliver such acknowledgements, instruments, certificates,
and other ministerial documents (including without limitation, certification as
to specific actions performed by me in my capacity as an officer of the Company)
as may be necessary or appropriate to formalize and complete the applicable
corporate records; (ii) reasonably consult with the Company regarding business
matters that I was involved with while employed by the Company; and (iii) be
reasonably available, with or without subpoena, to be interviewed, review
documents or things, give depositions, testify, or engage in other reasonable
activities in connection with any litigation or investigation, with respect to
matters that I may have knowledge of by virtue of my employment by or service to
the Company. In performing my obligations under this paragraph to testify or
otherwise provide information, I will honestly, truthfully, forthrightly, and
completely provide the information requested, volunteer pertinent information
and turn over to the Company all relevant documents which are or may come into
my possession.

 

My Continuing Obligations. I understand and acknowledge that I must comply with
all of my post-employment obligations under the Agreement. I will not defame or
disparage the reputation, character, image, products, or services of Titan, or
the reputation or character of Titan’s directors, officers, employees and
agents, and I will refrain from making public comment about the Company except
upon the express written consent of an officer of Titan.

 

Additional Agreements and Understandings. Even though Titan will provide
consideration for me to settle and release My Claims, the Company does not admit
that it is responsible or legally obligated to me. In fact, the Company denies
that it is responsible or legally obligated to me for My Claims, denies that it
engaged in any unlawful or improper conduct toward me, and denies that it
treated me unfairly.

 

Advice to Consult with an Attorney. I understand and acknowledge that I am
hereby being advised by the Company to consult with an attorney prior to signing
this Release and I have done so. My decision whether to sign this Release is my
own voluntary decision made with full knowledge that the Company has advised me
to consult with an attorney.

 

Period to Consider the Release. I understand that I have 21 days from the date I
received this Release (or 21 days after the last day of my employment with
Titan, if later) to consider whether I wish to sign this Release. If I sign this
Release before the end of the 21-day period, it will be my voluntary decision to
do so because I have decided that I do not need any additional time to decide
whether to sign this Release. I understand and agree that if I sign this Release
prior to my last day of employment with Titan it will not be valid and Titan
will not be obligated to provide the consideration described in the Release.

 

My Right to Rescind this Release. I understand that I may rescind this Release
at any time within 7 days after I sign it, not counting the day upon which I
sign it. This Release will not become effective or enforceable unless and until
the 7-day rescission period has expired without my rescinding it. I understand
that if I rescind this Release Titan will not be obligated to provide the
consideration described in the Release.

 

Procedure for Accepting or Rescinding the Release. To accept the terms of this
Release, I must deliver the Release, after I have signed and dated it, to Titan
by hand or by mail within the 21-day period that I have to consider this
Release. To rescind my acceptance, I must deliver a written, signed statement
that I rescind my acceptance to Titan by hand or by mail within the 7-day
rescission period. All deliveries must be made to Titan at the following
address:

 

Chief Operating Officer

 

 

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If I choose to deliver my acceptance or the rescission by mail, it must be
postmarked within the period stated above and properly addressed to Titan at the
address stated above.

 

Interpretation of the Release. This Release should be interpreted as broadly as
possible to achieve my intention to resolve all of My Claims against the
Company. If this Release is held by a court to be inadequate to release a
particular claim encompassed within My Claims, this Release will remain in full
force and effect with respect to all the rest of My Claims. I agree that the
provisions of this Release may not be amended, waived, changed or modified
except by an instrument in writing signed by an authorized representative of
Titan and by me.

 

My Representations. I am legally able and entitled to receive the consideration
being provided to me in settlement of My Claims. I have not been involved in any
personal bankruptcy or other insolvency proceedings at any time since I began my
employment with Titan. No child support orders, garnishment orders, or other
orders requiring that money owed to me by Titan be paid to any other person are
now in effect.

 

I have read this Release carefully. I understand all of its terms. In signing
this Release, I have not relied on any statements or explanations made by the
Company except as specifically set forth in the Agreement. I am voluntarily
releasing My Claims against the Company. I intend this Release and the Agreement
to be legally binding.

 

 

 

Dated:

 

 

 

 

Peter Christianson

 

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